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What changed in N2OFF, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of N2OFF, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+472 added−438 removedSource: 10-K (2024-04-01) vs 10-K (2023-03-27)

Top changes in N2OFF, Inc.'s 2023 10-K

472 paragraphs added · 438 removed · 282 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

128 edited+48 added−63 removed121 unchanged
Biggest changeWe also compete with heavily diversified multi-national chemical conglomerates, who produce various biocide formulations designed to kill or deactivate pathogenic micro-organisms. Of these, two companies are the most significant: ● Peroxychem : Peroxychem is a subsidiary of Evonik Industries AG (Germany). It is a significant worldwide producer of hydrogen peroxide, persulfates and PAA.
Biggest changeCurrently, our main competitors are companies providing PAA, chlorine and other sanitization solutions, such as ozone, as well as technology companies developing new biorational fungicides. 23 We also compete with heavily diversified multi-national chemical conglomerates, which produce various biocide formulations designed to kill or deactivate pathogenic micro-organisms.
Such high concentration levels may have severe negative effects on human health, and the environment mainly due to the carcinogenic and/or teratogenic properties of the compounds, and by their cumulative toxic effects. 8 The effects of exposure to these hazardous chemicals on humans and the environment are a continuing concern as they are intrinsically toxic and pollute the environment through wastewater discharge from the packing house or a discarded fruit.
Such high concentration levels may have severe negative effects on human health, and the environment mainly due to the carcinogenic and/or teratogenic properties of the compounds, and by their cumulative toxic effects. 8 The effects of exposure to these hazardous chemicals on humans and the environment are a continuing concern as they are intrinsically toxic and pollute the environment through wastewater discharge from the packing house or discarded fruit.
Additionally, more countries require an MRL for the commodity to be imported into their country. As there is increased awareness regarding compliance with MRLs, MRLs have become a much greater concern. These changes have also impacted the market and we believe that consumers spearheaded this change by demanding organic or pesticide-free foods.
Additionally, more countries require an MRL for the commodity to be imported into their country. As there is increased awareness regarding compliance with MRLs, MRLs have become a much greater concern. These changes also impacted the market and we believe that consumers spearheaded this change by demanding organic or pesticide-free foods.
Jim Adaskaveg, Professor at the Microbiology and Plant Pathology Department at the University of California, Riverside, reported the completion of several successful field trials with FreshProtect on citrus trees where he demonstrated a significant reduction of decay in treated fruit and a reduction in bacterial populations.
Jim Adaskaveg, a professor at the Microbiology and Plant Pathology Department at the University of California, Riverside, reported the completion of several successful field trials with FreshProtect on citrus trees where he demonstrated a significant reduction of decay in treated fruit and a reduction in bacterial populations.
No. 86381-2), at both the federal level and in the individual states where the products are sold for the use in post-harvest settings. To allow the utilization of our FreshProtect in pre-harvest settings, we submitted to EPA an updated product label in January 2023.
No. 86381-2), at both the federal level and in the individual states where the products are sold for the use in post-harvest settings. To allow the utilization of our FreshProtect in pre-harvest settings, we submitted to the EPA an updated product label in January 2023.
While most chemicals marketed in the industry address either food safety or food waste, our multi-purpose solution are intended to provide a solution for both problems, while simplifying crop treatment and achieving cost saving. Our solutions are capable of cleaning and controlling pathogens that would otherwise render fresh produce as unsafe for human consumption.
While most chemicals marketed in the industry address either food safety or food waste, our multi-purpose solutions are intended to provide a solution for both problems, while simplifying crop treatment and achieving cost saving. Our solutions are capable of cleaning and controlling pathogens that would otherwise render fresh produce unsafe for human consumption.
Sanitizers are designed to inactivate/kill any bacteria in the water, drastically reducing the possibility of cross-contamination. We believe this represents a significant opportunity for us. 7 Food Loss The Food and Agriculture Organization of United Nations predicts that about one-third of the food produced globally is wasted or lost every year.
Sanitizers are designed to inactivate/kill any bacteria in the water, drastically reducing the possibility of cross-contamination. We believe this represents a significant opportunity for us. Food Loss The Food and Agriculture Organization of United Nations predicts that about one-third of the food produced globally is wasted or lost every year.
Our main product lines consist of a proprietary blend of organic food acids applied in pre- and post-harvest applications, which is designed to work together with an oxidizing agent (Save Foods solution) in order to improve food safety and increase fruit and vegetable’ shelf life by reducing microbial spoilage.
Our main product lines consist of a proprietary blend of organic food acids applied in pre- and post-harvest applications, which is designed to work together with an oxidizing agent (together, the Save Foods solution) in order to improve food safety and increase fruit and vegetable’ shelf life by reducing microbial spoilage.
Therefore, to maximize our efforts during 2023, we optimized our marketing and sales strategy. We now concentrate our efforts first on high value crops, such as avocado, mango, citrus, pears, various berries, dates and bell peppers, while targeting larger producing countries in both the northern and southern hemispheres to overcome the seasonal effect.
Therefore, during 2023, we optimized our marketing and sales strategy. We now concentrate our efforts first on high value crops, such as avocado, mango, citrus, pears, various berries, dates and bell peppers, while targeting larger producing countries in both the northern and southern hemispheres to overcome the seasonal effect.
The market of post-harvest treatments for fruits and vegetables is dominated by five large players with wide reach across the globe. We believe that a market edge will be given to a company that can solidify its reputation, product quality, customer service and customer intimacy, product innovation, technical service and value creation.
The market for post-harvest treatments for fruits and vegetables is dominated by five large players with wide reach across the globe. We believe that a market edge will be given to a company that can solidify its reputation, product quality, customer service and customer intimacy, product innovation, technical service and value creation.
The post-harvest team at the Central-and Northern-Arava Research and Development center validated these results and the results were thereafter published in an Israeli local professional agriculture journal. 14 Results on Easy Peelers Easy peelers are citrus fruits that are easier to peel, such as tangerines, mandarins, satsumas, and clementines.
The post-harvest team at the Central-and Northern-Arava Research and Development center validated these results and the results were thereafter published in an Israeli local professional agriculture journal. Results on Easy Peelers Easy peelers are citrus fruits that are easier to peel, such as tangerines, mandarins, satsumas, and clementines.
Although SavePROTECT is not a pesticide under FIFRA, it is still required to be registered in California because the California statute requires the registration of both pesticide and adjuvant products. 29 On July 31, 2020, we submitted an “Application for Registration of Adjuvant” for SavePROTECT to the California Department of Pesticide Regulation (the “CDPR”).
Although SavePROTECT is not a pesticide under FIFRA, it is still required to be registered in California because the California statute requires the registration of both pesticide and adjuvant products. On July 31, 2020, we submitted an “Application for Registration of Adjuvant” for SavePROTECT to the California Department of Pesticide Regulation (the “CDPR”).
OMRI reviews input products to verify that they meet the organic standards for use on organic farms or in organic processing. OMRI is recognized by the USDA National Organic Program as a reputable third-party input reviewer in Interim Instruction 3012 of the NOP Handbook.
OMRI reviews input products to verify that they meet the organic standards for use on organic farms or in organic processing. OMRI is recognized by the USDA National Organic Program as a reputable third-party input reviewer in Interim Instruction 3012 of the USDA’s NOP Handbook.
Increasing number of companies in the fresh food sector are investing in sustainability. Survey conducted by Champions 12.3 in 2017 showed that 99% of businesses that invested in reduction of food loss and waste, received a net positive financial return.
An increasing number of companies in the fresh food sector are investing in sustainability. A survey conducted by Champions 12.3 in 2017 showed that 99% of businesses that invested in reduction of food loss and waste, received a net positive financial return.
Turkey’s Ministry of Trade estimated that in 2020 the total value of Turkish exports to the EU exceeded €120 billion. Since August 2021, we have been working with a local post-harvest agent to introduce us to local Turkish packers.
Turkey’s Ministry of Trade estimated that in 2020 the total value of Turkish exports to the EU exceeded €120 billion. 19 Since August 2021, we have been working with a local post-harvest agent to introduce us to local Turkish packers.
The economic burden of foodborne illness has been estimated to be as high as $90 billion annually. When considering the farm-to-fork chain, microbial contamination of fresh produce can occur at multiple steps.
The economic burden of foodborne illness has been estimated to be as high as $90 billion annually. 7 When considering the farm-to-fork chain, microbial contamination of fresh produce can occur at multiple steps.
Following these pilots, a commercial application was performed with an Israeli mango packer, in which only 25% fungicide were used together with our solution and compared to the current commercial application with 100% fungicide.
Following these pilots, a small commercial application was performed with an Israeli mango packer, in which only 25% fungicide were used together with our solution and compared to the current commercial application with 100% fungicide.
Once registered at the EPA level, we would be able to start the registration in California. 20 Our Strengths We believe that our main strengths include: ● Strong Management Team with Commitment to Green Products .
Once registered at the EPA level, we would be able to start the registration in California. Our Strengths We believe that our main strengths include: ● Strong Management Team with Commitment to Green Products .
During the years 2019 and 2020, we developed, validated and tested the efficacy of our next generation product - a blend of food acids - on a variety of crops in small and large scale commercial pilots.
During 2019 and 2020, we developed, validated and tested the efficacy of our next generation product - a blend of food acids - on a variety of crops in small- and large- scale commercial pilots.
Our plan is to focus first on key countries and regions with the largest markets for our crops, including Mexico, Israel, Turkey, Egypt, and key markets in the United States such as California.
Our plan is to focus first on key countries and regions with the largest markets for our crops, including Mexico, Israel, Turkey, Egypt, key markets in the United States such as California and Brazil.
The EPA will review toxicity data and results from tests to show how well the product kills bacteria to determine if the product should be approved. See “ Government Regulation and Product Approval” below. This sub-category of products is based on our proprietary blend of food acids combined with hydrogen peroxide as the oxizider and includes SF3HS and SF3H.
The EPA will review toxicity data and results from tests to show how well the product kills bacteria to determine if the product should be approved. See “ Government Regulation and Product Approval” below. This sub-category of products is based on our proprietary blend of food acids combined with hydrogen peroxide as the oxidizer and includes SF3HS and SF3H.
However, significant problems such as environmental issues and health concerns have risen in the citrus industry due to chemical residues or the occurrence of pathogenic resistant strains which require the use of even higher concentration of these post-harvest treatments. However, currently, the residues of imazalil on citrus fruits is being revised by the European Commission.
However, significant problems such as environmental issues and health concerns have risen in the citrus industry due to chemical residues or the occurrence of pathogenic resistant strains which require the use of even higher concentration of these post-harvest treatments. However, currently, the residues of imazalil on citrus fruits are being revised by the European Commission.
Most relevant to us is their blends of PAA and hydrogen peroxide, sold in two primary formulations - OXYSTRONG for water treatment and PROXITANE for the food industry. In addition, we have several indirect competitors, which are companies with whom we seek to make strategic partnerships - large companies specializing in post-harvest solutions for the agricultural industry.
Most relevant to us is their blends of PAA and hydrogen peroxide, sold in two primary formulations - OXYSTRONG for water treatment and PROXITANE for the food industry. In addition, we have several indirect competitors, which are companies with whom we seek to form strategic partnerships - large companies specializing in post-harvest solutions for the agricultural industry.
Over the last three years, we have treated more than 200,000 tons of citrus fruit with the different version of our SavePROTECT product. Under the supervision of a world leading packing house to the citrus fruit industry, we evidenced SavePROTECT utility as having a good safety profile, ensuring food safety and in controlling microbial spoilage.
Over the last three years, we have treated more than 200,000 tons of citrus fruit with different version of our SavePROTECT product. Under the supervision of a world leading packing house to the citrus fruit industry, we evidenced our solutions’ utility as having a good safety profile, ensuring food safety and controlling microbial spoilage.
Save Foods products have a synergistic effect when combined with these oxidizing agent-based sanitizers and fungicides. Our “green” solutions are capable of cleaning, sanitizing and controlling pathogens on fresh produce with the goal of making them safer for human consumption and extending their shelf life by reducing their decay.
Our products have a synergistic effect when combined with these oxidizing agent-based sanitizers and fungicides. Our “green” solutions are capable of cleaning, sanitizing and controlling pathogens on fresh produce with the goal of making them safer for human consumption and extending their shelf life by reducing their decay.
In addition, consumers are also willing to pay more for better-quality produce and their basked will be 4% larger. ● Promoting sustainability : a large range of sustainability aspects are directly related and affected by the fresh produce industry. Food waste accounts for 8% of global greenhouse gas emissions.
In addition, consumers are also willing to pay more for better-quality produce and their basked will be 4% larger. ● Promoting sustainability : a large range of sustainability aspects are directly related and affected by the fresh produce industry. We believe food waste accounts for 8% of global greenhouse gas emissions.
According to the report, when choosing the place to buy their groceries, consumers focus on the quality of the stores’ fresh food, with freshness of fruits and vegetable being their top priority. The report also showed that customers who are satisfied with the store’s fresh food quality, would visit the store more frequently than those who are not.
According to the report, when choosing the place to buy their groceries, consumers focus on the quality of the stores’ fresh food, with freshness of fruits and vegetables being their top priority. The report also showed that customers who are satisfied with the store’s fresh food quality would visit the store more frequently than those who are not.
We also consider Citrosol, Xeda International, JBT and Agrofresh as our indirect competitors (and current or potential collaborators). The organic market offers a huge trade and income potential for producers, processors and trading companies globally. The rising demand of various organic products has driven the demand of organic post-harvest treatments.
We also consider Citrosol, Xeda International, JBT and Agrofresh as our indirect competitors (and current or potential collaborators). We believe that the organic market offers a huge trade and income potential for producers, processors and trading companies globally and that the rising demand of various organic products has driven the demand of organic post-harvest treatments.
Inability to visually spot pathogens makes the washing step one of the most important steps in packing because, if washing process is not controlled, it can become a source of cross-contamination (when foodborne pathogens fall off contaminated produce into the water where they can contaminate more produce).
Inability to visually spot pathogens make the washing step one of the most important steps in packing because, if washing process is not controlled, it can become a source of cross-contamination (when foodborne pathogens fall off contaminated produce into the water where they can contaminate more produce).
Our subsidiary was incorporated on January 14, 2004, under the name Pimi Marion Holdings Ltd., to exploit the knowledge, intellectual property and business assets of Nir Ecology Ltd., a company founded in September 1989, focused on developing sanitizing solutions for the water and food industry.
Our subsidiary, Save Foods Ltd., was incorporated on January 14, 2004, under the name Pimi Marion Holdings Ltd., to exploit the knowledge, intellectual property and business assets of Nir Ecology Ltd., a company founded in September 1989, focused on developing sanitizing solutions for the water and food industry.
The absence of toxicological residues not only improves food quality but also promotes occupational safety for the employees of packing houses, contributing to a friendlier and safer working environment. 21 Our Strategy In September 2018, we changed our organizational structure and management team.
The absence of toxicological residues not only improves food quality but also promotes occupational safety for the employees of packing houses, contributing to a friendlier and safer working environment. 17 Our Strategy In September 2018, we changed our organizational structure and management team.
Reduction of food waste, extension of the shelf life of fresh produce and reduction of the use of pesticides are main focus of the industry and many companies are addressing these objectives, including: The increased consumption of fruits and vegetables in combination with the current regulation and consumers’ demand for healthier food has placed a greater burden on the fresh produce industry to provide food products that are fresher in quality, demonstrate an extended shelf life and are safer to consume.
We believe that reduction of food waste, extension of the shelf life of fresh produce and reduction of the use of pesticides are still the main focus of the industry and many companies are addressing these objectives, including: The increased consumption of fruits and vegetables in combination with the current regulation and consumers’ demand for healthier food has placed a greater burden on the fresh produce industry to provide food products that are fresher in quality, demonstrate an extended shelf life and are safer to consume.
(a family of fungi) was also reduced on fruit inoculated with G. candidum , fungus that is a member of the human microbiome. Furthermore, FreshProtect can be used in combination with several different kinds of pesticides and fertilizers which allows the application of more than one pesticide at once. This in turn reduces cost and facilitates implementation.
(a family of fungi) was also reduced on fruit inoculated with G. candidum , fungus that is a member of the human microbiome. 16 Furthermore, FreshProtect can be used in combination with several different kinds of pesticides and fertilizers which allows the application of more than one pesticide at once. This in turn reduces costs and facilitates implementation.
When taking into account these regulations, which are becoming increasingly difficult, and the long transportation time, there is a significant increase to the risk of produce decay. ● Leverage Our Products Through Collaborations .
When taking into account these regulations, which are becoming increasingly difficult, and the long transportation time, there is a significant increase in the risk of produce decay. ● Leverage Our Products Through Collaborations .
While there are no harmonised requirements regarding the registration of a processing aids, some data (such as full composition and some toxicological data) must be disclosed and discussed with the competent authorities before the submission of a registration request.
While there are no harmonized requirements regarding the registration of a processing aids, some data (such as full composition and some toxicological data) must be disclosed and discussed with the competent authorities before the submission of a registration request.
As previously described, imazalil is currently one of the most commonly used fungicide that is effective in controlling post-harvest fungal pathogens in citrus. Currently, the residues of imazalil on citrus fruit is being revised by the European Commission and have already been reduced, and this reduction poses challenges, especially to packing houses exporting to Europe.
As previously described, imazalil is currently one of the most commonly used fungicides that is effective in controlling post-harvest fungal pathogens in citrus. Currently, the residues of imazalil on citrus fruit are being revised by the European Commission and have already been reduced, and this reduction poses challenges, especially to packing houses exporting to Europe.
This type of collaboration could allow them to continue selling their product. 22 Selling and Marketing Although over the course of 2022, we ran over fifty successful pilots with potential commercial partners, we discovered that the sale cycle is significantly longer than we had anticipated and noted it would take, on average, at least two seasons for our new solutions to be fully implemented.
This type of collaboration could allow them to continue selling their product. 18 Selling and Marketing Although since 2022, we ran over fifty successful pilots with potential commercial partners, we discovered that the sale cycle is significantly longer than we had anticipated and noted it would take, on average, at least two seasons for our new solutions to be fully implemented.
Our solutions have shown a decay reduction compared to the current industry standards and have maintained the firmness of the bell pepper overtime. While Israeli packers in the region are struggling to maintain a reasonable shelf life for their produce during the export process, our solutions have shown a significant improvement in export performance.
Our solutions have shown a decay reduction compared to the current industry standards and have maintained the firmness of the bell pepper over time. While Israeli packers in the region are struggling to maintain a reasonable shelf life for their produce during the export process, our solutions have shown a significant improvement in export performance.
In parallel, we started to run additional pilots in Israel with potential strategic partners in order for them to evaluate and validate the potential of FreshProtect for the pre-harvest market. We expect the registration of the product in the U.S. by the end of 2023.
In parallel, we started to run additional pilots in Israel with potential strategic partners in order for them to evaluate and validate the potential of FreshProtect for the pre-harvest market. We currently expect the registration of the product in the U.S. by the end of 2024.
The Post-harvest treatment market for fruits and vegetables, which is projected to grow from $1.5 billion in 2019 to $2.3 billion by 2026, growing at a CAGR of 6.5% during the forecast period, is led globally by select companies, including DECCO U.S.
The post-harvest treatment market for fruits and vegetables, which, according to a post-harvest treatment market analysis by Reports and Data, is projected to grow from $1.5 billion in 2019 to $2.3 billion by 2026, growing at a CAGR of 6.5% during the forecast period, is led globally by select companies, including DECCO U.S.
In addition, the use of PeroStar allows the packing house to meet the new limitations of imazalil utilization as well as meet its goal to apply greener and safer products (see graph below). 15 Results on Mangos We recently tested our PeroStar on mangos in collaboration with the Israeli-based Volcani Center for Agricultural Research.
In addition, the use of PeroStar allows the packing house to meet the new limitations of imazalil utilization as well as meet its goal to apply greener and safer products. Results on Mangos We recently tested our PeroStar on mangos in collaboration with the Israeli-based Volcani Center for Agricultural Research.
One of the main advantages of our products is that our ingredients do not leave any toxicological residues on the fresh produce we treat. In contrary, by forming a temporary protective shield around the fresh produce we treat, our products make it difficult for pathogens to develop and potentially provide protection which also reduces cross-contamination. The U.S.
One of the main advantages of our products is that our ingredients do not leave any toxicological residues on the fresh produce we treat. By forming a temporary protective shield around the fresh produce we treat, our solutions make it difficult for pathogens to develop and potentially provide protection which also reduces cross-contamination.
Therefore, processing aids must not follow the EFSA guideline of “Data Requirements for the Evaluation of Food Additive Applications.” In Europe, our PeroStar is not considered a processing aid in the enzymatic preparation category and, therefore, PeroStar is only regulated at the national level.
Therefore, processing aids are not required to follow the EFSA guideline of “Data Requirements for the Evaluation of Food Additive Applications.” In Europe, our PeroStar is not considered a processing aid in the enzymatic preparation category and, therefore, PeroStar is only regulated at the national level.
In addition, with multipurpose products, there is no need to order, ship or dispose of bottles of product, resulting in less energy consumed, less CO2, less fuel, and less waste.
In addition, with multipurpose products, there is no need to order, ship or dispose of bottles of product, resulting in less energy consumed, less CO 2 , less fuel, and less waste.
Average global production for the years 2016, 2017, 2018, 2019 and 2020. 2. Our general target markets include Chile, Colombia, Egypt, Israel, Italy, Mexico, Morocco, Peru, Philippines, South Africa, Spain, Thailand, Turkey and the United States.
Average global production for the years 2018, 2019, 2020 and 2021. 2. Our general target markets include Brazil, Chile, Colombia, Egypt, Israel, Italy, Mexico, Morocco, Peru, Philippines, South Africa, Spain, Thailand, Turkey and the United States.
Consumption as well as production of fresh fruit and vegetables is growing globally; in 2020, the global production of fresh fruit amounted to about 887 million tons, while the production of fresh vegetable amounted to about 1.09 billion tons (2018).
Consumption as well as production of fresh fruit and vegetables is growing globally; in 2020, the global production of fresh fruit amounted to about 887 million tons, while the production of fresh vegetable amounted to about 1.09 billion tons (2018) according to statista.com global fresh vegetable production research.
The graph below summarizes these results: The regulation for pre-harvest (in the field) application especially in California as well as in Israel may take more time than post-harvest application due the potential impact on the environment. We submitted the pre-harvest regulatory dossier on January 2023 in the US.
The regulation for pre-harvest (in the field) application especially in California as well as in Israel may take more time than post-harvest application due the potential impact on the environment. We submitted the pre-harvest regulatory dossier on January 2023 in the US.
File Number Country Type Status Application/Patent Number Priority Date SVF-P-006-EP Europe Patent Pending 21763868.3 March 1, 2020 SVF-P-006-MX Mexico Patent Pending MX/a/2022/010828 March 1, 2020 SVF-P-006-PE Peru Patent Pending 001876-2022/DIN March 1, 2020 SVF-P-006-US United States Patent Pending 17/908,624 March 1, 2020 SVF-P-006-ZA New Zealand Patent Pending 2022/09840 March 1, 2020 26 Combined Fungicidal Preparations and Methods for Use Thereof This patent family is directed to compositions and to methods for reducing pathogen load on a substrate.
File Number Country Type Status Application/Patent Number Priority Date SVF-P-006-EP Europe Patent Pending 21763868.3 March 1, 2020 SVF-P-006-MX Mexico Patent Pending MX/a/2022/010828 March 1, 2020 SVF-P-006-PE Peru Patent Pending 001876-2022/DIN March 1, 2020 SVF-P-006-US United States Patent Pending 17/908,624 March 1, 2020 SVF-P-006-ZA South Africa Issued Pending 2022/09840 March 1, 2020 Combined Fungicidal Preparations and Methods for Use Thereof This patent is related to compositions and to methods for reducing pathogen load on a substrate.
File Number Country Type Status Application/Patent Number Priority Date SVF-P-003-IL Israel Patent Issued 227328 June 23, 2013 SVF-P-003-US United States Patent Issued 9,487,350 June 23, 2013 Sterilization Compositions and Methods for Use Thereof This patent family is directed to compositions and methods for reducing pathogen load within a container or on a surface, including inter alia the surface of an edible plant matter.
File Number Country Type Status Application/Patent Number Priority Date SVF-P-003-IL Israel Patent Issued 227328 June 23, 2013 SVF-P-003-US United States Patent Issued 9,487,350 June 23, 2013 22 Sterilization Compositions and Methods for Use Thereof This patent is related to compositions and methods for reducing pathogen load within a container or on a surface, including the surface of an edible plant matter, and for disinfection of cooling systems.
Compositions and Methods of Treating Edible Matter and Substrates Therefor This patent family includes granted patents in the United States, Israel, and an allowed application in Europe and is directed to a method for protecting edible matter from decay by applying to the edible matter a disinfecting composition containing, among other things, (1) phosphonic or phosphoric acid, (2) a carboxylic acid, (3) performic acid, (4) a performic acid source (such as formic acid) and an oxidizer (such as hydrogen peroxide).
In addition, ten patent applications are pending. 21 Compositions and Methods of Treating Edible Matter and Substrates Therefor This patent family includes patents in the United States, Israel, and an allowed application in Europe and relate to a method for protecting edible matter from decay by applying to the edible matter a disinfecting composition containing, among other things, (1) phosphonic or phosphoric acid, (2) a carboxylic acid, (3) performic acid, (4) a performic acid source (such as formic acid) and an oxidizer (such as hydrogen peroxide).
Particularly in the United States and Europe, products such as berries, avocados, mangoes, pomegranates, papayas and sweet potatoes are gaining popularity and considered “super foods,” and these products are showing a strong annual import growth of 10% to 20%. ● Increasing demand for organic produce : the demand for organic products is growing rapidly particularly in both Europe and North America, and is closely related to consumer interest in healthy and pure eating.
Particularly in the United States and Europe, products such as berries, avocados, mangoes, pomegranates, papayas and sweet potatoes are gaining popularity and considered “super foods,” and these products are showing a strong annual import growth of 10% to 20% according to Inspirafarms, a designer and developer of cooling technology, including for fresh fruit and vegetables. ● Increasing demand for organic produce : the demand for organic products is growing rapidly, particularly in both Europe and North America and is closely related to consumer interest in healthy and pure eating.
Peroxychem generated sales of approximately $300 million in 2019; and 27 ● Solvay (Belgium) : Similar to Evonik Industries, Solvay is a heavily diversified multinational chemical conglomerate. During the fiscal year 2022, Solvay had approximately €13.4 billion in net sales, spread across the breadth of their product lines.
(Belgium) : Similar to Evonik Industries, Solvay is a heavily diversified multinational chemical conglomerate. During the fiscal year 2022, Solvay had approximately €13.4 billion in net sales, spread across the breadth of their product lines.
Over the next 12 months, we intend to focus mainly on following up with the pilots performed during the last 18 months and convert them into full commercial applications.
Over the next 12 months, we intend to focus mainly on following up with the pilots performed during the last 18 months in Peru, Brazil, the United States and Israel and convert them into full commercial applications.
We expect to start our commercial activities during the upcoming mango season in 2023. 16 Results on Limes Following a successful pilot in Mexico on Persian lime (where SavePROTECT has reduced to zero the fruit decay after 21 days as shown in the graph below), the packing house bought its first batch to start its utilization of our product.
Results on Limes Following a successful pilot in Mexico on Persian lime (where SavePROTECT has reduced to zero the fruit decay after 21 days as shown in the graph below), the packing house bought its first batch to start its utilization of our product.
In August 2020, we submitted a regulatory dossier for our PeroStar as a processing aid to be used with PAA in Spain and Italy, two of the largest fruit and vegetables producers in Europe. See “ Government Regulation and Product Approval” below. Commercialization Stage The table below summarizes our commercialization efforts and activities as of February 2023.
In August 2020, we submitted a regulatory dossier for our PeroStar as a processing aid to be used with PAA in Spain and Italy, two of the largest fruit and vegetables producers in Europe. 14 Commercialization Stage The table below summarizes our commercialization efforts and activities as of December 31, 2023.
In the future, we are also planning to increase the variety of crops that can be treated with our products, to include produce such as apples, tomatoes, pomegranate, eggplant, broccoli, and papayas. ● Focus on Exportation to Europe. We plan to increase our focus on exports to Europe as EU regulations permit a limited use of fungicides.
In the future, we are also planning to increase the variety of crops that can be treated with our products, to include produce such as apples, tomatoes, pomegranate, eggplant, broccoli, and papayas. ● Focus on Exportation to Europe.
File Number Country Type Status Application/Patent Number Priority Date SVF-P-004-USP United States Patent Pending 63/426,096 November 17, 2022 Sterilization Devices and Methods for Use Thereof This patent family is directed to a device for controlling pathogen load within a container or on a surface by spraying a disinfecting composition in response to a trigger, such as increased pathogenic contamination.
File Number Country Type Status Application/Patent Number Priority Date SVF-P-004-USP United States Patent Pending 63/605,514 December 3, 2023 Sterilization Devices and Methods for Use Thereof This patent is related to a device for controlling pathogen load within a container or on a surface by spraying a disinfecting composition in response to a trigger, such as increased pathogenic contamination.
Primary production companies are investing in aspects of food losses, energy efficiency and carbon footprint, through innovations such as drying produce, on-farm and off-grid cold rooms and post-harvest treatments. 10 ● Food retailers seek to reduce their waste and maximize their revenues : more than eight million tons of food are wasted every year in the United States in the retail sector alone, which translates into $18 billion in lost value (cost of waste) every year.
Primary production companies are investing in aspects of food losses, energy efficiency and carbon footprint, through innovations such as drying produce, on-farm and off-grid cold rooms and post-harvest treatments. ● Food retailers seek to reduce their waste and maximize their revenues : according to ReFED, a not-for-profit organization concerned with food loss and waste, in its report “Retail Food Waste Action Guide” more than eight million tons of food are wasted every year in the United States in the retail sector alone, which translates into $18 billion in lost value (cost of waste) every year.
A report published in April 2020, generated by the European Innovation Partnership Agricultural Productivity and Sustainability, estimates that in Europe an estimated 9 million tons of food is lost at the production stage (farm), while up to 16.9 million tons are lost at the processing stage (packing houses, etc.).
A report published in April 2020, generated by the European Innovation Partnership Agricultural Productivity and Sustainability, estimates that in Europe an estimated 9 million tons of food is lost at the production stage (farm), while up to 16.9 million tons are lost at the processing stage (packing houses, etc.) Much of this loss is caused by spoilage, which can be caused by microorganisms - primarily fungi and mold.
In December 2021, we submitted an application for certification for our SavePROTECT to the OMRI, an international nonprofit organization that determines which input products are allowed for use in organic production and processing. OMRI Listed® products are allowed for use in certified organic operations under the USDA National Organic Program.
In December 2021, we submitted an application for certification for our SavePROTECT to the Organic Materials Review Institute (“OMRI”), an international nonprofit organization that determines which input products are allowed for use in organic production and processing. OMRI Listed® products are allowed for use in certified organic operations under the United States Department of Agriculture (“USDA”) National Organic Program.
While our application was applied on the packing line, boxes of avocado were put aside for shelf-life evaluation. After 16 days at room temperature, the avocado treated with our solution showed the lowest percentage of decay resulting in two times more avocado available for consumption.
While our application was applied on the packing line, boxes of avocado were put aside for shelf-life evaluation. After 16 days at room temperature, the avocado treated with our solution showed the lowest percentage of decay resulting in two times more avocado available for consumption. Following this successful commercial pilot, Milopri fully adopted and implemented our solutions in August 2022.
The tested organisms are Listeria monocytogenes, Salmonella enterica and Escherichia coli O157:H7. 18 The last test was performed by Analytical Lab Group on a mix culture of Listeria monocytogenes with an exposure time of 30 seconds. The results showed more than 99.99999% (>7.51 Log10) reduction.
The last test was performed by Analytical Lab Group on a mix culture of Listeria monocytogenes with an exposure time of 30 seconds. The results showed more than 99.99999% (>7.51 Log10) reduction.
The last step usually includes application of wax sometimes combined with an additional application of fungicides to prevent or reduce physiological changes and risks of spoilage. Our main products and solutions are applied at the cleaning and sanitization steps.
The last step usually includes application of wax sometimes combined with an additional application of fungicides to prevent or reduce physiological changes and risks of spoilage. Our main products and solutions are applied at the cleaning and sanitization steps. One of the main advantages of our solutions is its non-toxic residues that provides protection to the treated produce.
Our regulatory consultant in Israel has confirmed that our PeroStar does not contain carcinogens, mutagens and/or teratogens, and, therefore, is considered approved in terms of the relevant regulations of the National Food Services, Ministry of Health, and can be used as an additive to cleaning and disinfectant agents for fresh produce.
Our regulatory consultant in Israel has confirmed that our PeroStar does not contain carcinogens, mutagens and/or teratogens, and, therefore, is considered approved in terms of the relevant regulations of the National Food Services, Ministry of Health, and can be used as an additive to cleaning and disinfectant agents for fresh produce. 25 On January 22, 2022, we received an approval from Peru’s Ministry of Agricultural Development and Irrigation to sell our products in Peru.
We used a modification of the Association of Official Agricultural Chemists Germicidal and Detergent Sanitizing Action of Disinfectants method and test protocol EN1276 (European standard for the evaluation of chemical disinfectant or antiseptic for bactericidal activity).
We used a modification of the Association of Official Agricultural Chemists Germicidal and Detergent Sanitizing Action of Disinfectants method and test protocol EN1276 (European standard for the evaluation of chemical disinfectant or antiseptic for bactericidal activity). The tested organisms are Listeria monocytogenes, Salmonella enterica and Escherichia coli O157:H7.
Results on Berries Berries are easily perishable and maintaining fresh quality after harvest depends on proper handling, transportation, and storage. If berries are not properly handled during and after the harvest, they lose nutritional and monetary value. Strawberries, raspberries, black raspberries, blackberries, and blueberries are picked fully ripe for best appearance and eating quality.
If berries are not properly handled during and after the harvest, they lose nutritional and monetary value. Strawberries, raspberries, black raspberries, blackberries, and blueberries are picked fully ripe for best appearance and eating quality.
The EPA requires that every chemical, regardless of percentage, in a Safer Choice-certified product is evaluated and allows only the safest ingredients. ● Increasing investment in foodtech and agritech companies : according to a recent report published by AgFunder, a venture capital firm active in the foodtech and agritech, startups developing agri-food tech solutions and products, raised approximately $51.7 billion into agrifood technologies in 2021; an 85% increase over 2020 2 .
The EPA requires that every chemical, regardless of percentage, in a Safer Choice-certified product is evaluated and allows only the safest ingredients. 10 ● Decreasing investment in foodtech and agritech companies : according to a recent report published by AgFunder, a venture capital firm active in the foodtech and agritech, startups developing agri-food tech solutions and products, raised approximately $15.6 billion into agrifood technologies in 2023; a 49% decrease compared to approximately $30.5 billion in 2022.
A., an agritech consultancy firm with expertise in introducing new products into Mexico. Agrinet has initiated a pilot program across Mexico to demonstrate the benefits of Save Foods solution. The program included several packing house companies in Mexico that export mainly to the United States.
Agrinet initiated a pilot program across Mexico to demonstrate the benefits of Save Foods solution. The program included several packing house companies in Mexico that export mainly to the United States.
Based on the intended use and claims for SavePROTECT, our product was registered with CDPR on October 27, 2021 as an adjuvant. In addition, based on the opinion of our U.S. regulatory experts, all SavePROTECT ingredients are GRAS when used as intended and product does not have pesticidal activity.
In addition, based on the opinion of our U.S. regulatory experts, all SavePROTECT ingredients are GRAS when used as intended and the product does not have pesticidal activity.
Thereafter, and beginning in June 2021, the packing house began applying our solution to all of its packing facilities in Mexico. 17 Based on these results, food retailers may benefit from additional income of up to $126 per ton of limes assuming a conservative average price of $3,000 per ton (based on an average price per pound lime of $1.49 in 2019), as presented in the graph below.
Based on these results, food retailers may benefit from additional income of up to $126 per ton of limes assuming a conservative average price of $3,000 per ton (based on an average price per pound lime of $1.49 in 2019), as presented in the graph below.
In order to determine the efficacy of the product, 25 swabs were taken across 18 trays (nine of each microgreen species). The results showed more than 90% reduction of the total bacterial load post-treatment.
Our treatment combined a post-harvest spray application and a fogging treatment to be used in the cooldown storage room. In order to determine the efficacy of the product, 25 swabs were taken across 18 trays (nine of each microgreen species). The results showed more than 90% reduction of the total bacterial load post-treatment.
File Number Country Type Status Application/Patent Number Priority Date SVF-P-005-USP United States Patent Pending 63/426,120 November 17, 2022 Compositions Comprising of Several Organic Acids and Use Thereof This patent family is directed to kits and methods for controlling pathogen load within or on the surface of an edible plant matter.
File Number Country Type Status Application/Patent Number Priority Date SVF-P-005-USP United States Patent Pending 63/605,516 December 3, 2023 Sterilization Compositions and Methods for Use Thereof This patent is related to kits and methods for controlling pathogen load within or on the surface of an edible plant matter.
The method includes applying a composition based on phosphonic acid to the edible plant matter. 25 File Number Country Type Status Application/Patent Number Priority Date SVF-P-002-IL Israel Patent Issued 229724 May 30, 2011 Method and Apparatus for Maintaining Fresh Produce in a Transportation Container This patent family includes granted patents in both Israel and the United States, it relates to a method used to maintain fresh produce stored in transportation containers.
File Number Country Type Status Application/Patent Number Priority Date SVF-P-002-IL Israel Patent Issued 229724 May 30, 2011 Method and Apparatus for Maintaining Fresh Produce in a Transportation Container This patent family includes patents in Israel and the United States and relate to a method for maintaining fresh produce stored in a transportation container.
If all the substances or ingredients in a particular product are cleared for use on food or food-contact surfaces or are GRAS then a company can market a product without obtaining any additional clearances.
If all the substances or ingredients in a particular product are cleared for use on food or food-contact surfaces or are GRAS then a company can market a product without obtaining any additional clearances. GRAS substances do not require pre-market approval or clearance by the FDA although the FDA does have a notification process for GRAS substances.
The dossier submitted included the following studies: (i) acute oral toxicity and acute dermal toxicity studies, (ii) physico-chemical property testing (determination of color, physical state, odor, density, pH, viscosity and oxidation/reduction chemical incompatibility), (iii) validation of the high-performance liquid chromatography method assay, (iv) stability test, and (iv) efficacy data.
The dossier submitted included the following studies: (i) acute oral toxicity and acute dermal toxicity studies, (ii) physico-chemical property testing (determination of color, physical state, odor, density, pH, viscosity and oxidation/reduction chemical incompatibility), (iii) validation of the high-performance liquid chromatography method assay, (iv) stability test, and (iv) efficacy data. 24 Based on the intended use and claims for SavePROTECT, our product was registered with CDPR on October 27, 2021 as an adjuvant.
Current Market Drivers and Trends In addition to food safety and food waste concerns, the following market drivers are also shaping the food industry by setting standards and conditions on the main actors in the industry: ● Focus of consumers on health characteristics : consumers are more aware and conscious of the health characteristics of the food they consume.
Our solutions have already shown their benefits in reducing significantly the residues of imazalil while maintaining the produce shelf life. 9 Current Market Drivers and Trends In addition to food safety and food waste concerns, the following market drivers are also shaping the food industry by setting standards and conditions on the main actors in the industry: ● Focus of consumers on health characteristics : consumers are more aware and conscious of the health characteristics of the food they consume.
Since our sanitizers will be and are intended to be used solely to treat raw agricultural commodities in post-harvest washing and packing facilities, at the federal level they are regulated solely by the EPA (as opposed to FDA): product registration is required under FIFRA and any food residues are regulated under the FFDCA.
If the antimicrobial product is applied to a raw agricultural commodity in a treatment facility that solely washes and packs food commodities, and the treatment does not change the status of the food as a raw agricultural commodity, then the EPA has sole federal regulatory jurisdiction. 26 Since our sanitizers will be and are intended to be used solely to treat raw agricultural commodities in post-harvest washing and packing facilities, at the federal level they are regulated solely by the EPA (as opposed to FDA): product registration is required under FIFRA and any food residues are regulated under the FFDCA.
We consider our relations with our employees to be good. 32 Company Information Our principal executive offices are located at HaPardes 134 (Meshek Sander), Neve Yarak, Israel, and our telephone number is (347) 468-9583. Our website address is www.savefoods.co.
Company Information Our principal executive offices are located at HaPardes 134 (Meshek Sander), Neve Yarak, Israel, and our telephone number is (347) 468-9583. Our website address is www.n2off.net.
Following such application, both batches of fruits were sent to a leading fresh produce distributor in Europe, and both were successfully distributed, demonstrating that our solutions help reduce up to 75% of the applied fungicide.
Following such application, both batches of fruits were sent to a leading fresh produce distributor in Europe, and both were successfully distributed, demonstrating that our solutions help reduce up to 75% of the applied fungicide Following these results, a larger commercial application was performed during August 2023 to evaluate our solution on mango at the end of the season.
To avoid potential issues with resistance, maximum concentration of fungicides will be generally used to ensure highly efficient eradication of the targeted pathogen which leaves high residue level on the treated produce.
However, as they tend to affect a single biochemical pathway within the pathogen, fungi may readily develop resistance to systemic fungicides. To avoid potential issues with resistance, maximum concentration of fungicides will be generally used to ensure highly efficient eradication of the targeted pathogen which leaves high residue level on the treated produce.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeGeneral Risk Factors ● Disruptions to our information technology systems due to cyber-attacks or our failure to upgrade and adjust our information technology systems, may materially impair our operations, hinder our growth and materially and adversely affect our business and results of operations. ● Failure to comply with anti-bribery, anti-corruption and anti-money laundering laws could subject us to penalties and other adverse consequences. ● We incur additional increased costs as a result of the listing of our Common Stock for trading on Nasdaq, and our management is required to devote substantial time to new compliance initiatives and reporting requirements. ● We face risks related to compliance with corporate governance laws and financial reporting standards. ● The ongoing conflict in Ukraine may result in market volatility that could adversely affect our business. ● If we fail to implement and maintain effective internal control over financial reporting, we may be unable to report our financial results accurately or meet our reporting obligations.
Biggest changeIf we cannot satisfy these requirements, Nasdaq could delist our securities. ● The market price of our common stock may be highly volatile. ● Sales of a substantial number of shares of our common stock in the public market by our existing stockholders could cause our share price to fall. ● Nevada law and provisions in our articles of incorporation and bylaws could make a merger, tender offer or proxy contest difficult, thereby depressing the market price of our common stock. ● We may be subject to securities litigation, which is expensive and could divert management attention. ● If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they adversely change their recommendations or publish negative reports regarding our business or our common stock, our stock price and trading volume could decline. ● We do not anticipate paying any cash dividends in the foreseeable future. ● We may need additional capital, and the sale of additional shares or equity or debt securities could result in additional dilution to our stockholders. ● Disruptions to our information technology systems due to cyber-attacks or our failure to upgrade and adjust our information technology systems, may materially impair our operations, hinder our growth and materially and adversely affect our business and results of operations. ● Failure to comply with anti-bribery, anti-corruption and anti-money laundering laws could subject us to penalties and other adverse consequences. ● We incur additional increased costs as a result of the listing of our common stock for trading on Nasdaq, and our management is required to devote substantial time to new compliance initiatives and reporting requirements. ● We face risks related to compliance with corporate governance laws and financial reporting standards. ● The ongoing conflict in Ukraine may result in market volatility that could adversely affect our business. ● If we fail to implement and maintain effective internal control over financial reporting, we may be unable to report our financial results accurately or meet our reporting obligations. ● We may not be able to enforce covenants not-to-compete under current Israeli law that might result in added competition for our products. ● FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our common stock. ● It is not possible to predict the actual number of shares we will sell under our agreement with the Investor, or the actual gross proceeds resulting from those sales. ● Investors who buy shares at different times will likely pay different prices. ● We completed a reverse stock split on October 5, 2023, in an effort to regain compliance with Nasdaq listing rules and we cannot predict the effect that such reverse stock split will have on the market price of our common stock. ● Political, economic and military instability in Israel may impede our ability to operate and harm our financial results. ● It may be difficult to acquire jurisdiction and enforce liabilities against our officers and directors who are based in Israel. 29 Risks Related to Our Financial Condition and Capital Requirements We have a history of operating losses and expect to incur additional losses in the future.
Foreign Corrupt Practices Act, as amended (the “FCPA”) its books and records provisions, or its anti-bribery provisions. Any of these factors could significantly harm our future international expansion and operations and, consequently, our results of operations. Our business depends to some extent on international transactions.
Foreign Corrupt Practices Act, as amended (the “FCPA”) its books and records, or its anti-bribery provisions. Any of these factors could significantly harm our future international expansion and operations and, consequently, our results of operations. Our business depends to some extent on international transactions.
If any analysts who may cover us were to cease coverage of the Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. We do not anticipate paying any cash dividends in the foreseeable future.
If any analysts who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. We do not anticipate paying any cash dividends in the foreseeable future.
Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiary, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors.
Even if our board of directors decides to declare and pay cash dividends, the timing, amount and form of future dividends, if any, will depend on our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiary, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors.
Doing business internationally involves a number of risks, including but not limited to: ● multiple, conflicting and changing laws and regulations such as privacy regulations, tax laws, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits, and licenses; ● failure by us to obtain regulatory approvals for the use of our product candidates in various countries; ● additional potentially relevant third-party patent or other intellectual property rights; ● complexities and difficulties in obtaining protection and enforcing our intellectual property; ● limits in our ability to penetrate international markets; ● financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and exposure to foreign currency exchange rate fluctuations; ● natural disasters, political and economic instability, including wars, terrorism, and political unrest, outbreak of disease, boycotts, curtailment of trade, and other business restrictions; ● certain expenses including, among others, expenses for travel, translation and insurance; and 44 ● regulatory and compliance risks that relate to maintaining accurate information and control over sales and activities that may fall within the purview of the U.S.
Doing business internationally involves a number of risks, including but not limited to: ● multiple, conflicting and changing laws and regulations such as privacy regulations, tax laws, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits, and licenses; ● failure by us to obtain regulatory approvals for the use of our product candidates in various countries; ● additional potentially relevant third-party patent or other intellectual property rights; ● complexities and difficulties in obtaining protection and enforcing our intellectual property; ● limits in our ability to penetrate international markets; ● financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and exposure to foreign currency exchange rate fluctuations; ● natural disasters, political and economic instability, including wars, terrorism, and political unrest, outbreak of disease, boycotts, curtailment of trade, and other business restrictions; ● certain expenses including, among others, expenses for travel, translation and insurance; and ● regulatory and compliance risks that relate to maintaining accurate information and control over sales and activities that may fall within the purview of the U.S.
Our Common Stock price could be subject to wide fluctuations in response to a variety of factors, including the following: ● reports of adverse events with respect to the commercialization and distribution of our products; ● inability to obtain additional funding; ● any delay in filing a regulatory submission for any of our products and any adverse development or perceived adverse development with respect to the review of that regulatory submission by the EPA, the FDA or other regulatory authority; ● failure to successfully develop and commercialize our products; ● failure to enter into strategic collaborations; ● failure by us or strategic collaboration partners to prosecute, maintain or enforce our intellectual property rights; ● changes in laws or regulations applicable to future products; ● inability to scale up our manufacturing capabilities through third-party manufacturers, inability to obtain adequate product supply for our products or the inability to do so at acceptable prices; ● introduction of new products or technologies by our competitors; ● failure to meet or exceed financial projections we may provide to the public; ● failure to meet or exceed the financial expectations of the investment community; ● announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by our competitors; ● disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our platform technologies, technologies, products or product candidates; ● additions or departures of key scientific or management personnel; ● significant lawsuits, including patent or stockholder litigation; ● changes in the market valuations of similar companies; ● sales of our securities by us or our stockholders in the future; and ● trading volumes of our securities.
Our common stock price could be subject to wide fluctuations in response to a variety of factors, including the following: ● reports of adverse events with respect to the commercialization and distribution of our products; ● inability to obtain additional funding; ● any delay in filing a regulatory submission for any of our products and any adverse development or perceived adverse development with respect to the review of that regulatory submission by the EPA, the FDA or other regulatory authority; ● failure to successfully develop and commercialize our products; ● failure to enter into strategic collaborations; 45 ● failure by our company or strategic collaboration partners to prosecute, maintain or enforce our intellectual property rights; ● changes in laws or regulations applicable to future products; ● inability to scale up our manufacturing capabilities through third-party manufacturers, inability to obtain adequate product supply for our products or the inability to do so at acceptable prices; ● introduction of new products or technologies by our competitors; ● failure to meet or exceed financial projections we may provide to the public; ● failure to meet or exceed the financial expectations of the investment community; ● announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by our competitors; ● disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our platform technologies, technologies, products or product candidates; ● additions or departures of key scientific or management personnel; ● significant lawsuits, including patent or stockholder litigation; ● changes in the market valuations of similar companies; ● sales of our securities by us or our stockholders in the future; and ● trading volumes of our securities.
Factors that may inhibit our efforts to commercialize our products on our own include: ● our inability to recruit, train and retain adequate numbers of effective selling and marketing personnel; ● the inability of sales personnel to obtain access to potential customers; 39 ● the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and ● unforeseen costs and expenses associated with creating an independent selling and marketing organization.
Factors that may inhibit our efforts to commercialize our products on our own include: ● our inability to recruit, train and retain adequate numbers of effective selling and marketing personnel; ● the inability of sales personnel to obtain access to potential customers; ● the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and ● unforeseen costs and expenses associated with creating an independent selling and marketing organization.
Our customers require that our products undergo a lengthy testing period without any assurance of sales. Our prospective customers generally test and evaluate our solutions before applying these to their commercial product lines and integrating them into their facilities. This testing period takes at least two seasons and could be longer or subject to delays.
Our customers require that our products undergo a lengthy testing period without any assurance of sales. Our prospective customers generally test and evaluate our solutions before applying them to their commercial product lines or integrating them into their facilities. This testing period takes at least two seasons and could be longer or subject to delays.
The occurrence of any of these events could result in production and distribution difficulties and disruptions, personal injury or wrongful death claims and other damage to properties. 41 Our business and operations may be affected by unexpected events, including climate change conditions and natural disasters, which could materially harm our financial results.
The occurrence of any of these events could result in production and distribution difficulties and disruptions, personal injury or wrongful death claims and other damage to properties. Our business and operations may be affected by unexpected events, including climate change conditions and natural disasters, which could materially harm our financial results.
The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers. 53 We face risks related to compliance with corporate governance laws and financial reporting standards.
The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers. We face risks related to compliance with corporate governance laws and financial reporting standards.
A significant investment in registration data is required (covering all aspects from manufacturing specifications through storage and transport, use, and, finally, disposal of unwanted product and used containers) to ensure that product performance (e.g., efficacy), intrinsic hazards and use patterns are fully characterized.
A significant investment in registration data is required (covering all aspects from manufacturing specifications through storage and transport, use, and disposal of unwanted product and used containers) to ensure that product performance (e.g., efficacy), intrinsic hazards and use patterns are fully characterized.
We are aware of this key factor and are focusing on conducting large scale pilots with major fruits and vegetables packers and retail suppliers of fresh consumed goods in several countries, in order to show the efficacy of the products and our technology, and to receive the recognition of packers and retailers.
We are aware of this key factor and are focusing on conducting large scale pilots with major fruits and vegetables packers and retail suppliers of fresh consumed goods in several countries to show the efficacy of the products and our technology, and to receive the recognition of packers and retailers.
Legislative or regulatory action in these areas is also evolving, and we may be unable to adapt our IT systems or to manage the IT systems of third parties to accommodate these changes. We have experienced and expect to continue to experience actual or attempted cyber-attacks of our IT networks.
Legislative or regulatory action in these areas is also evolving, and we may be unable to adapt our IT systems or to manage the IT systems of third parties to accommodate these changes. We have experienced and expect to continue to experience actual or attempted cyber-attacks on our IT networks.
We may not be successful in converting our completed pilots into paying customers or to develop new products, services and technology that successfully compete or be able to anticipate changing customer needs and preferences, and our customers may not accept one or more of our new products or services.
We may not be successful in converting our completed pilots into paying customers or to develop new products, services and technology that successfully compete or are able to anticipate changing customer needs and preferences, and our customers may not accept one or more of our new products or services.
In these circumstances, we may be unable to sell our products at competitive prices or at all, our business and operating results could be harmed. 46 We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.
In these circumstances, we may be unable to sell our products at competitive prices or at all, our business and operating results could be harmed. We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.
Some of our products are subject to technical review and approval by government authorities in each country where we currently conduct our business and where we intend to sell our products. 40 The regulatory requirements to which we are subject are complex and vary from country to country.
Some of our products are subject to technical review and approval by government authorities in each country where we currently conduct our business and where we intend to sell our products. The regulatory requirements to which we are subject are complex and vary from country to country.
The Sarbanes-Oxley Act of 2002, as well as related new rules and regulations implemented by the SEC and the Public Company Accounting Oversight Board, require changes in the corporate governance practices and financial reporting standards for public companies.
The Sarbanes-Oxley Act of 2002, as well as related rules and regulations implemented by the SEC and the Public Company Accounting Oversight Board, require changes in the corporate governance practices and financial reporting standards for public companies.
Additionally, if our current back-up storage arrangements and our disaster recovery plan are not operated as planned, we may not be able to effectively recover our information system in the event of a crisis, which may materially and adversely affect our business and results of operations. 52 In the current environment, there are numerous and evolving risks to cybersecurity and privacy, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, employee malfeasance and human or technological error.
Additionally, if our current back-up storage arrangements and our disaster recovery plan are not operated as planned, we may not be able to effectively recover our information system in the event of a crisis, which may materially and adversely affect our business and results of operations. 48 In the current environment, there are numerous and evolving risks to cybersecurity and privacy, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, employee malfeasance and human or technological error.
The degree of market acceptance of our products will depend on a number of factors, including: ● the results of our large-scale pilots; 37 ● the cost, safety, efficacy, and convenience of our new generation products; ● the acceptance of our products as a superior solution in the fresh produce industry; ● the ability of third parties to enter into relationships with us without violating their existing agreements; ● the effectiveness of our selling and marketing efforts; ● the strength of marketing and distribution support for, and timing of market introduction of, competing products; and ● publicity concerning our products or competing products.
The degree of market acceptance of our products will depend on a number of factors, including: ● the results of our large-scale pilots; 31 ● the cost, safety, efficacy, and convenience of our new generation products; ● the acceptance of our products as a superior solution in the fresh produce industry; ● the ability of third parties to enter into relationships with us without violating their existing agreements; ● the effectiveness of our selling and marketing efforts; ● the strength of marketing and distribution support for, and timing of market introduction of, competing products; and ● publicity concerning our products or competing products.
For example, both the failure to convince retailers to bear additional costs for “green” fruit and vegetables as well as the failure to persuade consumers to purchase “green” fruits and vegetables for higher prices may adversely affect our business, financial condition, operating results and cash flow going forward. 38 We may be unable to respond effectively to technological changes in our industry, which could reduce the demand for our products.
For example, both the failure to convince retailers to bear additional costs for “green” fruit and vegetables as well as the failure to persuade consumers to purchase “green” fruits and vegetables for higher prices may adversely affect our business, financial condition, operating results and cash flow going forward. 32 We may be unable to respond effectively to technological changes in our industry, which could reduce the demand for our products.
The results of our early tests may not be indicative of results in future tests and we cannot assure you that any planned or future tests will lead to results sufficient for the necessary regulatory approvals. Our products have been tested in multiple commercial and small-scale pilots on certain types of produce and during specific time of the year.
The results of our early tests may not be indicative of results in future tests and we cannot assure you that any planned or future tests will lead to results sufficient for the necessary regulatory approvals. Our products have been tested in multiple commercial and small-scale pilots on certain types of produce and during specific times of the year.
Likewise, we cannot be sure these products will be commercially viable and have no assurances that we will be able to expand upon our current product offerings or that any such expansion will generate revenue. Our products are highly regulated by governmental agencies in the countries where we conduct business and into which we plan to expand.
Likewise, we cannot be sure these products will be commercially viable and have no assurances that we will be able to expand upon our current product offerings or that any such expansion will generate revenue. 34 Our products are highly regulated by governmental agencies in the countries where we conduct business and in countries in which we plan to expand.
We are subject to the FCPA and other anticorruption, anti-bribery and anti-money laundering laws in the jurisdictions in which we do business, both domestic and abroad. These laws generally prohibit us and our employees from improperly influencing government officials or commercial parties in order to obtain or retain business, direct business to any person or gain any advantage.
We are subject to the FCPA and other anticorruption, anti-bribery and anti-money laundering laws in the jurisdictions in which we do business, both domestically and abroad. These laws generally prohibit us and our employees from improperly influencing government officials or commercial parties in order to obtain or retain business, direct business to any person or gain any advantage.
In order to achieve high volume sales and attain a leading market share and become the new standard of treatment, our products must not only be approved by the regulators, but also endorsed by the major packing houses and service providers, retailers of fruits and vegetables as well as environmental organizations.
To achieve high volume sales and attain a leading market share and become the new standard of treatment, our products must not only be approved by the regulators, but also endorsed by the major packing houses and service providers, retailers of fruits and vegetables as well as environmental organizations.
We require our office holders, employees, consultants and distributers of our products and most third parties to execute confidentiality agreements in connection with their relationships with us. However, these measures may not be adequate to safeguard our proprietary intellectual property and conflicts may, nonetheless, arise regarding ownership of inventions.
We require our office holders, employees, consultants, and distributors of our products and most third parties to execute confidentiality agreements in connection with their relationships with us. However, these measures may not be adequate to safeguard our proprietary intellectual property and conflicts may, nonetheless, arise regarding ownership of inventions.
In order to mitigate this factor, once we establish a significant presence in the market, we will proceed to establish strategic partnerships with some of the leading players in the market; however, there are no assurances that we will succeed in establishing such partnerships, which may harm the marketing of our products and the development of our business.
To mitigate this factor, once we establish a significant presence in the market, we will proceed to establish strategic partnerships with leading market players; however, there are no assurances that we will succeed in establishing such partnerships, which may harm the marketing of our products and the development of our business.
To continue to be listed on Nasdaq, we are required to satisfy a number of conditions, including a minimum bid price of at least $1.00 per share of Common Stock, a market value of our publicly held shares of at least $1 million and shareholders’ equity of at least $2.5 million.
To continue to be listed on Nasdaq, we are required to satisfy a number of conditions, including a minimum bid price of at least $1.00 per share of common stock, a market value of our publicly held shares of at least $1 million and stockholders’ equity of at least $2.5 million.
This may be costly, and our investment would be lost if we cannot retain or reposition our selling and marketing personnel.
This may be costly, and our investment may be lost if we cannot retain or reposition our selling and marketing personnel.
In the event of such delisting, our shareholders would likely find it significantly more difficult to dispose of, or to obtain accurate quotations as to the value of our securities, and our ability to raise future capital through the sale of our securities could be severely limited.
In the event of such delisting, our stockholders would likely find it significantly more difficult to dispose of, or to obtain accurate quotations as to the value of our securities, and our ability to raise future capital through the sale of our securities could be severely limited.
We believe that the principal factors of competition in our industry include reputation, product quality, customer service and customer intimacy, product innovation, technical service and value creation. Our success is dependent upon the acceptance of our environmentally friendly solutions for fruits and vegetables.
We believe that the principal competitive factors in our industry include reputation, product quality, customer service and customer intimacy, product innovation, technical service, and value creation. Our success is dependent upon the acceptance of our environmentally friendly solutions for fruits and vegetables.
The efficacy of our products has only been shown in the limited number of pathogens tested on certain produce and aforementioned climates, and therefore our products have yet to be proven against certain additional and relevant pathogens, produce and market climates to validate the efficacy and benefits of our products.
The efficacy of our products has only been shown in the limited number of pathogens tested on certain produce and climates, and therefore our products have yet to be proven against certain additional pathogens, produce and market climates to validate the efficacy and benefits of our products.
If we do not establish sales, marketing and distribution capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates. We rely on rapidly establishing global distributorship network in order to effectively market our products. We have developed initial partnerships with local partners.
If we do not establish sales, marketing and distribution capabilities successfully, either on our own or in collaboration with third parties, we may not be successful in commercializing our product candidates. We rely on rapidly establishing a global distributorship network in order to effectively market our products. We have developed initial partnerships with local partners.
Our ability to market and sell products containing our active ingredient to key service providers for treatment in post-harvest food safety industry in order to utilize their market position is important to our future success. 43 Our operating results may fluctuate, which makes our results difficult to predict and could cause our results to fall short of expectations.
Our ability to market and sell products containing our ingredient to key service providers for treatment in post-harvest food safety industry in order to utilize their market position is important to our future success. 37 Our operating results may fluctuate, which makes our results difficult to predict and could cause our results to fall short of expectations.
In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States. 45 If we are unable to prevent unauthorized use or disclosure of our proprietary trade secrets and unprotected know-how, our ability to compete will be harmed.
In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States. If we are unable to prevent unauthorized use or disclosure of our proprietary trade secrets and unprotected know-how, our ability to compete may be harmed.
We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our products effectively.
We likely will have little control over such third parties, and any or all of them may fail to devote the necessary resources and attention to sell and market our products effectively.
These rules and regulations increase our legal and financial compliance costs, introduce costs such as investor relations, stock exchange listing fees and shareholder reporting, and make some activities more time consuming and costly.
These rules and regulations increase our legal and financial compliance costs, introduce costs such as investor relations, stock exchange listing fees and stockholder reporting, and make some activities more time consuming and costly.
Any future changes in the laws and regulations affecting public companies in the United States, including Section 404 and other provisions of the Sarbanes-Oxley Act, the rules and regulations adopted by the SEC and the rules of the Nasdaq Stock Market may result in increased costs to us as we respond to such changes.
Any future changes in the laws and regulations affecting public companies in the United States, including Section 404 and other provisions of the Sarbanes-Oxley Act, the rules and regulations adopted by the SEC and the rules of the Nasdaq Stock Market may result in increased costs to our company as we respond to such changes.
The commercial success of our new generation products, as well as any future products, depends upon the degree of market acceptance by the packing house community as well as by other prospect markets and industries.
The commercial success of our new generation products, as well as any future products, depend upon the degree of market acceptance by the packing house community as well as by other prospect markets and industries.
During the years 2019 and 2020, we developed, validated and tested the efficacy of our next generation product - a blend of food acids - on a variety of crops in both small and large scale commercial pilots. In 2021, we commenced commercialization in various jurisdictions, while continuing to conduct commercial pilots.
From 2019 to 2020, we developed, validated and tested the efficacy of our next generation product - a blend of food acids - on a variety of crops in both small- and large-scale commercial pilots. In 2021, we commenced commercialization in various jurisdictions, while continuing to conduct commercial pilots.
Such risks include, but are not limited to, the following: ● the absence of a lengthy operating history, in connection with, inter alia, implementation of effective logistics for the export of our product globally; ● insufficient capital to fully realize our operating plan; ● expected continual losses for the foreseeable future; ● operating in multiple currencies; ● our ability to anticipate and adapt to a developing market(s); 36 ● acceptance of our products by the pre- and post-harvest industry players and consumers; ● limited marketing experience; ● a competitive environment characterized by well-established and well-capitalized competitors; ● the ability to identify, attract and retain qualified personnel; and ● operating in an environment that is highly regulated by a number of agencies.
Such risks include, but are not limited to, the following: ● the absence of a lengthy operating history, in connection with implementation of effective logistics for the export of our product globally; ● insufficient capital to fully realize our operating plan; ● expected continual losses for the foreseeable future; ● operating in multiple currencies; ● our ability to anticipate and adapt to a developing market(s); ● acceptance of our products by pre- and post-harvest industry players and consumers; 30 ● limited marketing experience; ● a competitive environment characterized by well-established and well-capitalized competitors; ● the ability to identify, attract and retain qualified personnel; and ● operating in an environment that is highly regulated.
In response to the foregoing developments, many individuals, organizations and institutions, both within and outside of Israel, have voiced concerns that the proposed changes may negatively impact the business environment in Israel including due to reluctance of foreign investors to invest or transact business in Israel as well as to increased currency fluctuations, downgrades in credit rating, increased interest rates, increased volatility in security markets, and other changes in macroeconomic conditions.
In response to such initiative, many individuals, organizations and institutions, both within and outside of Israel, have voiced concerns that the proposed changes may negatively impact the business environment in Israel including due to reluctance of foreign investors to invest or transact business in Israel as well as to increased currency fluctuations, downgrades in credit rating, increased interest rates, increased volatility in security markets, and other changes in macroeconomic conditions.
If our new generation products or any future product does not achieve an adequate level of acceptance, we may not generate significant product revenue and may not become profitable.
If our new generation products or any future product do not achieve an adequate level of acceptance, we may not generate significant product revenue and may not become profitable.
Our success is dependent upon our ability to achieve regulatory approvals and registration in the United States, Mexico, Peru, Turkey, Egypt, South Africa, and Israel, which might take longer than expected. We are subject to extensive national, state and local government regulation.
Our success is dependent upon our ability to achieve regulatory approvals and registration in the United States, Mexico, Peru, South Africa, Brazil, and Israel, which might take longer than expected. We are subject to extensive national, state and local government regulation.
This determination and any remedial actions required could divert internal resources and take a significant amount of time and effort to complete and could result in us incurring additional costs that we did not anticipate, including the hiring of outside consultants.
This determination and any remedial actions required could divert internal resources and take a significant amount of time and effort to complete and could result in our company incurring additional costs that we did not anticipate, including the hiring of outside consultants.
Risks Related to Our Business, Industry and Business Operations Because of our limited operating history, we may not be able to successfully operate our business or execute our business plan. In September 2018, the Company changed its organizational structure and management team.
Risks Related to Our Business, Industry and Business Operations Because of our limited operating history, we may not be able to successfully operate our business or execute our business plan. In September 2018, we changed our organizational structure and management team.
In addition, our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of the Company more difficult, including the following: ● our stockholders will only be able to take action at a meeting of stockholders and will not be able to take action by written consent for any matter; ● our board of directors is classified into three classes of directors with staggered three-year terms; ● a special meeting of our stockholders may only be called by a majority of our board of directors; ● advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders; and ● certain litigation against us can only be brought in Delaware.
In addition, our articles of incorporation and bylaws contain provisions that may make the acquisition of our company more difficult, including the following: ● our stockholders will only be able to take action at a meeting of stockholders and will not be able to take action by written consent for any matter; 46 ● our board of directors is classified into three classes of directors with staggered three-year terms; ● a special meeting of our stockholders may only be called by a majority of our board of directors; ● advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders; and ● certain litigation against us can only be brought in Nevada.
In order to expand selling and marketing globally and capture leading market share before any potential reaction from the competitors, we will need to rapidly expand geographically and establish a global distribution network. This is likely to put pressure on our management, financial and operational resources.
In order to expand selling and marketing globally and capture leading market share before any potential reaction from competitors, we will need to rapidly expand geographically and establish a global distribution network. This will likely put pressure on our management as well as on our financial and operational resources.
These provisions, alone or together, could discourage, delay or prevent a transaction involving a change in control of the Company.
These provisions, alone or together, could discourage, delay or prevent a transaction involving a change in control of our company.
Our status as a Delaware corporation and the anti-takeover provisions of the Delaware General Corporation Law may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the date of the transaction in which the person became an interested stockholder, even if a change of control would be beneficial to our existing stockholders.
Our status as a Nevada corporation and the anti-takeover provisions of the Nevada Revised Statutes may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the date of the transaction in which the person became an interested stockholder, even if a change of control would be beneficial to our existing stockholders.
After reviewing the Company’s then existing strategy and results of operation, as well as examining the market opportunities, the new management team decided to update the Company’s strategy, reduce the marketing and sales of its existing products, and focus the Company’s efforts and financial resources in developing its next generation products.
After reviewing our company then existing strategy and results of operation, as well as examining market opportunities, the new management team decided to update our strategy, reduce the marketing and sales of its existing products, and focus our efforts and financial resources on developing its next generation of products.
We are unable to predict the effect that sales may have on the prevailing market price of our Common Stock. Delaware law and provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer or proxy contest difficult, thereby depressing the market price of our Common Stock.
We are unable to predict the effect that sales may have on the prevailing market price of our common stock. Nevada law and provisions in our articles of incorporation and bylaws could make a merger, tender offer or proxy contest difficult, thereby depressing the market price of our common stock.
The market of post-harvest treatments for fruits and vegetables is dominated by five large players with wide reach across the globe, which players may perceive us as a competitive threat and institute commercial measures to reduce our market share, including by aggressively ‘bundling’ their products and services to compete with us, or purchase additional laboratories to further enable their expansion.
The market of post-harvest treatments for fruits and vegetables is dominated by five large players with wide reach across the globe, which players may perceive us as a competitive threat and institute commercial measures to reduce our market share, including by aggressively ‘bundling’ their products and services to compete with us.
For example, our partner in Turkey is located in eastern Turkey, which is the region that sustained an earthquake that registered a 7.8 magnitude on February 6, 2023.
For example, our partner in Turkey, located in eastern Turkey, a region that sustained an earthquake registered at a magnitude of 7.8 on February 6, 2023.
In 2022, we extended our commercial pilots in additional location in both the North and South hemisphere to address the seasonal effect. Given our limited operating history, it is hard to evaluate our proposed business and prospects. Our proposed business operations will be subject to numerous risks, uncertainties, expenses and difficulties associated with early-stage enterprises.
In 2022, we extended our commercial pilots in additional locations in the Northern and Southern hemispheres to address the seasonal effect. Given our limited operating history, it is hard to evaluate our proposed business and prospects. Our proposed business operations will be subject to numerous risks, uncertainties, expenses and difficulties associated with early-stage enterprises.
We are likely to continue to incur significant net losses for at least the next several years as we continue to pursue our strategy, which is currently focused on converting pilots into paying customers, following lengthy sale cycles of at least two seasons.
We have sustained losses in recent years, which as of December 31, 2023, accumulated to $29,360,235. We are likely to continue to incur significant net losses for at least the next several years as we continue to pursue our strategy, which is currently focused on converting pilots into paying customers, following lengthy sale cycles of at least two seasons.
Further, if our internal control over financial reporting is not effective, the reliability of our financial statements may be questioned and our share price may suffer. 54 Item 1b. unresolved staff comments None.
Further, if our internal control over financial reporting is not effective, the reliability of our financial statements may be questioned, and our share price may suffer.
In addition, patent and other intellectual property protection may not provide us with a competitive advantage against competitors that devise ways of making competitive products without infringing any patents that we own or have rights to. U.S. patents and patent applications may be subject to interference proceedings, and U.S. patents may be subject to re-examination proceedings in the U.S.
In addition, patent and other intellectual property protection may not provide us with a competitive advantage against competitors that devise ways of making competitive products without infringing any patents that we own or to which we have rights.
If we are not able to enforce non-compete covenants, we may be faced with added competition. It may be difficult to acquire jurisdiction and enforce liabilities against our officers and directors who are based in Israel.
If we are not able to enforce non-compete covenants, we may be faced with added competition. It may be difficult to acquire jurisdiction and enforce liabilities against our officers and directors who are based in Israel. All of our officers and directors reside outside of the United States and most of our operations are located outside the United States.
Any adverse determination in litigation could also subject us to significant liabilities. 51 If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they adversely change their recommendations or publish negative reports regarding our business or our Common Stock, our stock price and trading volume could decline.
If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they adversely change their recommendations or publish negative reports regarding our business or our common stock, our stock price and trading volume could decline.
In addition, we may not be successful in entering into arrangements with third parties to sell, market and distribute our products in our target markets, including Chile, Mexico, Peru, Columbia, the United States, South Africa, the Philippines, Thailand, Turkey, Egypt, Morocco, Spain, Italy and Israel , or may be unable to do so on terms that are favorable to us.
If we are unable to establish our own sales, marketing and distribution capabilities or enter into successful arrangements with third parties to perform these services, our revenues and our profitability may be materially adversely affected. 33 In addition, we may not be successful in entering into arrangements with third parties to sell, market and distribute our products in our target markets, including Chile, Mexico, Peru, Columbia, the United States, South Africa, the Philippines, Thailand, Turkey, Egypt, Morocco, Spain, Italy, Brazil and Israel , or may be unable to do so on terms that are favorable to us.
Risks Related to Our Business, Industry and Business Operations ● We may not be able to successfully operate our business or execute our business plan. ● Our customers require that our products undergo a lengthy pilot period without any assurance of sales. ● Our products and technology require additional trials, which could prolong the sales cycle. ● The commercial success of our new generation products, as well as any future products, depends upon the degree of market acceptance by the packing house community as well as by other prospect markets and industries. 33 ● We may face significant competition from other companies looking to develop or acquire new alternative environmentally friendly solutions for the treatment of fruits and vegetables, and other edible matter. ● Our success is dependent upon the acceptance of our environmentally friendly solutions for fruits and vegetables. ● We may be unable to respond effectively to technological changes in our industry, which could reduce the demand for our products. ● We currently rely on a limited number of suppliers to produce certain key components of our products. ● If we are unable to establish sales, marketing and distribution capabilities or enter into successful relationships with third parties to perform these services, we may not be successful in commercializing our products. ● We rely on rapidly establishing global distributorship network in order to effectively market our products. ● The results of our early tests may not be indicative of results in future tests and we cannot assure you that any planned or future tests will lead to results sufficient for the necessary regulatory approvals. ● Our products are highly regulated by governmental agencies in the countries where we conduct business and into which we plan to expand.
This list is not complete, and should be read together with the section titled “ Detailed Risk Factors ” below: ● We have a history of operating losses and expect to incur additional losses in the future. ● We may need to raise significant additional capital, which we may be unable to obtain. ● Because of our limited operating history, we may not be able to successfully operate our business or execute our business plan. ● We may not be able to successfully operate our business or execute our business plan. ● Our customers require that our products undergo a lengthy pilot period without any assurance of sales. ● Our products and technology require additional trials, which could prolong the sales cycle. ● The commercial success of our new generation products, as well as any future products, depends upon the degree of market acceptance by the packing house community as well as by other prospect markets and industries. ● Conditions in Israel, including the effect of recent attacks by Hamas and other terrorist organizations from the Gaza Strip and Israel’s war against them, on our operations and ability to manage and market our products, among other things, the direct effects of the war on the agriculture in Israel, which could indirectly lead to a decrease in revenues. ● We may face significant competition from other companies looking to develop or acquire new alternative environmentally friendly solutions for the treatment of fruits and vegetables, and other edible matter. ● Our success is dependent upon the acceptance of our environmentally friendly solutions for fruits and vegetables. ● We may be unable to respond effectively to technological changes in our industry, which could reduce the demand for our products. ● We currently rely on a limited number of suppliers to produce certain key components of our products. ● If we are unable to establish sales, marketing and distribution capabilities or enter into successful relationships with third parties to perform these services, we may not be successful in commercializing our products. ● We rely on rapidly establishing global distributorship network in order to effectively market our products. ● The results of our early tests may not be indicative of results in future tests and we cannot assure you that any planned or future tests will lead to results sufficient for the necessary regulatory approvals. ● Our products are highly regulated by governmental agencies in the countries where we conduct business and into which we plan to expand.
In addition, companies trading in the stock market have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies.
In addition, companies trading in the stock market have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance.
As a result of the international nature of our business, we are exposed to risks associated with changes in foreign currency exchange rates. A majority of our revenues and substantially all of our cost of sales are in USD, whilst our management, marketing, sales and R&D costs are in NIS.
As a result of the international nature of our business, we are exposed to risks associated with changes in foreign currency exchange rates. A majority of our revenues and substantially all of our cost of sales are in U.S. dollars and our management, marketing, sales and research and development costs are in New Israeli Shekels.
Competition for these employees exists; new members of management must have significant industry expertise when they join us or engage in significant training which, in many cases, requires significant time before they achieve full productivity. If we fail to attract, train, retain, and motivate our key personnel, our business and growth prospects could be severely harmed.
In addition, to execute our growth plan we must attract and retain highly qualified personnel. Competition for these employees exists; new members of management must have significant industry expertise when they join us or engage in significant training which, in many cases, requires significant time before they achieve full productivity.
These new laws, rules and regulations, including compliance with Section 404 of the Sarbanes-Oxley Act of 2002 relating to internal control over financial reporting, have materially increased the legal and financial compliance costs of small companies and have made some activities more time-consuming and more burdensome.
These laws, rules and regulations, including compliance with Section 404 of the Sarbanes-Oxley Act of 2002 relating to internal control over financial reporting, have materially increased the legal and financial compliance costs of small companies and have made some activities more time-consuming and more burdensome. 49 The ongoing conflict in Ukraine may result in market volatility that could adversely affect our business.
Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could seriously hurt our business.
Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could seriously hurt our business. Any adverse determination in litigation could also subject us to significant liabilities.
Our core post-harvest business includes solutions designed to improve the yields of the packing house but mainly ensure food safety and assisting packing houses to meet the new FSMA requirements.
Our business is highly dependent on a small number of products, which are based on our main ingredients. Our core post-harvest business includes solutions designed to improve the yields of the packing house but mainly ensure food safety and assisting packing houses to meet the new FSMA requirements.
In either of the aforementioned situations, we may not be able to fully implement its growth plans. Additional financings that we may require in the future will dilute the percentage ownership interests of our stockholders and may adversely affect our earnings and net book value per share.
Any additional financings that we may require in the future will dilute the percentage ownership interests of our stockholders and may adversely affect our earnings and net book value per share.
The ongoing conflict in Ukraine may result in market volatility that could adversely affect our business. In late February 2022, Russia invaded Ukraine, significantly amplifying already existing geopolitical tensions among Russia and other countries in the region and in the west, including the U.S.
In late February 2022, Russia invaded Ukraine, significantly amplifying already existing geopolitical tensions among Russia and other countries in the region and in the west, including the U.S.
Broad market and industry factors may negatively affect the market price of our Common Stock, regardless of our actual operating performance. 50 Sales of a substantial number of shares of our Common Stock in the public market by our existing stockholders could cause our share price to fall.
Sales of a substantial number of shares of our common stock in the public market by our existing stockholders could cause our share price to fall.
Any actions asserted against us could include payment of damages for infringement, stopping the use, require that we obtain licenses from these parties or substantially re-engineer our products or processes in order to avoid infringement. We may not be able to obtain the necessary licenses on acceptable terms, or at all, or be able to re-engineer our products successfully.
Any actions asserted against us could require payment of damages for infringement, enjoining the use of said product, or a requirement that we obtain licenses from these parties or substantially re-engineer our products or processes in order to avoid infringement.
Our facilities are in range of rockets that may be fired from Lebanon, Syria or the Gaza Strip into Israel. In the event that our facilities are damaged as a result of hostile action or hostilities otherwise disrupt the ongoing operation of our facilities, our ability to deliver products to customers could be materially and adversely affected.
In the event that our facilities are damaged as a result of hostile action or hostilities otherwise disrupt the ongoing operation of our facilities, our ability to deliver products to customers in a timely manner to meet our contractual obligations with customers and vendors could be materially and adversely affected.
These hazards and risks include, but are not limited to fires, explosions, third-party interference (including terrorism) and mechanical failure of equipment at our or third-party facilities.
It should be transported in special tanks and vehicles and should be stored in a container composed of non-reactive materials. These hazards and risks include, but are not limited to fires, explosions, third-party interference (including terrorism) and mechanical failure of equipment at our or third-party facilities.
Risks Related to Intellectual Property ● If we are unable to secure and maintain patent or other intellectual property protection for the intellectual property used in our products, our ability to compete will be harmed. ● If we are unable to prevent unauthorized use or disclosure of our proprietary trade secrets and unprotected know-how, our ability to compete will be harmed. ● We could become subject to patent and other intellectual property litigation that could be costly, result in the diversion of management’s attention, require us to pay damages and force us to discontinue selling our products. ● We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property. ● We may experience claims that our products infringe the intellectual property rights of others, which may cause us to incur unexpected costs or prevent us from selling our products or services. 34 Risks Related to Regulatory Compliance ● If we or our contractors or service providers fail to comply with laws and regulations, we or they could be subject to regulatory actions, which could affect our ability to develop, market and sell our products or future products that we may develop and may harm our reputation in our industry. ● Regulatory reforms may adversely affect our ability to sell our products profitably.
Conditions in the global economy, including inflation and recessionary pressures, may adversely affect our business, financial condition and results of operation. ● Our relationship with our employees could deteriorate, and certain key employees could leave, which could adversely affect our business and results of operations. ● We are subject to risks relating to portfolio concentration. ● Our operating results may fluctuate, which makes our results difficult to predict and could cause our results to fall short of expectations. ● International expansion of our business exposes us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States, Mexico or Israel. ● Our business depends to some extent on international transactions. ● If we are unable to secure and maintain patent or other intellectual property protection for the intellectual property used in our products, our ability to compete will be harmed. 28 ● If we are unable to prevent unauthorized use or disclosure of our proprietary trade secrets and unprotected know-how, our ability to compete will be harmed. ● We could become subject to patent and other intellectual property litigation that could be costly, result in the diversion of management’s attention, require us to pay damages and force us to discontinue selling our products. ● We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property. ● We may experience claims that our products infringe the intellectual property rights of others, which may cause us to incur unexpected costs or prevent us from selling our products or services. ● If we or our contractors or service providers fail to comply with laws and regulations, we or they could be subject to regulatory actions, which could affect our ability to develop, market and sell our products or future products that we may develop and may harm our reputation in our industry. ● Regulatory reforms may adversely affect our ability to sell our products profitably. ● We may not satisfy Nasdaq’s requirements for continued listing.
If we are delisted from the Nasdaq, trading in our securities may be conducted, if available, on the OTC Markets or, if available, via another market.
Accordingly, the total market capitalization of our common stock following the reverse stock split could be lower than the total market capitalization before the reverse stock split. If we are delisted from the Nasdaq Capital Market, trading in our securities may be conducted, if available, on the OTC Markets or, if available, via another market.
International expansion of our business exposes us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States, Mexico or Israel.
International expansion of our business exposes us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States, Mexico or Israel. Other than our headquarters and other operations which are located in Israel (as further described below), we currently have limited international operations.
We do not anticipate any significant problems in obtaining future required licenses, permits or approvals that are necessary to expand our business, however such registration filling might take longer period than expected due to various factors including the recent disruptions in regular services as a result of COVID-19, and it might delay obtaining such regulatory approvals, or might cause delays in starting operations on a large scale in these countries and other jurisdictions.
We do not anticipate any significant problems in obtaining future required licenses, permits or approvals that are necessary to expand our business, however such licenses, permits or approvals may take longer than expected due to various factors, which might cause delays in these countries and other jurisdictions.
We also plan to retain sales representatives and third-party distributors, outside of the United States and Israel at a later date.
Our business strategy incorporates potentially significant international expansion, particularly in anticipation of approval of our product candidates and we also plan to retain sales representatives and third-party distributors, outside of the United States and Israel at a later date.
We are therefore exposed to foreign currency risk due to fluctuations in exchange rates. This may result in gains or losses with respect to movements in exchange rates, which may be significant and may also cause fluctuations in reported financial information that are not necessarily related to our operating results.
This may result in gains or losses with respect to movements in exchange rates, which may be significant and may also cause fluctuations in reported financial information that are not necessarily related to our operating results. 38 Risks Related to Intellectual Property If we are unable to secure and maintain patent or other intellectual property protection for our products, our ability to compete may be harmed.
From time to time, we oppose patent applications that we consider overbroad or otherwise invalid in order to maintain the ability to operate freely in our various business lines without the risk of being sued for patent infringement.
We cannot guarantee that we will not experience claims that our processes and products infringe issued patents (whether present or future) or other intellectual property rights belonging to others. 40 From time to time, we oppose patent applications that we consider overbroad or otherwise invalid in order to maintain the ability to operate freely in our various business lines without the risk of being sued for patent infringement.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur current monthly rent payment is NIS 9,180 (approximately $2,500) which includes taxes. Our lease of office space in Miami, Florida was extended in January 2023 for an additional year and is set to expire in January 2024. Our current monthly rent payment is $630 which includes taxes.
Biggest changeWe lease office space in Miami, Florida. We renewed our lease in December 2023 for one year until December 2024, with an option to renew it for an additional one-year term. Our current monthly rent payment is $630 which includes taxes.
Item 2. properties Our commercialization and manufacturing operations are currently conducted at Neve Yarak (Israel) where we lease approximately 230 square meters of space to run our trials. The lease expires on August 31, 2023 with the option to extend the lease agreement for an additional one-year period.
Item 2. properties Our commercialization and manufacturing operations are currently conducted at Neve Yarak (Israel) where we lease approximately 230 square meters of space to run our trials. The lease expired on August 31, 2023, and was extended for an additional one-year period. Our current monthly rent payment is NIS 9,900 (approximately $2,750) which includes taxes.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeitem 3. legal proceedings We are not aware of any pending legal proceedings to which we are a party, or to which any director, officer or affiliate of our Company, or any owner of record or beneficially of more than 5% of any class of our voting securities, is a party adverse to us or has a material interest adverse to us. item 4. mine safety disclosures.
Biggest changeitem 3. legal proceedings There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company.
Added
The Company’s property is not the subject of any pending legal proceedings. item 4. mine safety disclosures. Not applicable. part II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES. 55 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 55 ITEM 6. SELECTED FINANCIAL DATA 59 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 60 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 67 ITEM 8.
Biggest changeITEM 4. MINE SAFETY DISCLOSURES. 51 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 51 ITEM 6. [RESERVED] 54 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 54 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 62 ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 67 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 67 ITEM 9A. CONTROLS AND PROCEDURES 67
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 62 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 62 ITEM 9A. CONTROLS AND PROCEDURES 62 ITEM 9B. OTHER INFORMATION 63

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

14 edited+8 added−26 removed6 unchanged
Biggest changeThe following table presents the information as of December 31, 2022. 55 Plan Category (a) Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (b) Weighted-average Exercise Price of Outstanding Options, Warrants and Rights (c) Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) Equity compensation plans approved by security holders: 2018 Plan 192,576 3.38 91,016 2022 Plan 42,098 1.25 954,902 Total equity compensation plans approved by stockholders 234,674 3.00 1,048,918 Equity compensation plans not approved by security holders - - - 2018 Equity Incentive Plan As of December 31, 2022, the number of shares of Common Stock reserved for the exercise of options granted under 2018 Plan was 91,016.
Biggest changePlan Category (a) Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (b) Weighted-average Exercise Price of Outstanding Options, Warrants and Rights (c) Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) Equity compensation plans approved by security holders: 2018 Plan 27,518 $ 23.69 12,995 2022 Plan - - 641,787 Total equity compensation plans approved by stockholders 27,518 $ 23.69 654,782 Equity compensation plans not approved by security holders - - - 2018 Equity Incentive Plan The 2018 Equity Incentive Plan (the “2018 Plan”) provides for the grant of incentive stock options to employees of our company, including officers and directors, and non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares and other stock or cash awards as the board of directors determine, to our employees, directors and consultants. 12,995 shares of common stock were reserved for issuance under the 2018 Plan. 2022 Share Incentive Plan The 2022 Share Incentive Plan (the “2022 Plan”) provides for the grant of incentive stock options and nonqualified stock options, restricted shares of common stock, restricted stock units and other share-based awards to any employee, director, officer, consultant, advisor and any other person or entity who provides services to our company or any parent, subsidiary, or affiliate. 641,787 shares of common stock are reserved for issuance under the 2022 Plan.
In the event of a share split, reverse share split, share dividend, recapitalization, combination or reclassification of our shares, or any other increase or decrease in the number of issued shares effected without receipt of consideration by the company (but not including the conversion of any convertible securities of the company), the administrator in its sole discretion shall make an appropriate adjustment in the number of shares related to each outstanding award and to the number of shares reserved for issuance under the 2022 Plan, to the class and kind of shares subject to the 2022 Plan, as well as the exercise price per share of each outstanding award, as applicable, the terms and conditions concerning vesting and exercisability and the term and duration of outstanding awards, or any other terms that the administrator adjusts in its discretion, or the type or class of security, asset or right underlying the award (which need not be only that of the Company, and may be that of the surviving corporation or any affiliate thereof or such other entity party to any of the above transactions); provided that any fractional shares resulting from such adjustment shall be rounded down to the nearest whole share unless otherwise determined by the administrator.
In the event of a share split, reverse share split, share dividend, recapitalization, combination or reclassification of our shares, or any other increase or decrease in the number of issued shares effected without receipt of consideration by our company (but not including the conversion of any convertible securities of our company), the board in its sole discretion shall make an appropriate adjustment in the number of shares related to each outstanding award and to the number of shares reserved for issuance under the 2022 Plan, to the class and kind of shares subject to the 2022 Plan, as well as the exercise price per share of each outstanding award, as applicable, the terms and conditions concerning vesting and exercisability and the term and duration of outstanding awards, or any other terms that the board adjusts in its discretion, or the type or class of security, asset or right underlying the award (which need not be only that of our company, and may be that of the surviving corporation or any affiliate thereof or such other entity party to any of the above transactions); provided that any fractional shares resulting from such adjustment shall be rounded down to the nearest whole share unless otherwise determined by the administrator.
Section 102 of the Ordinance allows employees, directors and officers who are not controlling shareholders and are considered Israeli residents to receive favorable tax treatment for compensation in the form of shares or options. Our non-employee service providers and controlling shareholders may only be granted options under section 3(i) of the Ordinance, which does not provide for similar tax benefits.
Section 102 of the Ordinance allows employees, directors and officers who are not controlling stockholders and are considered Israeli residents to receive favorable tax treatment for compensation in the form of shares or options. Our non-employee service providers and controlling stockholders may only be granted options under section 3(i) of the Ordinance, which does not provide for similar tax benefits.
Any awards which are unvested as of the date of such termination or which are vested but not then exercised within the twelve month period following such date, will terminate and the shares covered by such awards shall again be available for issuance under the 2022 Plan.
Any awards which are unvested as of the date of such termination or which are vested but not then exercised within the twelve months period following such date, will terminate and the shares covered by such awards shall again be available for issuance under the 2022 Plan.
In the event of termination of a grantee’s employment or service with the company or any of its affiliates due to such grantee’s death, permanent disability or retirement, all vested and exercisable awards held by such grantee as of the date of termination may be exercised by the grantee or the grantee’s legal guardian, estate, or by a person who acquired the right to exercise the award by bequest or inheritance, as applicable, within twelve months after such date of termination, unless otherwise provided by the administrator.
In the event of termination of a grantee’s employment or service with the company or any of its affiliates due to such grantee’s death, permanent disability or retirement, all vested and exercisable awards held by such grantee as of the date of termination may be exercised by the grantee or the grantee’s legal guardian, estate, or by a person who acquired the right to exercise the award by bequest or inheritance, as applicable, within twelve months after such date of termination.
In the event of a distribution of a cash dividend to all shareholders, the administrator may determine, without the consent of any holder of an award, that the exercise price of an outstanding and unexercised award shall be reduced by an amount equal to the per share gross dividend amount distributed by the Company, subject to applicable law. 57 In the event of a merger or consolidation of our company, or a sale of all, or substantially all, of the Company’s shares or assets or other transaction having a similar effect on the Company, or change in the composition of the board of directors, or liquidation or dissolution, or such other transaction or circumstances that the board of directors determines to be a relevant transaction, then without the consent of the grantee, the administrator may but is not required to (i) cause any outstanding award to be assumed or substituted by such successor corporation, or (ii) regardless of whether or not the successor corporation assumes or substitutes the award (a) provide the grantee with the option to exercise the award as to all or part of the shares, and may provide for an acceleration of vesting of unvested awards, or (b) cancel the award and pay in cash, shares of the company, the acquirer or other corporation which is a party to such transaction or other property as determined by the administrator as fair in the circumstances.
In the event of a merger or consolidation of our company, or a sale of all, or substantially all, of our shares or assets or other transaction having a similar effect on us, or change in the composition of the board of directors, or liquidation or dissolution, or such other transaction or circumstances that the board of directors determines to be a relevant transaction, then without the consent of the grantee, the administrator may but is not required to (i) cause any outstanding award to be assumed or substituted by such successor corporation, or (ii) regardless of whether or not the successor corporation assumes or substitutes the award (a) provide the grantee with the option to exercise the award as to all or part of the shares, and may provide for an acceleration of vesting of unvested awards, or (b) cancel the award and pay in cash, shares of our company, the acquirer or other corporation which is a party to such transaction or other property as determined by the administrator as fair in the circumstances.
Action Stock Transfer serves as transfer agent for our Common Stock. Dividend Policy We have never paid cash dividends on any of our capital stock and we currently intend to retain our future earnings, if any, to fund the development and growth of our business.
Dividend Policy We have never paid cash dividends on any of our capital stock, and we currently intend to retain our future earnings, if any, to fund the development and growth of our business.
In the event of termination of a grantee’s employment or service with the company or any of its affiliates, all vested and exercisable awards held by such grantee as of the date of termination may be exercised within three months after such date of termination, unless otherwise determined by the administrator.
In the event of termination of a grantee’s employment or service with us or any of our affiliates, all vested and exercisable awards held by such grantee as of the date of termination generally may be exercised within three months after such date of termination.
The administrator also has the authority to amend and rescind rules and regulations relating to the 2022 Plan or terminate the 2022 Plan at any time before the date of expiration of its ten-year term. 56 The 2022 Plan provides for granting awards under various tax regimes, including, without limitation, in compliance with Section 102 of the Israeli Income Tax Ordinance (New Version), 5721-1961 (the “Ordinance”), and Section 3(i) of the Ordinance and for awards granted to our United States employees or service providers, including those who are deemed to be residents of the United States for tax purposes, Section 422 of the Code and Section 409A of the Code.
The 2022 Plan provides for granting awards under various tax regimes, including, without limitation, in compliance with Section 102 of the Israeli Income Tax Ordinance (New Version), 5721-1961 (the “Ordinance”), and Section 3(i) of the Ordinance and for awards granted to our United States employees or service providers, including those who are deemed to be residents of the United States for tax purposes, Section 422 of the Code and Section 409A of the Code.
We do not intend to pay cash dividends to holders of our Common Stock in the foreseeable future. Securities Authorized for Issuance under Equity Compensation Plans As of the date of this Annual Report, we maintain two active equity compensation plans: the 2018 Equity Incentive Plan (the “2018 Plan”) and the 2022 Share Incentive Plan (the “2022 Plan”).
We do not intend to pay cash dividends to holders of our common stock in the foreseeable future. 51 Securities Authorized for Issuance under Equity Compensation Plans We have two equity compensation plans: the 2018 Equity Incentive Plan and the 2022 Share Incentive Plan. The following table provides information regarding our equity compensation plans as of December 31, 2023.
Notwithstanding the foregoing provisions, options may be granted with a per share exercise price of less than 100% of the fair market value per share on the date of grant pursuant to the issuance or assumption of an option in a transaction to which Section 424(a) of the Code applies in a manner consistent with said Section 424(a).
Notwithstanding the foregoing provisions, options may be granted with a per share exercise price of less than 100% of the fair market value per share on the date of grant pursuant to the issuance or assumption of an option in a transaction to which Section 424(a) of the Code applies in a manner consistent with said Section 424(a). 52 With regards to tax withholding, exercise price and purchase price obligations arising in connection with awards under the 2022 Plan, the board may, in its discretion, accept cash, provide for net withholding of shares in a cashless exercise mechanism or direct a securities broker to sell shares and deliver all or a part of the proceeds to our company or the trustee.
item 5. market for registrant’s common equity, related stockholder matters and issuer purchases OF EQUITY SECURITIES Market Information The shares of our Common Stock are currently traded on the Nasdaq Capital Market under the symbol “SVFD”. The last reported sales price of our Common Stock on Nasdaq on March 24, 2023, was $0.74 per share.
item 5. market for registrant’s common equity, related stockholder matters and issuer purchases OF EQUITY SECURITIES Market Information Our common stock was traded on the Nasdaq Capital Market under the symbol “SVFD” until March 18, 2024. In connection with our name change on March 19, 2024, our stock began trading under the symbol “NITO”.
Issuer Purchases of Equity Securities During the year ended December 31, 2022, we did not purchase any of our equity securities.
The issuances of the shares described above were exempt from registration under Section 4(a)(2) under the Securities Act, as transactions by an issuer not involving any public offering. Issuer Purchases of Equity Securities During the year ended December 31, 2023, we did not purchase any of our equity securities.
We estimated the value of the shares issued to be $53,856. 58 On November 3, 2021, and May 2, 2022, we issued 700 and 600 shares of Common Stock to a consultant, which related to investor relations and public relations services provided to the Company pursuant to an agreement between the parties dated June 15, 2021.
On December 7, 2023, we issued 1,755 shares of common stock to a consultant for investor relations and public relations services provided to our company pursuant to an agreement, dated November 23, 2023. On December 21, 2023, we issued an aggregate of 369,124 shares of common stock to six consultants for services provided to us.
Removed
Holders As of March 24, 2023, there were approximately 145 holders of record of our Common Stock. These numbers are not representative of the number of beneficial holders of our shares nor is it representative of where such beneficial holders reside, since many of these shares were held of record by brokers or other nominees.
Added
The last reported sales price of our common stock on Nasdaq on March 29, 2024, was $ 1.29 per share. Holders As of March 29, 2024, there were 186 holders of record of our common stock.
Removed
As of December 31, 2022, 192,576 options to purchase Common Stock were outstanding under the 2018 Plan, at a weighted exercise price of $3.38, and the last expiration date for any such option is July 1, 2030. The 2018 Plan was adopted by our board of directors in October 2018, and became effective immediately thereafter.
Added
The 2022 Plan is currently administered by the board of directors. Subject to the provisions of the 2022 Plan, the board determines subject to applicable law, awards granted thereunder, designates recipients of awards, determines and amends the terms of awards, including any vesting schedule applicable to an award.
Removed
The 2018 Plan permits the grant of incentive stock options to employees of the Company, including officers and directors, and non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares and other stock or cash awards as the administrator of the plan may determine, to the Company’s employees and service providers. 2022 Share Incentive Plan On August 29, 2022, the Company’s stockholders approved the 2022 Plan, which was previously approved by our board of directors on July 18, 2022.
Added
The board also has the authority to amend and rescind rules and regulations relating to the 2022 Plan or terminate the 2022 Plan at any time before the date of expiration of its ten-year term.
Removed
As of December 31, 2022, the number of shares of Common Stock reserved for the exercise of options granted under 2022 Plan was 954,902. The 2022 Plan permits the grant of stock options (including incentive stock options and nonqualified stock options), shares of common stock, restricted shares, restricted share units and other share-based awards.
Added
In the event of a distribution of a cash dividend to all stockholders, the administrator may determine, without the consent of any holder of an award, that the exercise price of an outstanding and unexercised award shall be reduced by an amount equal to the per share gross dividend amount distributed by us, subject to applicable law.
Removed
The maximum number of ordinary shares available for issuance under the 2022 Plan is equal to the sum of 1,000,000 shares of common stock, or such number as our board of directors may determine from time to time. The 2022 Plan may be administered by the board of directors or a duly authorized committee of our board of directors.
Added
On July 31, 2023, our board of directors and on October 2, 2023, our stockholders approved an amendment to the 2022 Plan to increase the number of shares of common stock authorized for issuance under the 2022 Plan by an additional 928,571 shares from 2,857,143 shares to 3,785,714 shares of our common stock. 53 Recent Sales of Unregistered Securities Except as set forth below, there were no sales of common stock equity securities during the period covered by this Report that were not registered under the Securities Act and were not previously reported in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K filed by us.
Removed
Subject to the provisions of the 2022 Plan, the administrator will have the authority, in its sole discretion to determine subject to applicable law, to interpret the terms of the 2022 Plan and any award agreements or awards granted thereunder, designate recipients of awards, determine and amend the terms of awards, including the exercise price of an option award, the fair market value of an ordinary share, the time and vesting schedule applicable to an award or the method of payment for an award, accelerate or amend the vesting schedule applicable to an award, prescribe the forms of agreement for use under the 2022 Plan and take all other actions and make all other determinations necessary for the administration of the 2022 Plan.
Added
On September 27, 2023, in connection with the Purchase Agreement with the Investor, we issued 26,224 shares of common stock as a commitment fee to a subsidiary of the Investor.
Removed
An award under the 2022 Plan may be exercised by providing the company with a written or electronic notice of exercise and full payment of the exercise price for such shares underlying the award, if applicable, in such form and method as may be determined by the administrator and permitted by applicable law.
Added
On December 21, 2023, we issued 57,142 shares of common stock to David Palach, our Chief Executive Officer, 28,571 shares of common stock to Lital Barda, our Chief Financial Officer, 100,000 shares of common stock to Amitay Weiss, a director, and 14,500 shares of common stock to each of Messrs.
Removed
An award may not be exercised for a fraction of a share.
Added
Arbib, Berenstein, Kalifi and Rosenbloom, members of the board of directors, for services provided to us. On December 28, 2023, we issued 12,500 shares of common stock to the designee of a law firm for professional services rendered to our company by such firm.
Removed
With regard to tax withholding, exercise price and purchase price obligations arising in connection with awards under the 2022 Plan, the administrator may, in its discretion, accept cash, provide for net withholding of shares in a cashless exercise mechanism or direct a securities broker to sell shares and deliver all or a part of the proceeds to the Company or the trustee.
Removed
During the year ended December 31, 2022, we granted to our directors and officers options to purchase a maximum aggregated number of 42,098 of the Company’s Common Stock and issued 3,000 shares of restricted Common Stock, under the 2022 Plan . 42,098 options were granted at an exercise price of $1 to $1.5 per share, and the latest expiration date for such options is December 31, 2031.
Removed
Recent Sales of Unregistered Securities Set forth below is information regarding shares of Common Stock and preferred stock issued, and options granted, by us during the years ended December 31, 2020, 2021, and 2022 that were not registered under the Securities Act.
Removed
Also included is the consideration, if any, received by us, for such shares and options and information relating to the Securities Act, or rule of the SEC, under which exemption from registration was claimed.
Removed
During July, August and September 2020, we issued: (i) 67,369 shares of Common Stock in respect of the conversion of convertible loans; (ii) 32,769 units, for an aggregate amount of $250,000, at a price of $7.63 per unit, where each unit consists of one share of Common Stock and one warrant to purchase one share of Common Stock with an exercise price of $8.40 per share.
Removed
During September 2020, we issued 13,107 units, for an aggregate amount of $100,000, at a purchase price of $7.63 per unit to Medigus Ltd. (“Medigus”), where each unit consists of one share of Common Stock and one warrant to purchase one share of Common Stock with an exercise price of $8.40 per share.
Removed
During December 2020, we issued 6,350 shares of Common Stock following the exercise of options. On June 20, 2021, we issued 12,000 shares of Common Stock to a consultant in exchange for investor relation services. We estimated the value of the shares issued to be $126,600.
Removed
On August 2, 2021, we issued 14,285 shares of Common Stock to a consultant in exchange for investor and public relations services. We estimated the value of the shares issued to be $127,622.
Removed
On each of August 5, 2021, September 30, 2021 and November 3, 2021, we issued 2,000 shares of Common Stock to a consultant in exchange for strategic consulting services, which included digital marketing campaigns.
Removed
We estimated the value of the shares issued to be $5,747 and $4,926, respectively. Also on November 3, 2021, January 27, 2022 and May 2, 2022, we issued 9,000, 12,500 and 12,500 shares of Common Stock to a consultant, which related to investor relations services provided to the Company pursuant to an agreement between the parties dated October 24, 2021.
Removed
On March 10, 2022, we issued 14,000 shares of Common Stock to a consultant, which related to investor relations services provided to the Company pursuant to an agreement between the parties dated March 10, 2022. On March 24, 2022, we issued 9,000 shares of Common Stock to Mr.
Removed
Joachim Fuchs, which related to services provided to the Company pursuant to a consulting agreement between the parties dated February 10, 2022.
Removed
On May 18, 2022, we issued 9,000 shares of Common Stock to a consultant, which related to services provided to the Company in connection with its cross-listing on the Frankfurt Stock Exchange pursuant to a board resolution dated May 11, 2022.
Removed
On July 11, 2022 and September 7, 2022 and October 11, 2022 we issued 6,000,7,500 and 710,090 shares of Common Stock, respectively, to a consultant in consideration for services rendered pursuant to a consulting agreement by and between the Company and the consultant dated January 9, 2022.
Removed
On both, May 2, 2022 and August 22, 2022, we issued 12,000 shares of Common Stock to a consultant in consideration for services rendered pursuant to an amended consulting agreement by and between the Company and the consultant dated June 26, 2022. On September 7, 2022, we issued 3,000 shares of Common Stock to Mr.
Removed
Joachim Fuchs, chairman of the board of directors of our subsidiary, Save Foods Ltd. This grant and following grants were issued pursuant to the 2022 Plan.
Removed
On September 7, 2022, we issued 50,000 shares of Common stock to a consultant in consideration for services rendered pursuant to an amended consulting agreement by and between the Company and the consultant dated September 6, 2022.
Removed
On October 26, 2022, the Board approved the issuance of 50,000 shares of Common Stock to a consultant pursuant to his investor relations consulting agreement and in addition, quarterly issuances of 9,000 shares of Common Stock commencing January 1, 2023 and ending on December 31, 2024. On November 16, 2022 we issued 50,000 shares of Common Stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

25 edited+60 added−36 removed10 unchanged
Biggest changeThe following table discloses the breakdown of general and administrative expenses: Year Ended December 31 2022 2021 Professional services $ 2,575,294 $ 2,527,076 Share based compensation 934,188 598,699 Salaries and related expenses 297,848 214,570 Legal expenses 108,814 160,814 Insurance 473,650 473,985 Registration fees 233,350 233,395 Other expenses 93,765 58,315 Total $ 4,716,909 $ 4,266,854 61 Comparison of the Year Ended December 31, 2022 to the Year Ended December 31, 2021 Results of Operations The following table summarizes our results of operations for the years ended December 31, 2022 and 2021, together with the changes in those items in dollars: Year Ended December 31 2022 2021 Revenues from sales of products $ 394,004 $ 438,141 Cost of sales (158,313 ) (135,943 ) Gross profit 235,691 302,198 Research and development expenses (770,826 ) (538,684 ) Selling and marketing expenses (567,598 ) (200,299 ) General and administrative expenses (4,716,909 ) (4,266,854 ) Operating loss (5,819,642 ) (4,703,639 ) Finance income (expenses), net 39,801 (161,737 ) Comprehensive loss (5,779,841 ) (4,865,376 ) Less: Net loss attributable to non-controlling interests 40,241 44,796 Net loss attributable to the Company’s shareholders (5,739,600 ) (4,820,580 ) Loss per share (basic and diluted) (1.64 ) (2.06 ) Weighted average number of shares of Common Stock outstanding 3,498,273 2,343,088 Revenues Revenues for the year ended December 31, 2022 were $394,004, a decrease of $44,137, or 10%, compared to total revenues of $438,141 for the year ended December 31, 2021.
Biggest changeThe following table sets forth the breakdown of general and administrative expenses: Year Ended December 31 2023 2022 Professional services $ 1,899,847 $ 2,575,294 Share based compensation 2,562,259 934,188 Salaries and related expenses 232,842 297,848 Legal expenses 276,336 108,814 Insurance 245,482 473,650 Registration fees 261,622 233,350 Other expenses 97,455 93,765 Total $ 5,575,843 $ 4,716,909 Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022 Results of Operations The following table summarizes our results of operations for the years ended December 31, 2023 and 2022.: Year Ended December 31 2023 2022 Revenues from sales of products $ 263,445 $ 394,004 Cost of sales (55,178 ) (158,313 ) Gross profit 208,267 235,691 Research and development expenses (1,938,234 ) (770,826 ) Selling and marketing expenses (271,966 ) (567,598 ) General and administrative expenses (5,575,843 ) (4,716,909 ) Operating loss (7,577,776 ) (5,819,642 ) Finance income, net 46,511 39,801 Other income 984,940 - Changes in fair value of an investment in an associate measured under the fair value option (713,593 ) - Net loss (7,259,918 ) (5,779,841 ) Less: Net loss attributable to non-controlling interests 737,510 40,241 Net loss attributable to the Company’s stockholders (6,522,408 ) (5,739,600 ) Loss per share (basic and diluted) (5.43 ) (1.64 ) Weighted average number of shares of common stock outstanding 1,200,608 3,498,273 56 Revenues Revenues for the year ended December 31, 2023 were $263,445, a decrease of $130,559, or 33%, compared to revenues of $394,004 for the year ended December 31, 2022.
Any estimates and assumptions are continually reviewed. The changes to the accounting estimates are credited during the period in which the change to the estimate is made. 63 Stock-based Compensation Employees and other service providers of the Company may receive benefits by way of stock-based compensation settled with company options exercised for shares of our Common Stock.
Any estimates and assumptions are continually reviewed. The changes to the accounting estimates are credited during the period in which the change to the estimate is made. Stock-based Compensation Employees and other service providers of our company may receive benefits by way of stock-based compensation settled with company options exercised for shares of our common stock.
As of December 31, 2022, we had a working capital of $5,557,595, as compared to $6,297,793 as of December 31, 2021. The decrease in our cash balance is mainly attributable to cash used in operations.
As of December 31, 2023, we had a working capital of $4,687,149, as compared to $5,557,595 as of December 31, 2022. The decrease in our cash balance is mainly attributable to cash used in operations.
The following table discloses the breakdown of revenues and costs of revenues: Year Ended December 31 2022 2021 Revenues from sale of products $ 394,004 $ 438,141 Cost of sales (158,313 ) (135,943 ) Gross profit $ 235,691 $ 302,198 Operating Expenses Our current operating expenses consist of three components - research and development expenses, selling and marketing expenses and general and administrative expenses.
The following table discloses the breakdown of revenues and costs of revenues: Year Ended December 31 2023 2022 Revenues from sale of products $ 263,445 $ 394,004 Cost of sales (55,178 ) (158,313 ) Gross profit $ 208,267 $ 235,691 Operating Expenses Our current operating expenses consist of three components - research and development expenses, selling and marketing expenses and general and administrative expenses.
The increase is mainly attributable to the increase in salaries and related expenses and professional services expenses. 62 General and Administrative Expenses General and administrative expenses consist primarily of salaries and related expenses including share based compensation and other non-personnel related expenses such as legal expenses and directors and insurance costs.
General and Administrative Expenses General and administrative expenses consist primarily of salaries and related expenses including share based compensation and other non-personnel related expenses, including legal expenses and directors and officers insurance costs.
General and administrative expenses for the year ended December 31, 2022 were $ 4,716,909 , an increase of $450,055 , or 11%, compared to total general and administrative expenses of $4,266,854 for the year ended December 31, 2021.
General and administrative expenses for the year ended December 31, 2023 were $ 5,575,843, an increase of $858,934, or 18%, compared to general and administrative expenses of $4,716,909 for the year ended December 31, 2022.
Total Comprehensive Loss As a result of the foregoing, our total comprehensive loss for the year ended December 31, 2022 was $5,779,841, compared to $4,865,376 for the year ended December 31, 2021, an increase of $914,465, or 19%.
Total net Loss As a result of the foregoing, our total net loss for the year ended December 31, 2023 was $7,259,918, compared to $5,779,841 for the year ended December 31, 2022, an increase of $1,480,077, or 26%.
The table below presents our cash flows for the periods indicated: Year Ended December 31 2022 2021 Net cash used in operating activities $ (5,097,126 ) $ (4,113,307 ) Net cash used in investing activities (51,689 ) (67,749 ) Net cash provided by financing activities 4,094,940 10,725,016 Increase (decrease) in cash and cash equivalents and restricted cash $ (1,056,841 ) $ 6,542,317 As of December 31, 2022, we had cash of $5,700,709, as compared to $6,750,938 as of December 31, 2021.
The table below presents our cash flows for the periods indicated: Year Ended December 31 2023 2022 Net cash used in operating activities $ (3,232,759 ) $ (5,097,126 ) Net cash used in investing activities (1,519,560 ) (51,689 ) Net cash provided by financing activities 3,472,712 4,094,940 Decrease in cash and cash equivalents and restricted cash $ (1,272,597 ) $ (1,056,841 ) Operating Activities Net cash used in operating activities was $3,232,759 for the year ended December 31, 2023, as compared to $5,097,126 for the year ended December 31, 2022.
In contrary, by forming a temporary protective shield around the fresh produce we treat, our products make it difficult for pathogens to develop and potentially provide protection which also reduces cross-contamination. Components of Results of Operation Revenues and Cost of Revenues Our total revenue consists of products and our cost of revenues consists of cost of products.
One of the main advantages of our products is that our ingredients do not leave any toxicological residues on the fresh produce we treat. In contrast, by forming a temporary protective shield around the fresh produce we treat, our products make it difficult for pathogens to develop and potentially provide protection which also reduces cross-contamination.
Investing Activities Net cash used in investing activities was $51,689 for the year ended December 31, 2022, as compared to net cash used in investing activities of $67,749 for the year ended December 31, 2021.
Investing Activities Net cash used in investing activities was $1,519,560 for the year ended December 31, 2023, as compared to net cash used in investing activities of $51,689 for the year ended December 31, 2022. The increase is mainly attributable to the investment in Plantify in April and September 2023.
The increase is mainly a result of the increase in share-based compensation to our employees and service providers, salaries and related expenses and professional services, offset partially by a decrease in legal expenses.
The increase is mainly a result of the increase in share-based compensation to our employees and service providers offset partially by a decrease in salaries and related expenses and professional services. 57 Financing Income, Net Financing income, net for the year ended December 31, 2023 was $46,511, an increase of $6,710, or 17%, compared to financing income of $39,801 for the year ended December 31, 2022.
The decrease is mainly a result of the decrease in revenues, as detailed above as well as an increase in the prices of raw materials. Research and Development Expenses Research and development expenses consist of salaries and related expenses, share base compensation, consulting fees, service providers’ costs, related materials and overhead expenses.
Research and Development Expenses Research and development expenses consist of salaries and related expenses, share base compensation, consulting fees, service providers’ costs, related materials and overhead expenses.
Selling and marketing expenses for the year ended December 31, 2022 were $567,598, an increase of $367,299, or 183%, compared to total selling and marketing expenses of $200,299 for the year ended December 31, 2021.
Selling and marketing expenses for the year ended December 31, 2023 were $271,966, a decrease of $295,632, or 52%, compared to selling and marketing expenses of $567,598 for the year ended December 31, 2022.
The decrease is mainly attributable to the decrease in purchase of property and equipment. 64 Financing Activities Net cash provided by financing activities was $4,094,940 for the year ended December 31, 2022, as compared to $10,725,016 for the year ended December 31, 2021.
Financing Activities Net cash provided by financing activities was $3,472,712 for the year ended December 31, 2023, as compared to $4,094,940 for the year ended December 31, 2022.
Our products are based on a proprietary blend of food acids which have a synergistic effect when combined with certain types of oxidizing agent-based sanitizers and fungicides at low concentrations.
In addition, we have a 23% ownership in Plantify, a Canadian-based food tech company focused on the development and production of clean-label, plant-based food products. 54 Our solutions are based on our proprietary blend of food acids combined with certain types of oxidizing agent-based sanitizers and in some cases with fungicides at low concentrations.
Our green products are capable of cleaning, sanitizing and controlling pathogens on fresh produce with the goal of making them safer for human consumption and extending their shelf life by reducing their decay. One of the main advantages of our products is that our active ingredients do not leave any toxicological residues on the fresh produce we treat.
Our products have a synergistic effect when combined with these oxidizing agent-based sanitizers and fungicides. Our “green” solutions are capable of cleaning, sanitizing, and controlling pathogens on fresh produce with the goal of making them safer for human consumption and extending their shelf life by reducing their decay.
The increase is mainly a result of an increase in the prices of raw materials offset partially by a decrease in salaries. Gross Profit Gross loss for the year ended December 31, 2022 was $235,691, a decrease of $66,507, or 22%, compared to gross loss of $302,198 for the year ended December 31, 2021.
Gross Profit Gross profit for the year ended December 31, 2023 was $208,267, a decrease of $27,424, or 12%, compared to gross profit of $235,691 for the year ended December 31, 2022. The decrease is mainly a result of the decrease in revenues.
The following table discloses the breakdown of research and development expenses: Year Ended December 31 2022 2021 Salaries and related expenses $ 438,217 $ 176,520 Share based compensation 3,024 19,235 Subcontractors 120,360 238,784 Laboratory and field tests 89,717 20,025 Depreciation 22,034 38,166 Other expenses 97,474 45,954 Total $ 770,826 $ 538,684 60 Following careful consideration, our board of directors decided to implement certain cost reduction measures in 2023, including, inter alia, the reduction of our research and development expenses.
The following table sets forth the breakdown of research and development expenses: Year Ended December 31 2023 2022 Salaries and related expenses $ 70,863 $ 438,217 Share based compensation - 3,024 Subcontractors 138,478 120,360 Laboratory and field tests 1,889 89,717 Depreciation 12,961 22,034 IPR&D 1,661,707 - Other expenses 52,336 97,474 Total $ 1,938,234 $ 770,826 We implemented certain cost reduction measures in 2023, including, the reduction of our research and development expenses, as we decided to focus on marketing and sales to try to materialize the efforts of our pilots conducted during 2022 and 2023.
The following table discloses the breakdown of selling and marketing expenses: Year Ended December 31 2022 2021 Salaries and related expenses $ 256,700 $ 30,329 Share based compensation 3,024 7,694 Professional services 167,084 90,249 Travel expenses 52,721 - Other expenses 88,069 72,027 Total $ 567,598 $ 200,299 We expect that our selling and marketing expenses will increase as we continue to increase our selling and marketing efforts including commercial validation pilots and recruit additional employees or contractor to support our selling and marketing efforts in our targeted geographical areas.
The following table sets forth the breakdown of selling and marketing expenses: Year Ended December 31 2023 2022 Salaries and related expenses $ 156,762 $ 256,700 Share based compensation - 3,024 Professional services 31,211 167,084 Travel expenses 13,543 52,721 Other expenses 70,450 88,069 Total $ 271,966 $ 567,598 We implemented certain cost reduction measures in 2023, including, the reduction of our selling and marketing expenses.
Cost of Sales Cost of sales consists primarily of salaries, materials, and overhead costs of manufacturing our products. Cost of revenues for the year ended December 31, 2022 was $158,313, an increase of $22,370, or 16%, compared to total cost of revenues of $135,943 for the year ended December 31, 2021.
Cost of sales for the year ended December 31, 2023 was $55,178, a decrease of $103,135, or 65%, compared to total cost of sales of $158,313 for the year ended December 31, 2022. The decrease is mainly a result of a decrease in our revenues.
The increase is mainly attributable to the increase in our net loss of $914,465 as well as decrease in liability for employee rights upon retirement and in accounts payables, partially offset by decrease in other current assets and in share-based compensation.
The decrease is mainly attributable to our net loss of $7,259,918, a decrease in accounts receivable offset by an increase in non-cash expenses of share-based compensation and IPR&D.
Research and development expenses for the year ended December 31, 2022 were $770,826, an increase of $232,142, or 43%, compared to total research and development expenses of $538,684 for the year ended December 31, 2021. The increase is mainly attributable to an increase in salaries and related expenses and field tests offset partially by a decrease in subcontractor’s expenses.
Research and development expenses for the year ended December 31, 2023 were $1,938,234, an increase of $1,167,408, or 151%, compared to research and development expenses of $770,826 for the year ended December 31, 2022.
The decrease in financing expenses is mainly a result of decrease in changes in fair value of our convertible loans fully converted during 2021 as well as interest and currency exchange gains on our cash balances.
The increase in financing income is mainly a result of an increase in interest on our cash balances offset by a decrease in exchange rate differences.
Selling and Marketing Expenses Selling and marketing expenses consist primarily of salaries and related costs for selling and marketing personnel, travel related expenses and services providers.
The cost reduction measures included the reduction of research and development activities as our focus was primarily on the commercialization of our solutions with emphasis on converting recently completed pilots into paying customers. Selling and Marketing Expenses Selling and marketing expenses consist primarily of salaries and related costs for selling and marketing personnel, travel related expenses and services providers.
Since our inception through December 31, 2022, we have funded our operations principally with approximately $20 million (net of issuance expenses) from the issuance of shares of our Common Stock, options and loans.
Liquidity and Capital Resources Since our inception through September 30, 2023, we have funded our operations, principally with the issuance of equity and debt. As of December 31, 2023, we had cash of $4,447,003, as compared to $5,700,709 as of December 31, 2022.
Removed
Selling and Marketing Expenses Selling and marketing expenses consist primarily of salaries and related expenses, share based compensation and other expenses.
Added
We operate through our two majority-owned Israeli subsidiaries, Save Foods Ltd., which focuses on post-harvest treatments in fruit and vegetables to control and prevent pathogen contamination, significantly reduce the use of hazardous chemicals and prolong fresh produce’s shelf life, and NTWO OFF which offers a pioneering solution to mitigate N2O (nitrous oxide) emissions, a potent greenhouse gas with 265 times the global warming impact of carbon dioxide.
Removed
The decrease is mainly a result of a decrease in sales due to adverse weather conditions , which caused a reduction in citrus production. We do not have backlogs or firm commitments from our customers for our products. Our sales might deteriorate if we fail to achieve commercial success or obtain regulatory approval of any of our products.
Added
Through NTWO OFF we aim to promote agricultural practices that are both environmentally friendly and economically viable and to become a global leader in this field by collaborating with or acquiring other companies that create innovative solutions and tools to solve other aspects of global warming’s impact of carbon dioxide.
Removed
Financing Income (Expenses), Net Financing income, net for the year ended December 31, 2022 were $39,801, a decrease of $201,538, or 125 %, compared to total financing expenses of $161,737 for the year ended December 31, 2021.
Added
Results of Operations Revenues and Cost of Revenues Our total revenue consists of products and our cost of revenues consists of cost of products.
Removed
Impact of COVID-19 The global spread of COVID-19 led many countries, including the United States, Europe and Israel (where we maintain material operations), to impose stringent limitations on movement, gatherings, transit of passengers and goods and to close the borders between countries. The responses of governments have notably impacted many economies as well as capital markets worldwide.
Added
Following our August 29, 2023 Exchange Agreement with Yaaran Investment Ltd. we recorded IPR&D costs associated with such transaction, for further information, see Research and Development Expenses below. 55 Selling and Marketing Expenses Selling and marketing expenses consist primarily of salaries and related expenses, share based compensation and other expenses.
Removed
While we have no and do not expect to experience any material impact on our overall liquidity and outlook, it is not possible at this time to estimate the full impact the COVID-19 pandemic may have on our business results of operations and financial condition.
Added
The decrease is mainly a result of a decrease in our sales in Mexico and Israel. Cost of Sales Cost of sales consists primarily of salaries, materials, and overhead costs of manufacturing our products.
Removed
Liquidity and Capital Resources Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures.
Added
The increase is mainly attributable to IPR&D costs associated with the issuance of 223,008 shares of common stock to Yaaran Investment Ltd. resulted with an expense of $1,661,707, offset by a decrease in salaries and related expenses and field tests costs and the implementation of certain cost reduction measures, in light of the prevailing macroeconomic conditions and certain results of our operations.
Removed
Operating Activities Net cash used in operating activities was $5,097,126 for the year ended December 31, 2022, as compared to $4,113,307 for the year ended December 31, 2021 an increase of $983,819.
Added
The decrease is mainly attributable to the decrease in salaries and related costs and other professional fees associated with our reduction in personnel following our cost reduction measures.
Removed
The decrease is mainly the result of proceeds from the May 2021 Underwritten Offering described above and conversions of convertible loans which occurred during the second quarter of 2021 as compared to proceeds from the August 2022 Underwritten Offering described above.
Added
Convertible Loan granted In connection with the Securities Exchange Agreement, the Company and Plantify executed a debenture containing conversion feature and debt component. The fair value of the conversion feature loan was estimated using the Black-Scholes option pricing model using a third-party appraiser.
Removed
Financial Arrangements Since our inception, we have financed our operation primarily through proceeds from sales of our shares of Common Stock and convertible loan agreements.
Added
The fair value of the debt component 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. We recorded equity losses in respect of the conversion feature and debt component in the convertible loan.
Removed
On June 24, 2020, we entered into a Securities Purchase Agreement (the “June 2020 SPA”) with the December 2019 Lenders in connection with the sale and issuance of 67,369 units, at a purchase price of $7.63 per unit.
Added
On April 5, 2023, we closed a securities exchange with Plantify (the “ Securities Exchange ”), pursuant to which we issued 166,340 shares of common stock representing 19.99% of our outstanding capital stock as of immediately prior to the closing (and 16.66% of our outstanding capital stock as of immediately following the closing), and Plantify issued 30,004,349 common shares to us, representing 19.99% of Plantify’s outstanding share capital as of immediately prior to the closing (and 16.66% of Plantify’s outstanding share capital immediately following the closing). 58 In connection with the Securities Exchange, we and Plantify executed a debenture pursuant to which we agreed to lend C$1,500,000 (approximately US$1,124,000) to Plantify.
Removed
Each unit consists of: (i) one share of the Company’s Common Stock; and (ii) one warrant to purchase one share of Common Stock with an exercise price of $8.40.
Added
The debenture accrues interest at a rate of 8% annually and is due and payable by Plantify on October 4, 2024. Outstanding principal under the debenture may be converted, at our sole discretion, into common shares of Plantify at a price of C$0.05 per share until the first anniversary of the debenture’s issuance and C$0.10 per share thereafter.
Removed
In connection with the June 2020 SPA, the Company issued to the December 2019 Lenders an aggregate of 67,369 shares of Common Stock and warrants to purchase an aggregate of 67,369 shares of Common Stock. The shares of Common Stock were issued on July 2, 2020.
Added
Accrued interest under the debenture may be converted at the market price of Plantify’s common shares, subject to TSXV approval at the time of conversion. Plantify executed a general security agreement in our favor and pledged to our company the shares of Plantify’ subsidiary, Peas of Bean Ltd.
Removed
Simultaneous with and conditioned upon the execution of the June 2020 SPA, the Company and each of the December 2019 Lenders, agreed to effectively cancel the December 2019 CLA and the equity securities issued thereunder. In connection therewith, each of the December 2019 Lenders, voluntarily waived any right to receive interest that accrued thereupon pursuant to the December 2019 CLAs.
Added
On September 7, 2023, we purchased additional 55,004,349 common shares of Plantify at a price of C$0.01 per common share (US$404,890), in a rights offering, resulting in an increase of approximately 7% in our company’s aggregate ownership of the issued and outstanding common shares of Plantify.
Removed
On September 23, 2020, we entered into a Securities Purchase Agreement (the “September 2020 SPA”) with Medigus in connection with the sale and issuance of 13,107 units, at a purchase price of $7.63 per unit, and for an aggregate purchase price of $100,000.
Added
Following the additional acquisition, we own 85,008,698 common shares of Plantify, representing approximately 23% of the current issued and outstanding common shares.
Removed
Each unit consists of: (i) one share of Common Stock and (ii) one warrant to purchase one share of Common Stock with an exercise price of $1.20. In connection with the September 2020 SPA, the Company issued to Medigus an aggregate of 13,107 shares of Common Stock and warrants to purchase an aggregate of 13,107 shares of Common Stock.
Added
The decrease is mainly the result of proceeds of $4,103,330 from our August 2022 underwritten offering compared to proceeds of $3,472,712 from standby equity purchase agreements in each of October 2023 and December 2023.
Removed
Furthermore, the September 2020 SPA contemplates an additional investment by Medigus not to exceed $25,000 (the “Additional Investment”), which investment shall be triggered following the parties’ initiation of a proof of concept procedure to test the effectiveness of the Company’s sanitizers and its residual effects against different pathogens.
Added
Financial Arrangements On August 18, 2022, we closed the August 2022 Underwritten Offering pursuant to which we issued a total of 228,572 shares of common stock at a public offering price of $21.00 per share.
Removed
In consideration for the Additional Investment, the Company has agreed to issue an additional 3,277 units at a purchase price of $7.63, which units shall contain the same composition of securities as described in the aforementioned description of the September 2020 SPA.
Added
In connection with the August 2022 Underwritten Offering, we agreed to grant the underwriter a 45-day option to purchase up to 34,286 additional shares of common stock at the public offering price of $21.00 per share, less the underwriting discounts and commissions solely to cover over-allotments, and to issue ThinkEquity LLC, as representative ( the “Representative”) a five-year warrant to purchase up to 11,429 shares of common stock, at a per share exercise price equal to 125% of the August 2022 Underwritten Offering price per share of common stock.
Removed
During September 2020, we entered into a series of convertible loan agreements (each a “September 2020 CLA”) with certain lenders (the “September 2020 Lenders”), to sell convertible promissory notes with an aggregate principal amount of $125,000 (the “September 2020 Notes”). The September 2020 Notes will bear interest at a rate of 5% per annum.
Added
The gross proceeds from the August 2022 Underwritten Offering were approximately $4,800,000. 59 On July 23, 2023, we entered into a purchase agreement with YA II PN, Ltd. (the “Investor”), pursuant to which the Investor agreed to purchase up to $3,500,000 of common stock, for 40 months from the date of the purchase agreement.
Removed
The outstanding loan amount will mature on the earlier of (i) the third anniversary of each September 2020 CLA or (ii) a deemed liquidation event (as defined therein).
Added
The price of the shares to be issued under the Purchase Agreement will be 94% of the lowest volume-weighted average price of the common stock for the three days prior to the delivery of each of our advance notices subject to certain limitations, including that (i) the Investor cannot purchase a number of shares that would result in it beneficially owning more than 4.99% of our outstanding shares of common stock.
Removed
The loan amount represented by the September 2020 Notes will be repaid to the September 2020 Lenders according to the following schedule: (i) the principal amount represented by the September 2020 Notes will be repaid in four bi-annual installments, commencing on the first anniversary following the closing of each September 2020 CLA, and (ii) the interest accrued on the loan amount will be paid in two bi-annual installments, commencing on the first anniversary of the first payment of that principal amount.
Added
We may request the Investor to advance up to $700,000 of the $3,500,000 commitment amount, with such advances to be evidenced by a promissory note. We cannot request any such advances after January 31, 2024.
Removed
The September 2020 Lenders may convert all or any portion of the September 2020 Notes into shares of Common Stock at any time prior to the closing of an underwritten public offering (the “Mandatory Conversion Event”), at a conversion price of $7.63 per share.
Added
On December 22, 2023, we entered into the Purchase Agreement with the Investor, pursuant to which the Investor has agreed to purchase up to $20 million of the common stock over the course of 36 months from the date of the Purchase Agreement.
Removed
In addition, the September 2020 Notes will be automatically converted into shares of Common stock immediately prior to a Mandatory Conversion Event, at a conversion price as shall be determined in connection with the Mandatory Conversion Event. 65 During October 2020, we entered into a series of convertible loan agreements (each a “October 2020 CLA”) with certain lenders (the “October 2020 Lenders”), to sell convertible promissory notes with an aggregate principal amount of $100,000 (the “October 2020 Notes”).
Added
The price of shares to be issued under the Purchase Agreement will be 94% of the lowest VWAP of our common stock for the three trading days immediately following the delivery of each Advance notice by us.
Removed
The October 2020 Notes will bear interest at a rate of 5% per annum. The outstanding loan amount will mature on the earlier of (i) the third anniversary of each October 2020 CLA or (ii) a deemed liquidation event (as defined therein).
Added
The Purchase Agreement will terminate automatically on the earlier of December 22, 2027, or when the Investor has purchased an aggregate of $20 million of our shares of common stock. We have the right to terminate the Purchase Agreement upon five trading days’ prior written notice to the Investor.
Removed
The loan amount represented by the October 2020 Notes will be repaid to the October 2020Lenders according to the following schedule: (i) the principal amount represented by the notes will be repaid in four bi-annual installments, commencing on the first anniversary following the closing of each October 2020 CLA, and (ii) the interest accrued on the loan amount will be paid in two bi-annual installments, commencing on the first anniversary of the first payment of that principal amount.
Added
As of March 29, 2024, we have sold the Investor 28,333 shares of common stock at an average purchase price of $1.50.
Removed
The October 2020 Notes will be automatically converted into shares of Common stock immediately prior to a Mandatory Conversion Event, at a conversion price as shall be determined in connection with the Mandatory Conversion Event.
Added
In connection with and subject to the satisfaction of certain conditions set forth in the Purchase Agreement, upon our request, the Investor pre-advanced to us up to $3,000,000 of the $20,000,000 commitment amount (a “Pre-Advance”), with each Pre-Advance to be evidenced by a promissory note (each, a “Note”).
Removed
In addition, the October 2020 Lenders may convert all or any portion of the notes into shares of Common Stock at any time prior to a Mandatory Conversion Event, at a conversion price of $7.63 per share.
Added
The Pre-Advance made to us will be subject to a 3% discount to the principal amount equal to each Note. Each Note accrues interest on the outstanding principal balance at the rate of 8% per annum.
Removed
During January 2021, we entered into a series of convertible loan agreements (each a “January 2021 CLA”) with certain lenders (the “January 2021 Lenders”), to sell convertible promissory notes with an aggregate principal amount of $274,000 (the “January 2021 Notes”). The January 2021 Notes bear interest at a rate of 5% per annum.
Added
The Company is required to pay, on a monthly basis, one tenth of the outstanding principal amount of each Note, together with accrued and unpaid interest, either (i) in cash or (ii) by submitting an Advance notice pursuant to the Purchase Agreement and selling the Investor shares, or any combination of (i) or (ii) as determined by us.
Removed
The outstanding loan amount matures on the earlier of (i) the third anniversary of each January 2021 CLA or (ii) a deemed liquidation event (as defined therein).

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