NITO.N2off, INC
10-Q: N2OFF Q3 2025: Strategic Shifts, MitoCareX Acquisition
Sentiment:
Quarterly Report
N2OFF, Inc. reports Q3 2025 results, highlighting strategic shifts into oncology and renewable energy, a significant MitoCareX acquisition, and ongoing capital raises amidst a going concern warning.
Delay expectedThe Purchase Agreement Amendment on July 25, 2025, was entered into 'in light of delays in filing of the registration statement' related to the Standby Equity Purchase Agreement (SEPA II).
Capital raiseConsummated a Private Placement transaction on January 2, 2025, issuing shares and warrants for gross proceeds of $1,500,000.Entered into a facility agreement with L.I.A. Pure Capital Ltd. on October 1, 2024, providing for up to EUR 6,000,000 (approximately $7,020,000) in financing.Utilized the Standby Equity Purchase Agreement (SEPA II) with YA II PN, Ltd., issuing 418,261 shares for $3,335,000 in September 2025 and 169,400 shares for $831,000 in October 2025.Issued a promissory note in the principal amount of $1,500,000 to YA II PN, Ltd. on August 12, 2025, as part of the Purchase Agreement Amendment.
Worse than expectedThe company's net loss for the nine months ended September 30, 2025, increased to $5,395,000 from $3,936,000 in the prior year, indicating a worsening financial performance year-to-date.Operating loss also increased significantly for the nine-month period, reflecting higher expenses relative to revenues.Management has explicitly stated substantial doubt about the company's ability to continue as a going concern, with current cash projected to last only until the end of Q3 2026, which is a critical negative indicator for investors.
Summary
- Reported a net gain of $370,000 for the three months ended September 30, 2025, a significant improvement compared to a net loss of $2,314,000 for the same period in 2024.
- Incurred a net loss of $5,395,000 for the nine months ended September 30, 2025, an increase from a net loss of $3,936,000 for the corresponding period in 2024.
- Gross profit for the nine months ended September 30, 2025, was $49,000, a substantial improvement from a gross loss of $41,000 in the prior year, primarily due to a decrease in cost of sales.
- Operating loss increased to $4,779,000 for the nine months ended September 30, 2025, from $3,064,000 in 2024, driven by higher research and development and general and administrative expenses.
- Cash and cash equivalents increased to $6,044,000 as of September 30, 2025, from $2,154,000 at December 31, 2024, largely due to financing activities.
- Completed the acquisition of 100% of MitoCareX Bio Ltd. on October 20, 2025, for $700,000 cash and 1,171,942 shares of common stock, representing approximately 40% of the company's fully diluted share capital.
- The investment in Plantify Foods, Inc. was fully impaired as of September 30, 2025, due to lack of an active market, deteriorating financial condition, and the insolvency of its operating subsidiary.
- The company's N2O emissions global warming solutions segment (NTWO OFF Ltd.) was discontinued following its sale on April 9, 2025, for approximately $4,000, resulting in a gain on disposal of $44,000.
- A 1-for-35 reverse stock split was effected on September 22, 2025, to regain compliance with Nasdaq's minimum bid price requirement.
- Management has expressed substantial doubt about the company's ability to continue as a going concern, with existing cash projected to fund operations only until the end of the third quarter of 2026.
Sentiment
Score: 4
Explanation: The sentiment is moderately negative due to the explicit 'going concern' warning, increased year-to-date net losses, and significant increases in general and administrative expenses. While there was a positive net gain in the most recent quarter and strategic moves into new sectors, the overall financial health and operational challenges, including the impairment of a significant investment and geopolitical impacts, weigh heavily on the outlook.
Positives
- Achieved a net gain of $370,000 for the three months ended September 30, 2025, a significant turnaround from a net loss of $2,314,000 in the prior year's comparable quarter.
- Gross profit for the nine months ended September 30, 2025, improved to $49,000 from a gross loss of $41,000 in 2024, driven by a substantial decrease in cost of sales.
- Net cash used in operating activities decreased to $2,311,000 for the nine months ended September 30, 2025, from $2,927,000 in 2024, indicating improved operational cash management.
- Successfully raised $8,097,000 from financing activities for the nine months ended September 30, 2025, significantly increasing cash and cash equivalents.
- Completed the strategic acquisition of MitoCareX Bio Ltd., expanding into oncology biotechnology with proprietary MITOLINE algorithm for cancer treatment.
- Expanded renewable energy portfolio through investments in solar photovoltaic joint venture projects in Germany and battery storage projects in Italy and Poland.
Negatives
- Reported an increased net loss of $5,395,000 for the nine months ended September 30, 2025, compared to $3,936,000 for the same period in 2024.
- Operating loss for the nine months ended September 30, 2025, increased to $4,779,000 from $3,064,000 in 2024, primarily due to higher research and development and general and administrative expenses.
- General and administrative expenses surged by 65% to $4,617,000 for the nine months ended September 30, 2025, largely due to increased share-based compensation, salaries, and legal expenses.
- Financing expenses, net, increased significantly to $1,832,000 for the nine months ended September 30, 2025, from $116,000 in 2024, mainly due to changes in the fair value of warrant liabilities and credit facilities.
- The investment in Plantify Foods, Inc. was fully impaired as of September 30, 2025, reflecting a loss of value due to its deteriorating financial condition and the insolvency of its operating subsidiary.
- The company's operations in Israel were temporarily shut down due to Operation Rising Lion on June 12, 2025, and the ongoing conflict with Hamas and other regional parties continues to pose risks.
Risks
- Efforts to complete and integrate current and/or future acquisitions and joint ventures could disrupt current business activities and adversely affect results of operations or future growth.
- Regulatory and compliance changes may adversely impact Solterra's operations and the joint venture value.
- Joint venture and partnership risks may affect Solterra's projects and the joint venture value.
- The ability to implement potential synergies between the company and MitoCareX may not be realized.
- International expansion of the business exposes the company to business, regulatory, political, operational, financial, and economic risks associated with doing business outside of the United States or Israel.
- The evolution of the business strategy may not be successful, potentially requiring additional financing, increasing operational costs, or causing other financial harm.
- Conditions in Israel, including ongoing political and economic instability and military conflicts, may adversely affect operations and limit the ability to market products, leading to decreased revenues.
- Inherent dangers in the production and transportation of hydrogen peroxide and highly concentrated organic acids could cause disruptions and expose the company to significant losses, costs, or liabilities.
- The ability to attract and retain sufficient, qualified personnel is crucial for future growth.
- The ability to obtain or maintain patents or other appropriate protection for intellectual property is essential.
- Potential product liability or intellectual property infringement claims could arise.
- The effect of climate change conditions on business operations and financial results is a concern.
- Portfolio concentration in specific projects or technologies poses a risk.
- Substantial doubt exists regarding the company's ability to continue as a going concern, as existing cash is projected to fund operations only until the end of the third quarter of 2026.
- Additional funds may not be available when needed, on favorable terms, or at all, potentially forcing the company to cease operations.
Future Outlook
Management expects to continue generating losses and negative cash flows for the foreseeable future and plans to secure sufficient financing through additional equity sales or strategic partnerships. The company intends to continue collaborating with Solterra to survey the European solar energy market for additional projects and will focus on integrating MitoCareX to advance oncology solutions. The final allocation of the MitoCareX purchase price will be calculated as part of the audited financial statements for December 31, 2025.
Management Comments
- Management currently is of the opinion that its existing cash will be sufficient to fund operations until the end of the third quarter of 2026.
- Management plans to continue securing sufficient financing through the sale of additional equity securities or capital inflows from strategic partnerships.
- We believe that our assumptions are based upon reasonable data derived from and known about our business and operations. No assurances are made that actual results of operations or the results of our future activities will not differ materially from our assumptions.
Industry Context
The company is undergoing a significant strategic diversification, shifting from primarily agri-food tech (Save Foods Ltd.) to include oncology biotechnology (MitoCareX Bio Ltd.) and renewable energy projects (NITO Renewable Energy, Inc. and Solterra collaborations). This move positions the company in high-growth sectors, potentially reducing reliance on the agri-food tech segment, which has faced challenges including the impairment of the Plantify investment and operational disruptions in Israel. The expansion into solar and battery storage aligns with global trends towards sustainable energy, while the oncology focus targets unmet medical needs. However, these new ventures require substantial capital and carry inherent development and market risks.
Comparison to Industry Standards
- The filing does not provide specific comparable companies, projects, or results to assess performance against global benchmarks.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Chief Executive Officer of MitoCareX BioLtd. | NA | Dr. Alon Silberman | 2025-10-20 | Appointment in connection with the acquisition of MitoCareX BioLtd. |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Stockholder Approval | Stockholders approved the acquisition of all share capital of MitoCareX Bio Ltd., including the issuance of common stock as consideration. | 2025-09-25 | Enables strategic expansion into oncology biotechnology and significant share issuance. |
| Stockholder Approval | Stockholders authorized the board of directors to effect a reverse stock split at a ratio of not less than 1-for-2 and not more than 1-for-150. | 2025-09-25 | Provides flexibility to manage share price for Nasdaq compliance and investor appeal. |
| Stockholder Approval | Stockholders approved the issuance of 1,850,000 shares of Common Stock and any additional shares upon exercise of a warrant issued to L.I.A. Pure Capital Ltd. | 2025-09-25 | Facilitates financing arrangements and potentially increases share count upon warrant exercise. |
| Reverse Stock Split | Effected a 1-for-35 reverse stock split of the company's outstanding Common Stock. | 2025-09-22 | Aimed to increase per share price to regain Nasdaq compliance and make stock more attractive to institutional investors; reduces outstanding share count. |
Related Party Transactions
- Loans granted to MitoCareX BioLtd. (First, Second, Third, and Fourth Loans) are guaranteed by L.I.A. Pure Capital Ltd., which is owed by the brother of Dr. Alon Silberman, the Chief Executive Officer of MitoCareX.
- The company's chairman of the board of directors also serves as a director of Solterra Energy Ltd., which is the parent company of Solterra Renewable Energy Ltd., a partner in solar projects and a loan recipient.
- L.I.A. Pure Capital Ltd. is the lender for the Pure Capital Credit Facility and was issued a five-year warrant to purchase 52,858 shares of common stock.
- Directors' compensation amounted to $324,000 for the nine months ended September 30, 2025, and salaries and fees to officers amounted to $856,000 for the same period.
Stakeholder Impact
- Shareholders face potential dilution from ongoing equity financing activities and the recent reverse stock split, but also potential long-term value creation from strategic diversification into oncology and renewable energy.
- Employees, particularly those in Israel, are directly affected by economic, political, geopolitical, and military conditions, including temporary operational shutdowns.
- Customers in the agri-food tech sector benefit from eco-friendly solutions for food safety and shelf life, while future customers in oncology could benefit from new cancer treatment therapeutics.
- Creditors (e.g., L.I.A. Pure Capital Ltd., YA II PN, Ltd.) are involved through various loan agreements, credit facilities, and standby equity purchase agreements, providing capital but also holding claims against the company.
- The company's ability to continue as a going concern directly impacts all stakeholders, as failure to secure additional financing could lead to cessation of operations.
Next Steps
- Secure sufficient financing through the sale of additional equity securities or capital inflows from strategic partnerships to address the going concern uncertainty.
- Complete the final allocation of the MitoCareX BioLtd. purchase price as part of the audited financial statements for December 31, 2025.
- Continue to collaborate with Solterra Renewable Energy Ltd. to survey the European solar energy market for additional projects and potential expansion to new countries.
- Advance targeted small-molecule therapeutics for oncology through MitoCareX BioLtd., focusing on Non-Small Cell Lung Cancer (NSCLC) and other disease indications associated with mitochondrial dysfunction.
Key Dates
| Date | Description |
|---|---|
| 2009-04-01 | Company incorporated under the laws of the State of Delaware. |
| 2009-04-27 | Acquired 98.48% of Save Foods Ltd. |
| 2023-03-31 | Entered into a securities exchange agreement with Plantify Foods, Inc. |
| 2023-04-05 | Securities Exchange with Plantify Foods, Inc. closed. |
| 2023-08-29 | Entered into an exchange agreement with Yaaran Investments Ltd. and formed NTWO OFF Ltd. |
| 2023-09-07 | Increased holdings in Plantify Foods, Inc. through participation in a rights offering. |
| 2023-10-02 | Stockholders approved the Reincorporation Merger. |
| 2023-11-06 | Entered into an Agreement and Plan of Merger with N2OFF, Inc., a newly formed Nevada corporation. |
| 2023-11-10 | Reincorporation Merger became effective on The Nasdaq Capital Market. |
| 2023-12-22 | Entered into an additional standby equity purchase agreement (SEPA II) with YA II PN, Ltd. |
| 2024-02-08 | Stockholders approved the company's name change to N2OFF, Inc. |
| 2024-03-19 | Company's name change to N2OFF, Inc. became effective on The Nasdaq Capital Market. |
| 2024-04-02 | Board of directors approved a Credit Facility of up to $250,000 for Plantify Foods, Inc. |
| 2024-06-28 | Stockholders approved a proposal authorizing the board of directors to effect a reverse stock split at a ratio of 1-for-2 to 1-for-35. |
| 2024-06-30 | Entered into a Loan Agreement with Solterra Renewable Energy Ltd. |
| 2024-07-31 | Entered into a Loan and Partnership Agreement with Horizons RES PE1 UG & Co. KG and Solterra Renewable Energy Ltd. |
| 2024-10-01 | Entered into a facility agreement with L.I.A. Pure Capital Ltd. (Pure Capital Credit Facility). |
| 2024-11-01 | Plantify Foods, Inc. fully utilized the Credit Facility. |
| 2024-12-05 | Company and Plantify Foods, Inc. completed a debt settlement agreement. Lender agreed not to convert warrants unless stockholders approve. |
| 2024-12-20 | Plantify Foods, Inc. conducted a private placement. |
| 2024-12-22 | Entered into a loan agreement (First Loan) with MitoCareX BioLtd. |
| 2025-01-02 | Consummated a Private Placement transaction. |
| 2025-01-06 | Drew down approximately EUR 375,000 (approximately $405,000) from the Pure Capital Credit Facility. |
| 2025-01-12 | Company's ownership interest in Plantify Foods, Inc. was reduced to approximately 25%. |
| 2025-02-10 | NITO Renewable Energy, Inc. was formed. |
| 2025-02-12 | Drew down approximately EUR 645,000 (approximately $700,000) from the Pure Capital Credit Facility. |
| 2025-02-24 | Entered into a shareholders agreement (Italy Agreement) with Solterra Brand Services Italy SRL and SB Impact 4 LTD. |
| 2025-02-25 | Entered into a securities purchase and exchange agreement (Mito Agreement) with MitoCareX BioLtd., SciSparc Ltd., Dr. Alon Silberman, and Prof. Ciro Leonardo Pierri. |
| 2025-03-12 | Entered into an additional Loan Agreement (Second Loan) with MitoCareX BioLtd. |
| 2025-03-14 | Holders of warrants to purchase 20,835 shares of common stock exercised their warrants. |
| 2025-03-28 | Received notice from Nasdaq regarding non-compliance with the minimum bid price requirement. |
| 2025-04-09 | Entered into a share purchase agreement (SPA) to sell 100% of NTWO OFF Ltd. |
| 2025-05-06 | Entered into a loan agreement with Soltra Renewable Energies Ltd. (Pikozow Project). |
| 2025-05-11 | Board of directors approved the issuance of an equity grant to executive officers and consultants. |
| 2025-05-12 | Issued shares to executive officers and consultants. Entered into a Purchase Agreement with YA II PN, Ltd. (First Closing of SEPA II). |
| 2025-05-13 | Paid a structuring fee and issued 19,305 shares to YA II PN, Ltd. |
| 2025-05-22 | Entered into an additional loan agreement (Third Loan) with MitoCareX BioLtd. Amended the terms of the First Loan and Second Loan to extend their maturity dates. |
| 2025-06-12 | Israel launched Operation Rising Lion, resulting in a temporary shutdown of operations in Israel for several days. |
| 2025-06-23 | Lenders provided EUR 25,000 in additional funding to the SRE Loan and Partnership Agreement. |
| 2025-07-25 | Entered into an amendment to the Purchase Agreement with YA II PN, Ltd. |
| 2025-07-28 | Holders of warrants to purchase 7,429 shares of common stock exercised their warrants. |
| 2025-07-31 | Issued an aggregate of 85,716 shares of common stock to three consultants for investor relations and business development services. |
| 2025-08-06 | Filed a registration statement on Form S-1 with the SEC. |
| 2025-08-12 | Issued a promissory note in the principal amount of $1,500,000 to YA II PN, Ltd. |
| 2025-08-13 | Entered into an additional loan agreement (Fourth Loan) with MitoCareX BioLtd. |
| 2025-08-17 | Fourth Loan Agreement with MitoCareX BioLtd. for $372,000. |
| 2025-08-19 | Filed a registration statement on Form S-1 with the SEC. |
| 2025-08-22 | Registration statement on Form S-1 declared effective by the SEC. |
| 2025-09-08 | Partnership entered into Addendum No. 2 to the SRE Loan and Partnership Agreement, committing additional funding of EUR 600,000. |
| 2025-09-10 | A ceasefire agreement was reached between Israel and Hamas. |
| 2025-09-18 | Board of directors approved a one-for-thirty-five (1-for-35) reverse stock split. |
| 2025-09-22 | Reverse Stock Split became effective for Nasdaq purposes. |
| 2025-09-25 | Stockholders approved the MitoCareX BioLtd. acquisition, the reverse stock split authorization, and the issuance of warrants to L.I.A. Pure Capital Ltd. |
| 2025-09-30 | End of the quarterly reporting period. |
| 2025-10-01 | Issued 169,400 shares of common stock to YA II PN, Ltd. for $831,000. |
| 2025-10-20 | Completed the acquisition of 100% of the share capital of MitoCareX BioLtd. |
| 2025-11-13 | Filing date of the Quarterly Report on Form 10-Q. |
Recommendation
sellDespite a positive net gain in the most recent quarter and strategic moves into promising sectors like oncology and renewable energy, the company faces significant financial distress. The explicit 'substantial doubt about its ability to continue as a going concern,' with cash projected to last only until Q3 2026, is a critical red flag. The increased year-to-date net loss, rising general and administrative expenses, and the impairment of a significant investment in Plantify Foods highlight ongoing operational and financial challenges. While capital raises have provided liquidity, they also lead to shareholder dilution. The geopolitical risks in Israel further complicate the outlook. A seasoned investor would likely view the going concern warning and persistent losses as outweighing the potential future benefits of strategic diversification, leading to a 'sell' recommendation to mitigate risk.
Keywords
N2OFF, NITO, SEC filing, 10-Q, quarterly report, financial results, agri-food tech, eco crop protection, food safety, shelf life, oncology biotechnology, cancer treatment, mitochondrial SLC25A, MITOLINE, renewable energy, solar projects, battery storage, Israel, going concern, capital raise, reverse stock split, MitoCareX, Solterra, Plantify
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