NOTE 10 – COMMON STOCK AND WARRANTS

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

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

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

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

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

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

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

N2OFF, INC.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)

(USD in thousands, except share and per share data)

NOTE 10 – COMMON STOCK AND WARRANTS (continued)

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

 SCHEDULE OF ESTIMATED FAIR VALUE OF WARRANT SHARES ASSUMPTIONS

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

N2OFF, INC.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)

(USD in thousands, except share and per share data)

NOTE 10 – COMMON STOCK AND WARRANTS (continued)

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

NOTE 13 – STOCKHOLDERS’ EQUITY

COMMON STOCK AND WARRANTS

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

Common Stock:

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

Transactions:

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

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

N2OFF, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and per share data)

NOTE 13 – STOCKHOLDERS’ EQUITY (continued)

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

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

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

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

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

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

N2OFF, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and per share data)

NOTE 13 – STOCKHOLDERS’ EQUITY (continued)

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

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

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

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

N2OFF, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and per share data)

NOTE 13 – STOCKDERS’ EQUITY (continued)

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

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

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

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

N2OFF, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and per share data)

NOTE 13 – STOCKDERS’ EQUITY (continued)

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

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

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

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

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

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

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

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

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

N2OFF, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and per share data)

NOTE 13 – STOCKDERS’ EQUITY (continued)

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

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

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

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

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

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

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

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

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

N2OFF, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and per share data)

NOTE 13 – STOCKDERS’ EQUITY (continued)

The Pre-Funded Warrants are immediately exercisable at an exercise price of $0.00001 per share of Common Stock and will not expire until exercised in full. The Common Warrants have a 5 five-year term, are immediately exercisable and have an exercise price of $0.24, subject to certain anti-dilution and stock combination event protections. As of December 31, 2024, no balances have been recorded under this Agreement. See also note 24 (1).

N2OFF, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and per share data)