UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from To

Commission File No. 001-40403

SAVE FOODS, INC.

(Exact name of registrant as specified in its charter)

Delaware		26-4684680
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

HaPardes 134 (Meshek Sander)
Neve Yarak, Israel		4994500
(Address of Principal Executive Offices)		(Zip Code)

(347) 468 9583

(Registrant’s telephone number, including area code)

n/a

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of exchange on which registered
Common Stock, Par value $0.0001 per share		SVFD		The Nasdaq Capital Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

☐	Large accelerated filer	☐	Accelerated filer
☒	Non-accelerated filer	☒	Smaller reporting company
		☒	Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of September 30, 2022, the registrant had 4,554,636 shares of common stock, par value $0.0001 (the “Common Stock”) issued and outstanding.

As used in this Quarterly Report and unless otherwise indicated, the terms “Save Foods,” “we,” “us,” “our,” or “our Company” refer to Save Foods, Inc. and Save Foods Ltd., the 98.48% owned subsidiary of Save Foods, Inc. Unless otherwise specified, all dollar amounts are expressed in United States dollars.

Save Foods, Inc.

Quarterly Report on Form 10-Q

TABLE OF CONTENTS

		Page
Cautionary Note Regarding Forward-Looking Statements		3

PART I - FINANCIAL INFORMATION		5

Item 1.	Condensed Consolidated Interim Financial Statements (unaudited)	5

	Condensed Consolidated Interim Balance Sheets (unaudited)	7

	Condensed Consolidated Interim Statements of Comprehensive Loss (unaudited)	8

	Condensed Consolidated Interim Statements of Stockholders’ Equity (unaudited)	9

	Condensed Consolidated Interim Statements of Cash Flows (unaudited)	10

	Notes to Condensed Consolidated Interim Financial Statements	11

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	25

Item 4.	Control and Procedures	25

PART II - OTHER INFORMATION		25

Item 1A.	Risk Factors	25

Item 6.	Exhibits	26

SIGNATURES		27

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information set forth in this Quarterly Report on Form 10-Q, including in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere herein may address or relate to future events and expectations and as such constitutes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements which are not historical reflect our current expectations and projections about our future results, performance, liquidity, financial condition, prospects and opportunities and are based upon information currently available to us and our management and their interpretation of what is believed to be significant factors affecting our business, including many assumptions regarding future events. Such forward-looking statements include statements regarding, among other things:

●	our expectations regarding our short and long-term capital requirements;

●	our history of operating losses and expectation to incur additional losses in the future;

●	our ability to raise additional capital to meet our liquidity needs;

●	because of our limited operating history, we may not be able to successfully operate our business or execute our business plan;

●	our products and technology requiring additional trials;

●	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

●	our ability to comply with the continued listing standards of the Nasdaq Capital Market;

●	sales of our products;

●	the size and growth of our product market;

●	our marketing plans;

●	our activity in the civilian market;

●	our ability to obtain market acceptance of our environmentally friendly solutions for fruits and vegetables;

●	our inability to respond effectively to technological changes in our industry, which could reduce the demand for our products;

●	our ability to satisfy or maintain compliance in the U.S. (including the U.S. Food and Drug Administration, the United States Environmental Protection Agency and the California Department of Pesticide Regulation), and international regulatory requirements and obtain required approvals for sales or exports of our products;

●	our ability to achieve regulatory approvals and registration in the United States and abroad (Mexico, Israel, Spain and Italy), which might take longer than expected;

●	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 reliance on a limited number of suppliers to produce certain key components of our products;

●	our plans to continue to invest in research and development;

●	our ability to establish and maintain strategic partnerships with third parties, including for the distribution of products;

●	our ability to establish sales, marketing and distribution capabilities or enter into successful relationships with third parties to perform these services;

●	our reliance on rapidly establishing global distributorship network in order to effectively market our products;

●	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;

●	inherent dangers in production and transportation of hydrogen peroxide and highly concentrated organic acids could cause disruptions and could expose us to potentially significant losses, costs or other liabilities;

●	our ability to attract and retain sufficient, qualified personnel;

●	our ability to obtain or maintain patents or other appropriate protection for the intellectual property;

●	our ability to grow both domestically and internationally;

●	our ability to adequately support future growth;

●	potential product liability or intellectual property infringement claims;

●	our business and operations may be affected by climate change conditions, which could materially harm our financial results;

●	risks relating to portfolio concentration;

●	risks relating to international expansion of our business and operations;

●	the effect of COVID-19 on our business; and

●	information with respect to any other plans and strategies for our business.

Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “should,” “would,” “could,” “scheduled,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “seek,” or “project” or the negative of these words or other variations on these words or comparable terminology. Actual results, performance, liquidity, financial condition and results of operations, prospects and opportunities could differ materially and perhaps substantially from those expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors. These statements may be found under the section of our Annual Report on Form 10-K for the year ended December 31, 2021 (filed on March 31, 2022) (“2021 Annual Report”) entitled “Risk Factors” as well as in our other public filings.

In light of these risks and uncertainties, and especially given the start-up nature of our business, there can be no assurance that the forward-looking statements contained herein will in fact occur. Readers should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

On February 23, 2021, we implemented a one-for-seven reverse stock split of our Common Stock pursuant to which holders of our Common Stock received one share of our Common Stock for every seven shares of Common Stock held. Unless the context expressly dictates otherwise, all references to share and per share amounts referred to herein reflect the reverse stock split.

PART I – FINANCIAL INFORMATION

Item 1. Condensed Consolidated Interim Financial Statements (unaudited).

SAVE FOODS, INC.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

AS OF SEPTEMBER 30, 2022

SAVE FOODS, INC.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

AS OF SEPTEMBER 30, 2022

IN U.S. DOLLARS

TABLE OF CONTENTS

	Page
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED):

Unaudited Condensed Consolidated Interim Balance Sheets	7

Unaudited Condensed Consolidated Interim Statements of Comprehensive Loss	8

Unaudited Condensed Consolidated Interim Statements of Stockholders’ Equity	9

Unaudited Condensed Consolidated Interim Statements of Cash Flows	10

Notes to Unaudited Condensed Consolidated Interim Financial Statements	11 - 17

SAVE FOODS, INC.

UNAUDITED CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS

(U.S. dollars except share and per share data)


	September 30,			December 31,
	2022			2021
Assets
Current Assets
Cash and cash equivalents		6,689,979			6,750,938
Restricted cash		49,707			56,674
Accounts receivable, net		49,329			172,630
Inventories		84,861			22,603
Other current assets		634,671			226,252
Total Current assets		7,508,547			7,229,097
Right-of-use asset arising from operating lease		134,577			129,613
Property and equipment, net		118,009			100,944
Funds in respect of employee rights upon retirement		125,462			137,625
Total assets		7,886,595			7,597,279
Liabilities and Shareholders’ Equity
Current Liabilities
Short-term loan from banking institutions		1,858			8,390
Accounts payable		345,922			539,360
Other liabilities		315,766			383,554
Total current liabilities		663,546			931,304
Operating lease liabilities		58,152			87,287
Liability for employee rights upon retirement		148,319			166,077
Total liabilities		870,017			1,184,668
Stockholders’ Equity
Common Stock $ 0.0001 par value per share (“Common Stock”): 495,000,000 shares authorized as of September 30, 2022 and December 31, 2021; issued and outstanding 4,554,636 and 2,806,536 shares as of September 30, 2022 and December 31, 2021, respectively.		457			281
Preferred Stock $ 0.0001 par value per share (“Preferred Stock”): 5,000,000 shares authorized as of September 30, 2022 and December 31, 2021; issued and outstanding 0 shares as of September 30, 2022 and December 31, 2021.		-			-
Additional paid-in capital		28,582,657			23,607,503
Foreign currency translation adjustments		(26,275	)		(26,275	)
Accumulated deficit		(21,444,060	)		(17,098,227	)
Total		7,112,779			6,483,282
Non-controlling interests		(96,201	)		(70,671	)
Total stockholders’ equity		7,016,578			6,412,611
Total liabilities and stockholders’ equity		7,886,595			7,597,279

The accompanying notes are an integral part of the condensed consolidated interim financial statements.

SAVE FOODS, INC.

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS

(U.S. dollars except share and per share data)


	Nine months ended						Three months ended
	September 30						September 30
	2022			2021			2022			2021

Revenues from sales of products		169,943			248,840			51,233			71,363
Cost of sales		(79,249	)		(67,931	)		(24,402	)		(53,644	)
Gross profit		90,694			180,909			26,831			17,719
Research and development expenses		(521,239	)		(363,003	)		(198,501	)		(66,470	)
Selling and marketing expenses		(440,156	)		(102,428	)		(117,107	)		(69,019	)
General and administrative expenses		(3,519,746	)		(2,847,444	)		(1,479,064	)		(1,174,737	)
Operating loss		(4,390,447	)		(3,131,966	)		(1,767,841	)		(1,292,507	)
Financing income (expenses), net		17,498			(163,837	)		(1,334	)		(7,776	)
Comprehensive loss		(4,372,949	)		(3,295,803	)		(1,769,175	)		(1,300,283	)
Less: net loss attributable to non-controlling interests		27,116			34,879			9,762			13,202
Net loss attributable to the Company’s stockholders’ equity		(4,345,833	)		(3,260,924	)		(1,759,413	)		(1,287,081	)

Loss per share (basic and diluted)		(1.39	)		(1.49	)		(0.48	)		(0.46	)

Basic and diluted weighted average number of shares of Common Stock outstanding		3,131,047			2,188,365			3,701,631			2,786,451

The accompanying notes are an integral part of the condensed consolidated interim financial statements.

SAVE FOODS, INC.

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(U.S. dollars, except share and per share data)


	Number of *shares ()**		Amount		Additional paid-in capital		Foreign currency translation adjustments			Accumulated deficit			Total Company’s stockholders’ equity			Non- controlling interests			Total stockholders’ equity

BALANCE AT DECEMBER 31, 2021		2,806,536		281		23,607,503		(26,275	)		(17,098,227	)		6,483,282			(70,671	)		6,412,611

Issuance of shares to employees and services providers		35,500		4		279,139		-			-			279,143			591			279,734
Share based compensation to employees and directors		-		-		11,642		-			-			11,642			180			11,822
Comprehensive loss for the period		-		-		-		-			(1,329,750	)		(1,329,750	)		(10,020	)		(1,339,770	)
BALANCE AT MARCH 31, 2022		2,842,036		285		23,898,284		(26,275	)		(18,427,977	)		5,444,317			(79,920	)		5,364,397
Issuance of shares to employees and services providers		34,100		4		283,114		-			-			283,118			-			283,118
Share based compensation to employees and directors		-		-		5,098		-			-			5,098			79			5,177
Comprehensive loss for the period		-		-		-		-			(1,256,670	)		(1,256,670	)		(7,334	)		(1,264,004	)
BALANCE AT JUNE 30, 2022		2,876,136		289		24,186,496		(26,275	)		(19,684,647	)		4,475,863			(87,175	)		4,388,688
Issuance of shares, net of issuance costs of $696,670		1,600,000		160		4,103,170		-			-			4,103,330			-			4,103,330
Issuance of shares to employees and services providers		78,500		8		245,456		-			-			245,464			-			245,464
Share based compensation to employees and directors		-		-		47,535		-			-			47,535			736			48,271
Comprehensive loss for the period		-		-		-		-			(1,759,413	)		(1,759,413	)		(9,762	)		(1,769,175	)
BALANCE AT SEPTEMBER 30, 2022		4,554,636		457		28,582,657		(26,275	)		(21,444,060	)		7,112,779			(96,201	)		7,016,578

(*) See note 3 (11)

	Number of shares		Amount		Additional paid-in capital		Foreign currency translation adjustments			Accumulated deficit			Total Company’s stockholders’ equity			Non- controlling interests			Total stockholders’ equity

BALANCE AT DECEMBER 31, 2020		1,606,765		161		11,867,585		(26,275	)		(12,277,647	)		(436,176	)		(29,277	)		(465,453	)

Share based compensation for employees and directors		-		-		83,605		-			-			83,605			895			84,500
Comprehensive loss for the period		-		-		-		-			(492,402	)		(492,402	)		(1,893	)		(494,295	)
BALANCE AT MARCH 31, 2021		1,606,765		161		11,951,190		(26,275	)		(12,770,049	)		(844,973	)		(30,275	)		(875,248	)

Issuance of shares, net of issuance costs of $1,542,138		1,090,909		109		10,457,753		-			-			10,457,862			-			10,457,862
Conversion of convertible loans		66,877		7		648,403		-			-			648,410			-			648,410
Stock based compensation to employees and directors		-		-		60,227		-			-			60,227			1,331			61,558
Issuance of shares to employees and services providers		12,000		1		126,599		-			-			126,600			-			126,600
Comprehensive loss for the period		-		-		-		-			(1,481,441	)		(1,481,441	)		(19,784	)		(1,501,225	)
BALANCE AT JUNE 30, 2021		2,776,551		278		23,244,172		(26,275	)		(14,251,490	)		8,966,685			(48,728	)		8,917,957
Stock based compensation to employees and directors		-		-		56,041		-			-			56,041			867			56,908
Issuance of shares to employees and services providers		16,285		2		151,320		-			-			151,322			-			151,322
Comprehensive loss for the period		-		-		-		-			(1,287,081	)		(1,287,081	)		(13,202	)		(1,300,283	)
BALANCE AT SEPTEMBER 30, 2021		2,792,836		280		23,451,533		(26,275	)		(15,538,571	)		7,886,967			(61,063	)		7,825,904

The accompanying notes are an integral part of the condensed consolidated interim financial statements.

SAVE FOODS, INC.

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

(U.S. dollars except share and per share data)


	Nine months ended
	September 30,
	2022			2021

CASH FLOWS FROM OPERATING ACTIVITIES:
Loss for the period		(4,372,949	)		(3,295,803	)
Adjustments required to reconcile net loss for the period to net cash used in operating activities:
Depreciation and amortization		30,528			14,511
Increase(decrease) in liability for employee rights upon retirement		(17,758	)		707
Issuance of shares to employees and services providers		641,463			277,925
Share based compensation to employees and directors		65,270			202,966
Expenses on convertible loans		-			116,100
Interest expenses on loans		(643	)		-
Exchange rate differences on operating leases		(13,912	)		-
Decrease in accounts receivable, net		123,301			111,139
Increase in inventories		(62,258	)		(1,618	)
Increase in other current assets		(241,566	)		(600,941	)
Increase (decrease) in accounts payable		(190,203	)		41,665
Decrease in other liabilities		(87,975	)		(56,557	)
Net cash used in operating activities		(4,126,702	)		(3,189,906	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(47,593	)		(15,357	)
Decrease (increase) in funds in respect of employee rights upon retirement		12,163			(8,403	)
Net cash used in investing activities		(35,430	)		(23,760	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible loans		-			274,000
Repayments of long-term loans from banking institutions		(5,889	)		(5,829	)
Proceeds from stock issued for cash, net of issuance costs		4,103,330			10,497,862
Net cash provided by financing activities		4,097,441			10,766,033
Effect of exchange rate changes on cash and cash equivalents		(3,235	)		8,383

INCREASE (DECREASE) IN CASH , CASH EQUIVALENTS AND RESTRICTED CASH		(67,926	)		7,560,750

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR		6,807,612			265,295

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD		6,739,686			7,826,045

Supplemental disclosure of cash flow information:
Non cash transactions:
Issuance of shares for future services		166,853			-
Initial recognition of operating lease right-of-use assets		56,671			152,472
Initial recognition of operating lease liability		56,671			152,472
Conversion of convertible loans		-			648,410
Deferred issuance expenses		-			40,000

The accompanying notes are an integral part of the condensed consolidated interim financial statements

SAVE FOODS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

NOTE 1 - GENERAL

Save Foods, Inc. (the “Company”) was incorporated on April 1, 2009, under the laws of the State of Delaware. On April 27, 2009, the Company acquired from its stockholders 98.48% of the issued and outstanding shares of Save Foods Ltd. (the Company and Save Foods Ltd. collectively, the “Group”), including preferred and Common Stock. Save Foods Ltd. was incorporated in 2004 and commenced its operations in 2005. Save Foods Ltd. develops, produces, and focuses on delivering innovative solutions for the food industry aimed at improving food safety and shelf life of fresh produce.

On May 13, 2021, the Company completed an underwritten public offering of 1,090,909 shares of its Common Stock for net proceeds of $10,457,862. Commencing on May 14, 2021, The Company’s common stock was listed on the Nasdaq Capital under the symbol “SVFD”.

On August 15, 2022, the Company completed an underwritten public offering of 1,600,000 shares of its Common Stock at a price to the public of $3.00 per share. The gross proceeds to the Company from this offering were $4,800,000, before deducting underwriting discounts, commissions and other offering expenses, and excluding the exercise of the over-allotment option by the underwriter, which was not exercised. The Company granted the underwriter a 45-day option to purchase up to 240,000 additional shares of Common Stock of the Company to cover over-allotments at the public offering price, less the underwriting discounts and commissions. In addition, the Company issued to the underwriter as compensation, warrants to purchase up to 80,000 shares of Common Stock (5% of the aggregate number of shares of Common Stock sold in this offering). The underwriter’s warrants are exercisable at a per share exercise price equal to 125% of the public offering price per share in this offering ($3.75). The underwriter’s warrants are exercisable at any time and from time to time, in whole or in part, during the four and a half year period commencing 180 days from the effective date of the registration statement.

Effects of the spread of the coronavirus

The COVID-19 pandemic continues to create business and economic uncertainty and volatility in the global markets. Many countries around the world are experiencing further outbreaks of the pandemic, which has resulted in governments once again imposing various restrictions. At the same time, there is a recovery trend in the volume of economic activity around the world that leads, on one hand, to significant demand for certain products and services, and on the other hand, disruptions to worldwide supply chain routes and some raw materials. The Group continues to take measures to ensure the health and safety of its employees, suppliers, other business partners and the communities in which it operates in order to ensure, among others, its operation level, the proper functioning of its facilities and to minimize the pandemic’s potential impact on its business. Manufacturing continues at the Group’s sites without interruptions. However, there is still a difficulty in assessing the future impacts of the pandemic on the Group’s operations, inter alia, in light of the uncertainty of its duration, the extent of its intensity and effects on global supply chains and global markets, and additional countermeasures that may be taken by governments and central banks.

SAVE FOODS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

Basis of presentation

The condensed interim consolidated financial statements included in this quarterly report are unaudited. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for a fair statement of the Company’s financial position as of September 30, 2022, and its results of operations for the three and nine months ended September 30, 2022, and 2021, changes in shareholders’ equity for the three and nine months ended September 30, 2022 and 2021, and cash flows for the nine months ended September 30, 2022 and 2021. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any other future annual or interim period. These financial statements should be read in conjunction with the audited financial statements included in the Company’s Form 10-K for the year ended December 31, 2021 as filed with the SEC. The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended December 31, 2021 included in the Company’s Form 10-K. Since the date of such financial statements, there have been no changes to the Company’s significant accounting policies.

Use of Estimates

The preparation of unaudited condensed consolidated interim financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, certain revenues and expenses, and disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results could differ from those estimates. As applicable to these financial statements, the most significant estimates and assumptions relate to share based compensation.

NOTE 3 – COMMON STOCK

On January 31, 2022, following the Board of Directors of Save Foods Ltd.’s appointment of Mr. Joachim Fuchs as the Chairman of the Board of Directors of Save Foods Ltd, the Board of Directors of the Company (the “Board”) approved the nomination and his consulting agreement. Based on the consulting agreement, Mr. Joachim Fuchs is entitled to a monthly fee of NIS 5,000 (approximately $1,600) and subject to the approval of the Board, 9,000 shares of Common Stock and, subject to the terms of the equity incentive plan to be adopted by the Company, options to purchase 1.5% of the Company’s’ outstanding capital stock as of the date of the agreement of which (1) 0.5% of such options shall have an exercise price of $1 and shall vest in 4 equal installments during the 12 month period commencing on the Effective Date (January 1, 2022), (2) 0.5% of such options shall have an exercise price of $1.25 and shall vest in 4 equal installments during the 12 month period following the 12 month anniversary of the Effective Date, (3) 0.5% of such options shall have an exercise price of $1.5 and shall vest in 4 equal installments during the 12 month period following the 24 month anniversary of the Effective Date. The Company determined the fair value of the options at $90,665. On March 24, 2022, the Company issued to Mr. Joachim Fuchs 9,000 shares of common stock. The Company determined the value of the shares at $38,790.

SAVE FOODS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

NOTE 3 – COMMON STOCK (continue)

On August 29, 2022, the Board of Directors approved an increase in Mr. Joachim Fuchs monthly fee to $5,000 and in addition, a one time issuance of 3,000 shares of Common Stock. Such shares were issued on September 7, 2022. The Company determined the value of the shares at $8,610 based on the share price at the resolution date.

On February 1, 2022, the Company entered into a letter agreement (the “Letter Agreement”) with a consultant according to which the consultant will provide the Company with public relations, branding and other services as detailed in the Letter Agreement. As consideration for the services, the Company will issue the consultant, a warrant to purchase up to an aggregate of 77,400 shares of Common Stock, at an exercise price of $0.05 per share (the “ February 2022 Warrant”). The February 2022 Warrant will be issuable in five equal installments, 15,480 warrant shares upon the later of the signing of the Letter Agreement or the approval of the Letter Agreement by the Board, and four additional quarterly installments ending in February 2023.

The fair value of the February 2022 Warrant was determined based on the Company’s share price as of the date of the Letter Agreement using the Black-Scholes pricing model, assuming a risk-free rate of 1.35%, a volatility factor of 52.14%, dividend yields of 0% and an expected life of 0.75 years and was calculated at $332,859.

During the nine months ended September 30, 2022, the Company recorded $105,358 as share based compensation expenses in respect of the February 2022 Warrant and share based compensation in the amount of $33,334, related to the cash exercise option.

On July 28, 2022 the Company and the consultant entered into an amendment to the Letter Agreement according to which the consultant shall be entitled to 30,960 February 2022 Warrants already vested and issued under the Letter Agreement and no further February 2022 Warrant shall be issued or issuable. The consultant shall be entitled to a per hour fee with a minimum aggregate compensation amounting to $30,600 for the six month period commencing on August 1, 2022.

On March 10, 2022, the Company entered into an Investor Relations Agreement (the “March IR Agreement”) with a consultant for a period of 12 months. According to the Agreement, the Company will pay the consultant for his services a monthly fee of $11,000 and in addition, 14,000 shares of Common Stock of the Company upon execution of the March IR Agreement. The shares were issued on March 10, 2022. The Company determined the value of the shares at $103,600. During the period of nine months ended September 30, 2022, the Company recorded share based compensation expenses of $57,907 and the remaining amount was recorded as prepaid expenses under other current assets.

SAVE FOODS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

NOTE 3 – COMMON STOCK (continue)

On June 27, 2022 the Company and the consultant, signed an amendment to the March IR Agreement, according to which the monthly cash payment for the three months ended September 30, 2022 would be $5,500.

On January 27, 2022, and on May 2, 2022, the Company issued an aggregate of 25,000 shares under its October 1, 2021 consulting agreement. On June 8, 2022 the Company decided to terminate the consulting agreement. During the nine months ended September 30, 2022, the Company recorded share based compensation expenses of $136,000 in respect of the above agreement.

On April 1, 2022, the Company entered into an Investor Relations Agreement (the “April IR Agreement”) with a consultant for a period of 90 days. According to the April IR Agreement, the Company will pay the consultant for his services a monthly fee of $15,000 and in addition, 12,000 shares of Common Stock of the Company upon execution of the agreement. The shares were issued on May 2, 2022. The Company estimated the value of the shares issued at $66,000 based on the share price on the agreement date.

In addition, the Company will issue warrants (the “April Warrant”) to purchase 60,000 shares of Common Stock, of which (a) 20,000 warrants shall vest after 12 months with an exercise price of $8, (b) 20,000 warrants shall vest upon the laps of 18 months with an exercise price of $9.50, and (c) 20,000 warrants shall vest after 24 months with an exercise price of $11. The fair value of the April Warrant was determined based on the Company’s share price as of the date of the April IR Agreement using the Black-Scholes pricing model, assuming a risk-free rate between 1.72% to 2.44%, a volatility factor between 52.14% to 63.36%, dividend yields of 0% and an expected life between 1 to 2 years and was calculated at $40,350.

On June 26, 2022 (the “April IR Amendment Date”), the Company entered into an amendment to the April IR Agreement (the “April IR Amendment”), according to which the Company shall engage the consultant for additional period of 90 days commencing on July 1, 2022. According to the amendment to the April IR Agreement, the Company will pay the consultant for his services a monthly fee of $3,333 and in addition, issued 12,000 shares of Common Stock upon execution of the amendment. Such shares were issued on August 22, 2022. The Company determined the value of the shares at $39,480 based on the share price of the April IR Amendment Date.

In addition, per the April IR Amendment, the Company will issue warrants to purchase 40,000 shares of Common Stock, of which (a) 20,000 warrants shall vest after 6 months with an exercise price of $4.50, (b) 20,000 warrants shall vest after 12 months with an exercise price of $6. The fair value of the warrants was determined based on the Company’s share price as of the April IR Amendment Date using the Black-Scholes pricing model, assuming a risk-free rate between 2.52% to 2.79%, a volatility factor between 52.12% to 56.48%, dividend yields of 0% and an expected life between 0.5 to 1 years and was calculated at $7,009.

On August 29, 2022, the Board approved a

SEC Form 10-Q filed by Save Foods Inc.