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 June 30, 2023

☐ 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)

______________________________________

(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 August 11, 2023, the registrant had 9,689,211 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		6

Item 1.	Condensed Consolidated Interim Financial Statements (unaudited)	6

	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	11-23

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33

Item 4.	Control and Procedures	33

PART II - OTHER INFORMATION		34

Item 1A.	Risk Factors	34

Item 6.	Exhibits	35

SIGNATURES		36

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 (set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) 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 customers require that our products undergo a lengthy pilot period without any assurance of sales;

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

●	we need to raise additional capital or sell more of our products to continue as a going concern;

●	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, which could prolong sales cycle;

●	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 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 achieve regulatory approvals and registration in the United States, Mexico, Israel, Spain, Italy, Chile, Colombia, Peru, and South Africa, 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 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 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, 2022 (filed on March 27, 2023) (“2022 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.

PART I – FINANCIAL INFORMATION

SAVE FOODS, INC.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

AS OF JUNE 30, 2023

IN U.S. DOLLARS

TABLE OF CONTENTS

		Page
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED):

	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 - 23

SAVE FOODS, INC.

UNAUDITED CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS

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

	June 30,			December 31,
	2023			2022
Assets
Current Assets
Cash and cash equivalents		2,969,707			5,700,709
Restricted cash		47,696			50,062
Accounts receivable, net		109,521			192,597
Inventories		91,702			81,706
Other current assets		737,434			247,370
Total Current assets		3,956,060			6,272,444

Right-of-use asset arising from operating lease		89,395			121,855
Property and equipment, net		64,204			97,914
Investment in nonconsolidated subsidiary (Note 3)		2,053,271			-

Total assets		6,162,930			6,492,213

Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable		394,939			419,814
Other liabilities		195,223			295,035
Total current liabilities		590,162			714,849
Operating lease liabilities		10,345			40,023

Total liabilities		600,507			754,872

Stockholders’ Equity
Common Stock of $ 0.0001 par value each (“Common Stock”): 495,000,000 shares authorized as of June 30, 2023 and December 31, 2022; issued and outstanding 7,774,545 and 4,614,726 shares as of June 30, 2023 and December 31, 2022, respectively.		777			462
Preferred stock of $ 0.0001 par value (“Preferred stock”): 5,000,000 shares authorized as of June 30, 2023 and December 31, 2022; issued and outstanding 0 shares as of June 30, 2023 and December 31, 2022.		-			-
Additional paid-in capital		30,970,981			28,710,019
Foreign currency translation adjustments		(26,275	)		(26,275	)
Accumulated deficit		(25,261,010	)		(22,837,827	)
Total Company’s stockholders’ equity		5,684,473			5,846,379
Non-controlling interests		(122,050	)		(109,038	)
Total equity		5,562,423			5,737,341
Total liabilities and equity		6,162,930			6,492,213

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)


	Six months ended						Three months ended
	June 30						June 30
	2023			2022			2023			2022

Revenues from sales of products		157,618			118,710			36,608			31,080
Cost of sales		(69,753	)		(54,847	)		(27,007	)		(12,998	)
Gross profit		87,865			63,863			9,601			18,082
Research and development expenses		(135,765	)		(322,738	)		(16,857	)		(113,376	)
Selling and marketing expenses		(157,921	)		(323,049	)		(88,775	)		(144,913	)
General and administrative expenses		(2,378,151	)		(2,040,682	)		(744,287	)		(1,036,725	)
Operating loss		(2,583,972	)		(2,622,606	)		(840,318	)		(1,276,932	)
Financing income, net		33,087			18,832			10,982			12,928
Other income		12,294			-			12,294			-
Gain on investment in nonconsolidated subsidiary		102,107			-			102,107			-
Net loss		(2,436,484	)		(2,603,774	)		(714,935	)		(1,264,004	)
Less: net loss attributable to non-controlling interests		13,301			17,354			5,430			7,334
Net loss attributable to the Company’s stockholders’ equity		(2,423,183	)		(2,586,420	)		(709,505	)		(1,256,670	)

Loss per share (basic and diluted)		(0.42	)		(0.91	)		(0.10	)		(0.44	)

Basic and diluted weighted average number of shares of Common Stock outstanding		5,833,578			2,841,027			6,986,046			2,862,562
Basic weighted average number of shares of Common Stock outstanding		5,833,578			2,841,027			6,986,046			2,862,562

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 equity

BALANCE AT DECEMBER 31, 2022		4,614,726		462		28,710,019		(26,275	)		(22,837,827	)		5,846,379			(109,038	)		5,737,341

Share based compensation to employees and directors		1,000,000		100		690,919		-			-			691,019			201			691,220
Issuance of shares to services providers		44,000		4		67,610		-			-			67,614			-			67,614
Comprehensive loss for the period		-		-		-		-			(1,713,678	)		(1,713,678	)		(7,871	)		(1,721,549	)
BALANCE AT MARCH 31, 2023		5,658,726		566		29,468,548		(26,275	)		(24,551,505	)		4,891,334			(116,708	)		4,774,626

Issuance of shares for exchange agreement		1,164,374		116		826,589		-			-			826,705			-			826,705
Share based compensation to employees and directors		-		-		5,699		-			-			5,699			88			5,787
Issuance of shares to services providers		951,445		95		670,145		-			-			670,240			-			670,240
Comprehensive loss for the period		-		-		-		-			(709,505	)		(709,505	)		(5,430	)		(714,935	)
BALANCE AT JUNE 30, 2023		7,774,545		777		30,970,981		(26,275	)		(25,261,010	)		5,684,473			(122,050	)		5,562,423

	Number of shares		Amount		Additional paid-in capital		Foreign currency translation adjustments			Accumulated deficit			Total Company’s stockholders’ equity			Non-controlling interests			Total 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
BALANCE		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
BALANCE		2,876,136		289		24,186,496		(26,275	)		(19,684,647	)		4,475,863			(87,175	)		4,388,688

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 )

	2023			2022
	Six months ended
	June 30,
	2023			2022

CASH FLOWS FROM OPERATING ACTIVITIES:
Loss for the period		(2,436,484	)		(2,603,774	)
Adjustments required to reconcile net loss for the period to net cash used in operating activities:
Depreciation		23,215			18,792
Decrease in liability for employee rights upon retirement, net		-			(15,935	)
Issuance of shares to employees and services providers		868,825			491,042
Share based compensation to employees and directors		14,247			16,999
Gain from sales of property and equipment		(12,294	)		-
Gain on investment in nonconsolidated subsidiary		(102,107	)		-
Interest expenses on loans		-			(677	)
Exchange rate differences on operating leases		(2,635	)		(15,474	)
Decrease in accounts receivable		83,076			141,550
Increase in inventory		(9,996	)		(13,702	)
Decrease (increase) in other current assets		61,725			(208,693	)
Decrease in accounts payable		(27,595	)		(52,556	)
Decrease in other liabilities		(94,395	)		(112,579	)
Net cash used in operating activities		(1,634,418	)		(2,355,007	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in nonconsolidated subsidiary		(1,124,458	)		-
Purchase of property and equipment		-			(26,968	)
Proceeds from sales of property and equipment		22,789			-
Decrease in funds in respect of employee rights upon retirement		-			11,287
Net cash used in investing activities		(1,101,669	)		(15,681	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term loans from banking institutions		-			(3,965	)
Net cash used in financing activities		-			(3,965	)

Effect of exchange rate changes on cash and cash equivalents		2,719			(4,239	)

DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		(2,733,368	)		(2,378,892	)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR		5,750,771			6,807,612

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD		3,017,403			4,428,720
Supplemental disclosure of cash flow information:
Non cash transactions:
Investment in nonconsolidated subsidiary (see Note 3)		826,705			-
Issuance of shares for future services		551,790			71,810
Initial recognition of operating lease right-of-use assets		-			56,671
Initial recognition of operating lease liability		-			56,671

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

SAVE FOODS, INC.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)

NOTE 1 - GENERAL

	A.	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., 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 for net proceeds of $4,103,330.

	B.	Securities Exchange agreement with Plantify

		On March 31, 2023, the Company entered into the Securities Exchange agreement with Plantify Foods, Inc. (“Plantify”) - see Note 3 below for further information.

	C.	Stock Exchange agreement with Yaaran Investments

		On July 11, 2023, the Company entered into a stock exchange agreement by and among the Company, Save Foods Ltd., Yaaran Investments Ltd., and NewCo a yet-to-be formed Israeli company (“NewCo”, and together, the “Parties”), see Note 9B below.

	D.	Going concern uncertainty

		Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $25 million. The Company has financed its operations mainly through fundraising from various investors.

		The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flows and cash balances as of June 30, 2023, management is of the opinion that its existing cash will be sufficient to fund operations until the middle of the third quarter of 2024. As a result, there is substantial doubt regarding the Company’s ability to continue as a going concern.

		Management plans to continue securing sufficient financing through the sale of additional equity securities or capital inflows from strategic partnerships. Additional funds may not be available when the Company needs them, on terms that are acceptable to it, or at all. If the Company is unsuccessful in securing sufficient financing, it may need to cease operations.

		The financial statements do not include adjustments for measurement or presentation of assets and liabilities, which may be required should the Company fail to operate as a going concern.

SAVE FOODS, INC.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)

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 Securities and Exchange Commission (“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 June 30, 2023, and its results of operations for the three and six months ended June 30, 2023, and 2022, changes in shareholders’ equity for the three and six months ended June 30, 2023 and 2022, and cash flows for the six months ended June 30, 2023 and 2022. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 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, 2022 as filed with the SEC. The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended December 31, 2022 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 except for the accounting policies investment in non-consolidated subsidiary as discussed below.

Principles of Consolidation

The consolidated financial statements are prepared in accordance with US GAAP. The consolidated financial statements of the Company include the Company and its majority-owned subsidiary. All inter-company balances and transactions have been eliminated.

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 and fair value measurements of investment in nonconsolidated subsidiary.

Fair value

Fair value of certain of the Company’s financial instruments including cash, accounts payable, accrued expenses, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements” which defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements.

Fair value, as defined by ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company’s credit risk.

SAVE FOODS, INC.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (continued)

Fair value (continued)

Valuation techniques are generally classified into three categories: (i) the market approach; (ii) the income approach; and (iii) the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values.

Fair value measurements are required to be disclosed by the level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), (ii) segregating those gains or losses included in earnings, and (iii) a description of where those gains or losses included in earning are reported in the statement of operations.

The Company’s financial assets that are measured at fair value on a recurring basis by level within the fair value hierarchy are as follows:

	Level 1		Level 2		Level 3		Total
	As of June 30, 2023
	Level 1		Level 2		Level 3		Total
	US$

Assets:
Investment in Plantify		903,371		-		-		903,371
Convertible loan		-		-		1,149,900		1,149,900
Total assets		903,371		-		1,149,900		2,053,271

SAVE FOODS, INC.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (continued)

Fair value (continued)

The following table presents the changes in fair value of the level 1 assets for the period April 5, 2023 through June 30, 2023:

	Changes in Fair value
	US$
Assets:
Initial recognition of the investment in Plantify as at April 5, 2023 (*)		929,800
Changes in fair value		(26,429	)
Outstanding at June 30, 2023		903,371

The following table presents the changes in fair value of the level 3 assets for the period April 5, 2023 through June 30, 2023:

	Changes in Fair value
	US$
Assets:
Initial recognition of the convertible loan issued as at April 5, 2023 (*)		1,021,300
Changes in fair value		128,600
Outstanding at June 30, 2023		1,149,900

(*)	Relative fair value calculated at inception.

SAVE FOODS, INC.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)

NOTE 3 – INVESTMENT IN NONCONSOLIDATED SUBSIDIARY

On March 31, 2023, the Company entered into a Securities Exchange agreement with Plantify, pursuant to which each of the respective parties agreed to issue to the opposite party 19.99% of its issued and outstanding capital stock. The Securities Exchange closing occurred on April 5, 2023.

Upon the Closing, the Company issued 1,164,374 shares of the Company’s Common Stock to Plantify, which amount represented 19.99% of Save Foods’ outstanding capital stock as of immediately prior to the Closing (and 16.66% of the Company’s outstanding capital stock as of immediately following the Closing), and Plantify issued 30,004,349 common shares of Plantify to the Company represented

SEC Form 10-Q filed by Save Foods Inc.