SATT 10-Q
Sativus Tech Corp. (SATT)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
for the quarterly period ended
OR
For the period from ___________ to ___________.
Commission file number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
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|
||
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| NA | NA | NA |
Indicate by check mark whether
the registrant (1) has filed all reports required 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 day.
Indicate by check mark whether
the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted 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 and post such files). Yes ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 if the Exchange Act.
| Large accelerated filer | ☐ | 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 November 14, 2024, the registrant had shares of its Common Stock, $0.001 par value, outstanding.
When used in this quarterly report, the terms “Sativus Tech Corp.” “the Company,” “we,” “our,” and “us” refer to Sativus Tech Corp.
TABLE OF CONTENTS
| PART I. | FINANCIAL INFORMATION | 1 |
| ITEM 1. | CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | F-1 |
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 2 |
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 6 |
| ITEM 4. | CONTROLS AND PROCEDURES | 6 |
| PART II | OTHER INFORMATION | 8 |
| ITEM 5. | OTHER INFORMATION | 8 |
| ITEM 6. | EXHIBITS | 8 |
| SIGNATURES | 9 | |
| i |
PART I. Financial Information
Item 1. Condensed Consolidated Financial Statements
SATIVUS TECH CORP.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As of September 30, 2024
| 1 |
SATIVUS TECH CORP.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As of September 30, 2024
IN THOUSANDS OF U.S. DOLLARS
INDEX
| F-1 |
SATIVUS TECH CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Short-term deposits | ||||||||
| Other current assets | ||||||||
| Other receivables | ||||||||
| Total current assets | ||||||||
| NON-CURRENT ASSETS | ||||||||
| Right-of-use asset | ||||||||
| Property and equipment, net | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payables | $ | $ | ||||||
| Other current liabilities | ||||||||
| Convertible loans | ||||||||
| Fair value of convertible component in convertible loans | ||||||||
| Short term lease liability | ||||||||
| Total Liabilities | ||||||||
| SHAREHOLDER’S DEFICIT | ||||||||
| Ordinary shares of $ par value Authorized: shares at September 30, 2024 and December 31, 2023; Issued and Outstanding: and shares at September 30, 2024 and December 31, 2023, respectively | ||||||||
| Additional Paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Shareholders’ deficit | ( | ) | ( | ) | ||||
| Non-controlling interests | ||||||||
| Total shareholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and shareholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| F-2 |
SATIVUS TECH CORP.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
U.S. dollars in thousands, except share and per share data
| Three months ended | Nine months ended | |||||||||||||||
| September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Selling and marketing | ||||||||||||||||
| General and administrative | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Financial income (expenses), net | ( | ) | ||||||||||||||
| Net profit (loss) | ( | ) | ( | ) | ||||||||||||
| Non-controlling interests | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss attributable to equity holders of the Company | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
| Basic net gain (loss) per share | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
| Diluted net gain (loss) per share | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
| Weighted average number of Ordinary shares used in computing basic loss per share | ||||||||||||||||
| Weighted average number of Ordinary shares used in computing diluted loss per share | ||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| F-3 |
SATIVUS TECH CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
U.S. dollars in thousands, except share and per share data
| Ordinary shares | Additional Paid in | Accumulated | Total Shareholders’ | Non- controlling | ||||||||||||||||||||||||
| Number | Amount | Capital | Deficit | Deficiency | Interests | Total | ||||||||||||||||||||||
| Balance as of January 1, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||
| Share Based Compensation to employees and non-employees | – | |||||||||||||||||||||||||||
| Net income (loss) | – | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance as of March 31, 2024 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||
| Share based compensation to non-controlling parties | – | |||||||||||||||||||||||||||
| Share Based Compensation to employees and non-employees | – | |||||||||||||||||||||||||||
| Net income (loss) | – | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of June 30, 2024 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||
| Share based compensation to non-controlling parties | – | |||||||||||||||||||||||||||
| Share Based Compensation to employees and non-employees | – | |||||||||||||||||||||||||||
| Net income (loss) | – | ( | ) | |||||||||||||||||||||||||
| Balance as of September 30, 2024 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||
| Ordinary shares | Additional Paid in | Accumulated | Total Shareholders’ | Non- controlling | ||||||||||||||||||||||||
| Number | Amount | Capital | Deficit | Deficiency | interests | Total | ||||||||||||||||||||||
| Balance as of January 1, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||
| Share based compensation to non-controlling parties | – | |||||||||||||||||||||||||||
| Share Based Compensation to employees and non-employees | – | |||||||||||||||||||||||||||
| Transactions with non-controlling parties | – | |||||||||||||||||||||||||||
| Net income (loss) | – | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of March 31, 2023 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||
| Share based compensation to non-controlling parties | – | |||||||||||||||||||||||||||
| Share Based Compensation to employees and non-employees | – | |||||||||||||||||||||||||||
| Cancellation of share options in subsidiary | – | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
| Net loss | – | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of June 30, 2023 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||
| Share based compensation to non-controlling parties | – | |||||||||||||||||||||||||||
| Share Based Compensation to employees and non-employees | – | |||||||||||||||||||||||||||
| Net gain (loss) | – | ( | ) | |||||||||||||||||||||||||
| Balance as of September 30, 2023 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| F-4 |
SATIVUS TECH CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
U.S. dollars in thousands
| Nine months ended | ||||||||
| September 30, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Share based compensation expenses to employees and non-employees | ||||||||
| Financial expenses related to convertible loans and warrants | ||||||||
| Change in fair value of convertible component in convertible loans | ( | ) | ||||||
| Changes in assets and liabilities: | ||||||||
| Decrease in other accounts receivable | ||||||||
| Increase in trade payables | ( | ) | ( | ) | ||||
| Decrease in other current liabilities | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Decrease (Increase) in short-term deposits | ( | ) | ||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from convertible loans | ||||||||
| Lease payments | ( | ) | ( | ) | ||||
| Repayment of convertible loans | ( | ) | ||||||
| Repayment of short term loans | ( | ) | ||||||
| Proceeds from issuance of shares to minority interests in subsidiary | ||||||||
| Net cash provided by financing activities | ( | ) | ||||||
| Decrease in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents at the beginning of the year | ||||||||
| Cash and cash equivalents at the end of the period | $ | $ | ||||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Conversion of convertible loans | $ | $ | ||||||
| Purchase of fixed assets by issuance of share capital | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| F-5 |
SATIVUS TECH CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands
| NOTE 1:- | GENERAL |
| a. | SATIVUS TECH CORP. (formerly SEEDO CORP.) (the “Company”, “Our” or “We”) was formed on January 16, 2015, under the laws of the State of Delaware. Prior to July 2020, we were involved in producing a plant growing device managed and controlled by an artificial intelligent algorithm, allowing consumers to grow their own herbs and vegetables effortlessly from seed to plant, while providing optimal conditions to assure premium quality produce year-round. However, due to financial and operational difficulties and during 2020, we ceased these operations and on July 19, 2020, the Company formed a new wholly-owned subsidiary in Israel, Hachevra Legiduley Pkaot Beisrael Ltd. (the “New Subsidiary”), to develop a fully automated and remotely managed system for growing saffron and other vegetables. On November 5, 2020, the New Subsidiary changed its name to Saffron-Tech Ltd. (or “Saffron Tech”). As of the date of this report, and following various financings in Saffron Tech, the Company owns 59% of Saffron Tech. |
The Company, through Saffron Tech, is focusing on its in-house research and development of agriculture technology products, among others, in the fields of exotic plants . Saffron Tech plans to roll out its proof of concept in the coming months. This technology will provide turnkey automated growing containers for high-quality, high-yield saffron all year round. The Company is in advanced stages of developing and testing a fully automated and remotely managed system for growing high-quality, high-yield saffron anywhere and anytime.
It is also environmentally friendly, using economic levels of water, space, fertilizer, and energy. Accounting to the Company’s calculations, we believe that the controlled indoor growing area will produce ten times more yield compared to the same land area using traditional methods. The sealed environment eliminates the need for herbicides, producing a clean and safe product that is easy to control from anywhere. The Company’s solution is easily scalable and pre-designed to quickly grow operations.
Saffron is used in many industries, such as the food industry, particularly by famous chefs and Michelin starred restaurants, the natural cosmetics industry and the food supplements industry and as a dye in the food industry. Medicinal claims as an anti-depressant, antioxidant, and antiseptic are constantly increasing.
| b. | The Company has an accumulated deficit in the total amount of $ |
The Company intends to finance operating costs over the next twelve months with existing cash on hand, reducing operating spend, and future issuances of equity and debt securities, or through a combination of the foregoing. However, the Company will need to seek additional sources of financing if the Company requires more funds than anticipated during the next 12 months or in later periods.
The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and liabilities and commitments in the normal course of business.
The consolidated financial statements for the nine months ended September 30, 2024, do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern.
| F-6 |
| SATIVUS TECH CORP. |
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
| U.S. dollars in thousands |
| NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES |
Basis of Presentation and Principles of Consolidation:
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary and were prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“GAAP”)
All intercompany accounts and transactions have been eliminated in consolidation.
Unaudited Interim Financial Information
The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2023, and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on April 1st, 2024 (the “2023 Annual Report”). The results for any interim period are not necessarily indicative of results for any future period.
The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments that are necessary to present fairly the Company’s financial position and results of operations for the interim periods presented. The results for the three and nine months ended September 30, 2024, are not necessarily indicative of the results for the year ending December 31, 2023, or for any future period.
As of September 30, 2024, there have been no material changes in the Company’s significant accounting policies from those that were disclosed in the 2023 Annual Report.
| F-7 |
| SATIVUS TECH CORP. |
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
| U.S. dollars in thousands |
| NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES (cont.) |
Fair value of financial instruments
ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”), defines fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.
In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the inputs as follows:
| Level 1 — | Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. |
| Level 2 — | Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. |
| Level 3 — | Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
The carrying amounts of cash and cash equivalents, short term deposits, trade receivables, trade payables and short-term loan approximate their fair value due to the short-term maturity of such instruments.
The Company elected to measure some of the convertible loans under the fair value option. Under the fair value option the convertible loans will be measured at fair value in each reporting period until they will be converted, with changes in the fair values being recognized in the Company’s consolidated statement of operations as financial income or expense. The proceeds received for the issuance of the convertible loans were allocated at fair value conducted on an arm’s-length basis.
| F-8 |
| SATIVUS TECH CORP. |
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
| U.S. dollars in thousands |
| NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES (cont.) |
The Company’s financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy are as follows:
| Balance as of September 30, 2024 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Liabilities: | ||||||||||||||||
| Fair Value of convertible component in convertible loan, net of discounts and debt issue costs | $ | $ | $ | $ | ||||||||||||
| Total liabilities | $ | $ | $ | $ | ||||||||||||
| Balance as of December 31, 2023 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Liabilities: | ||||||||||||||||
| Fair Value of convertible component in convertible loan, net of discounts and debt issue costs | $ | $ | $ | $ | ||||||||||||
| Total liabilities | $ | $ | $ | $ | ||||||||||||
| NOTE 3:- | CONVERTIBLE LOANS |
| a. | On February 21, 2019, the Company received a convertible loan from third party (“February 2019 Lender”), with a two-year term, in the principal amount of $ |
The Company at its option shall have the right to redeem, in part or in whole, outstanding principal amount and interest under this loan agreement prior to the maturity date. The Company shall pay an amount equal to the principal amount being redeemed plus a redemption premium equal to 20% of the outstanding principal amount being redeemed plus outstanding and accrued interest.
The February 2019 Lender shall be entitled to convert at its option any portion of the outstanding and unpaid principal or accrued interest into fully paid and nonassessable of shares of common stock, at the lower of the fixed conversion price then in effect or the market conversion price. The number of shares of common stock issuable upon conversion of any conversion amount shall be determined by dividing (x) such conversion amount by (y) the fixed conversion price of $20.00 or (z) 80% of the lowest the volume-weighted average price of the Company’s shares of common stock during the 30 trading days immediately preceding the conversion date.
The Company accounted for the February
2019 Loan in accordance with ASC 470-20, Debt with conversion and other Options. As of September 30, 2024, the BCF was revalued at $
| F-9 |
| SATIVUS TECH CORP. |
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
| U.S. dollars in thousands |
| NOTE 3:- | CONVERTIBLE LOANS (cont.) |
On November 1, 2024, the loan agreement
was extended until
The February 2019 Loan is included in
the convertible loans in current liabilities as of September 30th, 2024, in the amount of $
| b. | On October 15,
2019, the Company received a convertible loan from a third party (“October 2019 Lender”) in the principal amount of $ |
The October 2019 Lender shall be entitled to convert the principal loan and the outstanding interest (the “Conversion Amount”) into such number of ordinary shares determined by dividing (x) such Conversion Amount by (y) the fixed conversion price of $12.50 or (z) 80% of the lowest the volume-weighted average price of the Company’s ordinary shares during the 10 trading days immediately preceding the conversion date.
The Company accounted for the October
2019 Loan in accordance with ASC 470-20, Debt with conversion and other Options. As of September 30, 2024, the BCF was revalued at $
On November 1, 2024, the loan agreement
was extended until
Conversion feature
In accordance with ASC 815-15-25 the conversion feature was considered an embedded derivative instrument and is to be recorded at its fair value separately from the convertible notes, within current liabilities in the Company’s balance sheet. The conversion component is then marked to market at each reporting period with the resulting gains or losses shown in the statements of operations.
The Company accounted for the October
2019 Loan in accordance with ASC 470-20, Debt with conversion and other Options. As of September 31, 2024, the BCF was revalued at $
The October 2019 Loan is included in
the convertible loans in current liabilities as of September 30, 2024, in the amount of $
During the nine months ended September
30, 2024, the Company recorded interest and financial expenses related to October 2019 Loan in the amount of $
| F-10 |
| SATIVUS TECH CORP. |
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
| U.S. dollars in thousands |
| NOTE 3:- | CONVERTIBLE LOANS (cont.) |
| c. | On August 7,
2020, the Company received a convertible loan from a third party (“August 2020 Lender”) in the amount of $ |
The August 2020 Loan is convertible by the August 2020 Lender into Shares, at their discretion, at the lower of a fixed price of $1.02 (the “Fixed Conversion Price”) or 80% of the lowest volume weighted average price (“VWAP”) of the Company’s common stock during the 10 trading days immediately preceding the conversion date (the “Market Conversion Price”).
On November 1, 2024, the loan agreement
as extended until
The Company also granted the August 2020 Investor warrants to purchase shares of common stock of the Company at an exercise price of $2.00 per share, such exercise price is subject to any future price-based anti-dilution adjustments. Accordance with ASU 2017-11 the warrants were classified in shareholders equity.
The fair value of the warrants granted
was $
| August 2020 | ||||
| Share price | $ | |||
| Dividend yield | % | |||
| Risk-free interest rate | % | |||
| Expected term (in years) | ||||
| Volatility | % | |||
The Company accounted for the August
2020 Loan in accordance with ASC 470-20, Debt with conversion and other Options. The combined intrinsic value of the BCF for the August
2020 Loan was calculated and valued at $
The Company accounted for the August
2020 Loan in accordance with ASC 470-20, Debt with conversion and other Options. As of September 31, 2024, the BCF was revalued at $
The August 2020 Loan is included
in the convertible loans in short term liabilities as of September 31, 2024, in the amount of $
| F-11 |
| SATIVUS TECH CORP. |
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
| U.S. dollars in thousands |
| NOTE 3:- | CONVERTIBLE LOANS (cont.) |
During the nine months ended September
31, 2024, the Company recorded interest and financial expenses related to August 2020 Loan in the amount of $
| d. | From November 2020 through to December 31, 2020, the Company received $ |
From January 2021 through to February
16, 2021, the Company received an additional $
During the year ended December 31, 2021,
Promissory Notes in the amount of $
| e. | On July 31, 2020, the Company received a convertible loan from Mr. Shmuel Yannay (a third party at that time, and a director of the Company as of October 28, 2021) in the amount of $ |
The Director Loan is convertible into Shares, at his discretion, at the lower of a fixed price of $1.02 (the “Fixed Conversion Price”) or 80% of the lowest volume weighted average price (“VWAP”) of the Company’s common stock during the 10 trading days immediately preceding the conversion date (the “Market Conversion Price”).
The Company also granted the Mr. Yannay warrants to purchase shares of common stock of the Company at an exercise price of $2.00 per share, such exercise price is subject to any future price-based anti-dilution adjustments. Accordance with ASU 2017-11 the warrants were classified in shareholders equity.
The fair value of the warrants granted
was $
| August 2020 | ||||
| Share price | $ | |||
| Dividend yield | % | |||
| Risk-free interest rate | % | |||
| Expected term (in years) | ||||
| Volatility | % | |||
| F-12 |
| SATIVUS TECH CORP. |
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
| U.S. dollars in thousands |
| NOTE 3:- | CONVERTIBLE LOANS (cont.) |
The Company accounted for the director’s
loan in accordance with ASC 470-20, Debt with conversion and other Options. The combined intrinsic value of the BCF for the August 2020
Loan was calculated and valued at $
The Director Loan is included in the convertible
loans in short term liabilities as of September 31, 2024, in the amount of $
During the nine months ended September
30, 2024, the Company recorded interest and financial income related to Director Loan in the amount of $
| NOTE 4:- | RELATED PARTIES |
The following transactions arose with related parties:
| Nine months ended September 30, 2024 | Amounts owing by the Company | |||||||||||||||||||
| Directors Fees | Consulting Fees / Salaries | Interest | Total | as of September 30, 2024 | ||||||||||||||||
| Director and CEO | $ | $ | $ | $ | $ | ( | ) | |||||||||||||
| CFO | ( | ) | ||||||||||||||||||
| Company controlled by CFO | ( | ) | ||||||||||||||||||
| Directors | ( | ) | ||||||||||||||||||
| $ | $ | $ | $ | $ | ( | ) | ||||||||||||||
| Nine months ended September 30, 2023 | Amounts owing by the Company | |||||||||||||||||||
| Directors Fees | Consulting Fees / Salaries | Interest | Total | as of September 30, 2023 | ||||||||||||||||
| Director and CEO | $ | $ | $ | $ | $ | ( | ) | |||||||||||||
| CFO | ( | ) | ||||||||||||||||||
| Company controlled by CFO | ( | ) | ||||||||||||||||||
| Directors | ( | ) | ||||||||||||||||||
| $ | $ | $ | $ | $ | ( | ) | ||||||||||||||
| F-13 |
| SATIVUS TECH CORP. |
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
| U.S. dollars in thousands |
| NOTE 5:- | SHAREHOLDERS’ DEFICIT |
| a. | As of September 30, 2024 and December 31, 2023, the Company’s share capital is composed as follows: |
| September 30, 2024 | December 31, 2023 | |||||||||||||||
| Authorized | Issued and outstanding | Issued and outstanding | Issued and outstanding | |||||||||||||
| Number of shares | ||||||||||||||||
| Shares of common stock of $0.0001 par value each “Shares” | ||||||||||||||||
| b. | Warrants |
A summary of warrant activity during the nine months period ended September 30, 2024, and year ended December 31, 2023 is as follows:
| Number | Average exercise price | |||||||
| Warrants outstanding at January 1, 2023 | $ | |||||||
| Granted | ||||||||
| Exercised | ||||||||
| Forfeited/Cancelled | ( | ) | ||||||
| Forfeited/Cancelled | ( | ) | ||||||
| Warrants outstanding at December 31, 2023 | ||||||||
| Expired | ||||||||
| Exercised | ||||||||
| Forfeited/Cancelled | ||||||||
| Warrants outstanding at September 30, 2024 | $ | |||||||
| F-14 |
| SATIVUS TECH CORP. |
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
| U.S. dollars in thousands |
| NOTE 5:- | SHAREHOLDERS’ DEFICIT (cont.) |
The following warrants are outstanding as of December 31, 2023:
| Issuance date | Warrants outstanding | Exercise price per warrant | Warrants outstanding and exercisable | Expiry date | ||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
The following warrants and are outstanding as of September 30, 2024:
| Issuance date | Warrants outstanding | Exercise price per warrant | Warrants outstanding and exercisable | Expiry date | ||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| c. | Share option plans: |
On April 1, 2019, the Company’s board of directors adopted the Sativus Tech Corp. 2018 Share Options Plan (the “2018 Plan”).
Awards granted under the 2018 Plan are subject to vesting schedules and unless determined otherwise by the administrator of the 2018 Plan, generally vest following a period of four years from the applicable vesting commencement date, such that the awards vest in four annual equal instalments and/or generally vest following a period of one year from the applicable vesting commencement date, such that the awards vest in four quarterly equal instalments.
| F-15 |
| SATIVUS TECH CORP. |
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
| U.S. dollars in thousands |
| NOTE 5:- | SHAREHOLDERS’ DEFICIT (cont.) |
| (i) | A summary of employee share options activity during the nine-month period ended September 30, 2024, and for the year ended December 31, 2023, is as follows: |
| Number | Average weighted exercise price | |||||||
| Options outstanding at January 1, 2023 | $ | |||||||
| Granted | ) | |||||||
| Exercised | ||||||||
| Forfeited | ||||||||
| Options outstanding at December 31, 2023 | ||||||||
| Granted | ||||||||
| Exercised | ||||||||
| Forfeited | ||||||||
| Options outstanding at September 30, 2023 | ||||||||
| Options exercisable at September 30, 2024 | $ | |||||||
The following options are outstanding as of September 30, 2024:
| Issuance date | Options outstanding | Exercise price per option | Options outstanding and exercisable | Expiry date | ||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| F-16 |
| SATIVUS TECH CORP. |
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
| U.S. dollars in thousands |
| NOTE 5:- | SHAREHOLDERS’ DEFICIT (cont.) |
| (i) | A summary of employee share options activity during the nine-month period ended September 30, 2024, and for the year ended December 31, 2023, is as follows: |
| d. | Restricted Share Units: |
RSUs under the 2018 Plan may be granted upon such terms and conditions, no monetary payment (other than payments made for applicable taxes) shall be required as a condition of receiving the Company’s shares pursuant to a grant of RSUs, and unless determined otherwise by the Company, the aggregate nominal value of such RSUs shall not be paid and the Company shall capitalize applicable profits or take any other action to ensure that it meets any requirement of applicable laws regarding issuance of shares for consideration that is lower than the nominal value of such shares. If, however, the Company’s board of directors determines that the nominal value of the shares shall not be waived and shall be paid by the grantees, then it shall determine procedures for payment of such nominal value by the grantees or for collection of such amount from the grantees by the Company.
Shares issued pursuant to any RSUs units may (but need not) be made subject to exercise conditions, as shall be established by the Company and set forth in the applicable notice of grant evidencing such award. During any restriction period in which shares acquired pursuant to an award of RSUs remain subject to exercise conditions, such shares may not be sold, exchanged, transferred, pledged, assigned or otherwise disposed of unless otherwise provided in the 2018 Plan. Upon request by the Company, each grantee shall execute any agreement evidencing such transfer restrictions prior to the receipt of shares hereunder and the Company may place appropriate legends evidencing any such transfer restrictions on the relevant share certificates.
A summary of RSU activity during the nine months ended September 30, 2024, and the year ended December 31, 2023 is as follows:
| Number | ||||
| RSU outstanding at January 1, 2023 | ||||
| Granted | ||||
| Exercised | ||||
| Forfeited | ) | |||
| RSU outstanding at December 31, 2023 | ||||
| Granted | ||||
| Exercised | ||||
| Forfeited | ) | |||
| RSU’s outstanding at September 30, 2024 | ||||
| F-17 |
| SATIVUS TECH CORP. |
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
| U.S. dollars in thousands |
| NOTE 6:- | FINANCIAL INCOME (EXPENSES) |
| Three months ended | Nine months ended | |||||||||||||||
| September 30, 2024 | June 30, 2023 | September 30, 2024 | December 30, 2023 | |||||||||||||
| Financial income (expenses) related to interest and revaluation of convertible component in convertible loans | $ | $ | $ | ( | ) | $ | ||||||||||
| Financial expenses related to warrants | ||||||||||||||||
| Foreign currency transactions and other | ( | ) | ( | ) | ( | ) | ||||||||||
| $ | $ | $ | ( | ) | $ | |||||||||||
| NOTE 7:- | LIENS, COMMITMENTS |
Saffron leases its facility on a lease
that expires on
Saffron Tech is committed to pay royalties to the IIA on the proceeds from sales of products resulting from research and development projects in which the IIA participates by way of grants. In the first 3 years of sales the Company shall pay 3% of the sales of the product which was developed under IIA research and development projects. In the fourth, fifth and sixth years of sales, the Company shall pay 4% of such sales and from the seventh year onwards the Company shall pay 5% of up to 100% of the amount of grants received plus interest at LIBOR. Saffron Tech was entitled to the grants only upon incurring research and development expenditures. There were no future performance obligations related to the grants received from the IIA. As of September 30, 2024, the contingent liabilities with respect to grants received from the IIA, subject to repayment under these royalty agreements on future sales is $Nil. As of September 30, 2024, Saffron Tech received a total of $1,125 from the IIA
| NOTE 8:- |
SUBSEQUENT EVENTS |
On October 28th, 2024, the Board appointed Board Member and Director Shmulik Yannay as CEO of the Company. On the same day Tal Wilkes Glazer resigned her position as Director, CEO & Board Member. Her resignation was not the result of any dispute with the Company.
| F-18 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH OUR AUDITED FINANCIAL STATEMENTS AND THE RELATED NOTES THAT APPEAR ELSEWHERE IN THIS QUARTERLY REPORT ON FORM 10-Q AND THE FINANCIAL STATEMENTS AND RELATED NOTES THERETO FOR THE FISCAL YEAR ENDED DECEMBER 31, 2023 AND THE RELATED MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, BOTH OF WHICH ARE CONTAINED IN OUR ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”), ON MARCH 31, 2023. PAST OPERATING RESULTS ARE NOT NECESSARILY INDICATIVE OF RESULTS THAT MAY OCCUR IN FUTURE PERIODS. THE FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT REFLECT OUR PLANS, ESTIMATES AND BELIEFS. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE THOSE DISCUSSED BELOW AND ELSEWHERE IN THIS QUARTERLY REPORT.
FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws, and is subject to the safe-harbor created by such Act and laws. Forward-looking statements may include statements regarding our goals, beliefs, strategies, objectives, plans, including product and technology developments, future financial conditions, results or projections or current expectations These forward-looking statements involve known or unknown risks, uncertainties and other factors that may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “potential,” “continue,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” and similar expressions. These statements are based on our current beliefs, expectations, and assumptions and are subject to a number of risks and uncertainties. Although we believe that the expectations reflected-in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Our actual results may differ materially from those anticipated in these forward-looking statements. These forward-looking statements are made as of the date of this report, and we assume no obligation to update these forward-looking statements whether as a result of new information, future events, or otherwise, other than as required by law. In light of these assumptions, risks, and uncertainties, the forward-looking events discussed in this report might not occur and actual results and events may vary significantly from those discussed in the forward-looking statements. Further information on potential factors that could affect our business is described under the heading “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Readers are also urged to carefully review and consider the various disclosures we have made in that report.
When used in this quarterly report, the terms “Sativus,” “the Company,” “we,” “our,” and “us” refer to SATIVUS TECH CORP., a Delaware corporation, unless otherwise indicated or as otherwise required by the context.
Company Overview
SATIVUS TECH CORP. (formerly SEEDO CORP.) (the “Company”, “Our” or “We”) was formed on January 16, 2015, under the laws of the State of Delaware. Prior to July 2020, we were involved in producing a plant growing device managed and controlled by an artificial intelligent algorithm, allowing consumers to grow their own herbs and vegetables effortlessly from seed to plant, while providing optimal conditions to assure premium quality produce year-round. However, due to financial and operational difficulties and during 2020, we ceased these operations and on July 19, 2020, the Company formed a new wholly-owned subsidiary in Israel, Hachevra Legiduley Pkaot Beisrael Ltd. (the “New Subsidiary”), to develop a fully automated and remotely managed system for growing saffron and other vegetables. On November 5, 2020, the New Subsidiary changed its name to Saffron-Tech Ltd. (or “Saffron Tech”). As of the date of this report, and following various financings in Saffron Tech, the Company owns 54% of Saffron Tech.
| 2 |
The Company, through Saffron Tech, is focusing on its in-house research and development of agriculture technology products, among others, in the fields of exotic plants and mushrooms. Saffron Tech plans to roll out its proof of concept in the coming months. This technology will provide turnkey automated growing containers for high-quality, high-yield saffron all year round. The Company is in advanced stages of developing and testing a fully automated and remotely managed system for growing high-quality, high-yield saffron anywhere and anytime.
It is also environmentally friendly, using economic levels of water, space, fertilizer, and energy. Accounting to the Company’s calculations, we believe that the controlled indoor growing area will produce ten times more yield compared to the same land area using traditional methods. The sealed environment eliminates the need for harmful pesticides and herbicides, producing a clean and safe product that is easy to control from anywhere. The Company’s solution is easily scalable and pre-designed to quickly grow operations.
Saffron is used in many industries, such as the food industry, particularly by famous chefs and Michelin starred restaurants, the natural cosmetics industry and the food supplements industry and as a dye in the textile industry. Medicinal claims as an anti-depressant, antioxidant, and antiseptic are constantly increasing.
On January 6, 2022, the Company announced that its subsidiary, Saffron Tech, has planted approximately 25,000 Saffron bulbs in fields in the Golan Heights, in Norther Israel. The plantation is being managed in conjunction with the Shamir Research Institute.
On April 4, 2022, the Company announced that Mr. Moshe Bar Siman Tov and Mrs. Iris Tova Ginsburg have resigned from the Board of Directors of the Company, and immediately appointed Mrs. Tal Wilk-Glazer to its Board of Directors and as CEO of the Company.
In April 2022, Saffron Tech announced its new state-of-the-art indoor research and development center is operational. From April 2022, through to December 2022, Saffron Tech successfully completed three Saffron cultivation cycles using vertical farming technology, while traditional agriculture only produces one harvest of saffron per year.
On August 30, 2022, Saffron Tech, announced its intention to raise up to 5 million New Israeli Shekels (“NIS”) (approximately $1.5 million) at a pre-money valuation of NIS 32.5 million (approximately $10 million) through the Israeli crowdfunding platform – Pipelbiz (“2022 Crowd Funding Round”). Assuming the maximum amount is raised, the Company will own approximately 61% of Saffron Tech. The 2022 Crowd Funding Round was closed on December 1, 2022, having raised 3.8 million NIS (approximately $1.3 million). Fundraising expenses accumulated to $152 and the net amount raised through Pipelbiz was $1.15 million. Saffron Tech also raised 1.15 million NIS (approximately $328 thousand) through the issuance of SAFEs. The SAFEs are convertible at a 20% discount to the current crowdfunding round. Sativus Tech’s interest in Saffron Tech now totals 67.5% post-raise. All SAFEs were converted before December 31, 2022. Saffron Tech continued to raise funds through Pipelbiz under the same pre-money valuation from December 2022 through to January 2023, via another crowdfunding round “2023 Crowd Funding Round” which closed on February 5, 2023, having raised another 1.1 million NIS (approximately $314 thousand).
On March 1, 2023, Saffron Tech entered into an investment agreement with Korean-based company, Dreamtech Co Ltd (“Dreamtech”), a leading provider and manufacturer of tech components for innovative products including advanced mobile and medical devices. Under this new agreement, Dreamtech will fund an initial investment of $1 million followed by an additional $1 million upon a successful cultivation of saffron in Korea. Saffron Tech aims to be the first company to create a large-scale production of saffron using vertical farming technology to meet the growing demand of the spice for use in beauty, wellness, and pharmaceutical applications. Sativus Tech’s interest in Saffron Tech now totals 59% post-raise.
| 3 |
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial statement presentation and in accordance with Form 10-Q. Accordingly, they do not include all of the information and footnotes required in annual financial statements. In the opinion of management, the unaudited condensed financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position and results of operations and cash flows. The results of operations presented are not necessarily indicative of the results to be expected for any other interim period or for the entire year.
These unaudited condensed financial statements should be read in conjunction with our December 31, 2022, annual financial statements included in our Form 10-K, filed with the SEC on April 1st, 2024.
Going Concern
Due to the uncertainty of our ability to meet our current operating and capital expenses, our independent auditors included an explanatory paragraph in their report on the condensed consolidated financial statements for the nine months ended September 30, 2024, regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.
Our unaudited condensed financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they become due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that we will be able to continue as a going concern. Our unaudited condensed financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern. There is no assurance that our operations will be profitable. Our continued existence and plans for future growth depend on our ability to obtain the additional capital necessary to operate either through the generation of revenue or the issuance of additional debt or equity.
Financing
We will require additional financing to implement our business plan, which may include joint venture projects and debt or equity financings. The nature of this enterprise and constraint of positive cash flow places debt financing beyond the credit-worthiness required by most banks or typical investors of corporate debt until such time as an economically viable profits and losses can be demonstrated. Therefore, any debt financing of our activities may be costly and result in substantial dilution to our stockholders.
Future financing through equity investments is likely to be dilutive to existing stockholders. Also, the terms of securities we may issue in future capital transactions may be more favorable for our new investors. Newly issued securities may include preferences, superior voting rights, and the issuance of warrants or other derivative securities, which may have additional dilutive effects. Further, we may incur substantial costs in pursuing future capital and financing, including investment banking fees, legal fees, accounting fees, and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which will adversely impact our financial condition.
Our ability to obtain needed financing may be impaired by such factors as the capital markets, both generally and specifically in the Agro-tech industry, which could impact the availability or cost of future financings. If the amount of capital we are able to raise from financing activities, together with our revenue from operations, is not sufficient to satisfy our capital needs, even to the extent that we reduce our operations accordingly, we may be required to cease operations.
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There is no assurance that we will be able to obtain financing on terms satisfactory to us, or at all. We do not have any arrangements in place for any future financing. If we are unable to secure additional funding, we may cease or suspend operations. We have no plans, arrangements or contingencies in place in the event that we cease operations.
Results of Operations
Nine months ended September 30, 2024 compared to the nine months ended September 30, 2023
Operating Expenses
Research and development expenses for the nine months ended September 30, 2024, were $417 thousand compared to $301 thousand for the same period in 2022. Gross research and development expenses were $508 thousand, offset by the amounts received in respect of participation in expenses by the Israeli Innovation Authority in the amount of $91 thousand (previous period – $535) which reduced total research and development expenses for the nine months ended September 30, 2024, to $417 thousand.
General and administrative (“G&A”) expenses for the nine months ended September 30, 2024, were $194 thousand compared to $412 thousand for the same period in 2023.
Total financial expenses for the nine months ended September 30, 2024, was $171 compared to financial income in the amount of $380 thousand for the same period in 2023. Financial expenses and income are due mainly to financial gains or losses related to revaluations of convertible component in convertible loans.
Three months ended September 30, 2024 compared to the three months ended September 30, 2023
Operating Expenses
Research and development income for the three months ended September 30, 2024, was $93 thousand compared to expenses in the amount of $161 thousand for the same period in 2023. Gross research and development expenses in 2023 were $101 thousand, offset by the amounts received in respect of participation in expenses by the Israeli Innovation Authority in the amount of $9 which reduced total research and development expenses for the three months ended September 30, 2024, to $93 thousand.
General and administrative (“G&A”) expenses for the three months ended September 30, 2024, were $62 thousand compared to $107 thousand for the same period in 2023.
Total financial income for the three months ended September 30, 2024, was $2,174 compared to a total income of $1,252 thousand for the same period in 2023. Financial expenses and income are due mainly to financial profits or losses related to revaluations of the convertible component of the convertible loans.
Liquidity and Capital Resources
Overview
Since inception on January 16, 2015, the Company has a cumulative deficit of $23,482 thousand and a working capital deficit of $2,952 thousand as of September 30, 2024. Our future growth is dependent upon achieving further purchase orders and execution, management of operating expenses and the ability of the Company to obtain the necessary financing to fund future obligations, and upon profitable operations.
| 5 |
Historically, we have financed our cash flow and operations from the initial contribution of our majority shareholder and by raising equity and convertible loans.
As of September 30, 2024, we had current assets of $323 thousand consisting of $128 thousand in cash and cash equivalents, $22 thousand in short-term deposits and $173 thousand in other receivables.
We had $3,275 thousand in current liabilities consisting of $140 thousand in other current liabilities, $2,196 thousand in Convertible loans, $901 thousand in convertible component, and $38 thousand accounts payables.
As of December 31, 2023, we had current assets of $1,137 thousand consisting of $176 thousand in cash and cash equivalents, $648 thousand in short-term deposits and $313 thousand in other current assets. We had $3,130 thousand in current liabilities, which consisted of $46 thousand in accounts payable, $112 thousand other accounts payable, $2,074 thousand Convertible loans, $885 thousand in BCF liability, and $13 thousand in short term lease liability.
We had a negative working capital of $2,952 thousand and $1,993 thousand as of September 30, 2024, and December 31, 2023, respectively.
Our Current liabilities as of September 30, 2024, were $3,275 thousand compared to $3,130 thousand as of December 31, 2023.
During the nine months ended September 30, 2024, we had negative cash flow from operations of $380 thousand which was mainly the result of a net loss of $782 thousand, offset by financial losses from revaluations of convertible component in convertible loans in the amount of $122 thousand.
During the nine months ended September 30, 2024, we had cash flow from investing activities of $345 thousand compared to a negative cash flow from investing activities of $774 thousand during the nine months ended September 30, 2023. The increase was mainly due to the decrease in short term deposits in the amount of $626 thousand.
During the nine months ended September 30, 2024, we had a negative cash flow from financing activities of $13 thousand compared to a positive cash flow from financing activities of $1,019 thousand during the nine months ended June 30, 2023. Cash flow from financing activities in the nine months ended September 30, 2024, was a result of lease payment of $13 thousand.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act of 1934, as amended (the “Exchange Act”) and are not required to provide the information required under this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of our Quarterly Report on Form 10-Q, an evaluation was carried out by management, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of September 30, 2024. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
| 6 |
During evaluation of disclosure controls and procedures as of September 30, 2024, conducted as part of our preparation of the quarterly unaudited condensed financial statements, management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures and concluded that our disclosure controls and procedures were not effective.
Changes in Internal Control Over Financial Reporting
As of the end of the period covered by this report, there have been no changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
| 7 |
Part II - Other Information
Item 5. Other Information
During
the quarter ended September 30, 2024, no director or officer of the Company
Item 6. Exhibits
| Exhibit Number |
Description | |
| 10.1 | Form of Subscription Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 2, 2019). | |
| 31.1* | Rule 13a-14(a) Certification of the Chief Executive Officer | |
| 31.2* | Rule 13a-14(a) Certification of the Chief Financial Officer | |
| 32.1** | Section 1350 Certification of Chief Executive Officer | |
| 32.2** | Section 1350 Certification of Chief Financial Officer | |
| 101.INS | Inline XBRL Instance Document. | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| * | Filed herewith. |
| * | Furnished herewith. |
| 8 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated.
| SATIVUS TECH CORP. | ||
| Dated: November 14th, 2024 | By: | /s/ Shmulik Yannay |
| Shmulik Yannay | ||
| Chief Executive Officer | ||
| By: | /s/ Uri Ben-Or | ||
| Name: | Uri Ben-Or | ||
| Title: | Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | |||
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