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 March 31, 2020June 30, 2021

☐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. 000-56100000-40403

SAVE FOODS, INC.

(Exact name of registrant as specified in its charter)

(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:

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 [X] ☒ 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 [X] ☒ 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.

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 [X] ☒

AsThe number of March 31, 2020,shares of the registrant had 10,209,487shares ofregistrant’s common stock, $0.0001 par value, $0.0001,outstanding as of the registrant issued and outstanding.August 11, 2021: 2,790,836.

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., our 98.48% owned subsidiary. Unless otherwise specified, all dollar amounts are expressed in United States dollars.

Save Foods, Inc.

Quarterly Report on Form 10-Q

TABLE OF CONTENTS

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:

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, 20192020 (filed on March 30, 2020)29, 2021) (“2020 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, par value $0.0001 per share (the “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. CONSOLIDATED FINANCIAL STATEMENTS.

SAVE FOODS, INC.

INTERIMCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2020JUNE 30, 2021

UNAUDITEDIN U.S. DOLLARS

INDEXTABLE OF CONTENTS

SAVE FOODS, INC.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2020

SAVE FOODS, INC.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2020

IN U.S. DOLLARS

TABLE OF CONTENTS

SAVE FOODS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

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

SAVE FOODS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

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

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

SAVE FOODS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

EQUITY (DEFICIT)

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

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

SAVE FOODS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

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

SAVE FOODS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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 all 98.48% of the issued and outstanding shares of Save Foods Ltd (formerly Pimi Agro Cleantech Ltd). (hereinafter: “Save Foods Israel”)Ltd., an Israeli company, including preferred and ordinary shares.

Common Stock. Save Foods IsraelLtd. was incorporated in 2004 and commenced its operations in 2005. Save Foods IsraelLtd. develops, produces, and focuses on delivering innovative solutions for the food industry aimed at improving food safety and prolonging shelf life of fresh produce.

In February 2010,Through May 13, 2021, the Company’s shares of common stock began quotation on the OTC Bulletin Board under the symbol “PIMZ.OB”. As of the date of the financial statements the Company’s shares of common stock areCommon Stock was quoted on the OTC, Pink Tier, under the symbol “SAFO”.

Going Concern

Since its incorporation (April 1, 2009), On May 13, 2021, the Company has not had any operations other than those carried out by Save Foods Israel. The development and commercializationcompleted an underwritten public offering of Save Foods Israel’s products will require substantial expenditures. Save Foods Israel and1,090,909 shares of Common Stock of the Company have not yet generated sufficient revenues from their operationsat a price to fund the Group activities and are therefore dependent upon external sources for financing their operations. There can be no assurance that Save Foods Israel and the Company will succeed in obtaining the necessary financing to continue their operations. Aspublic of March 31, 2020, the Company had $180,003 in cash, a negative working capital of $363,886 and an accumulated deficit of $11,050,155.

$11.00per share. The Company will need to secure additional capital in the future in order to meet its anticipated liquidity needs primarily through the sale of additional Common Stock or other equity securities and/or debt financing. Funds from these sources may not be availablegross proceeds to the Company on acceptable terms, if at all,from this offering were $12,000,000, before deducting underwriting discounts, commissions and other offering expenses, and excluding the exercise of the over-allotment option by the underwriter, which were not exercised. The Company granted the underwriter a 45-day option to purchase up to 163,636 additional shares of Common Stock of the Company cannot give assurance that it will be successful in securing such additional capital.

The Company focuses its solutions towards vegetablesto cover over-allotments at the public offering price, less the underwriting discounts and fruitscommissions, which are consideredwas not exercised by the largest in terms of worldwide consumption. Among other things,underwriter. In addition, the Company triesissued to cooperate with major fruit packing housesthe underwriter as compensation warrants to purchase up to 54,545 shares of Common Stock (5% of the aggregate number of shares of Common Stock sold in Israelthis offering exclusive of the over-allotment option, or the underwriter’s warrants). The underwriter’s warrants are exercisable at a per share exercise price equal to 125% of the public offering price per share in the offering, or $13.75 per share.The underwriter’s warrants are exercisable at any time and abroad. Asfrom time to time, in whole or in part, during the four one half year period commencing 180 days from the effective date of balance sheet date, the Company had not signed any significant agreements.registration statement.

These factors raise substantial doubt about Save Foods Israel andCommencing on May 14, 2021, the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result fromCommon Stock was initially listed on the outcome of this uncertainty.Nasdaq Capital Market under the symbol “SVFD”.

OnIn March 11, 2020, the World Health Organization declared the coronavirus (COVID-19) outbreak a global pandemic. To date, the impact of the pandemic on the Company’s operations has been mainly limited to a temporary facility closure in the context of a novel coronavirus (SARS-CoV-2)government-mandated general lockdown, which temporary delayed certain development activities. Due to be a global pandemic (COVID-19)the effects of COVID-19, as of the date of this report, some of Company's employees are on temporary leave without pay (furlough), which continuesincluding Company's Chief Technology Officer, and we have postponed some of our planned field tests due to spread throughout the United Statescurrent restriction on international travels. However, to date, the Company did not experience any material impact on our financial condition and aroundresults of operations due to COVID-19 However, the world. TheCompany is unable to assess with certainty the extent of future impact, in part due to the uncertainty regarding the duration of the COVID-19 pandemic, is having significantits force and its effects on globalthe markets supply chains, businesses,in which the Company operates and communities. Specificthe effects of possible government measures to prevent the spread of the virus.

Reverse Stock Split

On February 23, 2021, the Company amended its Certificate of Incorporation to effect a 7 to 1 reverse stock split of the Company’s outstanding Common Stock.

As a result of the reverse stock split, every 7 shares of the Company’s outstanding Common Stock prior to the Company, COVID-19 may impact various partseffect of its 2020 operationsthat amendment were combined and reclassified into one share of the Company’s Common Stock. No fractional shares were issued in connection with or following the reverse split. The number of authorized capital of the Company’s Common Stock and par value of the shares remained unchanged.

All share, stock option and per share information in these condensed consolidated financial results including but not limitedstatements have been restated to reduction in sales, difficulties in obtaining additional financing, or potential shortages of personnel. The Company believes it is taking appropriate actions to mitigatereflect the negative impact. However, the full impact of COVID-19 is unknown and cannot be reasonably estimated as these events occurred subsequent to year end and are still developing.stock split on a retroactive basis.

SAVE FOODS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

Unaudited Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiary, prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and with the instructions to Form 10-Q.. In the opinion of management, the financial statements presented herein have not been audited by an independent registered public accounting firm but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the financial condition, results of operations and cash flows for the for three-monthsthree and six-months ended March 31,June 30, 2021 and 2020. However, these results are not necessarily indicative of results for any other interim period or for the year ended December 31, 2020.2021. The preparation of financial statements in conformity with U.S. GAAP requires the Company to make certain estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual amounts could differ from these estimates.

Certain information and footnote disclosures normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission (“SEC”). These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on published on the OTCIQ Alternative Reporting System,Form 10-K for the year ended December 31, 20192020.

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 wholly-owned and majority-owned subsidiaries.subsidiary. All inter-company balances and transactions have been eliminated.

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United StatesU.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 the going concern assumptions and convertible loans.share based compensation.

SAVE FOODS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

Recent Accounting Pronouncements

In June 2016, FASBAugust 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”2020-06”). The guidance in ASU 2020-06 simplifies the accounting for convertible debt and convertible preferred stock by removing the requirements to separately present certain conversion features in equity. In November 2018, FASB issuedaddition, the amendments in the ASU No. 2018-19, “Codification Improvements2020-06 also simplify the guidance in ASC Subtopic 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity, by removing certain criteria that must be satisfied in order to Topic 326, Financial Instruments-Credit Losses”,classify a contract as equity, which amends the scope and transition requirements of ASU 2016-13. Topic 326 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amountis expected to be collected. The measurementdecrease the number of expected credit losses is basedfreestanding instruments and embedded derivatives accounted for as assets or liabilities. Finally, the amendments revise the guidance on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectabilitycalculating earnings per share, requiring use of the reported amount. Topic 326 will originally becomeif-converted method for all convertible instruments and rescinding an entity’s ability to rebut the presumption of share settlement for instruments that may be settled in cash or other assets. The amendments in ASU 2020-06 are effective for the Company beginning January 1, 2020, with early adoption permitted, on a modified retrospective approach. As a smaller reporting company, the effective date for the Company has been delayed until fiscal years beginning after December 15, 2022, in accordance with ASU 2019-10, although early adoption is still permitted. This standard is not expected to have a material impact to the Company’s consolidated financial statements after evaluation.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this ASU simplify the accounting for income taxes, eliminates certain exceptions to the general principles in Topic 740 and clarifies certain aspects of the current guidance to improve consistent application among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021 and interim periods within annual periods beginning after December 15, 2022, though early2021. Early adoption is permitted, including adoption in any interim period for which financial statements havepermitted. The guidance must be adopted as of the beginning of the fiscal year of adoption. The Company is currently evaluating the impact of this new guidance, but does not yet been issued. This standard is not expectedexpect it to have a material impact to the Company’s consolidatedon its financial statements after evaluation.statements.

NOTE 3 – CONVERTIBLE LOANS

In December 2019,On September 21, 2020, the Company entered into a series of Convertible Loan Agreements (each a “CLA”)convertible loan agreements with third parties and certain existing shareholders (the “Lenders”), pursuantlenders to which the Lenders agreed to provide the Company loans in the aggregate amount of $379,000 and in exchange the Company issued to the Lenders (i)sell convertible promissory notes (the “Notes”) and (ii) warrants with an exercise price of $1.20. In January and March 2020, the Company entered into two additional CLA agreements in the aggregate principal amount of $135,000, in the same terms.

The Notes will bear interest at a rate of 5% per annum. The loan amount represented by the Notes will be repaid to the Lenders according to the following schedule: (i) the principal amount represented by the Notes will be repaid in twenty four equal monthly installments, commencing on the twenty fifth month following the closing of each CLA and (ii) the interest accrued on the loan amount will be paid in two bi-annual installments, commencing on the first anniversary of the first payment of the principal amount.

$125,000. The outstanding loan amount of these convertible promissory notes will mature on the earlier of (i) the third anniversary of each CLAsuch convertible loan agreement or (ii) a deemed liquidation event, (as defined therein), and the Lenderslenders may convert all or any portion of the Notes at any time prior to the one-year anniversary of each issuanceconvertible promissory notes into shares of Common Stock at any time prior to a mandatory conversion event at a conversion price of US$1.20 $7.63 per share.share (collectively the “September 2020 CLAs”).

During October 2020, the Company entered into a series of additional convertible loan agreements with additional lenders to sell notes with an aggregate principal amount of $100,000, pursuant to the same terms a set forth in the September 2020 CLAs.

During January 2021, the Company entered into a series of additional convertible loan agreements with additional lenders to sell notes with an aggregate principal amount of $274,000, pursuant to the same terms a set forth in the September 2020 CLAs.

As part of the foregoing convertible loan agreements, the Company entered into registration rights agreements with each of the lenders, whereby each lender received piggyback registration rights for the shares of Common Stock issuable upon conversion of the notes.

On May 11, 2021 and May 12, 2021, the lenders of the convertible loans agreements utilized their optional conversion, of the entire balance of the convertible promissory notes in the aggregate principal amount of $499,000 and of aggregated accrued interest amount of $11,211, at a conversion price of $7.63 per share and the Company issued to the lenders an aggregate amount of 66,877 shares of Common Stock following the conversion.

SAVE FOODS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 34 – CONVERTIBLE LOANS (continue)COMMON STOCK

In accordance with ASC 815-15-25On May 13, 2021, the conversion feature was considered embedded derivative instruments, and is to be recorded at their fair value as its fair value can be separated from the convertible loan and its conversion is independentCompany completed an underwritten public offering of 1,090,909 shares of Common Stock of the underlyingCompany at a price to the public of $11.00 per share – see note value.1 above.

On May 15, 2021, the Company signed consulting agreement with a third party according to which the Consultant will provide the Company with investor relations services for a period of 12 months following the commencement date. As consideration for the agreement, the Company will pay the consultant an annual fee of $40,000 and issue the consultant 12,000 shares of Common Stock of the Company. On June 20, 2021, the Company issued 12,000 shares of Common Stock of the Company to the consultant. The Company recorded finance expenses in respect ofestimated the convertible component in the convertible loan in the excess amount of the convertible component fair value over the face loan amount. The conversion liability is then marked to market each reporting period with the resulting gains or losses shown in the statements of operations.

As a result of the above issuances, the Company recorded in the periods ended March 31, 2020 and December 31, 2019 a total amounts of US$34,696 and US$97,406, respectively, in respect of the detachable warrants, as a credit to stockholders’ equity (additional paid in capital). The fair value of the Warrants was determined using the Black-Scholes pricing model, assuming a risk free rate of 1.6%, a volatility factor of 54.00 %, dividend yields of 0 % and an expected life of 3 years. During the periods ended March 31, 2020 and December 31, 2019, the Company recorded interest and amortization expenses in the amounts of $16,790 and $4,323, respectively, in respect of the discounts recorded on the debentures.shares issue at $126,600.

NOTE 45 – STOCK OPTIONS

The following table presents the Company’s stock option activity for employees, directors and directorsconsultants of the Company for the threesix months ended March 31, 2020:June 30, 2021:

SCHEDULE OF STOCK OPTION ACTIVITY

The aggregate intrinsic value of the awards outstanding as of March 31, 2020June 30, 2021 is US$491,252.$941,627. These amounts represent the total intrinsic value, based on the Company’s stock price of US$ 0.9$ 7.92 as of March 31, 2020,June 30, 2021, less the weighted exercise price. This represents the potential amount received by the option holders had all option holders exercised their options as of that date.

Costs incurred in respect of stock-based compensation for employees and directors, for the threesix months ended March 31,June 30, 2021 and 2020 were $146,058 and 2019 were $35,403$219,667 respectively

SAVE FOODS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 6 – COMMITMENT AND CONTINGENT LIABILITIES

NOTE 7 – RELATED PARTIES

A. Transactions and $67,955, respectivelybalances with related parties

SCHEDULE OF TRANSACTIONS AND BALANCES WITH RELATED PARTIES