NEVE YARAK, Israel - Clean tech company N2OFF, Inc. (NASDAQ: NITO) has unveiled a series of strategic initiatives aimed at enhancing shareholder value, including the potential spin-off of its cleantech operations and the acquisition of a computational drug discovery firm.
The company is considering the formation of a new publicly traded entity to house its cleantech subsidiaries, NTWO OFF Ltd. and Save Foods Ltd. If the spin-off occurs, N2OFF plans to retain a controlling 75% stake in Save Foods Ltd. and will appoint the board of directors for the new company. Decisions regarding future dividends or distributions will be at the discretion of the new entity's board.
In addition, N2OFF has signed a non-binding letter of intent to acquire a drug discovery company valued at a minimum of $5 million, with the potential for an increase in valuation by $2 million. The acquisition would be financed through a combination of cash and equity. This move is expected to allow N2OFF to enter the pharmaceutical research market and aid the expansion of the drug discovery company.
Furthermore, the company has secured a €6 million credit line with an annual interest rate of 7%. Repayment of the loan is planned through profits from pre-approved projects or from a third of the proceeds from certain financing activities.
CEO David Palach expressed pride in leading a company with a forward-thinking board and believes these strategic decisions will strengthen N2OFF's position in the cleantech and pharmaceutical sectors while delivering long-term value to stockholders.
N2OFF, formerly known as Save Foods, Inc., focuses on sustainable solutions for the energy sector and agri-tech innovation. Its subsidiary NTWO OFF Ltd. provides solutions to reduce nitrous oxide emissions, and Save Foods Ltd. specializes in post-harvest treatments for fruits and vegetables. N2OFF is also involved in the solar PV market and holds a minority interest in Plantify Foods, Inc.
The company's forward-looking statements are subject to risks and uncertainties, including the successful execution of the spin-off, the definitive agreement for the acquisition, the integration of new businesses, and the repayment of the credit facility. These initiatives are based on a press release statement and are subject to change due to market conditions and other factors.
In other recent news, N2OFF, Inc. has made notable strides in the clean energy sector. The company issued shares to executives and an investor, as per a recent SEC filing. Additionally, N2OFF has partnered with Solterra Renewable Energy Ltd. on a 111 MWp solar PV project in Melz, Germany, which has secured grid connection approval. This development offers the potential to increase the project's capacity by up to 10% or integrate battery storage solutions.
The company has also committed a loan of €2.08 million towards the project, marking its entry into the solar sector. The global solar PV market is projected to grow from $150 billion in 2022 to over $383.78 billion by 2032, indicating a promising future for the venture.
Furthermore, N2OFF's shareholders have approved a reverse stock split, with the board determining the exact ratio and timing. However, a proposal to increase the number of authorized shares of capital stock from 500 million to over 10 billion did not receive the required majority approval. These are recent developments shaping N2OFF's journey in the renewable energy sector and corporate restructuring.
InvestingPro Insights
As N2OFF, Inc. (NASDAQ: NITO) embarks on its strategic initiatives, InvestingPro data provides additional context to the company's financial position and market performance. The company's market capitalization stands at a modest $1.85 million, reflecting its current small-cap status.
InvestingPro Tips highlight that N2OFF holds more cash than debt on its balance sheet, which could be advantageous as the company pursues its acquisition plans and manages its new credit line. This financial cushion may provide some flexibility as N2OFF navigates its strategic transitions.
However, the company faces significant challenges. InvestingPro data shows that N2OFF's revenue for the last twelve months as of Q2 2023 was only $0.17 million, with a concerning revenue growth decline of -61.61% over the same period. This context underscores the importance of the company's strategic moves to potentially spin off its cleantech operations and enter the pharmaceutical research market.
The stock's performance has been notably weak, with InvestingPro Tips indicating that the price has fallen significantly over the last year, three months, and six months. In fact, the one-year price total return stands at a stark -93.03%. This poor stock performance may be a driving factor behind the company's efforts to enhance shareholder value through restructuring and new business ventures.
It's worth noting that analysts anticipate sales growth in the current year, according to InvestingPro Tips. This projection, combined with the company's strategic initiatives, suggests that N2OFF is actively working to reverse its recent financial trends.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for N2OFF, providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.