NEVE YARAK, Israel - N2OFF Inc. (NASDAQ: NITO), a clean tech company specializing in sustainable energy solutions, has entered the solar energy market with a new project in Melz, Germany. The company, in partnership with private investors, has agreed to finance a solar photovoltaic (PV) project with a capacity of 111 megawatts peak (MWp), committing a loan of €2.08 million.
The Melz solar project has received municipal approval and an indicative grid connection solution from a major regional energy service provider in Germany. This marks N2OFF's first foray into the solar sector, as it aims to establish a steady revenue stream by financing carefully selected projects.
David Palach, CEO of N2OFF, highlighted the increasing global demand for alternative energy solutions and the attractive profit margins in the solar sector. The agreement also includes a right of first refusal for the company and investors for future project investments up to €6 million.
Solterra, established in 2022, is active in Italy, Poland, and Germany, managing a diverse portfolio of solar PV projects with a cumulative capacity of approximately 300 megawatts. The global solar PV market, valued at $150 billion in 2022, is expected to surge to over $383.78 billion by 2032, growing at a compound annual growth rate (CAGR) of 9.90%.
The financing arrangement with N2OFF and its investors will assist the Melz project in achieving RTB status. The loan will be distributed based on completed milestones, carrying an interest rate of 7% per annum, and granting the lenders up to 50% of the net earnings rights.
N2OFF, formerly known as Save Foods, Inc., continues to engage in agri-tech solutions alongside its new solar PV initiatives. Its Israeli subsidiary, NTWO OFF Ltd., focuses on reducing greenhouse gas emissions, particularly nitrous oxide (N2O). Save Foods Ltd., another subsidiary, works on post-harvest treatments for fruits and vegetables.
N2OFF Inc. has announced a strategic expansion into the solar photovoltaic (PV) market via a partnership with Solterra Renewable Energy Ltd. The move is expected to diversify the company's portfolio in the renewable energy sector. The global solar PV market, valued at $150 billion in 2022, is projected to reach over $383.78 billion by 2032, according to Precedence Research.
Moreover, shareholders of N2OFF Inc. have approved a reverse stock split. The board now has the discretion to determine the exact ratio and timing of the implementation. 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.
InvestingPro Insights
N2OFF Inc. (NASDAQ: NITO) has made a significant move by entering the solar energy market with its latest project in Germany. As investors and market watchers evaluate the company's prospects in this new venture, certain financial metrics and expert tips can provide deeper insights into NITO's current financial health and future potential.
With a market capitalization of just 1.92 million USD, N2OFF is a relatively small player in the industry. This could imply a higher risk profile but also potential for growth, especially given the company's pivot into the burgeoning solar energy sector. The InvestingPro data indicates a Price / Book ratio of 0.33 as of the last twelve months leading up to Q1 2024, suggesting that the stock might be undervalued relative to the company's book value—a point of interest for value investors.
However, the company's revenue growth presents a challenge, with a significant decline of 56.42% over the last twelve months as of Q1 2024. This might raise concerns about the company's current business model and its ability to pivot successfully to new markets such as solar energy. Despite these challenges, N2OFF has demonstrated resilience in the short term, with a strong return over the last month of 16.98%.
InvestingPro Tips for N2OFF highlight that the company holds more cash than debt on its balance sheet and that analysts anticipate sales growth in the current year. These insights could signal financial stability and optimism about the company's future performance, aligning with the strategic move into the solar sector. Furthermore, the company's liquid assets exceed short-term obligations, suggesting a healthy liquidity position to support its new projects.
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