N2OFF, Inc., an agricultural chemicals company, has entered into an agreement with Plantify Foods, Inc. to settle an outstanding debt by acquiring a majority share in the Canadian company. On Monday, N2OFF, Inc. disclosed through an 8-K filing with the SEC that it will receive 2,420,848 common shares of Plantify Foods at a deemed price of CDN$0.848 per share, effectively settling a debt totaling CDN$2,052,879.39.
The debt settlement, dated November 15, 2024, addresses the principal and accrued interest on a matured convertible debenture as well as amounts drawn against a credit line provided by N2OFF to Plantify. Completion of the agreement is contingent upon approval from the TSX Venture Exchange, which at the time of reporting has not been granted. The transaction is scheduled to close on the third business day following the receipt of the necessary approval.
Upon finalization of the deal, N2OFF will hold approximately 65.4% of Plantify’s outstanding common shares, making it the majority shareholder. The agreement stipulates that the issuance of these shares will fully satisfy and extinguish the debt, releasing Plantify from any further claims or obligations related to it. Additionally, N2OFF will release any collateral that was securing the convertible debenture.
The Settlement Shares are subject to restrictions under U.S. and Canadian securities laws, including a four-month plus one day hold period in Canada, and cannot be offered or sold in the U.S. without registration or an applicable exemption from registration requirements. Plantify has indicated that there are no current plans to register these shares under U.S. securities laws.
In other recent news, N2OFF Inc. has been making significant strides in both the renewable energy and agriculture sectors. The company's subsidiary, Save Foods Ltd., has signed a non-binding letter of intent with an Ethiopian federal entity, GENSIS PM TDC, which could potentially generate millions in revenue for N2OFF and support Ethiopia's sustainable agriculture initiatives.
In addition, N2OFF 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 has also secured a €6 million credit line and issued shares to key executives and an investor.
In the renewable energy sector, N2OFF has partnered with Solterra Renewable Energy Ltd. on a solar PV project in Melz, Germany, committing a loan of €2.08 million to the project. This marks N2OFF's entry into the solar sector, a market projected to grow to over $383.78 billion by 2032.
InvestingPro Insights
N2OFF's acquisition of a majority stake in Plantify Foods through debt settlement comes at a time when the company's financial metrics reveal some challenges. According to InvestingPro data, N2OFF has a market capitalization of $1.88 million USD, with its stock price experiencing significant declines across various timeframes. The company's revenue for the last twelve months as of Q3 2024 stands at $0.18 million USD, with a concerning revenue growth of -54.07% over the same period.
InvestingPro Tips highlight that N2OFF holds more cash than debt on its balance sheet, which could provide some financial flexibility as it navigates this acquisition. Additionally, the company is trading at a low Price / Book multiple of 0.35, potentially indicating undervaluation. However, it's worth noting that N2OFF has not been profitable over the last twelve months, with a negative operating income of -$3.79 million USD.
Investors considering this development should be aware that N2OFF's stock has taken a significant hit, with a one-year price total return of -90.45%. This acquisition may be seen as a strategic move to diversify and potentially improve the company's financial position. For a more comprehensive analysis, InvestingPro offers 12 additional tips for N2OFF, providing deeper insights into the company's financial health and market position.
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