N2OFF, Inc. Reports 50% Revenue Increase but Faces Rising Losses in Q1 2025

N2OFF, Inc. reported its financial results for the first quarter of 2025, revealing a revenue of $66,000, a significant increase of 50% compared to $44,000 in the same period last year. The company achieved a gross profit of $52,000, up from $16,000, primarily due to a reduction in cost of sales, which decreased by 50% to $14,000 from $28,000. This improvement in profitability reflects the company's strategic focus on enhancing sales to its U.S. clients while managing operational costs effectively.

The company's total comprehensive loss for the quarter was $1,257,000, an increase of 53% from a loss of $822,000 in the prior year. This rise in losses was attributed to a substantial increase in financing expenses, which surged to $813,000 from a mere $5,000 in the previous year, largely due to changes in the fair value of PIPE warrant liabilities and credit facilities. Operating expenses also saw a decline, with general and administrative expenses falling to $604,000 from $742,000, driven by reduced share-based compensation and professional service costs.

In terms of strategic developments, N2OFF has been active in expanding its operations and partnerships. The company entered into a purchase agreement with YA II PN, Ltd. for a potential $3 million investment, which will be made available in two tranches. Additionally, N2OFF sold its 100% stake in NTWO OFF Ltd. for NIS 15,000, marking a significant organizational change. The company also formed a new subsidiary, NITO Renewable Energy, Inc., to enhance its renewable energy initiatives.

Operationally, N2OFF's cash and cash equivalents stood at $2,724,000 as of March 31, 2025, compared to $3,490,000 a year earlier. The company reported a working capital of $3,359,000, down from $3,861,000, indicating a tightening liquidity position. The company’s employee headcount and customer engagement metrics were not disclosed in the filing, but the focus on expanding its renewable energy projects suggests a strategic pivot towards sustainable solutions.

Looking ahead, N2OFF's management expressed concerns regarding its ability to continue as a going concern, citing an accumulated deficit of $35,746,000 and the need for additional financing to support operations. The company plans to seek further capital through equity or debt financing, although it acknowledges the uncertainty surrounding its ability to secure such funding on favorable terms. The ongoing geopolitical situation in Israel, where most of its operations are based, also poses risks that could impact future growth and operational stability.