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Credit facility | 3 Months Ended
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Mar. 31, 2025
Credit Facility |
Credit facility | Credit facility Under the Fair Value Option Subsection of ASC Subtopic 825-10, Financial Instruments – Overall (“ASC 825”), the Company has an irrevocable option to designate certain financial assets and financial liabilities at fair value on an instrument-by-instrument basis, with changes in fair value reported in the statement of operations. The loans drawn under the credit facility are measured at fair value at each reporting date, with changes in fair value recognized in earnings. Fair value changes exclude accrued interest, which is recorded separately in interest expense. In accordance with ASC 825-10-45-5, the portion of the change in fair value attributable to changes in the instrument-specific credit risk is recognized in other comprehensive income (loss). The Company estimates changes in instrument-specific credit risk by calculating the difference between the total fair value change of the instrument and the portion attributable to changes in a relevant risk-free interest rate benchmark. The Company elected the fair value option for its credit facility which includes an embedded prepayment option, see Note 7. N2OFF, INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (continued) Project assets The Company develops commercial solar power projects (“project assets”) for sale. Project assets consist primarily of costs relating to solar power projects in various stages of development that are capitalized prior to entering into a definitive sales agreement for the solar power project. These costs include certain acquisition costs, land costs and costs for developing and constructing a solar power project. Development costs can include legal, consulting, permitting, and other similar costs. Construction costs can include execution of field construction, installation of solar equipment, and solar modules and related equipment. The Company does not depreciate the project assets when they are considered held for sale. Any revenue generated from a solar power project connected to the grid would be considered incidental income and accounted for as a reduction of the capitalized project costs for development. In addition, the Company presents all expenditures related to the purchase, development and construction of project assets as a component of cash flows from investing activities. During the development phase, these project assets are accounted for in accordance with the recognition, initial measurement and subsequent measurement subtopics of ASC 970-360, as they are considered in substance real estate. While the solar power projects are in the development phase, they are generally classified as non-current assets, unless it is anticipated that construction will be completed, and sale will occur within one year. The Company reviews project assets and deferred project costs for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company considers a project commercially viable or recoverable if it is anticipated to be sold for a profit once it is either fully developed or fully constructed. The Company considers a partially developed or partially constructed project commercially viable or recoverable if the anticipated selling price is higher than the carrying value of the related project assets and the estimated costs to complete. The Company examines a number of factors to determine if the project will be recoverable, the most notable of which include whether there are any changes in environmental, ecological, permitting, market pricing or regulatory conditions that impact the project. Such changes could cause the costs of the project to increase or the selling price of the project to decrease. If a project is not considered recoverable, the Company impairs the respective project assets and adjusts the carrying value to the estimated recoverable amount, with the resulting impairment recorded within operations. Fair value Fair value of certain of the Company’s financial instruments including cash, accounts payable, accrued expenses, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements” which defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements. Fair value, as defined by ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. Valuation techniques are generally classified into three categories: (i) the market approach; (ii) the income approach; and (iii) the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values. Fair value measurements are required to be disclosed by the level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), (ii) segregating those gains or losses included in earnings, and (iii) a description of where those gains or losses included in earning are reported in the statement of operations. N2OFF, INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (continued) Fair value (continued) The Company’s financial assets that are measured at fair value on a recurring basis by level within the fair value hierarchy are as follows: SCHEDULE OF FAIR VALUE ASSETS ON RECURRING BASIS
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
|  | As of March 31, 2025 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
|  | US$ |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment in Plantify |  |  | 782 |  |  |  | - |  |  |  | - |  |  |  | 782 |
Investment in Solterra |  |  | 230 |  |  |  | - |  |  |  | - |  |  |  | 230 |
Solar photovoltaic joint venture project |  |  | - |  |  |  | - |  |  |  | 1,252 |  |  |  | 1,252 |
Loan granted to MitoCareX |  |  | - |  |  |  | - |  |  |  | 477 |  |  |  | 477 |
Convertible loan to Solterra |  |  | - |  |  |  | - |  |  |  | 346 |  |  |  | 346 |
Total assets |  |  | 1,012 |  |  |  | - |  |  |  | 2,075 |  |  |  | 3,087 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
|  | As of December 31, 2024 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
|  | US$ |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment in Plantify |  |  | 603 |  |  |  | - |  |  |  | - |  |  |  | 603 |
Investment in Solterra |  |  | 307 |  |  |  | - |  |  |  | - |  |  |  | 307 |
Solar photovoltaic joint venture project |  |  | - |  |  |  | - |  |  |  | 808 |  |  |  | 808 |
Loan granted to MitoCareX |  |  | - |  |  |  | - |  |  |  | 234 |  |  |  | 234 |
Convertible loan to Solterra |  |  | - |  |  |  | - |  |  |  | 350 |  |  |  | 350 |
Total assets |  |  | 910 |  |  |  | - |  |  |  | 1,392 |  |  |  | 2,302 |
N2OFF, INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (continued) Fair value (continued) The following table presents the changes in fair value of the level 3 assets for the period December 31, 2024 through March 31, 2025: SCHEDULE OF FAIR VALUE OF THE LEVELS 3 ASSETS
|  | Solar photovoltaic joint venture project |  |  | Loan granted to MitoCareX |  |  | Convertible loan to Solterra |  |  | Total |
|  | US$ |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Outstanding at December 31, 2024 |  |  | 808 |  |  |  | 234 |  |  |  | 350 |  |  |  | 1,392 |
Additions during the period |  |  | 362 |  |  |  | 250 |  |  |  | - |  |  |  | 612 |
Changes in fair value |  |  | 82 |  |  |  | (7 | ) |  |  | (4 | ) |  |  | 71 |
Outstanding at March 31, 2025 |  |  | 1,252 |  |  |  | 477 |  |  |  | 346 |  |  |  | 2,075 |
The Company’s financial liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy are as follows:
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
|  | As of March 31, 2025 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
|  | US$ |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stock purchase warrants liability |  |  | - |  |  |  | - |  |  |  | 1,912 |  |  |  | 1,912 |
warrant liabilities to Pure Capital |  |  | - |  |  |  | - |  |  |  | 415 |  |  |  | 415 |
Credit facility |  |  | - |  |  |  | - |  |  |  | 764 |  |  |  | 764 |
Total liabilities |  |  | - |  |  |  | - |  |  |  | 3,091 |  |  |  | 3,091 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
|  | As of December 31, 2024 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
|  | US$ |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
warrant liabilities to Pure Capital |  |  | - |  |  |  | - |  |  |  | 312 |  |  |  | 312 |
Total liabilities |  |  | - |  |  |  | - |  |  |  | 312 |  |  |  | 312 |

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