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INVESTMENT AND LOAN TO SOLTERRA

3 Months Ended

Mar. 31, 2025

NOTE 5 – INVESTMENT AND LOAN TO SOLTERRA

On June 30, 2024, the Company entered into a 24 month Loan Agreement with Solterra Renewable Energy Ltd. (“Solterra”) and other lenders, under which the Company committed €375 thousand (approximately $406) out of a total €500 thousand principal amount. The loan bears annual interest of 7%, payable beginning June 30, 2025. Solterra shall have the option to convert the loan into shares of Solterra Energy Ltd. (“SE”), at the lowest price per share under which SE raises capital during the period from the Loan Agreement date through conversion. If the loan is not converted or repaid in full within nine months from the closing date of the merger involving SE, the interest rate increases to 12% per annum.

The Company elected to account for the Loan Agreement under the fair value option in accordance with ASC 825. As of March 31, 2025, the Company estimated the fair value of the Loan Agreement at $346, based on a third-party valuation applying a 54.7% market discount rate for similar loans. The Company’s chairman of the board of directors also serves as a director of SE.

During 2024, the Company acquired 267,000 shares of SE for a total consideration of NIS801 thousand (approximately $219).

The Company calculated the investment at fair value accordance with ASC 321.

As of March 31, 2025, the Company recorded loss from the decrease in the fair value of the shares in the amount of $77.

N2OFF, INC.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)

(USD in thousands, except share and per share data)