Sativus Tech Corp. 10-K

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

Commission File Number: 333-208814

SATIVUS TECH CORP.

(Exact name of registrant as specified in its charter)

Delaware		47-2847446
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

#3 Bethesda Metro Center, #700 Bethesda, MD		06880
(Address of principal executive offices)		(Zip Code)

(800) 608-6432

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
NA		NA		NA

Securities registered pursuant to section 12(g) of the Act:

Common Stock, par value $0.0001

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No ☒

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

Note.—If a determination as to whether a particular person or entity is an affiliate cannot be made without involving unreasonable effort and expense, the aggregate market value of the common stock held by non-affiliates may be calculated on the basis of assumptions reasonable under the circumstances, provided that the assumptions are set forth in this Form. 0

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

Class		March 31^th, 2024
Common Stock, $0.001 par value per share		4,215,571 shares

TABLE OF CONTENTS

Part I
Item 1.	Business.	1
Item 1A.	Risk Factors.	2
Item 1B.	Unresolved Staff Comments.	2
Item 1C.	Cybersecurity.	2
Item 2.	Properties.	2
Item 3.	Legal Proceedings.	2
Item 4.	Mine Safety Disclosures.	2

Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	3
Item 6.	[Reserved]	5
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	5
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	10
Item 8.	Financial Statements and Supplementary Data.	F-1
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	11
Item 9A.	Controls and Procedures.	11
Item 9B.	Other Information.	12
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.	12

Part III
Item 10.	Directors, Executive Officers and Corporate Governance.	13
Item 11.	Executive Compensation.	16
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	17
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	17
Item 14.	Principal Accounting Fees and Services.	17

Part IV
Item 15.	Exhibits, Financial Statement Schedules.	18

SIGNATURES		19

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (this “Report”) contains “forward-looking statements” within the meaning of the Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue”, negatives thereof or similar expressions. These forward-looking statements are found at various places throughout this Annual Report and include information concerning: possible or assumed future results of our operations; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future operations, future cash needs, business plans and future financial results; and any other statements that are not historical facts.

From time to time, forward-looking statements also are included in our other periodic reports on Forms 10-Q and 8-K, in our press releases, in our presentations, on our website and in other materials released to the public. Any or all the forward-looking statements included in this Annual Report and in any other reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate. These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Considering these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Annual Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Annual Report.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

The cautionary statements made in this annual report are intended to be applicable to all related forward-looking statements wherever they may appear in this report.

We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly update any forward looking-statements, whether as a result of new information, future events or otherwise.

For discussion of factors that we believe could cause our actual results to differ materially from expected and historical results see “Item 1A - Risk Factors” below.

PART I

Item 1. Description of Business.

SATIVUS TECH CORP. (formerly SEEDO CORP.) (the “Company”, “Our” or “We”) was formed on January 16, 2015, under the laws of the State of Delaware. Prior to July 2020, we were involved in producing a plant growing device managed and controlled by an artificial intelligent algorithm, allowing consumers to grow their own herbs and vegetables effortlessly from seed to plant, while providing optimal conditions to assure premium quality produce year-round. However, due to financial and operational difficulties and during 2020, we ceased these operations and on July 19, 2020, the Company formed a new wholly-owned subsidiary in Israel, Hachevra Legiduley Pkaot Beisrael Ltd. (the “New Subsidiary”), to develop a fully automated and remotely managed system for growing saffron and other vegetables. On November 5, 2020, the New Subsidiary changed its name to Saffron-Tech Ltd. (or “Saffron Tech”). As of the date of this report, and following various financings in Saffron Tech, the Company owns 54% of Saffron Tech.

The Company, through Saffron Tech, is focusing on development of agriculture and technological products, in the fields of exotic plants.

Saffron Tech has developed a comprehensive agronomic and agrotechnical protocol for the cultivation of saffron. Moreover, the company has innovated proprietary Controlled Environment Agriculture (CEA) technology, designed to execute, monitor, and optimize this cultivation protocol effectively. Furthermore, Saffron Tech has established a meticulous extraction protocol to ensure the production of high-quality saffron extract. This holistic approach underscores the company's commitment to advancing saffron cultivation and extraction through cutting-edge technological solutions.

Saffron Tech is poised to launch its proof of concept pilot site for commercial saffron cultivation in the upcoming months. This initiative aims to introduce an advanced Controlled Environment Agriculture (CEA) system, facilitating the year-round cultivation of saffron irrespective of external climatic conditions. The system is engineered to ensure a continuous and dependable yield of saffron, maintaining consistent quality and quantity in a cost-effective manner.

Saffron finds application across multiple sectors, notably within the culinary realm where it is favored by renowned chefs and Michelin-starred establishments, the natural cosmetics sector, and the nutraceuticals industry. The recognition of saffron for its medicinal properties, including its use as an antidepressant, antioxidant, and antiseptic, is on the rise. The total Saffron Tech market opportunity evaluated as $2.3B in 2023, and is anticipated to grow up to $3.7B by 2032. The market opportunity is based on the Saffron Marker, Saffron extraction market, and potential segments in the nutraceutical and cosmetical use markets.

In April 2022, Saffron Tech announced its new state-of-the-art indoor research and development center is operational. As of April 2022 Saffron Tech successfully completing four Saffron cultivation cycles a year, using CEA, while traditional agriculture only produces one harvest of saffron per year.

On December 9, 2021, we implemented a 1-for-10 consolidation, or reverse split, of our issued and outstanding common shares. Except where otherwise indicated, all share and per share data in this 10-K have been retroactively restated to reflect the reverse stock split.

On December 13, 2021, the Company changed its name from Seedo Corp to Sativus Tech Corp. On the same day the Company also announced the appointment of Tal Wilk-Glazer as the CEO of Saffron Tech. Wilk-Glazer joins Saffron-Tech after finishing her job at Salesforce as Salesforce’s Industries Eastern Europe, Africa and Israel regional director.

On January 6, 2022, the Company announced that its subsidiary, Saffron Tech, has planted approximately 25,000 Saffron bulbs in fields in the Golan Heights, in Norther Israel. The plantation is being managed in conjunction with the Shamir Research Institute, which operates under the auspices of the Haifa University, Israel.

On April 4, 2022, the Company announced that Mr. Moshe Bar Siman Tov and Mrs. Iris Tova Ginsburg have resigned from the Board of Directors of the Company, and immediately appointment of Mrs. Tal Wilk-Glazer to its Board of Directors and as CEO of the Company.

On August 30, 2022, Saffron Tech, announced its intention to raise up to 5 million New Israeli Shekels (“NIS”) (approximately $1.5 million) at a pre-money valuation of NIS 32.5 million (approximately $10 million) through the Israeli crowdfunding platform – Pipelbiz (“2022 Crowd Funding Round”). Assuming the maximum amount is raised, the Company will own approximately 61% of the Saffron Tech. The 2022 Crowd Funding Round was closed on December 1, 2022, having raised 3.8 million NIS (approximately $1.3 million). Fund raising expenses accumulated to $152 and the net amount raised through Pipelbiz was $1.15 million. Saffron Tech also raised 1.15 million NIS (approximately $328 thousand) through the issuance of SAFEs. The SAFEs are convertible at a 20% discount to the current crowd funding round. Sativus Tech’s interest in Saffron Tech now totals 67.5% post-raise. All SAFEs were converted before December 31, 2023. Saffron Tech continued to raise funds through Pipelbiz under the same pre-money valuation during December 2022 through to January 2023, via another crowd funding round “2023 Crowd Funding Round” which closed on February 5, 2023, having raised another 1.1 million NIS (approximately $314 thousand).

On March 1, 2023, Saffron Tech entered into an investment agreement with Korean-based company, Dreamtech Co Ltd (“Dreamtech”), a leading provider and manufacturer of tech components for innovative products including advanced mobile and medical devices. Under this new agreement, Dreamtech will fund an initial investment of $1 million followed by an additional $1 million upon a successful cultivation of saffron in Korea. Saffron Tech aims to be the first company to create a large-scale production of saffron using vertical farming technology to meet the growing demand of the spice for use in beauty, wellness, and pharmaceutical applications. Dreamtech and Saffron Tech started a mutual POC in Korea. The POC results expected to be amounted in Q1/24. The Company’s interest in Saffron Tech now totals 54% post-raise.

Item 1A. Risk Factors.

We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Item 1B. Unresolved Staff Comments

None.

Item 1C. Cybersecurity

Item 2. Properties

None.

Item 3. Legal Proceedings

There are no legal proceedings involving the Company.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

We have one class of securities, Common Voting Equity Shares (“Common Stock”). The holders of our common stock have equal ratable rights to dividends from funds legally available if and when declared by our Board of Directors and are entitled to share pro-rata in all of our available assets for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs.

Our common stock is quoted on the NASDAQ OTC Bulletin Board (“OTCBB”) under the symbol “SATT”. As of December 31, 2023, the Company’s common stock was held by 87 shareholders of record, which does not include shares that are held in street or nominee name.

The closing share prices presented below represent prices between broker-dealers and do not include retail mark-ups and mark-downs or any commission to the dealer.

QUARTER ENDED:	HIGH	LOW

December 31, 2022	$0.12	$0.08
March 31, 2023	$0.11	$0.10
June 31, 2023	$0.07	$0.05
September 30, 2023	$0.03	$0.03
December 31, 2023	$0.03	$0.03

Shareholders

Our shares of common stock are issued in registered form. The registrar and transfer agent for our shares of common stock is Cleartrust LLC, 16540 Pointe Village Drive, Suite 210, Lutz, FL 33558

On December 31, 2023, the shareholders’ list of our shares of common stock showed 87 registered holders of our shares of common stock and 4,215,571 shares of common stock outstanding. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of shares of common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies.

Dividend Policy

Our board of directors may declare and pay dividends on outstanding shares of common stock out of funds legally available there for in our sole discretion; however, to date no dividends have been declared or paid on common stock.

Indemnification of Directors and Officers

Delaware Corporation Law allows for the indemnification of officers, directors, and any corporate agents in terms sufficiently broad to indemnify such persons under certain circumstances for liabilities, including reimbursement for expenses, incurred arising under the 1933 Act. The Bylaws of the Company provide that the Company will indemnify its directors and officers to the fullest extent authorized or permitted by law and such right to indemnification will continue as to a person who has ceased to be a director or officer of the Company and will inure to the benefit of his or her heirs, executors and Consultants; provided, however, that, except for proceedings to enforce rights to indemnification, the Company will not be obligated to indemnify any director or officer in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized by the Board of Directors. The right to indemnification conferred will include the right to be paid by the Company the expenses (including attorney’s fees) incurred in defending any such proceeding in advance of its final disposition.

The Company may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Company similar to those conferred to directors and officers of the Company. The rights to indemnification and to the advancement of expenses are subject to the requirements of the 1940 Act to the extent applicable.

Furthermore, the Company may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Company or another company against any expense, liability or loss, whether or not the Company would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law.

Unregistered Sales of Equity Securities.

On March 9, 2021, the Company issued 13,025 shares in respect of RSU’s granted during 2021.

On March 10, 2021, the Company issued a total of 50,000 shares to two directors in respect of 50,000 RSU’s that were granted to them.

On April 1, 2021, the Company issued a total of 10,000 shares to two directors in respect of 10,000 RSU’s that were granted to them.

From June 2021 through to December 2021, the Company issued 830,000 shares in respect of converted Promissory Notes in the amount of $830 thousand.

On August 17, 2021, the Company granted three directors 47,134 shares.

On October 5, 2021, the Company issued a director 7,500 shares in respect of 7,500 RSU’s that were granted to him.

On October 5, 2021, the Company issued 29,167 shares to a consultant in respect of 500,000 share options that were exercised.

On October 25, 2021, the Company issued 40,000 shares to a consultant in respect of 400,000 share options that were exercised.

On December 30, 2022, the Company issued 21,186 shares in respect of an investor’s converted SAFE agreement in Saffron Tech.

Penny Stock Regulation

Our shares must comply with the Penny Stock Reform Act of 1990, which may potentially decrease our shareholders’ ability to easily transfer their shares. Broker-dealer practices in connection with transactions in “penny stocks” are regulated. Penny stocks generally are equity securities with a price of less than $5.00. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock, the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that must comply with the penny stock rules. Since our shares must comply with such penny stock rules, our shareholders will in all likelihood find it more difficult to sell their securities.

Item 6. [Reserved]

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH OUR AUDITED FINANCIAL STATEMENTS AND THE RELATED NOTES THAT APPEAR ELSEWHERE IN THIS ANNUAL REPORT. THE FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT REFLECT OUR PLANS, ESTIMATES AND BELIEFS. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE THOSE DISCUSSED BELOW AND ELSEWHERE IN THIS ANNUAL REPORT.

Emerging Growth Company - We are an emerging growth company as defined in Section 2(a)(19) of the Securities Act. We will continue to be an emerging growth company until: (i) the last day of our fiscal year during which we had total annual gross revenues of $1,000,000,000 or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act; (iii) the date on which we have, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or (iv) the date on which we are deemed to be a large accelerated filer, as defined in Section 12b-2 of the Exchange Act.

As an emerging growth company, we are exempt from:

	·	Sections 14A(a) and (b) of the Exchange Act, which require companies to hold stockholder advisory votes on executive compensation and golden parachute compensation;

	·	The requirement to provide, in any registration statement, periodic report or other report to be filed with the Securities and Exchange Commission (the “Commission” or “SEC”), certain modified executive compensation disclosure under Item 402 of Regulation S-K or selected financial data under Item 301 of Regulation S-K for any period before the earliest audited period presented in our initial registration statement;

	·	Compliance with new or revised accounting standards until those standards are applicable to private companies;

	·	The requirement under Section 404(b) of the Sarbanes-Oxley Act of 2002 to provide auditor attestation of our internal controls and procedures; and

	·	Any Public Company Accounting Oversight Board (“PCAOB”) rules regarding mandatory audit firm rotation or an expanded auditor report, and any other PCAOB rules subsequently adopted unless the Commission determines the new rules are necessary for protecting the public.

We are also a smaller reporting company as defined in Rule 12b-2 of the Exchange Act. As a smaller reporting company, we are not required to provide selected financial data pursuant to Item 301 of Regulation S-K, nor are we required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002. We are also permitted to provide certain modified executive compensation disclosure under Item 402 of Regulation S-K.

This form 10-K contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained in this Form 10-K that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may”, “will”, “expect”, “believe”, “anticipate”, “estimate” or “continue” or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include by are not limited to economic conditions generally and in the industries in which we may participate; competition within our chosen industry, including competition from much larger competitors; technological advances and failure to successfully develop business relationships.

This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those anticipated in these forward-looking statements.

This discussion summarizes the significant factors affecting the consolidated financial statements, financial condition, liquidity, and cash flows of Sativus Tech, Corp, for the fiscal year ended December 31, 2023 and 2022. The following discussion and analysis should be read in conjunction with the consolidated financial statements and notes included elsewhere in this Form 10-K.

Executive Overview

SATIVUS TECH CORP. (formerly SEEDO CORP.) (the “Company”, “Our” or “We”) was formed on January 16, 2015, under the laws of the State of Delaware. Prior to July 2020, we were involved in producing a plant growing device managed and controlled by an artificial intelligence algorithm, allowing consumers to grow their own herbs and vegetables effortlessly from seed to plant, while providing optimal conditions to assure premium quality produce year-round. However, due to financial and operational difficulties in 2020, we ceased these operations and on July 19, 2020, the Company formed a new wholly-owned subsidiary in Israel, Hachevra Legiduley Pkaot Beisrael Ltd. (the “New Subsidiary”), to develop a fully automated and remotely managed system for growing saffron and other vegetables. On November 5, 2020, the New Subsidiary changed its name to Saffron-Tech Ltd. (or “Saffron Tech”). As of the date of this report, and following various financings in Saffron Tech, the Company owns 54% of Saffron Tech.

The Company, through Saffron Tech, is focusing on development of agriculture and technological products, in the fields of exotic plants.

The total Saffron Tech market opportunity evaluated as $2.3B in 2023, and is anticipated to grow up to $3.7B by 2032. The market opportunity is based on the Saffron Marker, Saffron extraction market, and potential segments in the nutraceutical and cosmetical use markets.

Results of Operations during the year ended December 31, 2023, as compared to the year ended December 31, 2022

Operating Expenses

Research and Development Expenses for the year ended December 31, 2023, amounted to $253 thousand as compared to $673 for the year ended December 31, 2022. During 2023, Saffron Tech reduced its research and development expenses in Israel due to financial constraints.

General and Administrative expenses for the year ended December 31, 2023, amounted to $562 thousand as compared to $660 thousand for the year ended December 31, 2022. The decrease during the year ended December 31, 2023, was mainly due the decrease in share-based expenses that amounted to $156 thousand, compared to $267 thousand for the year ended December 31, 2022.

Financing income for the year ended December 31, 2023, amounted to $228 thousand as compared financing expenses to $480 thousand for the year ended December 31, 2022. Financing income, net include interest expenses on loans and convertibles loans of $170, financing income of BCF in the sum of $ 442 and exchange rate expenses of $45

Results of Operations during the year ended December 31, 2022, as compared to the year ended December 31, 2021

Operating Expenses

Research and Development Expenses for the year ended December 31, 2022, amounted to $673 thousand as compared to $911 for the year ended December 31, 2021. During 2022, Saffron Tech reduced its research and development expenses in Israel due to financial constraints.

General and Administrative expenses for the year ended December 31, 2022, amounted to $660 thousand as compared to $1,639thousand for the year ended December 31, 2021. The decrease during the year ended December 31, 2022, was mainly due the decrease in share-based expenses that amounted to $217 thousand, compared to $1,052 thousand for the year ended December 31,2021.

Financing expenses for the year ended December 31, 2022, amounted to $480 thousand as compared to $1,391 thousand for the year ended December 31, 2021. Financing expenses include interest on loans and convertibles loans, amortization of BCF and adjustments to the fair value of certain convertible loans.

Liquidity and Capital Resources

Overview

Since inception on January 16, 2015, the Company had a cumulative deficit as of December 31, 2023, of $22,928 thousand and we have a working capital deficit of $1,813 thousand as of December 31, 2023. Our future growth is dependent upon achieving further purchase orders and execution, management of operating expenses and ability of the Company to obtain the necessary financing to fund future obligations, and upon profitable operations. Those factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due.

Historically, we have financed our cash flow and operations from the initial contribution of our majority shareholder and by raising equity, convertible loans and warrants. As of December 31, 2023, our cash and deposit balance was $813 thousand.

On March 1, 2023, Saffron Tech, announced it has entered into an investment agreement with Korean-based company, Dreamtech Co Ltd (“Dreamtech”), a leading provider and manufacturer of tech components for innovative products including advanced mobile and medical devices. Under this new agreement, Dreamtech will fund an initial investment of $1 million followed by an additional $1 million upon successful cultivation of saffron in Korea. Saffron Tech aims to be the first company to create a large-scale production of saffron using vertical farming technology to meet the growing demand of the spice for use in beauty, wellness, and pharmaceutical applications. Sativus Tech’s interest in Saffron Tech now totals 54% post-raise.

Consistent with Section 144 of the Delaware General Corporation Law, it is our current policy that all transactions between the company and our officers, directors and their affiliates will be entered into only if such transactions are approved by a majority of the existing directors, are approved by vote of the stockholders, or are fair to us as a corporation as approved or ratified by the board or authorized officer. We will conduct an appropriate review of all related party transactions on an ongoing basis, and, where appropriate, we review the potential of conflicts of interest.

Year ended December 31, 2023 as compared to the year ended December 31, 2022

During the year ended December 31, 2023, the Company’s overall position of cash and cash equivalents decreased by $634 thousand. This decrease in cash can be attributed to the following:

The Company’s net cash used in operating activities during the year ended December 31, 2023, was $932 thousand as compared to $986 for the year ended December 31, 2022. This decrease is mostly due to a significant decrease in the net loss of the Company.

The Company’s net cash used in investing activities during the year ended December 31, 2023, was $721 thousand as compared to $192 for the year ended December 31, 2022. This increase is mostly due to increase in deposits offset by high investments in Saffron Tech’s new facility, located at Mavki’im year ended December 31, 2022.

Cash provided by financing activities for the year ended December 31, 2023, was $1,019 thousand as compared to $1,122 thousand for the year ended December 31, 2022. Cash provided in 2023 was from issuance of shares to minority interests of $1,273 thousand, offset in part by repayment of convertible loans in the amount of $126 thousand, repayment of short term loan of $114 thousand and lease payments of $14 thousand. Cash provided in 2022 was from the receipt of $114 in short term loans and $1,308 from issuance of shares to minority interests, offset in part by repayment of convertible loans in the amount of $278 thousand.

Year ended December 31, 2022 as compared to the year ended December 31, 2021

During the year ended December 31, 2022, the Company’s overall position of cash and cash equivalents decreased by $56 thousand. This decrease in cash can be attributed to the following:

The Company’s net cash used in operating activities during the year ended December 31, 2022, was $986 thousand as compared to $1,374 for the year ended December 31, 2021. This decrease is mostly due to a significant decrease in the net loss of the Company.

The Company’s net cash used in investing activities during the year ended December 31, 2022, was $192 thousand as compared to $27 for the year ended December 31, 2021. This increase is mostly due to investments in Saffron Tech’s new facility, located at Mavki’im.

Cash provided by financing activities for the year ended December 31, 2022, was $1,122 thousand as compared to $1,856 thousand for the year ended December 31, 2021. Cash provided in 2022 was from the receipt of $114 in short term loans and $1,308 from issuance of shares to minority interests, offset in part by repayment of convertible loans in the amount of $278 thousand.

Off Balance Sheet Arrangements

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect or change on the Company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with the Company is a party, under which the Company has (i) any obligation arising under a guarantee contract, derivative instrument or variable interest; or (ii) a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets. We had no outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.

Recently Issued Accounting Pronouncements

For information with respect to recent accounting pronouncements, see Note 2 to the audited consolidated financial statements of SATIVUS TECH CORP. included elsewhere in this Form 10-K

Critical Accounting Policies

Our discussion and analysis of the financial condition and results of operations are based upon the Company’s financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We believe that the estimates, assumptions and judgments involved in the accounting policies described below have the greatest potential impact on our financial statements, so we consider these to be our critical accounting policies. Because of the uncertainty inherent in these matters, actual results could differ from the estimates we use in applying the critical accounting policies. Certain of these critical accounting policies are fair value of convertible loans, and the calculation of share-based compensation and going concern.

Within the context of these critical accounting policies, we are not currently aware of any reasonably likely events or circumstances that would result in materially different amounts being reported.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Item 8. Financial Statements and Supplementary Data.

SATIVUS TECH CORP.

CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023

IN THOUSANDS OF U.S. DOLLARS

INDEX

		Page
Report of Independent Registered Public Accounting Firm		F-2

Consolidated Balance Sheets		F-6

Consolidated Statements of Comprehensive Loss		F-7

Consolidated Statements of Changes in Shareholders’ Deficit		F-8

Consolidated Statements of Cash Flows		F-9

Notes to Consolidated Financial Statements		F-10 - F-29

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Sativus Tech Corp.

Opinion on the Financial Statements

We have audited the accompanying the consolidated balance sheets of Sativus Tech Corp. and its subsidiary (“the Company”) as of December 31, 2023 and 2022 and the related statements of operations and comprehensive loss, statement of stockholders’ deficit and cash flows, for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with generally accepted accounting principles in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Going Concern

The accompanying financial statements have been prepared to assume that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, as of December 31, 2023, The Company suffered losses from operations in all years since inception, has a negative working capital and further losses are anticipated in the development of its business. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plan regarding these matters is also described in Note 1 to the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. This matter is also described in the “Critical Audit Matters” section of our report.

F-2

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Going concern- refer to note 1 of the financial statements

Critical audit matter description

The Company raised substantial doubt about the entity’s ability to continue as a going concern for a reasonable period of time. The financial statements for the years under audit have been prepared to assume that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. See the explanatory paragraph of the opinion paragraph.

How the Critical Audit Matter was addressed in our Audit

The primary procedures we performed to address this critical audit matter included the following: (i) We evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern for a reasonable period of time. (ii) We obtained information about management’s plans that are intended to mitigate the effect of such conditions or events and assess the likelihood that such plans can be effectively implemented. (iii) We added an explanatory paragraph to the audit report.

Evaluation of convertible debt with an embedded derivative liability and detachable warrants

Critical audit matter description

As discussed in Notes 2 and 3 to the financial statements, upon initial recognition of Convertible loans, Convertible Notes, similar instruments issued with or without detachable warrants, the Company considers whether the embedded feature within the convertible instruments should be separated from the host instrument and the manner of its presentation and future measurement and weather warrants granted by the Company to lenders through convertible bridge loans and stock warrants transactions should be classified as a component of permanent equity or as derivative liabilities. The Company utilized a Monte Carlo model to value the derivative bifurcated liabilities, which estimates the fair value of the liabilities based upon certain assumptions utilizing a probability-weighted analysis of certain future events. Other inputs into the model include volatility, closing stock prices at various valuation points, and conversion prices as determined by the applicable agreements.

We identified the fair value of the derivative liability as a critical audit matter, as (i) the assumptions utilized in the model to value the derivative liability required judgment, and the model is inherently complex. (ii) the accounting for derivative liabilities is complex (iii) the magnitude of the liabilities and losses recognized in the estimation process.

How the Critical Audit Matter was addressed in our Audit

The primary procedures we performed to address this critical audit matter involved the assistance of our valuation specialist and included the following: (i) we reviewed the qualifications of the valuation specialist utilized by the Company (ii) we audited the underlying inputs utilized by the valuation specialist in the model (iii) we evaluated the reasonableness of management’s assumptions included in the model (iv) we reviewed the underlying source documents to determine the proper accounting of the transactions (v) we tested the accuracy of those underlying calculations.

/s/ Elkana Amitai CPA

We have served as the Company’s auditor since 2023.

Mitzpe Netofa, Israel

March 31, 2024

(PCAOB 6816

F-3

SATIVUS TECH CORP.

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands, except per share data, except share and per share data


	December 31			December 31
	2023			2022
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	176		$	810
Deposits		637			–
Restricted cash		11			6
Prepaid expenses and other receivables		313			85

Total current assets		1,137			901

NON CURRENT ASSETS
Right-of-use asset		15			30
Property and equipment, net		256			219

Total non-current assets		271			249

Total assets	$	1,408		$	1,150

LIABILITIES AND SHAREHOLDERS’ DEFICIT

CURRENT LIABILITIES
Accounts payables		46			55
Loans		–			114
Convertible loans		2,074			2,031
Fair value of convertible component in convertible loans		885			1,327
Other accounts liabilities		112			160
Short term lease liability		13			32
Total current liabilities		3,130			3,719

SHAREHOLDER’S DEFICIT
Ordinary shares of $0.0001 par value Authorized: 500,000,000 shares at December 31, 2023 and December 31, 2022; Issued and Outstanding: 4,215,571 and 4,215,571 shares at December 31, 2023 and December 31, 2022, respectively		4			4
Additional Paid in capital		20,640			19,756
Accumulated deficit		(22,928	)		(22,604	)
Shareholders’ deficit		(2,284	)		(2,844	)
Non-controlling interests		562			275
Total shareholders’ deficit		(1,722	)		(2,569	)

Total liabilities and shareholders’ deficit	$	1,408		$	1,150

The accompanying notes are an integral part of the consolidated financial statements.

F-4

SATIVUS TECH CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

U.S. dollars in thousands, except per share data, except share and per share data


	Year ended December 31,
	2023			2022
Operating expenses:

Research and development	$	(253	)	$	(673	)

General and administrative		(562	)		(660	)
Operating loss		(815	)		(1,333	)

Financial Income (expenses), net		228			(480	)

Net loss		(587	)		(1,813	)

Non-controlling interests		263			286
Net loss attributable to equity holders of the Company		(324	)		(1,527	)

Basic and diluted net loss per share attributable to equity holders of the Company	$	(0.08	)	$	(0.36	)
Weighted average number of ordinary shares used in computing basic and diluted loss per share		4,215,571			4,194,443

The accompanying notes are an integral part of the consolidated financial statements.

F-5

SATIVUS TECH CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

U.S. dollars in thousands, except per share data, except share and per share data


	Ordinary shares				Additional Paid in			Accumulated			Total Shareholders’			Non- controlling
	Number		Amount		capital			Deficit			Deficiency			interests			Total

Balance at January 1, 2023		4,215,571	$	4	$	19,756		$	(22,604	)	$	(2,844	)	$	275		$	(2,569	)
Transactions with non-controlling parties		–		–		767			–			767			507			1,274
Share based compensation to non-controlling parties		–		–		51			–			51			49			100
Share based compensation to non-employees		–		–		74			–			74			–			74
Cancellation of share options in subsidiary		–		–		(8	)		–			(8	)		(6	)		(14	)
Net Loss		–		–		–			(324	)		(324	)		(263	)		(587	)
Balance at December 31, 2023		4,215,571	$	4	$	20,640		$	(22,928	)	$	(2,284	)	$	562		$	(1,722	)

	Ordinary shares				Additional Paid in			Accumulated			Total Shareholders’			Non- controlling
	Number		Amount		capital			Deficit			Deficiency			interests			Total

Balance at January 1, 2022		4,194,385	$	4	$	18,595		$	(21,077	)	$	(2,478	)	$	106		$	(2,372	)
Transactions with non-controlling parties		–		–		894			–			894			414			1,308
Cancelation of share options in subsidiary		–		–		(168	)		–			(168	)		(43	)		(211	)
Share based compensation to non-controlling parties		–		–		290			–			290			84			374
Share based compensation to non-employees		–		–		133			–			133			–			133
Issuance of shares in respect of converted SAFE in subsidiary		21,186		–		12			–			12			–			12
Net Loss		–		–		–			(1,527	)		(1,527	)		(286	)		(1,813	)
Balance at December 31, 2022		4,215,571	$	4	$	19,756		$	(22,604	)	$	(2,844	)	$	275		$	(2,569	)

The accompanying notes are an integral part of the consolidated financial statements.

F-6

SATIVUS TECH CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands, except per share data


	Year ended
	December 31,
	2023			2022
Cash flows from operating activities:
Net loss	$	(587	)	$	(1,813	)
Adjustments to reconcile loss to net cash used in operating activities:
Depreciation		60			38
Share based compensation expenses to employees and non-employees		156			267
Financial expenses related to convertible loans, warrants and leases		165			320
Change in fair value of convertible component in convertible loans		(441	)		117
Changes in assets and liabilities:
Increase in other accounts receivables		(228	)		(8	)
Increase (decrease) in accounts payables		(9	)		43
Increase in other accounts payables		(48	)		50
Net cash used in operating activities		(932	)		(986	)

Cash flows from investing activities
Decrease (increase) in restricted cash		(5	)		14
Decrease (increase) in deposits		(637	)		–
Purchase of property and equipment		(79	)		(206	)
Net cash used in investing activities		(721	)		(192	)

Cash flows from financing activities:
Proceeds from short-term loans		–			114
Lease payments		(14	)		(22	)
Repayment of short-term loans		(114	)		–
Proceeds from issuance of shares to minority interests in subsidiary		1,273			1,308
Repayment of convertible loans		(126	)		(278	)

Net cash provided by financing activities		1,019			1,122

Increase (decrease) in cash and cash equivalents		(634	)		(56	)
Cash and cash equivalents and restricted cash at the beginning of the year		810			866

Cash and cash equivalents at the end of the period	$	176		$	810

Supplemental disclosures of cash flow information:
Cash paid for interest	$	126		$	175

The accompanying notes are an integral part of the consolidated financial statements.

F-7

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share data

NOTE 1:-

GENERAL

The Company, through Saffron Tech, is focusing on its in-house research and development of agriculture technology products, among others, in the fields of exotic plants and mushrooms. Saffron Tech plans to roll out its proof of concept in the coming months. This technology will provide turnkey automated growing containers for high-quality, high-yield saffron all year round. The Company is in advanced stages of developing and testing a fully automated and remotely managed system for growing high-quality, high-yield saffron anywhere and anytime.

It is also environmentally friendly, using economic levels of water, space, fertilizer, and energy. Accounting to the Company’s calculations, we believe that the controlled indoor growing area will produce ten times more yield compared to the same land area using traditional methods. The sealed environment eliminates the need for harmful pesticides and herbicides, producing a clean and safe product that is easy to control from anywhere. The Company’s solution is easily scalable and pre-designed to quickly grow operations.

Saffron is used in many industries, such as the food industry, particularly by famous chefs and Michelin starred restaurants, the natural cosmetics industry and the food supplements industry and as a dye in the textile industry. Medicinal claims as an anti-depressant, antioxidant, and antiseptic are constantly increasing.

On December 9, 2021, FINRA gave final approval for the Company’s 1-for-10 consolidation, or reverse split, of our issued and outstanding common shares, as noted in our 8K of December 13, 2021. Except where otherwise indicated, all share and per share data in these financial statements have been retroactively restated to reflect said consolidation.

The Company has an accumulated deficit in the total amount of $22,928 as of December 31, 2023, the Company has negative operating cash flow in the total amount of $932 for the year ended December 31, 2023, further losses are anticipated in the development of its business. Those factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due.

The Company intends to finance operating costs over the next twelve months with existing cash on hand, reducing operating spend, and future issuances of equity and debt securities, or through a combination of the foregoing. However, the Company will need to seek additional sources of financing if the Company requires more funds than anticipated during the next 12 months or in later periods.

F-8

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share data

NOTE 1:-

GENERAL (Cont.)

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and liabilities and commitments in the normal course of business.

The consolidated financial statements for the year ended December 31, 2023, do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern.

NOTE 2:-

SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles in the United States of America.

Use of estimates:

The preparation of the financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions. The Company’s management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Financial statements in U.S. dollars:

The costs of the Company are denominated in United States dollars (“dollars”). Some of the costs in our Israeli subsidiary are incurred in New Israeli Shekels (NIS), however the selling prices will be linked to the Company’s price list which will be determined in dollars, the budget is managed in dollars, financing activities including loans and cash investments, are made in U.S. dollars and the Company’s management believes that the dollar is the primary currency of the economic environment in which the Company and its subsidiary operates. Thus, the dollar is the Company’s and its subsidiary functional and reporting currency.

Accordingly, transactions denominated in currencies other than the functional currency are re-measured to the functional currency in accordance with Accounting Standards Codification (“ASC”) No. 830, “Foreign Currency Matters” at the exchange rate at the date of the transaction or the average exchange rate in the relevant reporting period. At the end of each reporting period, financial assets and liabilities are re-measured to the functional currency using exchange rates in effect at the balance sheet date. Non-financial assets and liabilities are re-measured at historical exchange rates. Gains and losses related to re-measurement are recorded as financial income (expense) in the consolidated statements of operations as appropriate.

Principles of consolidation:

The consolidated financial statements include the financial statements of the Company and its subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation.

F-9

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share data

NOTE 2:-

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Cash and cash equivalents:

Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less, at the date acquired.

Restricted cash as of December 31, 2023 in respect of the Company’s credit card and manufacturing commitments.

Property and equipment:

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates:


	%
Computers, Software and peripheral equipment		33%
Mold & production Equipment		10%
Office furniture and equipment		10%

Impairment of long-lived assets:

The Company’s long-lived assets are reviewed for impairment in accordance with ASC No. 360, “Property, Plant and Equipment” whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. Recoverability of assets (or asset group) to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the years ended December 31, 2023 and 2022, no impairment losses have been recorded.

Leases:

In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02. The guidance establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. The Group determines if an arrangement is or contains a lease at contract inception.

The Group is a lessee in an operating lease for a research facility. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities in our consolidated balance sheets.

F-10

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share data

NOTE 2:-

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

ROU assets represent Company’s right to use an underlying asset for the lease term and lease liabilities represent Group’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As our lease does not provide an implicit rate, the Company generally uses the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Group monitors for events or changes in circumstances that require a reassessment of one of its leases. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset balance is recorded in statement of comprehensive loss.

Concentration of credit risks:

Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents and restricted bank deposit. Cash and cash equivalents and restricted bank deposit are invested in major banks in Israel and the United States. Such funds in the Israel may be in excess of insured limits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company and its subsidiary’ cash and cash equivalents have high credit ratings.

The Company, have no off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements.

Research and development expenses:

Research and development costs are charged to the consolidated statement of operations as incurred.

Royalty-bearing grants:

Royalty-bearing grants from the Israeli Innovation Authority (the “IIA”) for funding approved research and development projects are recognized at the time Saffron Tech is entitled to such grants (i.e. at the time that there is reasonable assurance that the Company will comply with the conditions attached to the grant and that there is reasonable assurance that the grant will be received), on the basis of the costs incurred and reduce research and development costs. The cumulative research and development grants received by the Company from inception through December 2023 amounted to $1,183.

As of December 31, 2023, the Company did not accrue for or pay any royalties to the IIA since no revenues were recognized in respect of the funded projects.

F-11

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share data

NOTE 2:-

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Liability for employee rights upon retirement pay:

Saffron Tech’s liability for severance pay is pursuant to Section 14 of the Severance Compensation Act, 1963 (“Section 14”), pursuant to which all the Company’s employees are included under Section 14, and are entitled only to monthly deposits. Under Israeli employment law, payments in accordance with Section 14 release the Company from any future severance payments in respect of those employees. The fund is made available to the employee at the time the employer-employee relationship is terminated, regardless of cause of termination. The severance pay liabilities and deposits under Section 14 are not reflected in the consolidated balance sheets as the severance pay risks have been irrevocably transferred to the severance funds.

Fair value of financial instruments:

ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”), defines fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.

In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the inputs as follows:

	Level 1 —	Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access.

	Level 2 —	Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

	Level 3 —	Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The carrying amounts of cash and cash equivalents, short term deposits, trade receivables, trade payables and short-term loan approximate their fair value due to the short-term maturity of such instruments.

The Company elected to measure some of the convertible loans under the fair value option (see note 4). Under the fair value option, the convertible loans will be measured at fair value in each reporting period until they will be converted, with changes in the fair values being recognized in the Company’s consolidated statement of operations as financial income or expense. The proceeds received for the issuance of the convertible loans were allocated at fair value conducted on an arm’s-length basis.

F-12

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share data

NOTE 2:-

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

The Company’s financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy are as follows:


	Balance as of December 31, 2023
	Level 1		Level 2		Level 3		Total
Liabilities:
Fair Value of convertible component in convertible loan, net of discounts and debt issue costs	$	–	$	–	$	885	$	885

Total liabilities	$	–	$	–	$	885	$	885

	Balance as of December 31, 2023
	Level 1		Level 2		Level 3		Total
Liabilities:
Fair Value of convertible component in convertible loan, net of discounts and debt issue costs	$	–	$	–	$	1,327	$	1,327

Total liabilities	$	–	$	–	$	1,327	$	1,327

Income Tax:

The Company account for income taxes in accordance with ASC 740, “Income Taxes” which prescribes the use of the liability method whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it not is more likely than not that a portion or all of the deferred tax assets will be realized. Based on ASC 740, a two-step approach is used to recognize and measure uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes.

The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. As of December 31, 2023, and 2022, no liability for unrecognized tax positions has been recorded. Accordingly, no interest or penalties related to uncertain tax positions are recorded, either. It is the Company’s policy that any interest or penalties associated with unrecognized tax positions would be reflected in income tax expense.

F-13

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share data

NOTE 2:-

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Basic and diluted net loss per share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of Ordinary shares outstanding during the period.

Diluted net loss per share is computed by giving effect to all potential shares of Ordinary shares, to the extent dilutive, all in accordance with ASC No. 260, “Earning Per Share”.

For the years ended December 31, 2023, and 2022, all outstanding shares warrants have been excluded from the calculation of the diluted net loss per share as all such securities are anti-dilutive for all years presented.

Contingencies:

The Company records accruals for loss contingencies arising from claims, litigation and other sources when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted periodically as assessments change or additional information becomes available. Legal costs incurred in connection with loss contingencies are expensed as incurred.

Stock-based payments:

The Company measures and recognizes the compensation expense for all equity-based payments to employees based on their estimated fair values in accordance with ASC 718, “Compensation-Stock Compensation”. Share-based payments including grants of stock options are recognized in the statement of comprehensive loss as an operating expense based on the fair value of the award at the date of grant. The fair value of stock options granted is estimated using the Black-Scholes option-pricing model. The Company has expensed compensation costs, net of estimated forfeitures, applying the accelerated vesting method, over the requisite service period or over the implicit service period when a performance condition affects the vesting, and it is considered probable that the performance condition will be achieved.

Share-based payments awarded to consultants (non-employees) are accounted for in accordance with ASC Topic 505-50, “Equity-Based Payments to Non-Employees”.

For the years ended December 31, 2023, December 31, 2022, the Company recorded $156, and $267 in share-based compensation, respectively.

F-14

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share data

NOTE 2:-

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Recent accounting pronouncements:

Financial Instruments – Credit Losses

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 replaces the current incurred loss model guidance with a new method that reflects expected credit losses. Under this guidance, an entity would recognize an allowance for credit losses equal to its estimate of expected credit losses on financial assets measured at amortized cost. In November 2019, the FASB extended the effective date of ASU 2016-13 for smaller reporting companies. As a result, ASU 2016-13 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2022, with early adoption permitted. The standard is not expected to have a significant impact on the Company’s consolidated financial statements.

Convertible instruments

In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible instruments by removing certain separation models in Accounting Standards Codification (“ASC”) 470-20, “Debt—Debt with Conversion and Other Options,” (“ASC 470-20”) for convertible instruments. Under ASU 2020-06, the embedded conversion features no longer are separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under ASC 815, “Derivatives and Hedging,” or that do not result in substantial premiums accounted for as paid-in capital. For smaller reporting companies, ASU 2020-06 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2023, with early adoption permitted for fiscal years beginning after December 15, 2020. The Company is currently assessing the impact of this update on the Company’s consolidated financial statements.

Business Combination

On October 28, 2021, the FASB issued ASU 2021-08, which amends ASC 805 to “require acquiring entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination.” Under current GAAP, an acquirer generally recognizes such items at fair value on the acquisition date. According to the FASB, this Update is intended “to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the following:

	·	Recognition of an acquired contract liability

	·	Payment terms and their effect on subsequent revenue recognized by the acquirer.

ASU 2021-08 06 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently assessing the impact of this update on the Company’s consolidated financial statements.

F-15

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share data

NOTE 2:-

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Warrants

In May 2021, the Financial Accountings Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04, “Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815- 40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options” (“ASU 2021-04”). The guidance is effective for the Company on January 1, 2022. The Company has evaluated the impact of adopting this standard and concluded there is no impact on the Company’s consolidated financial statements.

Income taxes

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this ASU simplify the accounting for income taxes, eliminates certain exceptions to the general principles in Topic 740 and clarifies certain aspects of the current guidance to improve consistent application among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021 and interim periods within annual periods beginning after December 15, 2022, though early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. The Company has evaluated the impact of adopting this standard and concluded there is no impact on the Company’s consolidated financial statements.

New Accounting Pronouncements:

Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income taxes (topic 740): Improvements to Income Tax Disclosures. The guides require disclosure of a tabular reconciliation, using both percentages and reporting currency amounts. Additional disclosers are required such as income taxes paid, Income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign and Income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. The guidance will be effective for the Company for fiscal years beginning after December 15, 2024. Early adoption is permitted. Adoption of the new standard will not have a material impact on the financial statements.

In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging Contracts in Entity s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity s Own Equity. ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and(2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective for public companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently evaluating the impact that the adoption of ASU 2020-06 will have on the Company’s consolidated financial statement presentation or disclosures.

Other new pronouncements issued but not effective as of December 31, 2023, are not expected to have a material impact on the Company’s consolidated financial statements.

F-16

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share data

NOTE 3:-

CONVERTIBLE LOANS

On February 21, 2019, the Company received a convertible loan from third party (“February 2019 Lender”), with a two-year term, in the principal amount of $550, which bears 10% annual interest rate (“February 2019 Loan”).

The Company at its option shall have the right to redeem, in part or in whole, outstanding principal amount and interest under this loan agreement prior to the maturity date. The Company shall pay an amount equal to the principal amount being redeemed plus a redemption premium equal to 20% of the outstanding principal amount being redeemed plus outstanding and accrued interest.

The February 2019 Lender shall be entitled to convert at its option any portion of the outstanding and unpaid principal or accrued interest into fully paid and nonassessable of shares of common stock, at the lower of the fixed conversion price then in effect or the market conversion price. The number of shares of common stock issuable upon conversion of any conversion amount shall be determined by dividing (x) such conversion amount by (y) the fixed conversion price of $20.00 or (z) 80% of the lowest the volume-weighted average price of the Company’s shares of common stock during the 30 trading days immediately preceding the conversion date.

The Company accounted for the February 2019 Loan in accordance with ASC 470-20, Debt with conversion and other Options. As of December 31, 2023, the BCF was revalued at $126.

During the year ended December 31, 2020, a portion of the February 2019 Loan in the amount of $190 and accrued interest of $87 was converted into 1,045,521 Shares.

On February 20, 2021, the Company and the February 2019 Lender extended the February 2019 Loan to November 10, 2021.

On May 12, 2021, a portion of the February 2019 Loan in the amount of $60 and accrued interest of the February 2019 Loan in the amount of $14 was paid by the Company.

On January 26, 2022, the Company paid accrued interest of the February 2019 Loan in the amount of $20, and the February 2019 Loan agreement was extended until December 31, 2023.

On December 10, 2023, the Loan agreement as extended until June 30, 2024.

The February 2019 Loan is included in the convertible loans in current liabilities as of December 31, 2023, in the amount of $361, and $332 as of December 31, 2022.

During the year ended December 31, 2023, and 2022, the Company recorded interest expenses related to February 2019 Loan in the amount of $30 and $30, respectively.

F-17

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share data

NOTE 3:-

CONVERTIBLE LOANS (Cont.)

On October 15, 2019, the Company received a convertible loan from a third party (“October 2019 Lender”) in the principal amount of $1,100 that bears an annual 10% interest rate (“October 2019 Loan”). The October 2019 Loan had a two-year term. Prior to the maturity date of the October 2019 Loan, the Company, at its option, has the right to redeem, in cash, in part or in whole, the amounts outstanding provided that as of the date of the redemption notice (i) the volume-weighted average price of the Company’s ordinary shares is less than $12.50 and (ii) there is no equity condition failures as defined therein. In the event that the Company wishes to redeem any amount under the convertible loan, the Company shall pay an amount equal to the principal amount being redeemed plus a redemption premium equal to 20% of the outstanding amount being redeemed in addition to outstanding and accrued interest.

The October 2019 Lender shall be entitled to convert the principal loan and the outstanding interest (the “Conversion Amount”) into such number of ordinary shares determined by dividing (x) such Conversion Amount by (y) the fixed conversion price of $12.50 or (z) 80% of the lowest the volume-weighted average price of the Company’s ordinary shares during the 10 trading days immediately preceding the conversion date.

The Company accounted for the October 2019 Loan in accordance with ASC 470-20, Debt with conversion and other Options. As of December 31, 2023, the BCF was revalued at $386.

On January 26, 2022, the Company paid accrued interest of the October 2019 Loan in the amount of $55.

On December 20, 2022, the Company paid accrued interest of the October 2019 Loan in the amount of $100, and the October 2019 Loan agreement as extended until June 30, 2023.

On January 2023, the Company paid accrued interest of the October 2019 Loan in the amount of $100.

On December 10, 2023, the Loan agreement as extended until June 30, 2024.

The October 2019 Loan is included in the convertible loans in current liabilities as of December 31, 2023, in the amount of $1,314.

During the year ended December 31, 2023, and 2022, the Company recorded interest expenses related to October 2019 Loan in the amount of $110 and $110, respectively.

F-18

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share data

NOTE 3:-

CONVERTIBLE LOANS (Cont.)

On August 7, 2020, the Company received a convertible loan from a third party (“August 2020 Lender”) in the amount of $200 (the “August 2020 Loan”). Per the terms of the Agreement, the August 2020 Loans has a maturity date of August 7, 2022, (“Maturity Date”) and accrues annual interest at a rate of 10%

The August 2020 Loan is convertible by the August 2020 Lender into Shares, at their discretion, at the lower of a fixed price of $1.02 (the “Fixed Conversion Price”) or 80% of the lowest volume weighted average price (“VWAP”) of the Company’s common stock during the 10 trading days immediately preceding the conversion date (the “Market Conversion Price”).

The Company also granted the August 2020 Investor warrants to purchase 50,000 shares of common stock of the Company at an exercise price of $2.00 per share, such exercise price is subject to any future price-based anti-dilution adjustments. Accordance with ASU 2017-11 the warrants were classified in shareholders equity.

The fair value of the warrants granted was $35 using the Black-Scholes-Merton option pricing model using the following assumptions:

Assumptions used for valuation
	August 2020
Share price		$ 0.86
Dividend yield		0%
Risk-free interest rate		0.21%
Expected term (in years)		5
Volatility		176.96%

The Company accounted for the August 2020 Loan in accordance with ASC 470-20, Debt with conversion and other Options. The combined intrinsic value of the BCF for the August 2020 Loan was calculated and valued at $249 as of August 7, 2020, and the Company allocated $249 to the BCF as a liability. As of December 31, 2023, the BCF was revalued at $190 ($180 as of December 31, 2022).

F-19

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share data

NOTE 3:-

CONVERTIBLE LOANS (Cont.)

On December 10, 2023, the Loan agreement as extended until June 30, 2024.

The Company used an independent appraiser to estimate the fair value of BCF which used the Monte Carlo option pricing model using the following weighted average assumptions:

Assumptions used for valuation
	August 7, 2020		December 31, 2022		December 31, 2023
Share price		$ 0.80		$ 0.50		$ 0.160
Dividend yield		0%		0%		0%
Risk-free interest rate		0.13%		4.76%		5.26%
Expected term (in years)		2		0.50		0.50
Volatility		163.31%		205.90%		54.14%

During the year ended December 31, 2023 and 2022, the Company recorded interest expenses related to the Loan in the amount of $20 and $20.

On July 31, 2020, the Company received a convertible loan from Mr. Shmuel Yannay (a third party at that time, and a director of the Company as of October 28, 2021) in the amount of $100 (“Director Loan”). The loan has a maturity date of July 31, 2022 (“Maturity Date”) and accrues annual interest at a rate of 10%.

The Director Loan is convertible into Shares, at his discretion, at the lower of a fixed price of $1.02 (the “Fixed Conversion Price”) or 80% of the lowest volume weighted average price (“VWAP”) of the Company’s common stock during the 10 trading days immediately preceding the conversion date (the “Market Conversion Price”).

The Company also granted the Mr. Yannay warrants to purchase 25,000 shares of common stock of the Company at an exercise price of $2.00 per share, such exercise price is subject to any future price-based anti-dilution adjustments. Accordance with ASU 2017-11 the warrants were classified in shareholders equity.

The fair value of the warrants granted was $18 using the Black-Scholes-Merton option pricing model using the following assumptions:

Assumptions used for valuation
	August 2020
Share price		$ 0.86
Dividend yield		0%
Risk-free interest rate		0.21%
Expected term (in years)		5
Volatility		176.96%

F-20

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share data

NOTE 3:-

CONVERTIBLE LOANS (Cont.)

The Company accounted for the director’s loan in accordance with ASC 470-20, Debt with conversion and other Options. The combined intrinsic value of the BCF for the August 2020 Loan was calculated and valued at $129 as of July 31, 2020, and the Company allocated $129 to the BCF as a liability. As of December 31, 2023, the BCF was revalued at $182 ($88 as of December 31, 2022).

The Company estimated the fair value of BCF using the Monte Carlo option pricing model using the following weighted average assumptions:

Assumptions used for valuation
	July 31, 2020		December 31, 2022		December 31, 2023
Share price		$ 0.86		$ 0.50		$ 0.160
Dividend yield		0%		0%		0%
Risk-free interest rate		0.11%		4.76%		5.26%
Expected term (in years)		2		0.50		0.50
Volatility		164.04%		205.90%		54.14%

During the year ended December 31, 2023, the Company recorded interest expenses related to Director Loan in the amount of $10, and financial expenses in the amount of $95 during the year ended December 31, 2023.

On January 2023, the Company paid accrued interest of the October 2019 Loan in the amount of $26.

On December 10, 2023, the Loan agreement as extended until June 30, 2024.

NOTE 4:-

RELATED PARTIES

The following transactions arose with related parties:

Schedule of related party transactions
	Year ended December 31, 2023
	Directors Fees		Consulting Fees / Salaries		Share based awards		Total		Amounts owing to as of December 31, 2022
Director and CEO	$	–	$	202	$	37	$	239	$	15
CFO Compensation		–		5		–		5		5
CFO Compensation		–		54		5		77		18
Company controlled by CFO		–		50		–		50		–
Directors		–		104		20		124		110
	$	–	$	415	$	62	$	490	$	143

F-21

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share data

NOTE 4:-

RELATED PARTIES (Cont.)

	Year ended December 31, 2022
	Directors Fees		Consulting Fees / Salaries		Share based awards		Total		Amounts owing to as of December 31, 2022
Director and CEO	$	–	$	175	$	271	$	446	$	6
CFO Compensation		–		72		25		97		18
Company controlled by CFO		–		36		–		36		8
Directors		–		–		39		39		121
	$	–	$	283	$	335	$	618	$	153

	a	The Company signed an agreement with the past CFO, effective November 11, 2021, pursuant to which the CFO received $6 per month for his services, and an additional amount of approximately $3 per month for additional services provided to the Company. During the years ended December 31, 2023, and 2022, the Company paid compensation expenses to the CFO in the amount of $54 and $72, respectively. Amounts owed to the CFO as of December 31, 2023, were $18. On December 29th, Mr. Gadi Levin has resigned his position as CFO of the Company.

	b.	The Company signed an agreement with the CEO of Saffron Tech, effective December 12, 2021, pursuant to which the newly appointed CEO will received $11.3 per month. During the years ended December 31, 2023, and 2022, the Company paid compensation expenses to the CEO in the amount of $202 and $175 respectively. Amounts owed to the CEO as of December 31, 2023, were $15.

NOTE 5:-

SHAREHOLDERS’ EQUITY

As of December 31, 2023, and 2022, the Company’s share capital is composed as follows:

December 31,
2023

December 31,
2022

Authorized

Issued and
outstanding

Authorized

Issued and
outstanding

Number of shares

Shares of common stock of $0.0001 par value each “Shares”

500,000,000

4,215,571

500,000,000

4,215,571

Each Ordinary share is entitled to receive dividend, participate in the distribution of the Company’s net assets upon liquidation and to receive notices of participate and vote (at one vote per share) at the general meetings of the Company on any matter upon which the general meeting is authorized.

On December 9, 2021, we implemented a 1-for-10 consolidation, or reverse split, of our issued and outstanding common shares. Except where otherwise indicated, all share and per share data in these financial statements have been retroactively restated to reflect the reverse stock split.

F-22

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share data

NOTE 5:-

SHAREHOLDERS’ EQUITY (Cont.)

Issuance of shares:

	1.	On March 9, 2021, the Company issued 13,025 shares in respect of RSU’s granted during 2020.

	2.	On March 10, 2021, the Company issued a total of 50,000 shares to two directors in respect of 50,000 RSU’s that were granted to them. The RSU’s vested immediately and had an exercise price of nil. The fair value of the RSU’s at the date of the grant was $275.

	3.	On April 1, 2021, the Company issued a total of 10,000 shares to two directors in respect of 10,000 RSU’s that were granted to them. The RSU’s vested immediately and had an exercise price of nil. The fair value of the RSU’s at the date of the grant was $59.

	4.	From June 2021 through to December 2021, the Company issued 830,000 shares in respect of converted Promissory Notes in the amount of $830.

	5.	From July 2021 through to August 2021, the Company granted three directors 47,134 shares. The fair value of the shares at the date of the grant was $106.

	6.	On October 5, 2021, the Company issued a director 7,500 shares in respect of 7,500 RSU’s that were granted to him. The RSU’s vested immediately and had an exercise price of nil. The fair value of the RSU’s at the date of the grant was $18.

	7.	On October 5, 2021, the Company issued a consultant 29,167 shares in respect of exercised options. The consultant exercised 50,000 options in a cashless exercise mechanism.

	8.	On October 25, 2021, the Company issued a consultant 40,000 shares in respect of 40,000 exercised options.

	9.	On December 30, 2022, the Company issued 21,186 shares in respect of an investor’s converted SAFE agreement in Saffron Tech.

Warrants:

A summary of warrant activity during the years ended December 31, 2023, 2022 is as follows:

Schedule of warrant activity
	Number			Average exercise price
Warrants outstanding at January 1, 2022		198,750		$	5.4
Granted		–			–
Forfeited		(13,750	)		2
Cancelled		(66,000	)		1.5
Warrants outstanding at December 31, 2022		119,000		$	5.88

Warrants outstanding at December 31, 2023		119,000		$	5.88

F-23

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share data

NOTE 5:-

SHAREHOLDERS’ EQUITY (Cont.)

The following warrants are outstanding as of December 31, 2023:

Schedule of warrants by issuance date
Issuance date	Warrants outstanding		Exercise price per warrant		Warrants outstanding and exercisable		Expiry date
October 15, 2019		44,000	$	12.50		44,000	October 15, 2024
August 7, 2020		50,000	$	2.00		50,000	August 7, 2025
August 11, 2020		25,000	$	2.00		25,000	August 11, 2025
		119,000				119,000

Share option plans:

On April 1, 2019, the Company’s board of directors adopted the Sativus Tech Corp. 2018 Share Options Plan (the “2018 Plan”).

Awards granted under the 2018 Plan are subject to vesting schedules and unless determined otherwise by the administrator of the 2018 Plan, generally vest following a period of four years from the applicable vesting commencement date, such that the awards vest in four annual equal instalments and/or generally vest following a period of one year from the applicable vesting commencement date, such that the awards vest in four quarterly equal instalments.

(i) A summary of employee share options activity during the years ended December 31, 2023, 2022 is as follows:

Schedule of employee share options activity
	Number			Average weighted exercise price

Options outstanding at January 1, 2022		195,000		$	0.63
Granted		45,000		$	1.00

Options outstanding at December 31, 2022		240,000		$	0.70
Exercised		(80,000	)	$	0.10

Options outstanding at December 31, 2023		160,000		$	1.05

Options exercisable at December 31, 2023		160,000		$	1.05

The following options are outstanding as of December 31, 2023:

Schedule of option outstanding activity
Issuance date	Options outstanding		Exercise price per option		Options outstanding and exercisable		Expiry date
September 1, 2020		15,000	$	0.70		15,000	September 1, 2025
October 13, 2020		50,000	$	1.00		50,000	October 12, 2023
November 3, 2020		25,000	$	1.00		25,000	October 25, 2025
November 3, 2020		25,000	$	1.50		25,000	October 25, 2025
November 15, 2022		45,000	$	1.00		45,000	November 15, 2024
		160,000				160,000

F-24

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share data

NOTE 5:-

SHAREHOLDERS’ EQUITY (Cont.)

The following option issues took place during the years ended December 31, 2023, and 2022:

On November 15, 2022, the Company granted a consultant 45,000 options to purchase 45,000 shares. All options are exercisable at $1.00 per Share. 30,000 options vest immediately, and 15,000 options vest quarterly. The fair value of the stock options issued is $12 and was determined using the Black-Scholes option pricing model and the following assumptions: share price - $0.33; exercise price - $1.00; expected life – 2 years; annualized volatility – 221%; dividend yield – 0%; risk free rate – 1.23%. During the year ended December 31, 2023, the Company recorded share-based expenses related to the options in the amount of $9.

Restricted Share Units:

RSUs under the 2018 Plan may be granted upon such terms and conditions, no monetary payment (other than payments made for applicable taxes) shall be required as a condition of receiving the Company’s shares pursuant to a grant of RSUs, and unless determined otherwise by the Company, the aggregate nominal value of such RSUs shall not be paid and the Company shall capitalize applicable profits or take any other action to ensure that it meets any requirement of applicable laws regarding issuance of shares for consideration that is lower than the nominal value of such shares. If, however, the Company’s board of directors determines that the nominal value of the shares shall not be waived and shall be paid by the grantees, then it shall determine procedures for payment of such nominal value by the grantees or for collection of such amount from the grantees by the Company.

Shares issued pursuant to any RSUs units may (but need not) be made subject to exercise conditions, as shall be established by the Company and set forth in the applicable notice of grant evidencing such award. During any restriction period in which shares acquired pursuant to an award of RSUs remain subject to exercise conditions, such shares may not be sold, exchanged, transferred, pledged, assigned or otherwise disposed of unless otherwise provided in the 2018 Plan. Upon request by the Company, each grantee shall execute any agreement evidencing such transfer restrictions prior to the receipt of shares hereunder and the Company may place appropriate legends evidencing any such transfer restrictions on the relevant share certificates.

A summary of RSU activity during the years ended December 31, 2023, and 2022, is as follows:

Schedule of RSU activity
	Number

RSU outstanding at January 1, 2022		196,000
Granted (i) (ii) (iii)		370,000
Forfeited		(30,000	)

RSU’s outstanding at December 31, 2022		536,000
Forfeited		(5,000	)

RSU’s exercisable at December 31, 2023		531,000

__________________

(i)	On November 15, 2022, the Company granted 370,000 RSU’s to directors and consultants. The fair value of the shares at the date of the grant was $122. The RSU’s vest quarterly in advance over one year.

F-25

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share data

NOTE 6:-

TAXES ON INCOME

The Company’s subsidiaries are separately taxed under the domestic tax laws of the jurisdiction of incorporation of each entity.

Corporate tax rates in U.S.:

On December 22, 2017, the U.S. Tax Cuts and Jobs Act (“the TCJA”) was signed into law, permanently lowering the corporate federal income tax rate from 35% to 21%, effective January 1, 2018. The company is subject to U.S. income tax laws. There are no significant provisions for U.S. federal, state or other taxes for any period.

Corporate tax rates in Israel:

The Israeli statutory corporate tax rate and real capital gains were 23% in 2022-2023.

Deferred income taxes:

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:

Schedule of deferred tax assets
	December 31,
	2023			2022
Deferred tax assets:
Carry forward tax losses	$	1,863		$	1,686

Net deferred tax asset before valuation allowance		1,863			1,686
Valuation allowance		(1,863	)		(1,686	)

Net deferred tax asset	$	–		$	–

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuation allowance at December 31, 2023, and 2022.

Net operating carry-forward losses for tax purposes:

As of December 31, 2023, the Company’s carry-forward losses amounting to approximately $8,663, and Saffron Tech’s carry-forward losses amounting to approximately $1,863, which can be carried forward for an indefinite period.

F-26

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share data

NOTE 7:-

FINANCIAL INCOME (EXPENSES), NET

Schedule of financial expenses
	Year ended			Year ended
	December 31,			December 31,
	2023			2022
Bank interest and commissions	$	(7	)	$	(13	)
Interest income on deposits		14			–
Financial Income (expenses) related to revaluation of convertible component in convertible loans		441			(420	)
Financial expenses related to interest, revaluation of warrants and leases		(175	)		11
Foreign currency transactions and other		(45	)		(58	)

	$	228		$	(480	)

NOTE 8:-

LIENS, COMMITMENTS

Saffron leases its facility on a lease that expires on September 11, 2024. Lease payments are approximately $2 per month ($23 annually).

Saffron Tech is committed to pay royalties to the IIA on the proceeds from sales of products resulting from research and development projects in which the IIA participates by way of grants. In the first 3 years of sales the Company shall pay 3% of the sales of the product which was developed under IIA research and development projects. In the fourth, fifth and sixth years of sales, the Company shall pay 4% of such sales and from the seventh year onwards the Company shall pay 5% of up to 100% of the amount of grants received plus interest at LIBOR. Saffron Tech was entitled to the grants only upon incurring research and development expenditures. There were no future performance obligations related to the grants received from the IIA. As of December 31, 2023, the contingent liabilities with respect to grants received from the IIA, subject to repayment under these royalty agreements on future sales is $Nil.

The Company's holdings in Saffron Tech are secured to a third party until such time that the third-party convertible loans have been extinguished.

NOTE 9:-

SUBSEQUENT EVENTS

In accordance with ASC 855-10, the Company reviewed all material events through the date of this report and determined that there are no additional material subsequent events to report..

F-27

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of our Annual Report on Form 10-K, an evaluation was carried out by management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (Exchange Act) as of December 31, 2023. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

During evaluation of disclosure controls and procedures as of December 31, 2023, conducted as part of our annual audit and preparation of our annual financial statements, management conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures and concluded that our disclosure controls and procedures were not effective.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for the preparation and fair presentation of the financial statements included in this annual report. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and reflect management’s judgment and estimates concerning effects of events and transactions that are accounted for or disclosed.

Management is also responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting includes those policies and procedures that pertain to our ability to record, process, summarize and report reliable data. Management recognizes that there are inherent limitations in the effectiveness of any internal control over financial reporting, including the possibility of human error and the circumvention or overriding of internal control. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement presentation. Further, because of changes in conditions, the effectiveness of internal control over financial reporting may vary over time.

In order to ensure that our internal control over financial reporting is effective, management regularly assesses controls and did so most recently for its financial reporting as of December 31, 2023.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses identified are described below.

Procedures for Control Evaluation. Management has not established with appropriate rigor the procedures for evaluating internal controls over financial reporting. Due to limited resources and lack of segregation of duties, documentation of the limited control structure has not been accomplished.

Lack of Audit Committee. To date, the Company has not established an Audit Committee. It is management’s view that such a committee, including a financial expert, is an utmost important entity level control over the financial reporting process.

Insufficient Documentation of Review Procedures We employ policies and procedures for reconciliation of the financial statements and note disclosures.

Insufficient Information Technology Procedures. Management has not established methodical and consistent data back-up procedures to ensure loss of data will not occur.

As a result of the management evaluation of company internal control over financial reporting described above, the Company’s management has concluded that, as of December 31, 2023, the Company’s internal control over financial reporting was not based on the criteria in Internal Control – Integrated Framework issued by COSO.

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. We were not required to have, nor have we, engaged our independent registered public accounting firm to perform an audit of internal control over financial reporting pursuant to the rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Annual Report.

Changes in Internal Control Over Financial Reporting

As of the end of the period covered by this report, there have been no changes in internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the year ended December 31, 2023, that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information.

During the quarter ended December 31, 2023, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The following table sets forth the name and age of officers and director as of the date hereof. Our executive officers are elected annually by our board of directors. Our executive officers hold their offices until they resign, are removed by the Board, or his successor is elected and qualified.

Name	Age	Title
Shmuel Yannay	45	Director
Abraham Stern	50	Director
Uri Ben-Or	53	Chief Financial Officer
Tal Wilk-Glazer	49	Chief Executive Officer

Shmuel Yannay, 45, is a licensed attorney (Israel) with broad managerial experience and has served as an Israeli investment banker and the managing partner or Axey Capital, a family office specialized in funding public companies around the globe. Shmuel has a proven track record in corporate equities, finance, capital markets, mergers & acquisitions, and start-up entrepreneurships. Shmuel holds a BA in Economics and an LL.B. degree in Law from Hebrew University in Jerusalem.

Abraham Stern, 50, currently serves as the Vice President of Finance at Wix.com, a leading cloud-based website development platform with millions of users worldwide. Prior to his role as Vice President of Finance at Wix.com, Stern served in several public and private companies in executive finance roles.

Uri Ben-Or, Mr. Uri Ben-Or, 53, is an accomplished CPA and has been CFO of several publicly held companies. Mr. Ben-Or brings over 25 years of broad experience in corporate finance, accounting, M&A transactions, IPO’s and operations of public companies on the TASE, Nasdaq & NYSE. Mr. Ben-Or earned his BA in Accounting, College of Management, 1996, and Executive MBA from Bar Ilan University, 2004.

Tal Wilk-Glazer, 49, became CEO of Sativus Tech’s subsidiary, Saffron Tech, in December 2021. In that short amount of time, she successfully established the company’s first operating R&D facility in southern Israel. On April 4, 2022, the Company announced the appointment of Mrs. Tal Wilk-Glazer to its Board of Directors and as CEO of the Company.

Board of Directors

The minimum number of directors we are authorized to have is one, and although we anticipate appointing additional directors in the near future, as of the date hereof we have one director. Directors on our Board of Directors are elected for one-year terms and serve until the next annual security holders’ meeting or until their death, resignation, retirement, removal, disqualification, or until a successor has been elected and qualified. All officers are appointed annually by the Board of Directors and serve at the discretion of the Board. Currently, directors receive no compensation for their services on our Board. During the next year we intend to strengthen our Board of Directors by expanding it and recruiting world class Key Members.

Committees of the Board

All proceedings of the board of directors for the fiscal year ended December 31, 2023, were conducted by resolutions consented to in writing by our board of directors and filed with the minutes of the proceedings of our board of directors. Our company currently does not have nominating, compensation or audit committees or committees performing similar functions nor does our company have a written nominating, compensation or audit committee charter. Our board of directors does not believe that it is necessary to have such committees because it believes that the functions of such committees can be adequately performed by the board of directors.

The Company does not have any defined policy or procedure requirements for shareholders to submit recommendations or nominations for directors. The Company’s board of directors believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. The Company does not currently have any specific or minimum criteria for the election of nominees to the board of directors and we do not have any specific process or procedure for evaluating such nominees. The board of directors will assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment.

A shareholder who wishes to communicate with the Company’s board of directors may do so by directing a written request addressed to any of our directors at the address appearing on the first page of this registration statement.

Audit Committee Financial Expert

We do not have a standing audit committee. Our directors perform the functions usually designated to an audit committee. Our board of directors has determined that we do not have a board member that qualifies as an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K, nor do we have a board member that qualifies as “independent” as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(14) of the NASD Rules.

We believe that our board of directors is capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. Our board of directors does not believe that it is necessary to have an audit committee because management believes that the functions of an audit committees can be adequately performed by the board of directors. In addition, we believe that retaining an independent director who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the stage of our development and the fact that we have not generated positive cash flow to date.

As we generate revenue in the future, we intend to form a standing audit committee and identify and appoint a financial expert to serve on our audit committee.

Code of Ethics

The Company has adopted a Code of Ethics for Senior Financial Officers that is applicable to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

Indemnification

Under our Articles of Incorporation and Bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a law suit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney’s fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Delaware.

Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Delaware law, we have been advised that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.

Family Relationships

No family relationship exists between any director, executive officer, or any person contemplated to become such.

Director Independence

We currently do not have any independent directors serving on our board of directors.

Possible Potential Conflicts

The OTCBB where our stock is quoted does not currently have any director independence requirements.

No member of the Board of Directors will be required by us to work on a full-time basis. Accordingly, certain conflicts of interest may arise between us and our director(s) in that they may have other business interests in the future to which they devote their attention, and they may be expected to continue to do so although Directors’ time must also be devoted to our business. As a result, conflicts of interest may arise that can be resolved only through their exercise of such judgment as is consistent with each officer’s understanding of his/her fiduciary duties to us.

Currently we have two, and will seek to add additional officer(s) and/or director(s) as and when the proper personnel are located and terms of employment are mutually negotiated and agreed, and we have sufficient capital resources and cash flow to make such offers.

We cannot provide assurances that our efforts to eliminate the potential impact of conflicts of interest will be effective.

Involvement in Certain Legal Proceedings

None of our directors or executive officers has, during the past ten years:

has had any bankruptcy petition filed by or against any business of which he was a general partner or executive officer, either at the time of the bankruptcy or within two years prior to that time;

been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences);

been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities, futures, commodities or banking activities;

been found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

been subject or a party to or any other disclosable event required by Item 401(f) of Regulation S-K.

Item 11. Executive Compensation.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table presents summary information regarding the total compensation awarded to, earned by, or paid to each of the named executive officers for services rendered:

							Stock		All Other
Name and Principal Position	Year		Salary		Bonus		Awards		Compensation		Total

Gadi Levin, CFO⁽¹⁾		2022	$	72	$	–		25	$	–	$	97
		2023	$	54	$	–		5	$	–	$	59

Uri Ben-Or, CFO⁽²⁾,		2022	$	–	$	–		–	$	–	$	–
		2023	$	5	$	–		–	$	–	$	5

Tal Wilk-Glazer, CEO⁽³⁾		2022	$	175	$	–		271	$	–	$	446
		2023	$	202	$	–		37	$	–	$	239

(1)	As of December 24, 2020 and through to December 29^th, 2023

(2)	As of January 1^st, 2024

(3)	As of April 6, 2022

Other than as set forth in the table above, there has been no cash or non-cash compensation awarded to, earned by or paid to any of our officers and directors since inception. We do not intend to pay salaries in the next twelve months. We do not currently have a stock option plan, non-equity incentive plan or pension plan.

Director Compensation

Our directors will not receive a fee for attending each board of directors meeting or meeting of a committee of the board of directors. All directors will be reimbursed for their reasonable out-of-pocket expenses incurred in connection with attending board of director and committee meetings.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

As of December 31, 2023, we had 4,215,571 shares of common stock outstanding which was held by 87 shareholders. The chart below sets forth the ownership, or claimed ownership, of certain individuals and entities. This chart discloses those persons known by the board of directors to have, or claim to have, beneficial ownership of more than 5% of the outstanding shares of our common stock as of December 31, 2023; of all directors and executive officers of SATIVUS TECH CORP; and of our directors and officers as a group.

Name	Number of Shares (1)		% Ownership
Shmuel Yannay (2)		157,642		3.74%
Uri Ben-Or		–		–
Tal Wilk-Glazer		–		–
Abraham Stern		7,500		0.18%
All officers and directors		165,142		3.92%
Nir Margalit		352,175		8.35%

(1)	The percent of common stock owned is calculated using the sum of the number of shares of common stock owned divided by the total number of common stock outstanding as of December 31, 2023.

(2)	The Company have outstanding convertible loan from Mr. Shmuel Yannay of $110. (principle 100K)

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The Company has no business relations or activity with any affiliates.

Item 14. Principal Accounting Fees and Services.

The following table indicates the fees paid by us for services performed for the:

	Year Ended December 31, 2023		Year Ended December 31, 2022
Auditing fees	$	28,000	$	31,000

Total	$	28,000	$	31,000

PART IV

Item 15. Exhibits, Financial Statement Schedules.

The following exhibits are incorporated into this Form 10-K Annual Report:

Exhibit Number		Description
31.1*		Rule 13a-14(a) Certification of the Chief Executive Officer
31.2*		Rule 13a-14(a) Certification of the Chief Financial Officer
32.1*		Section 1350 Certification of Chief Executive Officer
32.2*		Section 1350 Certification of Chief Financial Officer
101.INS*		Inline XBRL Instance Document.
101.SCH*		Inline XBRL Taxonomy Extension Schema Document.
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*	Filed along with this document

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Sativus Tech Corp.

Date: March 31, 2024	By:	/s/ Tal Wilk-Glazer
		Tal Wilk-Glazer
	Title:	Chief Executive Officer (Principal Executive Officer)

Date: March 31, 2024	By:	/s/ Uri Ben-Or
		Uri Ben-Or
	Title:	Chief Financial Officer (Principal Financial Officer)