Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

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, 2025 and 2024. 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.

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, 2025. 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.

On 28^th October 2024, Tal Wil-Glazer resigned from her position as the CEO and a director of the Company. On the same day, the company announced the appointment of Shmulik Yanai as the CEO of the Company.

Results of Operations during the year ended December 31, 2025, as compared to the year ended December 31, 2024

Operating Expenses

Research and Development Expenses for the year ended December 31, 2025, amounted to $694 thousand as compared to $687 thousand for the year ended December 31, 2024. The reason for the increase is a smaller grant from IIA during 2025 compared to 2024.

General and Administrative expenses for the year ended December 31, 2025, amounted to $366 thousand as compared to $271 thousand for the year ended December 31, 2024. The decrease during the year ended December 31, 2025, was mainly due the increase in professional services costs.

Financing Expenses for the year ended December 31, 2025, amounted to $183 thousand as compared financing income to $65 thousand for the year ended December 31, 2024. Financial expenses and income are due mainly to financial gains or losses related to revaluations of convertible components in convertible loans.

Results of Operations during the year ended December 31, 2024, as compared to the year ended December 31, 2023

Operating Expenses

Research and Development Expenses for the year ended December 31, 2024, amounted to $687 thousand as compared to $253 for the year ended December 31, 2023. The reason for the increase is a smaller grant from IIA during 2024 compared to 2023.

General and Administrative expenses for the year ended December 31, 2024, amounted to $271 thousand as compared to $562 thousand for the year ended December 31, 2023. The decrease during the year ended December 31, 2024, was mainly due the decrease in share-based expenses that amounted to $19 thousand, compared to $156 thousand for the year ended December 31, 2023.

Financing Expenses for the year ended December 31, 2024, amounted to $65 thousand as compared financing income to $228 thousand for the year ended December 31, 2023. Financial expenses and income are due mainly to financial gains or losses related to revaluations of convertible component in convertible loans.

Liquidity and Capital Resources

Overview

Since inception on January 16, 2015, the Company had a cumulative deficit as of December 31, 2025, of $24,477 thousand and we have a working capital deficit of $3,735 thousand as of December 31, 2025. 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, 2025, our cash and deposit balance was $96 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, 2025 as compared to the year ended December 31, 2024

During the year ended December 31, 2025, the Company's overall position of cash and cash equivalents decreased by $64 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, 2025, was $701 thousand as compared to $488 for the year ended December 31, 2024. This decrease is mostly due to a significant decrease in accounts receivable and an increase in the net loss of the Company.

The Company's net cash used in investing activities during the year ended December 31, 2025, was $1 thousand as compared to $368 net cash earned for the year ended December 31, 2024. This increase is mostly due to decrease in deposits offset by high investments in Saffron Tech's new facility, located at Ganei Tal during the year ended December 31, 2024.

Cash provided by financing activities for the year ended December 31, 2025, was $638 thousand as compared to $40 thousand for the year ended December 31, 2024. Cash provided in 2025 was from the issuance of shares of subsidiary of $504 thousand and convertible loans in the amount of $36 thousand and proceeds from related party loans of $98.

Year ended December 31, 2024 as compared to the year ended December 31, 2023

During the year ended December 31, 2024, the Company's overall position of cash and cash equivalents decreased by $80 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, 2024, was $488 thousand as compared to $932 for the year ended December 31, 2023. This decrease is mostly due to a significant decrease in accounts receivable offset by an increase in the net loss of the Company.

The Company's net cash earned in investing activities during the year ended December 31, 2024, was $371 thousand as compared to $721 net cash used for the year ended December 31, 2023. This increase is mostly due to increase in deposits offset by high investments in Saffron Tech's new facility, located at Ganei Tal during the year ended December 31, 2024.

Cash provided by financing activities for the year ended December 31, 2024, was $40 thousand as compared to $1,019 thousand for the year ended December 31, 2023. Cash provided in 2024 was from the issuance of shares to minority interests of $53 thousand offset by lease payments of $13 thousand. Cash provided in 2023 was from the issuance of shares to minority interests of $1,273, offset in part by the repayment of convertible loans in the amount of $126 thousand, and the repayment of short term loan in the amount of $114.

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.