UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the Quarterly Period Ended: June 30, 2020March 31, 2021

or

For the transition period from ________________ to ________________

Commission file number: 000-55680

TECHCARECITRINE GLOBAL, CORP.

(Exact Name Of Registrant As Specified In Its Charter)

(in process of name change to CITRINE GLOBAL, CORP.)

Securities registered pursuant to Section 12(b) of the Act:

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 [X] 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). [X] Yes [  ] No

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.

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

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

On August 13, 2020,May 14, 2021, the registrant had 494,721,815942,568,006 shares of common stock, par value $0.0001 per share, outstanding.

TABLE OF CONTENTS

CITRINE GLOBAL, CORP.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

IN U.S. DOLLARS

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TECHCARECITRINE GLOBAL, CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars except share and per share data)

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

TECHCARE CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(U.S. dollars except share and per share data)

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

TECHCARECITRINE GLOBAL, CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(U.S. dollars except share and per share data)

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

TECHCARECITRINE GLOBAL, CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT) AND REDEEMABLE CONVERTIBLE PREFERRED STOCK

(U.S. dollars, except share and per share data)

TECHCARECITRINE GLOBAL, CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars)dollars, except share and per share data)

The accompanying notes are an integral part of the condensed consolidated financial statement

TECHCARECITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 1 - GENERAL

TechCareCitrine Global, Corp. (“Techcare”Citrine Global” or the “Company”) (in process of name change to Citrine Global, Corp.) was incorporated under the laws of the State of Delaware on May 26, 2010. The Company’s common stock is traded in the United States on the OTCQB market under the ticker symbol “TECR.“CTGL.”

As reported inOn August 20, 2020, CTGL - Citrine Global Israel Ltd., the Company’s annual report on Form 10-K for the year ended December 31, 2019, the Company’s BoardIsraeli subsidiary (the “Israeli Subsidiary), Beezz Home Technologies Ltd., and Golden Holdings Neto Ltd. incorporated Cannovation Center Israel Ltd. Israeli Subsidiary holds 60% of Directors explored during 2019 strategic alternatives to enhance stockholder value, which the Company had previously reported might include future acquisitions, a merger with another company, the saleCannovation Center Israel Ltd.’s shares, while each of the Company, or a potential sale of certain assets, including the Company’s wholly owned subsidiary NovomicBeezz Home Technologies Ltd. (“Novomic”), a technology company engaged in the design, development and commercialization of a unique proprietary and patented delivery platform utilizing vaporization of various natural compounds for multiple health, beauty and wellness applications.

As of December 31, 2019, the Company had incurred accumulated losses of approximately $10.6 million, and based on the projected cash flows and Company’s cash balance, the Company’s management was of the opinion that without further fundraising it would not have sufficient resources to enable it to continue advancing its activities, including the development, manufacturing, and marketingGolden Holdings Neto Ltd. holds 20% of its products, which cast substantial doubt on the entity’s ability to continue as a going concern.shares.

On November 21, 2019, in light22, 2020, certain of the above,Company’s stockholders representing more than 50% of the Company’s outstanding share capital (the “Majority Consenting Stockholders”) approved an amendment to the Company’s Certificate of Incorporation (the “Reverse Stock Split Certificate of Amendment”) in order to effect a reverse stock split of the Company’s common stock pursuant to a range of between 40-to-1 and after100-to-1 (the “Reverse Stock Split”). Pursuant to the boardReverse Stock Split, each forty or one hundred shares of directorscommon stock, as shall be determined by the Board at a later time, will be automatically converted, without any further action by the stockholders, into one share of common stock. No fractional shares of common stock will be issued as the result of the Reverse Stock Split. Instead, each stockholder of the Company reachedwill be entitled to receive one share of common stock in lieu of the conclusionfractional share that would have resulted from the Reverse Stock Split. In addition, the Majority Consenting Stockholders also approved the elimination of the Company’s entire authorized class of fifty million (50,000,000) undesignated preferred stock, thereby reducing the total number of shares of capital stock that the Company wouldmay issue from one billion five hundred fifty-thousand (1,550,000,000) shares to one billion five hundred thousand (1,500,000,000) shares, all of which are designated as common stock (the “Certificate of Elimination”). The Certificate of Elimination will be effective upon the filing with the Secretary of the State of Delaware, which was not completed as of the date of this report’s filing. The Reverse Stock Split Certificate of Amendment will be ableeffective upon receipt of approval from the Financial Industry Regulatory Authority (“FINRA”) and the filing with the Secretary of the State of Delaware, both of which were not completed as of the date of the approval of the financial statements.

On December 30, 2020, the Ministry of the Economy of the Israeli government approved the grant of 10,000 square meters of industrial land in the Yeruham Biopharma Park to successfully commercialize any products or secure sufficient financing,Cannovation Center Israel for building the Company entered intoCannovation Center, that will include factories, laboratories, logistics and a Memorandum of Understanding withdistribution center for the medical cannabis, CBD, hemp and botanicals industries.

On April 13, 2021, Citrine S A L Investment & HoldingsHolding Ltd., which provided for the issuance and sale of a number of shares resulting in Citrine S A L Investment & Holdings Ltd and/or its designee(s) holding 95% of the fully diluted capital stockmajor shareholder of the Company, and the sale by the Company of 90% of its shares in Novomic.

On January 6, 2020, definitive agreements were executed for the sale of 90% of the shares in Novomic to Traistman Radziejewski Fundacja Ltd., which was completed on May 14, 2020, and for the issuance and sale of a number of shares equal after the issuance to 95% of the fully diluted capital stock of the Company to Citrine S A L Investment & Holdings Ltd. and a group of related persons and entities (the “TechCare Transaction”). Traistman Radziejewski Fundacja Ltd. is controlled by Oren Traistman, which is one of the Company’s beneficial shareholders and was a director of the Company until February 27, 2020. See additional information in Note 4 below.

On February 23, 2020, the Company entered into an agreement amending and restating the January 6, 2020 agreement concerning the TechCare Transaction, which provided for the issuance and sale of the shares in stages. Pursuant to this agreement, on February 27, 2020 and March 5, 2020, 432,996,555 shares of common stock of the Company were issued to Citrine S A L Investment & Holdings Ltd and its group of related persons and entities, resulting in a change of control of the Company. The amended and restated agreement provided for the issuance of 893,699,276 shares of common stock in total in consideration for $150 thousand, however the Company was unable to complete the issuance of all these shares at that time because the Company was authorized under its certificate of incorporation to issue only up to 500,000,000 shares of common stock. The Company’s certificate of incorporation was amended on May 14, 2020, increasing its authorized share capital by one billion shares of common stock, after it filed an information statement on Form 14C.

As of June 30, 2020, the Company received approximately $150 thousand out of $150 thousand mentioned above. Out of such amount of $150 thousand, an amount of approximately $105 thousand is presented as a current lability within the Company’s condensed consolidated balance sheet as of June 30, 2020, as the shares related to this amount were not issued yet, and legally can be called back by the investors.

Until May 14, 2020, the date on which the sale of 90% of Novomic’s shares was completed (see Note 4 below), the Company continued selling the Novokid® product produced by Novomic both through online and physical sales channels, including through its own website. Novomic was not presented as held for sale, although the held-for-sale criteria were met, because the Company concluded that the disposal of 90% of Novomic’s shares is comprised of substantially almost all of the Company’s net assets and operations and since the separate presentation of such a significant portion of the entity’s net assets as a single line item on the balance sheet would not be meaningful to financial statement users.

Also, starting Q1 2020, the Company began its plans for a new business activity. The Company’s new business activity comprises creating value and implementing expansion strategies for growth-stage technology companies. The Company believes the health, wellness, food tech and Israeli medical cannabis fields are demonstrating high growth potential, and, therefore, the Company has begun by focusing on these sectors. The Company aims to empower innovative companies to become global leaders and improve the health and quality of life of as many people as possible worldwide. The Company aims to support local and global expansion of such target companies via an array of services customized to each company’s needs, from assistance with strategic business planning to solving real estate-related and finance issues. The Company plans to offer multi-strategy solutions combining strategic marketing, business development, real estate and site management services and financing solutions. By offering such a wide spectrum of services, the Company aims to help create an integrated strategy that supports its target companies in achieving their local and global expansion ambitions. The Company seeks to work proactively and collaboratively with the target companies in order to allow them to scale quickly and achieve their milestones.

As part of this process, the Company established a new Israeli subsidiary CTGL – Citrine Global Israel Ltd, which was incorporated on June 3, 2020 (the “Israeli Subsidiary”).

Based on the Company’s current cash balances, capital raised in the second quarter of 2020 and the irrevocable letter it has received (as noted below), the Company has sufficient funds for its plans for the next twelve months from the issuance of these financial statements. Currently, as the Company is embarking on its new activity as detailed herein, it is incurring losses and cannot determine with reasonable certainty when and if it will have sustainable profits.

Citrine S A L Investment & Holdings Ltd., on behalf of itself and its affiliates and related parties, has furnished the Company with an irrevocable letter of obligation to financially support the Company until December 31, 2021June 30, 2022 that will allow itthe Company to be operational as planned and budgeted through this period.period (the “Irrevocable Letter”).

On March 11, 2020,Based on the World Health Organization declaredCompany’s current cash balances and the outbreak of a novel coronavirus (SARS-CoV-2) to be a global pandemic (COVID-19), which continues to spread throughoutIrrevocable Letter, the world. The COVID-19 pandemic is having significant effects on global markets, supply chains, businesses, and communities. Specific to the Company, COVID-19 may impact various parts of its 2020 plans, operations and financial results including but not limited to difficulties in obtaining additional financing. The Company believes it has sufficient funds for its plans for the next twelve months from the issuance of these financial statements. As the Company is taking appropriate actions to mitigate the negative impact, including by focusingembarking on its activities initially only within the country of Israel. However, the full impact of COVID-19new activity as detailed herein, it is unknownincurring losses. It cannot determine with reasonable certainty when and cannot be reasonably estimated as these events are still developing.if it will have sustainable profits.

CITRINE GLOBAL, CORP.

On May 26, 2020, the board of directors of the Company appointed Ms. Ilanit Halperin, CPA as Chief Financial Officer of the Company, replacing Mr. Zviel Gedalihou, effective from May 27, 2020. The board of directors also appointed Ms. Halperin as Chief Financial Officer of the Company’s wholly-owned Israel subsidiary, effective once it was incorporated.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

Unaudited Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiary, prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q. In the opinion of management, the financial statements presented herein include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the financial condition, results of operations and cash flows for the for six-monthsthree months ended June 30, 2020 and 2019.March 31, 2021. However, these results are not necessarily indicative of results for any other interim period or for the year ended December 31, 2020.2021.

Certain information and footnote disclosures normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission (“SEC”). These unaudited interim financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on May 11, 2020 for the year ended December 31, 20192020.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of TechCare,Citrine Global and its subsidiaries.Israeli Subsidiary. All significant intercompany accountsbalances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that 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 revenue and expenses during the reporting periods. Significant estimates include fair value estimates of derivative liabilities discussed in Notes 5 and 8, as well as the estimated service period related to share based payment to the Company’s legal advisor (refer to Note 6).assets. Actual results could differ from those estimates.

Functional Currency and Foreign Currency Translation and Transactions.CITRINE GLOBAL, CORP.

The currency of the primary economic environment in which the operations of the Company and its subsidiaries are conducted is the New Israeli Shekel (“NIS”).

The presentation currency of the financial statements is the U.S. dollar. Assets and liabilities are translated at year-end exchange rates, while revenues and expenses are translated at actual exchange rates during the year. Differences resulting from translation are presented in equity, under accumulated other comprehensive income (loss). Gains and losses arising from foreign currency transactions of monetary balances denominated in non-functional currencies are reflected in financial income (expense), net in the consolidated statements of operations and comprehensive loss.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Other financialNOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF expenses (income), net in the consolidated statements of operations and comprehensive loss comprised mainly of exchange rate differentials.

Investments valued under the measurement alternative

The Company’s investments as described in Notes 3 and 4 are valued under the measurement alternative include equity securities in other proprietary investments for which the Company does not have significant influence and fair value is not readily determinable. ASU 2016-01 requires equity securities to be recorded at cost and adjusted to fair value at each reporting period. However, the guidance allows for a measurement alternative, which is to record investments at cost, less impairment, if any, and subsequently adjust for observable price changes of identical or similar investments of the same issuer.

Due to the lack of readily determinable fair values for such investments, for which the Company does not have significant influence, the Company accounts for these investments under the measurement alternative at cost, less impairment.

The Company performs qualitative impairment assessments on its investments recorded under the measurement alternative.

Derivatives

Derivative instruments are recognized on the balance sheet at their fair value, with changes in the fair value recognized as a component of financial expenses, net in the statements of income.

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.RESENTATION (cont.)

Fair value

Fair value of certain of the Company’s financial instruments including cash, accounts receivable, accounts payable, accrued expenses, notes payables, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASCAccounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosure”Disclosure,” which defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements.

Fair value, as defined inby ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company’s credit risk.

Valuation techniques are generally classified into three categories: (i) the market approach; (ii) the income approach; and (iii) the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and

CITRINE GLOBAL, CORP .

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF RESENTATION (cont.)

Fair value (cont.)

Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values.

Fair value measurements are required to be disclosed by the Levellevel within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Levellevel 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), (ii) segregating those gains or losses included in earnings, and (iii) a description of where those gains or losses included in earning are reported in the statement of income.operations.

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:

Recent Accounting PronouncementsCITRINE GLOBAL, CORP.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments. This guidance replaces the current incurred loss impairment methodology. Under the new guidance, on initial recognition and at each reporting period, an entity is required to recognize an allowance that reflects its current estimate of credit losses expected to be incurred over the life of the financial instrument based on historical experience, current conditions and reasonable and supportable forecasts.

The guidance became effective on January 1, 2020, including interim periods within that year and requires a modified retrospective transition approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. Under the modified retrospective method of adoption, prior year reported results are not restated. The Company has performed its analysis of the impact on its financial instruments that are within the scope of this guidance and has concluded that there was no material impact to its consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement as part of the FASB’s broader disclosure framework project. ASU No. 2018-13 removes, modifies and adds certain disclosures providing greater focus on requirements that clearly communicate the most important information to the users of the financial statements with respect to fair value measurements. The adoption of ASU No. 2018-13 as of January 1, 2020 did not have a material impact on the Company’s consolidated financial statements.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 32 - INVESTMENT VALUED UNDER THE MEASUREMENT ALTERNATIVE

On June 22, 2020, the Company entered into a share purchase agreement with Nanomedic Technologies Ltd., an Israeli private company and a related party as further described below (“Nanomedic”SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF RESENTATION (cont.) as part of an A-1 funding round open only to existing Nanomedic shareholders and their affiliates. Nanomedic developed SpinCare™, a system that integrates electrospinning technology into a portable, bedside device, offering immediate wound and burn care treatment. The Company paid $450,000 for A-1 preferred shares of Nanomedic and also received warrants for A-1 preferred shares. Such investment represents a holding of approximately 3.3% in Nanomedic. The round raised approximately $2.2 million in total. Citrine S A L Investment & Holdings Ltd and certain of its partnerships, all affiliates of the Company, were already beneficial shareholders of Nanomedic immediately prior to the A-1 funding round. Ilan Ben-Ishay, a director of the Company was already a beneficial shareholder of Nanomedic immediately prior to the A-1 funding round. Ora Meir Soffer, chairperson and CEO of the Company, was already a director of both Nanomedic and its Israeli parent company Nicast Ltd. immediately prior to the A-1 funding round, and she was also already a beneficial shareholder of Nanomedic immediately prior to the A-1 funding round.

The Company accounts for the investment in Nanomedic in accordance with the provisions of ASC 321, “Investments - Equity Securities”, and elected to use the measurement alternative therein. The investment will be re-measured upon future observable price change(s) in orderly transaction(s) or upon impairment, if any.

NOTE 4 - SALE OF NOVOMICFair value (cont.)

As described in Note 1 above,The Company’s financial assets and liabilities that are measured at fair value on January 6, 2020, definitive agreements were executed for the sale of 90% of the shares in Novomic to Traistman Radziejewski Fundacja Ltd., which was completed on May 14, 2020. The remaining investment in Novomic (represents 10% holding) is not presenteda recurring basis by level within the Company’s condensed consolidated balance sheetfair value hierarchy are as of June 30, 2020, as it had no significant value as of that date. Starting on the deconsolidation date, the remaining investment in Novomic is accounted as an investment valued under the measurement alternative as described in Note 2 above.follows:

The following table summarizespresents the assets and liabilities of Novomic aschanges in fair value of the deconsolidation date:level 3 liabilities for the period ended March 31, 2021:

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 5 – CONVERTIBLE NOTES2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF

On April 1, 2020 the Company entered into a Convertible Note Purchase Agreement (the “CL Agreement”RESENTATION (cont.) with Citrine S A L Investment & Holdings Ltd, WealthStone Private Equity Ltd, WealthStone Holdings Ltd, Golden Holdings Neto Ltd, Beezz Home Technologies Ltd, Citrine Biotech 5 LP, Citrine High Tech 6 LP, Citrine High Tech 7 LP, Citrine 8 LP, Citrine 9 LP and Citrine Biotech 10 LP (together, the “Buyer”), all of which are affiliated with the Company. Under the CL Agreement, the Buyer agreed to purchase and the Company agreed to issue and sell, for up to an aggregate principal amount of $1,800 thousand, notes convertible into shares of common stock of the Company (the “Notes”), for a period starting on April 1, 2020 and ending upon the earlier of (i) 6 months thereafter and (ii) the consummation of a public offering by the Company. The CL Agreement provides that the Notes will bear an annual interest rate of six percent (6%) and that the conversion price per share of Common Stock shall equal 85% multiplied by the market price (as defined in the Notes), representing a discount of 15%, and that each Note will mature 18 months following the payment date.

On April 19, 2020 and June 12, 2020, the Company provided draw down notices under the CL Agreement for amounts of $170,000 and $1,000,000, respectively, which were received in cash by the Company.

On June 12, 2020, the CL Agreement (hereafter “CL Agreement amendment”) was amended to provide that for each draw down made by the Company under the CL Agreement, the Buyer shall be entitled to receive two types of warrants: A Warrants and B Warrants, with the A Warrants exercisable between 6 and 12 months after issuance for an exercise price per share equal to 1.25 times the average of the closing prices of the 3 trading days preceding the draw down, and the B Warrants exercisable between 6 and 24 months after issuance for an exercise price per share equal to 1.5 times the average of the closing prices of the 3 trading days preceding the draw down, and that the number of each of the A Warrants and the B Warrants issued will be equal to the draw down amount divided by the average of the closing prices of the 3 trading days preceding the draw down, and that these amended terms will apply in respect of all draw downs, including drawdowns made prior to the date of the amendment.

Conversion feature

In accordance with ASC 815-15-25, the conversion feature was considered embedded derivative instrument, and is to be recorded at its fair value separately from the convertible notes, within current liabilities in the Company’s balance sheet. The conversion component is then marked to market each reporting period with the resulting gains or losses shown in the statements of operations.

The fair value of the conversion feature (hereafter “Convertible Component”) was estimated using the Monte Carlo Simulation ModelMonte-Carlo simulation model to compute the Convertible Component’s fair value of $285,028 and derived service period of 1.5 years.value. The assumptions used to perform the Monte-Carlo simulation model were consistent with those utilized in the Company’s Black-Scholes valuation for stock options specifically: expected volatility of 65.69%, risk-free interest rate of return of 0.18% and dividend yield of 0.0%.are detailed below:

Warrants

As mentioned above, as part(*) the conversion price is 85% of the June 12, 2020 CL Agreement amendment,share price, during the Company issuedperiod of 5 days preceding the Buyer 5,589,172 A warrants and 5,589,172 B warrants to purchase a total of 11,178,344 shares of common stock of the Company.conversion date.

The fair value of such warrants as of the drawdowns datesshares exchange agreement was estimated at $301,665 using the Black-Scholes option-pricing model and is presented in shareholders equityamong current liabilities within the Company’s condensed consolidated balance sheet.

The following are the data and assumptions used as of the balance sheet date:date related to future potential issuance of shares as describe above for potential fall in share price of a party, not exceeding 20%:

Convertible NotesCITRINE GLOBAL, CORP.

The drawdowns notices amount, net of the Conversion feature and the Warrants amounts (hereafter “Convertible notes”), is $580,925. The convertible is accounted for based on the effective interest method.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 6 – SHAREHOLDERS’ EQUITY2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF RESENTATION (cont.)

On January 29, 2020, holders of 10,344,828 Redeemable convertible Series A preferred stock, par value $0.0001, converted their shares into shares of common stock, par value $0.0001. See also Note 9h below.

The terms of the transaction for the issuance of 893,699,276 shares of common stock in total are described in Note 1 above. During February and March 2020, the Company issued 432,996,555 shares of common stock, par value $0.0001, to investors in respect of the transaction described in Note 1 above, for total consideration of $45,000.Recent Accounting Pronouncements

AsIn August 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“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 June 30,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, 445,702,721 sharesincluding interim periods within those fiscal years. The Company is currently evaluating the impact that the adoption of common stock (out ofASU 2020-06 will have on the 893,699,276 mentioned above) have not been issued yet.Company’s consolidated financial statement presentation or disclosures.

On March 5, 2020 the CompanyOther new pronouncements issued 15,000,000 shares of common stock, par value $0.0001, to its legal advisor in respect of legal consulting services, with respect to the Techcare Transaction as well as other legal services, as agreed between the parties, which,but not effective as of June 30, 2020, isMarch 31, 2021 are not expected to be provided until June 30,have a material impact on the Company’s consolidated financial statements.

NOTE 3 – STOCK OPTIONS

The Company estimated the fair value of the shares issued based on the share price at the grant date at $4,785 thousand of which $1,340 thousand and $479 thousand were recorded asa share based compensation expense in the six and three month periods ended June 30, 2020, respectively, and the remaining was recorded as prepaid share based payment. The prepaid services will be expensed over the attribution periodamount of the remaining legal consulting services. Such expense is included1,737 thousands in the Marketing, general and administrative expenses within the condensed consolidated statements of operations and comprehensive loss.three months ended March 31, 2020.

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 74 – STOCK OPTIONSEVENTS DURING THE PERIOD

On June 25, 2020, the Company and the Israeli Subsidiary entered into an agreement to grant Intelicanna Ltd. (“Intelicanna”) New Israeli Shekel (“NIS”) 1 million in cash (approximately $290,000) in direct financing for working capital purposes. The following table presentsfinancing will bear 6% annual interest, and Intelicanna will make additional payments equal to 6% of its gross revenues from the date the financing was received and until the date Intelicanna’s aggregate gross revenues reach NIS 2 million (approximately $600 million). If the total of the 6% interest plus the additional payments would result in a return of less than 12% per year to the Company, the interest would be increased to bring the total return to 12%. Every three months Intelicanna must pay the interest, and after 12 months, it must repay the capital, plus the total of the additional payments due, plus any outstanding interest, and it must pay interest of 2% per month on any late payments, provided, however, that until the foregoing obligations are paid in full, Intelicanna must pay 50% of its gross revenues to the Company upon receipt. If Intelicanna does not pay all amounts due within 18 months, it shall, at the Company’s stock option, activity for employees and directorsissue to the Company a number of its shares equal to NIS 1.5 million (approximately $0.45 million ) divided by the lower of (i) volume weighted average price (VWAP) of the three trading days prior to the lapse of the 18 months, and (ii) VWAP of the three trading days prior to the signing of the financing agreement. The financing must be paid by the Company forto Intelicanna within 30 days of signing the six months ended June 30, 2020:financing agreement, subject to completion of due diligence to the Company’s satisfaction and to Intelicanna receiving a commercial growing license.

On July 9, 2020, the Company transferred to Intelicanna NIS 500,000 (approximately $145,000).

On March 31, 2021, Intelicanna repaid the full principal of the loan together with 12% interest, which amounted to NIS 46,000 (approximately $14,000).

NOTE 85 – AGREEMENTS WITH INTELICANNA LTDRELATED PARTIES

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 9 – RELATED PARTIES

NOTE 106 – SUBSEQUENT EVENTS

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward-looking Statements

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws, and is subject to the safe-harbor created by such Act and laws. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms, or other variations thereon or comparable terminology. The statements herein and their implications are merely predictions and therefore inherently subject to known and unknown risks, uncertainties, assumptions and other factors that may cause actual results, performance levels of activity, or our achievements, or industry results to be materially different from those contemplated by the forward-looking statements. Except as required by law, we undertake no obligation to release publicly the result of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Further information on potential factors that could affect our business is described under the heading “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.2020 as filed with the Securities and Exchange Commission, or the SEC, on April 15, 2021, and in Part II, Item 1A of our Quarterly Report on Form 10-Q for the nine months ended, as filed with the SEC on November 16, 2020. Readers are also urged to carefully review and consider the various disclosures we have made in that report. As used in this quarterly report, the terms “we”, “us”, “our”, the “Company” and “Citrine” mean Citrine Global, Corp. and our wholly-owned subsidiary CTGL -Citrine Global Israel Ltd. unless otherwise indicated or as otherwise required by the context.

Overview and Recent Developments

The Company’s newOur business activity was introduced immediately upon the changeis comprised of control of the Company which occurred on February 27, 2020.

The Company’s new business activity comprises creating valuedeveloping Israeli technologies and implementing expansion strategies for growth-stage technology companies. The Company believessolutions and bringing them to global markets. We believe in the health, wellness, food techfood-tech, botanicals, and Israeli medical cannabis fields are demonstratingindustries that demonstrate high growth potential and is therefore primarily focusedfocus on these sectors. The Company aims to empower innovative companies to become global leaders and improve the health and quality of life of as many people as possible worldwide. The Company aims to support local and global expansion of such target companies via an array of services customized to each company’s needs, from assistance with strategic business planning to solving real estate-related and finance issues. The Company offers multistrategy solutions combining strategic marketing, business development, real estate and site management services and financing solutions. By offering such a wide spectrum of services the Company aims to help create an integrated strategy that supports its target companies in achieving their local and global expansion ambitions. The Company seeks to work proactively and collaboratively with the target companies in order to allow them to scale quickly and achieve their milestones. Further detail is provided in the notes to the financial statements.markets.

Description of the New Business

Following the recent change of control over the Company, we started a new business. Our vision is to be a powerhouse for high-growth technology companies via our businessheadquarters, directors, and financial expertise. To better align our name with the new business, we decided to change the name of the Company to Citrine Global, Corp. We filed a Schedule 14(C) information statement in connection with the name change and expect the name change to take effect soon. On or about the same time, we expect to also start trading under a new ticker symbol. We will file a current report on Form 8-K once the new name and new ticker symbol become effective.

We are focused on creating value and implementing expansion strategies for growth-stage technology companies.

We aim to support local and global expansion of our client companies. We plan to bolster high-growth technology companies via an array of services, with the ability to customize them to each company’s needs - from assistance with strategic business planning to solving real estate-related and finance issues.

We offer multi-strategy solutions combining strategic marketing, business development, real estate and site management services and financing solutions. Such wide spectrum of services is targeted at helping create an integrated strategy that supports our client companies in achieving their local and global expansion ambitions.

We seek to work proactively and collaboratively with our clients in order to allow them to scale quickly and achieve their milestones.

We believe the health, wellness and food tech fields are demonstrating high growth potential and are therefore primarily focused on these sectors. We plan on empowering innovative companies to become global leaders and improve the health and quality of life of as many people as possible worldwide.

Strategy

Multi-Strategy Solutions:

We offer a mix of business development services, site management and real estate support and financing solutions to help our client companies achieve their growth potential.

Potential client companies we review will only receive financing with our assistance after successful completion of due diligence and evaluation of legal, IP, financial, technological, business, equity/collateral secured loans, shares, sales, assets and real estate aspects in order to minimize risk.

The Company seeks to work proactively and collaboratively to achieve the best possible results. Through our offices and partners around the world, we believe we have the platform to achieve our goals. Our global network of partners and advisers has vast experience in working with start-ups and growth-stage companies helping them create strategic growth plans and present unique, strategic partnership options using a global professional network.

The Company’s partners and managersexecutive officers are all experienced investors and top-level managers that held high level positions in leading companies. They place at the Company’s disposal their network, experience and expertise and offer deep industry know-how in emerging technology markets, to achieve the growth goals and global success our client companies strive for.

The Company’s services range from assistance with strategic business planning to operational execution and financing, customized for the needs of each client company.

Business Development and Consulting:

Business development, creating synergistic partnerships, assisting managements build a strategy and set milestones, assist in finding M&A targets and in paving the way for a public offering.

We assist our client companies with:

● The Business – assisting the company management in building strategic analysis, business modelling, sales strategies, brand positioning, process development, and milestones for global success.

● Optimize Product Strategy - we bring marketing and industry experts to perfect product strategies.

● Ramp up Sales Force - having scaled businesses globally, our team assists in further sales ramp-up.

● Expand Globally - assisting the company management in building strategy and milestones for global success.

● Preparation for Investment - support with financial valuations, preliminary negotiations for investment, mergers, IPO and more.

● Local and International Networking - market development with the support of our partners and business network, we help our companies access international markets.

● The Board - provide board advisory support and assist in finding the right team.

● The Team - our extensive network allows us to find the right team and recruit top talent.

● Capital Raising - public and private capital raising.

● Public Capital - as a publicly traded company we help with solutions adapted to public trade.

● Streamline Operations - with a strong operational background, we assist in improving operations.

● Scale Infrastructure - we want our businesses to be references in terms of their infrastructure.

● Asset and Real Estate - provide solutions for companies’ real estate and sites to support their local and global expansion.

Real Estate:

Provide solutions for companies’ real estate-related needs: whether it is an office space, a lab or a greenhouse, we will assist the company in finding the right real estate at the right place and provide ongoing management services to these assets - all with the aim of enabling our client companies to focus on the core aspects of their business and create value for their shareholders.

Financing:

Assist client companies in finding potential sources of financing for their businesses, whether by connecting them to third party investors or, exceptionally, making an investment ourselves, or both.

Selection Criteria and Process:

Growth stage technology companies in the fields of healthcare and wellness with high growth potential.

Selection Criteria:

● The companies’ technology and IP

● The management team

● Financial model, market strategy and growth potential

● Addressable global market, competition and potential for international partnerships, mergers, and strategic investments

● Capability for providing collateral

● Substantial equity and revenue base

● Public companies – an advantage

The Company intends to initially focus on Israeli companies through its Israeli subsidiary CTGL - CITRINE GLOBAL ISRAEL LTD (company number 516201159) which was incorporated on June 3, 2020.

Key Target Markets

We primarily target growth-stage technology companies focused on health and wellness solutions.

Health and Wellness Market – Overview:

The health and wellness industry is growing consistently and rapidly on a global scale, consisting of over 10% of the global GDP. Health and wellbeing tops consumer agendas creating addressable target markets of trillions of dollars.¹ The digital health market is projected to reach over $500 billion at a CAGR of nearly 30% by 2025, the biotech market is expected to reach $775 billion by 2024, and the wellness market is estimated at $4,500 billion.²

The healthcare industry, and specifically the biotech sector, seeks to solve many of the world’s medical problems.

¹ https://www.who.int/health_financing/documents/health-expenditure-report-2019.pdf?ua=1; https://www2.deloitte.com/global/en/pages/life-sciences-and-healthcare/articles/global-health-care-sector-outlook.html;

² https://www.gminsights.com/industry-analysis/digital-health-market; https://globalwellnessinstitute.org/industry-research/2018-global-wellness-economy-monitor/; https://www.grandviewresearch.com/industry-analysis/corporate-wellness-market

The wellness industry is defined as products and solutions that enable people to incorporate wellness activities and lifestyles into their daily life.

The industry is divided into the following main categories:

● therapeutics

● pharmaceuticals

● biologics

● botanicals

Improvements in health technology and scientific breakthrough innovations are changing treatment paradigms towards directions of:

● preventative

● diagnostic

● holistic patient care

Democratized knowledge is driving demand for innovative health and wellness products and services across all demographics and geographies.

Changing consumer behavior and disruptive technologies are enabling the rapid consumerization and personalization of healthcare.

There is an evolution from prescription drugs, doctor-administered diagnostics and medical treatments to a new marketplace centered around the well-being of people as individuals not patients, enabling and improving ‘quality of life’ in ways which can be seamlessly integrated into their daily routines.

For these reasons we decided to place our focus on personalized health and wellness.

Many of these innovations are being driven by a new generation of venture-backed, more consumer-orientated companies, often underserved by the traditional medical and pharma VC marketplace. There are also pronounced market asymmetries between the sources of some of the most important wellness innovations in parts of Europe and Israel and the large consumer-driven marketplaces for these innovations globally.

Health and Wellness Markets - Fields:

Medical Food:

● Vitamins and minerals

● Nutritional supplements

● Food allergies

● Personalized nutrition and functional foods

● Digestion and gut health

● Weight management

● Cannabis edibles

● Plant based alternatives

● Neutronics and personalized nutrition

Medical Cannabis:

● Cannabis plant genetics

● Pharmacological cannabis effects

● Cannabis cultivation methods

● Cannabis-infused edibles

● Cannabis-based medications

● Cannabis products development

● Cannabis wellness solutions development

● Cannabis personalized medicine solutions

Physical and Mental Wellbeing:

● Cognitive/brain wellbeing

● Physical therapies

● Injury prevention

● Relaxation management and meditation

● Brain health and neurosciences

● Mood and stress detection and management

● Hypertension

● Anxiety and depression

Anti-Aging and Improved Longevity:

● Skin health/repair

● Bone/joint health

● Personalized fitness and physical mobility

● Lifestyle management

● Fatigue abatement

● Sleep quality

● Pain management

● Mental alertness and dementia abatement

Consumer/Digital Healthcare:

● Preventive and personalized fitness tracking

● Continuous health monitoring and biofeedback

● Point of care testing and screening devices

● Personalized big data and e-health analytics

● Unregulated or minimally regulated wearables, implants

● Post hospital/surgery monitoring

Health and Wellness Markets - Trends and Drivers:

● Health and wellness industry drivers/trends turned into investment opportunities.

● Deregulation of healthcare industry: devolution from hospitals-to-clinics-to-self.

● Technical innovation driving change: consumerization, digitization and democratization of wellbeing.

● Increased awareness of food and nutrition: new generation of functional and personalized foods.

● Cognitive health just as important as physical health: alternative remedies and improved awareness.

● Increased lifespan places huge demands on current systems: anti-aging, lifestyle management, quality of life.

● New consumers’ preferences and behavior: non-surgical, nonprescription, self-administered, self-testing.

● New business models and connected ways of making payments: insurance coverage includes more wellbeing.

● New regulations allowing cannabis infused medications, products and edibles.

Geographies

The Company opens opportunities with an insider’s entree into fast-growing industries with access to strategic investment opportunities. All this under a credible institutional quality platform.

(graphic of potential future structure)

● Israel is truly a ‘start-up nation’ and has global leaders in almost any category of technology-driven innovation covered by the Company.³

● Europe has very active health and wellness innovation clusters in the Netherlands, UK, France, Nordic regions and Germany in particular.

● North America: - the USA is the market leader in health and wellness innovations and leads the world in M&A activity in this area for mature companies with proven revenues.

In December 2019, a strain of novel coronavirus (COVID-19) causing respiratory illness emerged in the city of Wuhan in the Hubei province of China, and in January 2020, the World Health Organization declared the COVID-19 outbreak a public health emergency. The COVID-19 has spread to many countries and is impacting the markets globally. Many countries, states and municipalities have enacted quarantining regulations which severely limit the ability of people to move and travel, and require non-essential businesses and organizations to close their physical offices. The situation created by COVID-19 worldwide has made it difficult and even impossible to meet with different investors, parties and partners. The Company managed to adapt to the situation and built an alternative plan in a short time. Since it was difficult and even impossible to travel specifically to New York and Europe, and since the Company directors and executives are based in Israel, the Company took the decision to focus on Israel as first step,where we operate via its fully-owned subsidiary CTGL - CITRINE GLOBAL ISRAEL LTD (company number 516201159) which was incorporated on June 3, 2020.

CGTL - Citrine Global Israel Ltd

CGTL - Citrine Global Israel Ltd, which is wholly owned by the Company, targets Israeli startups and technology companies, and in particular public companies, in the fields of healthcare, wellness, foodtech and medical cannabis.

About Israel - the “Startup Nation” ⁴:

● Israel has earned the nickname “Startup Nation” for a very good reason: with a population of around 8.5 million, it has the largest number of startups per capita in the world, around one startup per 1,400 people. This phenomenon has caught the eyes of companies with global reach and global aspirations.

● The hi-tech ecosystem in Israel is currently focusing its attention on research and development in the areas of healthcare and biotech, including solutions for COVID-19 and the medical cannabis plant for medical purposes.

● Israel is known for its academic research yielding world renowned innovations and Nobel prize winners.

● In addition, the government recognizes the role of the high-tech industry as a main economic catalyst and supports innovations via funding and other models.

● Israel, as small as it may be, has attracted the interest of the world’s major technology companies, some of which have set up R&D centres in Israel.

³ https://apex.aero/2019/05/22/startup-nation-israel-become-silicon-valley

⁴ ibid.

CGTL - Citrine Global Israel Ltd – Strategy:

CGTL - Citrine Global Israel Ltd offers a unique, independent strategy that covers the whole spectrum of services and financing options to ensure the success of its chosen client companies, combining working capital financing, business escort, technological consulting services, real estate and infrastructure services for companies and a global network of experts and business contacts in the relevant fields.

CTGL - Citrine Global Israel Ltd – Professional Ecosystem:

CTGL - Citrine Global Israel Ltd has a network which includes serial entrepreneurs, leading business people, top scientists, researchers and industry leaders, and this helps it to promote its client companies towards success.

CTGL - Citrine Global Israel Ltd leverages the knowledge and experience of its affiliate Citrine S A L Investment & Holdings Ltd, whose wholly owned subsidiaries Citrine S A L High Tech Ltd and Citrine S A L Biotech Ltd serve as general partners in investment funds that have been operating for years in the Israeli start up market and have long term experience in investing in and promoting many startup companies.

CTGL - Citrine Global Israel Ltd also leverages the knowledge and experience of its affiliates comprising the WealthStone Group, which specializes in real estate and hedge funds, and the Neto Group, which specializes in insurance and financial planning consultancy.

CTGL - Citrine Global Israel Ltd - Target Market: Medical Foods:

The medical foods market covers fields including: vitamins and minerals; nutritional supplements; food allergies; personalized nutrition and functional foods; digestion and gut health; weight management; cannabis edibles; plant based alternatives; neutronics and personalized nutrition.

The global medical foods market is expected to be worth $30.4 billion by 2027, growing from $18.4 billion in 2019 at a CAGR of 6.3%. ⁵

Medical food market drivers include:

● Rise in geriatric population

● Growing incidences of chronic diseases

● Increasing awareness regarding clinical nutrition amongst patients and healthcare professionals

In the past, meal replacements were mainly consumed by the elderly or the ill, frequently suffering from nutritional deficiencies. This has changed in recent years, with the marketing of meal replacements increasingly targeting healthy adults.

In addition, we see the emergence of cannabis-enhanced health edibles and drinks, that is expected to continuously grow by more than 250% by 2021. ⁶

⁵ https://www.grandviewresearch.com/industry-analysis/medical-foods-market

⁶ https://www.grandviewresearch.com/industry-analysis/medical-foods-market; https://www.grandviewresearch.com/press-release/global-medical-foods-mark

CTGL - Citrine Global Israel Ltd Target Market: Regulated Medical Cannabis:

The medical cannabis market covers fields including: cannabis plant genetics; pharmacological cannabis effects; cannabis cultivation methods; cannabis-infused edibles; cannabis-based medications; cannabis products development; cannabis wellness solutions development; cannabis personalized medicine solutions.

Medical cannabis solutions have been approved for medical use in many countries and have been shown to benefit more than 40 serious medical conditions, including:

● Cancer

● Multiple sclerosis

● Parkinsons

● Epilepsy

● Chronic pain

● Post trauma

● Chronic digestive problems, Crohn’s Disease

● Anxiety and sleep disorders

● Concentration and memory problems

● Tourette Syndrome

Medical cannabis in Israel:

● The State of Israel is currently focusing its attention on research and development on the cannabis plant for medical purposes.

● Research into the cannabis plant began in Israel in the 1960s, when Prof. Rafael Meshulam first discovered the main components of the cannabis plant, a discovery that was a world breakthrough in the study of the plant at the time.

● Research into the cannabis plant in Israel has continued ever since, in academic and research institutions. In recent years, many studies have been conducted in the field of medical cannabis in Israel. Israel is considered a world center in the field of cannabis research and treatment.

● The cannabis plant is still not permitted for research in the USA, is still restricted under US federal law, and is only recently increasingly studied in European countries.

● As a result, Israel has an advantage in the field, relative to the rest of the world, and in academic knowledge on the medical potential of the cannabis plant in treating diseases such as cancer, epilepsy, and childhood autism.

● The world’s major drug companies have already begun to express an interest in Israeli research, as well as the big challenge involved in registering patents and intellectual property for drugs using the cannabis plant, which is a complex plant with hundreds of active ingredients.

● Around 100 cannabis–related startups are currently operating in Israel.

Medical Cannabis Global Market Size:

● In the world, there are over 40 countries that allow legal use of medical cannabis and the medical cannabis industry is also expanding to the wellness and medical foods sectors with cannabis incorporated into a variety of edibles, pills, spray products, transdermal patches, supplements, salves, ointments and lotions.

● Legal medical cannabis products sales grew 45.7% to $14.9 billion in 2019. This worldwide growth estimate reflects the highest annual growth rate to date. As a result of expected growth ArcView Group has updated their 2024 forecast to $42.7 billion in worldwide legal cannabis sales. ⁷

● In addition, we see the emergence of the cannabis-enhanced health edibles and drinks market, that is expected to continuously grow by more than 250% by 2021. ⁸

Facilities and real estate services for the health and medical cannabis industry:

● The healthcare and medical cannabis industry creates attractive opportunities to invest in the industrial real estate sector with a focus on regulated medical-use cannabis facilities.

● Healthcare and medical cannabis companies specifically need infrastructure and assets that are licensed and guarded according to various regulations, involve long-term rentals, and more.

● CTGL – Citrine Global Israel Ltd has built a model adapted to these companies’ needs, covering innovation centers, laboratories, pharmacies, and clinics. The Cannovation Center is an application of this model.

Cannovation Center – a center for cannabis innovation in Israel.

The “Cannovation Center” - Cannabis Innovation Center - in Israel, referred to in Note 10 above, is being designed to address the needs of the emerging cannabis, CBD and hemp industry. It is intended that the Cannovation Center, when built, will demonstrate a unique model of an all-in-one platform including factories for producing cannabis, hemp and CBD products, laboratories, and a logistics and distribution center. It is intended that it will support the cannabis eco-system including cannabis growers, cannabis product developers, researchers and other cannabis businesses, which operate in a field that requires interdisciplinary professional expertise, compliance with a wide set of regulatory demands including IMC-GMP production standards, 24/7 surveillance and security, special recycling procedures, and more. It is intended that the Cannovation Center in Israel will provide solutions for companies in Israel and worldwide, leveraging Israel’s leadership in cannabis innovation and promoting the production and distribution of cannabis, hemp and CBD products for local and global markets. Affiliates of the Company are in the process of obtaining a government grant for the Cannovation Center. The Israeli Government provides grants and subsidies specific to the cannabis industry as part of its strategy for boosting the economy through technological innovation. Israel is a leading source of technological innovation, including in the cannabis industry. It is anticipated that the Company’s Israeli Subsidiary will hold around 60% of the shares in the Cannovation Center. The Cannovation Center venture is a result of years of involvement by affiliates of the Company in the cannabis industry. It is hoped that this will be the first center, to be joined by additional centers around the world.

⁷ https://www.grandviewresearch.com/industry-analysis/medical-foods-market

⁸ https://www.grandviewresearch.com/industry-analysis/medical-foods-market; https://www.grandviewresearch.com/press-release/global-medical-foods-mark

The Company at this time intends to carry out its cannabis-related activity through its Israeli subsidiary only, and not the US parent company, and to be involved, and engage with client companies that are involved, in cannabis-related activities only in countries where the activity has been authorised under all appliable laws. The Company does not at this time intend to be involved, either directly or indirectly, in cannabis-related activity in the United States, in light of the federal-level restrictions in place at this time.

The Company’s primary shareholders

The Company and itsour wholly-owned subsidiary, CTGL - Citrine Global Israel Ltd leverageLtd. (“Citrine Global Israel”).

We have developed a unique platform of operational innovation centers (each, an “Operational Innovation Center”) that create eco-systems for the knowledgehealth, wellness, botanicals, and experiencemedical cannabis industries. Our first Operational Innovation Center will be the Cannovation Center Israel Ltd. (the “Cannovation Center Israel”), focusing on Israeli health, wellness, botanicals, and medical cannabis industries, supported in part by Israeli government grants and contributions.

We have an experienced team and a network of partners that include leading experts with a proven track record in technology, high-tech, biotech, investment, entrepreneurship, real estate, finance, and strategic business development in Israel and worldwide. We plan to operate worldwide through domestic subsidiaries, local teams, partners, and industry experts in each area.

Our vision is to become a global leader in developing wellness and pharma technologies and solutions that improve people’s health and quality of life worldwide.

We created a five-element approach of multi-strategy solutions to realize our vision:

On December 30, 2020, the Ministry of the Company’s primary shareholders: membersEconomy of the WealthStone Group,Israeli government approved the grant of 10,000 square meters of industrial land in Yeruham, Israel for Cannovation Center Israel to build the Cannovation Center, that includes factories, laboratories, logistics and a distribution center for the medical cannabis, CBD, hemp and botanicals industries. We own 60% of the share capital of Cannovation Center Israel, through Citrine Global Israel.

We are in advanced negotiations with the Yeruham Local Council with respect to the Cannovation Center Israel project. There is already an architectural conceptual plan for the building and for the interior design and we have pricing for the project, including various suppliers. The Cannovation Center Israel’s new chief executive officer aims to establish the Cannovation Center Israel, obtain the required licenses, select suppliers, partners and other activities to realize our strategy.

On April 5, 2021, we announced that Intelicanna Ltd. (“Intelicanna”), a publicly-traded Israeli medical cannabis company listed on the Tel-Aviv Stock Exchange, has repaid in full the loan we provided to Intelicanna in the amount of NIS 500,000 (the “Loan”) as well as 12% interest. Previously, we and Citrine Global Israel had entered into several strategic agreements with Intelicanna, which specializes in real estateincluded a loan agreement to provide Intelicanna with the Loan.

On April 29, 2021, our board of directors (the “Board”) appointed David Kretzmer as a member of the Board and hedge funds; Citrine S A L Investment & Holdings Ltd,expanded the number of Board members to five, with such expansion of the Board and appointment of Mr. Kretzmer taking effect immediately.

On May 5, 2021, Cannovation Center Israel, which is part of the Wealthstone Group’s private equity activity for investments in the high-tech and biotech sectors; and members of the Neto Group, which specializes in insurance and financial planning consultancy. partly-owned (60%) by Citrine Global Israel, appointed Hagai Hillman as its new chief executive officer.

Results of Operations during the three months ended March 31, 2021 as compared to the three months ended March 31, 2020

The WealthStone Group

The WealthStone Group, which is one ofDuring the Company’s primary shareholders and makes its knowledge and experience available tothree months ended March 31, 2021, the Company specializesgenerated $0 in alternative investments and operates in various fields with extensive financial knowledge and experience. The WealthStone Group has real estate funds, hedge funds and technology investments funds and manages more than half a billion US dollars in investments in Israel.

The Wealthstone Group introduces private investorsrevenues, compared to a world of investments which until now was reserved to an exclusive group, to allow investors to benefit from diversified alternative investments, with strong collateral and attractive returns.

The Wealthstone Group has a variety of products with a wide range of investment periods, risk and security levels, so that each investor is matched with the most suitable investment.

The world of alternative investments is multi-faceted, with a wide range of investment opportunities that tend to be quite confusing for those who are unfamiliar with the field.

The management team and the funds’ GP partners specialize in each fund’s area, covering real estate, technologies, hedge funds and financing, and they are supported by top professional consultants in the respective fields, among them, appraisers, engineering companies, legal advisers, and other experts in each sector.

Wealthstone Real Estate Ltd:

Wealthstone Real Estate Ltd, which is part of the Wealthstone Group, deals with financing and lending for projects in the real estate sector, urban renewal, removal-and-construction, and projects requiring equity and senior debt financing. It is one of the largest companies in Israel for financing renewal projects through limited partnerships in which it serves as a general partner. It is ranked by DUN’S 100 among the leading 100 companies in Israel’s real estate sector. DUN’S 100 is a professional, objective, and reliable guide based on fixed, defined, and measurable criteria according to various market sectors.

Citrine S A L Investment & Holdings Ltd

Citrine S A L Investment & Holdings Ltd, which is one of the Company’s primary shareholders and makes its knowledge and experience available to the Company, is part of Wealthstone’s private equity activity for investments in the high-tech and biotech sectors.

Citrine S A L Investment & Holdings Ltd’s related technology funds, in which its wholly owned subsidiaries serve as general partners, invest in high potential Israeli startup companies that own transformational technologies, leading a unique, independent investment strategy with a professional team and a global network of first-class partners and advisors.

Citrine S A L Investment & Holdings Ltd operates through limited partnerships, in which its wholly owned subsidiaries Citrine S A L High Tech Ltd and Citrine S A L Biotech Ltd serve as general partners, offering a wide array of investment opportunities to private investors, for a range of investment periods.

The funds operate in various fields of technology investment and include:

● Partnerships for investing in high-tech companies.

● Partnerships for investing in biotech companies.

● Partnerships for investing in companies designed for an IPO.

● Along with bringing the financial investment, Citrine S A L Investment & Holdings Ltd provides assistance in building strategies, finding business partners, giving support in financial processes, mergers and acquisitions.

Citrine S AL Investment & Holdings Ltd’s related funds have already invested in several promising Israeli companies including Nicast, NanoMedic, WellBe, Biocep, Improdia, Intelicanna, IBOT, Cannbit, Novomic, Dario, BSP Medical, and ICB Israel-China Fund and more.

The Citrine S A L Investment & Holdings Ltd - ICB Israel-China Fund collaboration targets strategic international and Chinese partners interested in investment in and commercial cooperation with technology companies. Such investment and commercial collaboration includes investment in medical and biomedical companies in order to bring them to China as part of joint ventures.

Additionally, Citrine S A L Investment & Holdings Ltd offers models and investments in partnerships that are designed for institutional investors, foreign investors and designated investment groups.

Neto Financial Planning Insurance Agency Ltd

Neto Financial Planning Insurance Agency Ltd, which is part of the Neto Group, one of the Company’s primary shareholders, and makes its knowledge and experience available to the Company, was founded over 27 years ago and is one of the largest companies in the Israeli private and business financial planning and insurance industry.

Neto Financial Planning Insurance Agency Ltd has thousands of loyal customers, which it has been accompanying for many years, providing financial advisory services in respect of products with a market worth of over $3 billion.

Neto Financial Planning Insurance Agency Ltd is Israel’s largest financial planning private company. DUN’S 100 has ranked Neto Financial Planning Insurance Agency Ltd among the leading 100 companies in Israel’s financial planning sector each year since 2018. Neto Financial Planning Insurance Agency Ltd is the only Israeli broker included in the DUN’S 100 rankings. Neto Financial Planning Insurance Agency Ltd provides holistic (comprehensive) financial planning for thousands of clients across Israel, through a network which includes financial planners who are licensed pension advisors and an administrative and professional support team.

Neto Financial Planning Insurance Agency Ltd’s significant scale and experience enable its clients to benefit from a wide variety of investment opportunities, and services and benefits covering income tax planning and reduction, retirees, wills, medical committees, loans, mortgages, review and analysis of their insurance files, basic insurance, lower costs and access to current and comprehensive knowledge and technologies, for the management of their entire financial lives.

The Neto Group offers financial planning products encompassing the full range of financial needs of every household in Israel, including Neto - Financial Planning, Neto - Financial Protection, Neto - Savings and Investment Portfolios for Retirement Planning and Neto - Alternative Investments.

Neto - Alternative Investments: the Neto Group offers its clients a variety of alternative investments that are not directly sensitive to capital markets swings in Israel and globally. The operations in this area are conducted through the Wealthstone Group (which is owned 50% by Neto), which serves as the Neto Group’s alternative investments arm.

Results of Operations

Revenues

We generated $11 thousand in revenues in the sixthree months ended June 30, 2020 compared to $85 thousand in revenues in the six months ended June 30, 2019.March 31, 2020. The decrease is mainly attributable to a decrease in the demand for Novomic products and our failure to obtain FDA approval for Novomic products or enter into additional engagements with distributers, and also to us selling 90% of the shares we held in Novomic Ltd. (“Novomic”) and focusing on our new strategy and business activity, and, therefore, ceasing to consolidate the financial statements of Novomic.

The Company’s research and development expenses during the three months ended March 31, 2021 were $0 compared to $18 thousand during the three months ended March 31, 2020. The decrease is mainly attributable to our selling 90% of the shares we held in Novomic and focusing on our new business activity.activity, and therefore ceasing to consolidate the financial statements of Novomic.

Gross Profit

We incurred a gross loss during the six months ended June 30, 2020, of $2 thousand, compared to $33 thousand in the six months ended June 30, 2019.

Research and Development Expenses

Our research and development expenses during the six months ended June 30, 2020 were $18 thousand as compared to $80 thousand, during the six months ended June 30, 2019. The decrease is mainly attributable to decrease in expenses related to the Novomic products as a result of the conclusion of our board of directors that the Company would not be able to successfully commercialize the Novomic products.

Marketing, General and Administrative Expenses

OurCompany’s marketing, general and administrative expenses during the sixthree months ended June 30, 2020March 31, 2021, were $1,757$1,975 thousand as comparecompared to $811$668 thousand during the sixthree months ended June 30, 2019March 31, 2020. The increase in our marketing, general and administrative expenses is mainly attributable to the increase in our share basedshare-based compensation expenses somewhatand legal fees paid in connection with the TechCare Transaction, which was partially offset by a decrease in marketing expenses and professional servicessalary and related expenses as a result of the conclusionsale of 90% of the shares we held in Novomic resulting in our boardceasing to consolidate the financial statements of directors that the Company would not be able to successfully commercialize the Novomic products.

Net LossNovomic.

During the sixthree months ended June 30, 2020 weMarch 31, 2021, the Company incurred financial expenses of $126 thousand, as compared to financial income of $3 thousand during the three months ended March 31, 2020. The reason for the increase in financial expense was due to $23 thousand of fair value adjustment of liability in connection with stock exchange agreement with Intelicanna, $107 thousand as a result of a change in convertible component in convertible notes, as well as exchange rate differences resulting from variations in the New Israel Shekel exchange rate to the U.S. Dollar.

As a result of the above, the Company incurred a net loss of $1,786 thousand. Duringapproximately $2,100 thousand during the sixthree months ended June 30, 2019, we incurredMarch 31, 2021 as compared to a net loss of $937 thousand. The increase in net loss is mainly attributable toapproximately $689 thousand during the share based compensation expenses as described above.three months ended March 31, 2020.

Liquidity and Capital Resources

OurThe Company’s balance sheet as of June 30, 2020March 31, 2021 reflects total assets of $4,476approximately $1,277 thousand consisting mainly of cash and cash equivalents in the amount of approximately $580$289 thousand, prepaid share based payment and other current assets of approximately $3,445 thousand and investments valued under the measurement alternative in the amount of approximately $450 thousand and trading securities in the amount of approximately $520 thousand. AsThe Company’s balance sheet as of December 31, 2019, our balance sheet2020, reflects total assets of approximately $257$3,104 thousand consisting mainly of cash and cash equivalents in the amount of approximately $18$206 thousand, inventoryprepaid share based payments to a service provider in the amount of approximately $35$1,737 thousand, other receivablesinvestments valued under the measurement alternative in the amount of approximately $19$450 thousand, trading securities in the amount of approximately $522 thousand and property and equipment net,a short-term loan measured at fair value in the amount of approximately $156$165 thousand. The decrease is mainly related to the decrease in prepaid share-based compensation expense which was recognized in the current period because the related services were provided. 

As of June 30, 2020, weMarch 31, 2021, the Company had total current liabilities of approximately $630$1,975 thousand consisting mainly of approximately $632 thousand in accounts payable and accrued expenses and outstanding convertible notes in the amount of approximately $175 thousand, commitment to issue shares of approximately $105 thousand, fair value of shares exchange agreement of approximately $66 thousand and fair value of convertible component in convertible loan of approximately $285$1,248 thousand. As of December 31, 2019, we2020, the Company had total current liabilities of approximately $360$1,702 thousand consisting mainly of approximately $476 thousand in accounts payable and accrued expenses and outstanding convertible notes in the amount of approximately $224 thousand and a note payable of approximately $123$1,154 thousand.

As of June 30, 2020, excluding prepaid share based payment of $3,445 thousand to a service provider, weMarch 31, 2021, the Company had a negative working capital in the amount of approximately $50$1,152 thousand, compared to negativepositive working capital in the amount of approximately $278$947 thousand at December 31, 2019. Our2020.

The Company’s total liabilities as of June 30,March 31, 2021 and as of December 31, 2020 were approximately $1,211$1,975 thousand compared to approximately $368and $1,702 thousand at December 31, 2019.respectively.

During the sixthree months ended June 30, 2020, weMarch 31, 2021, the Company used approximately $473$81 thousand of cash in ourits operating activities. This resulted mainlyprimarily from an overall net lossoperating expenses of approximately $1,786$1,975 thousand, net of non-cash items mainly comprised of an increase in stock-based compensation of approximately $1,340$1,737 thousand, fair value adjustment of liability in connection with stock exchange agreementinterest accrued on convertible loan of approximately $66$95 and increase in account payables of $156.

During the three months ended March 31, 2020, the Company used approximately $218 thousand in its operating activities. This resulted from operating expenses of approximately $685 thousand, net of non-cash items comprised mainly of an increase in stock-based compensation of approximately $479 thousand.

During the sixthree months ended June 30, 2019, we used approximately $690March 31, 2021, the Company’s cash provided by investing activities amounted to $164 thousand, consisting of cash in our operating activities. This resulted mainly from an overall net lossrepayments of approximately $937 thousand, management fee waiver of approximately $145, a decrease in accounts payable and accrued expenses of approximately $75 thousand and an increase in other current assets of approximately $132 thousand.short-term loan.

During the sixthree months ended June 30,March 31, 2020, we used approximately $464 thousand ofthe Company’s net cash in our investing activities. This resulted mainly from subsidiary no longer consolidatedprovided by financing activities of approximately $14$226 thousand comprised of $154 thousand proceeds from related party loans and an investment accounted under the measurement alternative of $450$72 thousand as compared to approximately $4 thousand in the same period in the prior year.

During the six months ended June 30, 2020, we provided approximately $1,501 thousand of cash by our financing activities. This resulted mainly from the issued convertible notes and warrants of approximately $1,170 thousand and a commitment to issue shares to related parties of approximately $105 thousand and anproceeds from issuance of common stock, of approximately $72 thousand and loans from related parties of approximately $154 thousand, as compared to approximately $457 thousand in the same period in the prior year.net.

TheOn April 13, 2021, the Citrine S A L Group has furnished the Company has a historywith an irrevocable letter of accumulated lossesobligation to support the Company until June 30, 2022 financially, which will allow the Company to be operational as planned and its development and execution of its strategy is still uncertain. However, basedbudgeted through this period (the “Irrevocable Letter”).

Based on the Company’s current cash balances capital raised in the second quarter of 2020 and the irrevocable letter it has received (as noted above),Irrevocable Letter, the Company believes that it has sufficient funds for its plans for continuing its new activity in the next twelve months from the issuance of this Form 10Q.these financial statements. As the Company is embarking on its activities as detailed herein, it is incurring losses. It cannot determine with reasonable certainty when and if it will have sustainable profits.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Because it is a smaller reporting company, the Company is not required to provide the information required by this item.Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s principal executive officer and the Company’s principal financial officer to allow for timely decisions regarding required disclosure. In designing and evaluating the Company’s disclosure controls and procedures, the Company’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and theobjectives. The Company’s management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on the Company’s evaluation of the effectiveness of its disclosure controls and procedures as of June 30, 2020,March 31, 2021, the Company’s principal executive officer and the Company’s principal financial officer concluded that the Company’s disclosure controls and procedures were not effective to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chairperson and CFO, to allow timely decisions regarding required disclosure.