SECURITIES AND EXCHANGE COMMISSION
UNDER
THE SECURITIES ACT OF 1933
Delaware (State or Other Jurisdiction of Incorporation or Organization) | | 2844 (Primary Standard Industrial Classification Code Number) | | 81- 1417774 (I.R.S. Employer Identification Number) |
Petach Tikva, Israel 4959507
+972-77-407-4700
New York, NY 10003
(646) 233-1454
As soon as practicable after the effective date of this Registration Statement.
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock, par value $0.01 | ATMS | OTC Pink Open Market |
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1 |
Common Stock Offered by the Selling Stockholders: | Up to 16,232,246 shares of Common Stock. | |
Common Stock Currently Issued and Outstanding | 111,125,405 shares of Common Stock. | |
Use of Proceeds: | The Selling Stockholders will receive all of the proceeds from the sale of our Common Stock in this offering. We will not receive any proceeds from the sale of shares of Common Stock by the Selling Stockholders. See “Use of Proceeds.” | |
Risk Factors: | An investment in the Common Stock offered under this prospectus is highly speculative and involves substantial risk. Please carefully consider the “Risk Factors” section and other information in this prospectus for a discussion of risks. Additional risks and uncertainties not presently known to us or that we currently deem to be immaterial may also impair our business and operations. | |
Listing: | Our Common Stock is subject to quotation on OTC Pink Open Market under the symbol “ATMS”. |
Six Months ended June 30, | For the Year Ended December 31, | Period from March 22, (Inception) to December 31 | ||||||||||||||
2 0 2 2 | 2 0 2 1 | 2 0 2 1 | 2 0 2 0 | |||||||||||||
(USD in thousands) | ||||||||||||||||
$ | $ | $ | $ | |||||||||||||
Revenues | 78 | 4 | 7 | - | ||||||||||||
Costs of revenues | 21 | 1 | 1 | - | ||||||||||||
Gross profit | 57 | 3 | 6 | - | ||||||||||||
Operating expenses | ||||||||||||||||
Sales and marketing | 196 | 18 | 66 | 38 | ||||||||||||
General and administrative | 280 | 55 | 230 | 23 | ||||||||||||
Total operating expenses | 476 | 73 | 296 | 61 | ||||||||||||
Operating loss | (419 | ) | (70 | ) | (290 | ) | (61 | ) | ||||||||
Financial expenses (expenses)/ Income, net | 14 | (9 | ) | (39 | ) | (7 | ) | |||||||||
Net Loss and Total Comprehensive Loss | (405 | ) | (79 | ) | (329 | ) | (68 | ) | ||||||||
Loss per common stock: | ||||||||||||||||
Basic and diluted net loss per common stock | (0.0041 | ) | (0.0010 | ) | (0.0041 | ) | (0.0011 | ) | ||||||||
Weighted average number of shares of Common Stock used in calculation of net loss per common stock: | 31,624,556 | 26,109,483 | 26,139,289 | 20,315,323 |
● | sales of our products; |
● | the size and growth of our product market; |
● | our limited operating history and inability to effectively grow our business; |
● | our developing and manufacturing capabilities; |
● | supply disruption; |
● | our entering into certain partnerships with third parties; |
● | obtaining required regulatory approvals for sales or exports of our products; |
● | our marketing plans; |
● | our expectations regarding our short- and long-term capital requirements; |
● | the effect of COVID-19 on our business; |
● | our outlook for the coming months and future periods, including but not limited to our expectations regarding future revenue and expenses; and |
● | information with respect to any other plans and strategies for our business. |
• | risks that Manuka may not have sufficient capital to achieve its growth strategy; | |
• | risks that Manuka may not develop its product and service offerings in a manner that enables us to be profitable and meet its customers’ requirements; | |
• | risks that its growth strategy may not be successful; and | |
• | risks that fluctuations in its operating results will be significant relative to its revenues. |
• | continue its research and preclinical and clinical development of its products; | |
• | advance its programs into more expensive clinical studies; | |
• | initiate additional preclinical, clinical, or other studies for its product candidates; | |
• | change or add additional manufacturers or suppliers; | |
• | seek regulatory and marketing approvals for our product that successfully complete regulatory approvals; | |
• | establish a sales, marketing, and distribution infrastructure to commercialize any products for which Manuka may obtain marketing approval; | |
• | make milestone or other payments under any license agreements; | |
• | seek to maintain, protect, and expand its intellectual property portfolio; | |
• | seek to attract and retain skilled personnel; | |
• | create additional infrastructure to support its operations as a public company and its product development and planned future commercialization efforts; and | |
• | experience any delays or encounter issues with any of the above, including but not limited to failed studies, complex results, safety issues, or other regulatory challenges that require longer follow-up of existing studies, additional major studies, or additional supportive studies in order to pursue marketing approval. |
• | The increased concentration of the ownership of our shares by a limited number of affiliated stockholders following the Merger may limit interest in our securities; | |
• | variations in quarterly operating results from the expectations of securities analysts or investors; | |
• | revisions in securities analysts’ estimates or reductions in security analysts’ coverage; | |
• | announcements of new products or services by us or our competitors; | |
• | reductions in the market share of our products; | |
• | announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; | |
• | general technological, market or economic trends; | |
• | investor perception of our industry or prospects; | |
• | insider selling or buying; | |
• | investors entering into short sale contracts; | |
• | regulatory developments affecting our industry; and | |
• | additions or departures of key personnel. |
• | changes in our industry; | |
• | our ability to obtain working capital financing; | |
• | additions or departures of key personnel; | |
• | limited “public float” in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market price for our Common Stock; | |
• | sales of our Common Stock; | |
• | our ability to execute our business plan; | |
• | operating results that fall below expectations; | |
• | loss of any strategic relationship; | |
• | regulatory developments; | |
• | economic and other external factors; and | |
• | period-to-period fluctuations in our financial results. |
Financial Industry Regulatory Authority, Inc. (“FINRA”) sales practice requirements may limit a shareholder’s ability to buy and sell our Common Stock.
For the Six Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
(USD in thousands) | (Unaudited) | |||||||
Revenues | 78 | 4 | ||||||
Cost of revenues | 21 | 1 | ||||||
Gross profit | 57 | 3 | ||||||
Sales and marketing expenses, net | $ | 196 | $ | 18 | ||||
General and administrative expenses | 280 | 55 | ||||||
Operating loss | (419 | ) | (71 | ) | ||||
Financial (expenses) income, net | 14 | (8 | ) | |||||
Net loss | $ | (405 | ) | $ | (79 | ) | ||
Loss attributable to holders of Common Stocks | (0.0041 | ) | (0.0010 | ) |
For the Year Ended December 31, | Period from March 22, (Inception) to December 31 | |||||||
2021 | 2020 | |||||||
(USD in thousands) | ||||||||
Revenue | 7 | - | ||||||
Cost of revenue | 1 | - | ||||||
Gross profit | 6 | - | ||||||
Sales and marketing expenses, net | $ | 67 | $ | 38 | ||||
General and administrative expenses | 230 | 23 | ||||||
Operating loss | (290 | ) | (61 | ) | ||||
Financial expenses | (39 | ) | (7 | ) | ||||
Net loss | $ | (330 | ) | $ | (68 | ) | ||
Loss attributable to holders of common stock | (0.0041 | ) | (0.008 | ) |
For the Year Ended December 31, | Period from March 22, (Inception) to December 31 | For the Six Months Ended June 30, | ||||||||||||||
(USD in thousands) | 2021 | 2020 | 2022 | 2021 | ||||||||||||
Net cash provided by (used in) operating activities | $ | (279 | ) | $ | (58 | ) | $ | (293 | ) | $ | (99 | ) | ||||
Net cash provided by (used in) investing activities | $ | (27 | ) | $ | (1 | ) | $ | (18 | ) | $ | (17 | ) | ||||
Net cash provided by (used in) financing activities | 774 | 62 | (11 | ) | 113 | |||||||||||
Net increase (decrease) in cash and cash equivalents | 468 | 3 | (322 | ) | (3 | ) |
• | hiring additional accounting staff with adequate US GAAP and SEC reporting experience to address complex US GAAP technical accounting issues and to prepare and review the financial statements and related disclosures in accordance with US GAAP and SEC financial reporting requirements; |
• | formulating a formal and regular training program for accounting personnel to equip them with sufficient knowledge and practical experience of preparing financial statements under US GAAP and SEC reporting requirements, including mandatory requirements for accounting staff to attend US GAAP course programs offered by third-party organization or accounting firm on a periodically basis; and |
• | establishing clear roles and responsibilities for accounting and financial reporting staff to develop and implement formal comprehensive financial period-end closing policies and procedures to ensure all transactions are properly recorded and disclosed. |
• | Face Serum with Manuka Honey and Bee Venom. This product supports blurring and reduces skin wrinkles. It regenerates skin cells and gives a young and vital appearance to the skin. The bee venom encourages natural skin revival, boosts production of Collagen, enhances skin elasticity and has healing properties for damages skin cells. |
• | Face Serum with Enhanced Vitamin C. The single product without bee venom but with enhanced quantity of Vitamin C. Provides a hearty dose of moisture for a firm skin appearance and reduction of wrinkles. |
• | Day Cream. Nourishes the skin, protects, and guards its flexibility. Bee venom contributes to the toning of the skin for a smooth, radiant and healthy appearance, with the addition of hyaluronic acid for restoring skin vitality. |
• | Night Nourishing Cream with Manuka Honey and Nee Venom. This product contains a significant number of amino acids, vitamins, and minerals. It also includes bee venom that contributes to the toning of the skin for a smooth, radiant and healthy appearance, with the addition of hyaluronic acid for restoring skin vitality. |
• | Eye Cream with Manuka Honey and Bee Venom. This product treats and softens the sensitive area around the eyes. It has properties for nourishing the skin to protect and guard its flexibility. Bee venom contributes to the toning of the skin for a smooth, radiant and healthy appearance, with the addition of hyaluronic acid for restoring skin vitality. |
• | Face Cleanser Gel. This is a light and refreshing face cleanser, with Mānuka honey and bee venom. |
• | Pure Mānuka honey for direct consumer consumption. | |
• | Skincare products based on Mānuka honey and bee venom; and, | |
• | Gummy supplements (nutraceuticals) for skin, hair, and nails. |
1. | Drive growth across skincare and health enthusiast consumer communities. Manuka intends to target skincare and wellness groups across multiple demographics and shopping behaviors. Manuka believes it can drive customer acquisition across both skincare and wellness enthusiasts and up through advertising on social medias platforms, such as Facebook and Instagram as well as on, Youtube, TikTok and Google, thus driving Manuka’s leadership as a diversity-forward brand. |
2. | Deliver world class skincare and gummies products based on Manuka honey. Mānuka honey and bee venom that is included in Manuka’s skincare products, are the focus of Manuka’s value proposition and represents a core differentiator within the market. Manuka engages skincare and wellness clientele to discover the unique ingredients and health benefits of its leading component, Mānuka honey, with a combination focused on innovation and leading trends, differentiation, and exclusivity. Manuka believes that its selection of merchandise and affordable pricing, offer a unique shopping experience for its customers. |
3. | Digital engagement. Manuka’s strategic vision is to build a leading digital experience that engages with its customers through its differentiated products, personalization, convenience, and interactive experiences. |
4. | Deliver operational excellence and drive efficiencies. Its strategic vision is to manage end-to-end speed, quality, and efficiency to deliver exceptional customer experiences, while leveraging efficiencies of scale to drive profit improvement. |
5. | Invest in talent that drives a winning culture. Leadership, culture, and engagement of Manuka’s executives are key drivers of its performance. Manuka has an experienced management team that brings a creative and experienced online sales approach and a disciplined operating philosophy to Manuka’s business. |
Name | Age | Position | ||
Shimon Citron | 67 | Chief Executive Officer, Director | ||
David Dana | 58 | Chief Financial Officer |
Name and Principal Position | Year | Salary | Bonus | Equity Awards | Option Awards | All Other Compensation | Total | |||||||||||||||||||||
Shimon Citron, CEO | 2020-2021 | -- | -- | -- | -- | $ | 48,808 | (1) | $ | 48,808 | ||||||||||||||||||
2022 | $ | 7,671 | (2) | -- | -- | -- | $ | 11,555 | (3) | $ | 19,226 | |||||||||||||||||
David Dana, CFO | 2022 | -- | -- | -- | 370,014 | (4) | $ | 3,068 | (5) | $ | 3,068 |
• | prior to the time of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; | |
• | upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding (1) shares owned by persons who are directors and also officers and (2) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; and | |
• | on or subsequent to the time of the transaction, the business combination is approved by the board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder. |
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class(1) | ||||||
5% Stockholders: | ||||||||
Chomsky Group | 16,819,250 | 15 | %(2) | |||||
Executive Officers: | ||||||||
Shimon Citron | 80,729,883 | 72 | %(3) | |||||
David Dana | - | - | % | |||||
All directors and executive officers as a group (2 Persons) | 80,729,883 | 72 | % |
(1) | Applicable percentage ownership is based on 112,125,439 shares of Common Stock outstanding including and assuming the full conversion of the Series A Preferred and the Series C Preferred. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of Common Stock that are currently exercisable or exercisable within 60 days of September 21, 2022 are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. |
(2) | Includes shared vote of 12,614,850 shares of Common Stock common beneficially held by Adler Chomsky Marketing Communication Ltd. and 4,204,382 shares of Common Stock beneficially held by Eyal Chomsky Holdings Ltd. Address: 50 Menachem Begin St., Tel Aviv 6777682. |
(3) | Includes 32,292,193 shares of Common Stock beneficially owned by Mr. Citron’s wife, Mrs. Sigalit Citron and 48,437,690 shares of Common Stock beneficially owned by Mr. Shimon Citron. Address: 19 Haim Bar-Lev St., Tel Aviv 5265368. |
Name of Selling Stockholders | Number of Common Stock Owned Prior to Offering | Maximum Number of Common Stock to be Offered Pursuant to this Prospectus | Number of Common Stock Owned Immediately After Sale of Maximum Number of Common Stock in this Offering | |||||||||||||||||||||
Number(1) | Percent(2) | Number | Percent | Number(3) | Percent(2) | |||||||||||||||||||
Nadav Kidron(4) | 4,406,636 | 3.93 | % | 4,406,636 | 3.93 | % | - | - | ||||||||||||||||
Harmony (H.A) Investments Ltd.(5) | 2,711,069 | 2.42 | % | 2,711,069 | 2.42 | % | - | - | ||||||||||||||||
Shimon Citron(6) | 48,437,690 | 72 | % | 1,000,000 | * | % | 47,437,690 | 71 | % | |||||||||||||||
Sigalit Citron(7) | 32,292,193 | 72 | % | 1,000,000 | * | % | 31,292,193 | 71 | % | |||||||||||||||
Cutter Mill Capital LLC(8) | 1,871,006 | 1.67 | % | 1,871,006 | 1.67 | % | - | - | ||||||||||||||||
Globis Capital Partners, LP(9) | 1,585,682 | - | * | 1,585,682 | * | 1,585,682 | - | |||||||||||||||||
Chanan Morris(10) | 780,934 | - | * | 780,934 | * | 780,934 | - | |||||||||||||||||
Globis International Investments LLC(11) | 616,654 | - | * | 616,654 | * | 616,654 | - | |||||||||||||||||
Adler Chomsky Marketing Communications Ltd.(12) | 12,614,868 | 15 | % | 500,000 | 12,114,868 | 14 | % | |||||||||||||||||
Eyal Chomsky Holdings Ltd.(13) | 4,204,382 | 15 | % | 500,000 | 3,704,382 | 14 | % | |||||||||||||||||
Zavit Holding(14) | 385,461 | * | 385,461 | * | 385,461 | - | ||||||||||||||||||
Israel Alfassi(15) | 278,460 | * | 278,460 | * | 278,460 | - | ||||||||||||||||||
Brian M. Culley(16) | 220,233 | * | 220,233 | * | 220,233 | - | ||||||||||||||||||
Amiad Solomon(17) | 220,233 | * | 220,233 | * | 220,233 | - | ||||||||||||||||||
ARZ Chemicals International Trade Ltd.(18) | 155,878 | * | 155,878 | * | 155,878 | - | ||||||||||||||||||
Total | 110,781,379 | - | 16,232,246 | 94,549,133 | - |
(1) | Beneficial ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities. |
(2) | Assumes the full conversion of the Series A Preferred Stock and the Series C Preferred Stock. |
(3) | Assumes the sale of all shares being offered pursuant to this prospectus. |
(4) | Consists of 2,833,054 shares of Common Stock and 1,573,582 shares of Common Stock issued in connection with a debt forgiveness agreement. Address: 2 Elza St. Jerusalem, Israel. |
(5) | Includes 468,560 shares of Common Stock issued in connection with a debt forgiveness agreement with the Company and 2,242,509 shares of Common Stock issued in connection with the Share Exchange Agreement, as amended, entered into by the selling stockholder. Address: 1 Haharuv St., Ramat Hasharon 4725343, Israel. |
(6) | Beneficial ownership calculation includes Mr. Citron’s wife, Mrs. Sigalit Citron. Address: 19 Haim Bar-Lev St., Tel Aviv 5265368. |
(7) | Beneficial ownership calculation includes Mrs. Citron’s husband, Shimon Citron. Address: 19 Haim Bar-Lev St., Tel Aviv 5265368. |
(8) | Consists of 68,331 shares of Common Stock and 894,169 shares of Common Stock issued in connection with a debt forgiveness agreement, entered into by the selling stockholder and includes 658,506 shares of Common Stock issuable upon the conversion of 453 shares of our Series A Preferred Stock and 250,000 shares of Common Stock issuable upon the conversion of 250 of our shares of Series C Preferred Stock. The percentage assumes full conversion of our Series A Preferred stock and our Series C Preferred stock. Michael Vasinkevich, an Authorized Signatory of Cutter Mill Capital LLC, has voting and dispositive power over our shares held by the selling stockholder. Address: 430 Park Avenue, 3rd Fl., New York, NY 10022. |
(9) | Includes 1,585,682 shares of Common Stock issued in connection with a warrant exchange agreement, entered into by the selling stockholder. Paul Packer, a Managing Member of Globis Capital Partners, LP, has voting and dispositive power over our shares held by the selling stockholder. Address: 7100 W. Camino Real- Suite 302-48, Boca Raton, FL 33433. |
(10) | Consists of 780,934 shares of Common Stock issued in connection with an option exchange agreement, entered into by the selling stockholder. Address: 30 Pitum Haktoret 3, Efrat, Israel 9045830. |
(11) | Includes 616,654 shares of Common Stock issued in connection with a warrant exchange agreement, entered into by the selling stockholder. Paul Packer, a Managing Member of Globis International Investments LLC, has voting and dispositive power over our shares held by the selling stockholder. Address: 7100 W. Camino Real- Suite 302-48, Boca Raton, FL 33433. |
(12) | Beneficial ownership calculation includes shared vote beneficially held by Eyal Chomsky Holdings Ltd. Address: 50 Menachem Begin St., Tel Aviv 6777682. |
(13) | Beneficial ownership calculation includes shared vote beneficially held by Adler Chomsky Marketing Communications Ltd. Address: 50 Menachem Begin St., Tel Aviv 6777682. |
(14) | Consists of 385,461 shares of Common Stock. Amiad Solomon, a CEO and Owner of Zavit Holding, has voting and dispositive power over our shares held by the selling stockholder. Address: 14 Hameyasdim St., Kfar Adomim, Israel. |
(15) | Consists of 278,460 shares of Common Stock. Address: 73 Weizman St., Tel-Aviv, Israel 6215518. |
(16) | Consists of 220,233 shares of Common Stock issued in connection with a warrant exchange agreement, entered into by the selling stockholder. Address: 2153 Whisper Wind Lane, Encinitas, CA 92024. |
(17) | Includes 220,233 issued in connection with a warrant exchange agreement, entered into by the selling stockholder. Address: 14 Hameyasdim St., Kfar Adomim, Israel. |
(18) | Consists of 155,878 shares of Common Stock. Address: 27 Hareut St. Netanya, Israel 4256532. |
● | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; | |
● | block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; | |
● | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; | |
● | an exchange distribution in accordance with the rules of the applicable exchange; | |
● | privately negotiated transactions; | |
● | settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part; | |
● | broker-dealers may agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per share; | |
● | through the writing or settlement of options or other hedging transactions, whether such options are listed on an options exchange or otherwise; | |
● | a combination of any such methods of sale; and | |
● | any other method permitted pursuant to applicable law. |
● | one percent of the total number of shares of our Common Stock outstanding; or | |
● | the average weekly reported trading volume of our Common Stock for the four calendar weeks prior to the sale |
IN THOUSANDS U.S. DOLLARS
June 30 | December 31 | ||||||||||
Note | 2 0 2 2 | 2 0 2 1 | |||||||||
$ | $ | ||||||||||
ASSETS | |||||||||||
CURRENT ASSETS: | |||||||||||
Cash and cash equivalents | 149 | 471 | |||||||||
Trade receivables | 45 | - | |||||||||
Other receivables | 14 | 20 | |||||||||
Inventory | 3 | 66 | 74 | ||||||||
Total current assets | 274 | 565 | |||||||||
NON-CURRENT ASSETS: | |||||||||||
Property and equipment, net | 48 | 37 | |||||||||
Operating lease right-of-use assets | 4 | 47 | 55 | ||||||||
Intangible assets, net | 37 | 32 | |||||||||
Total long-term assets | 132 | 124 | |||||||||
TOTAL ASSETS | 406 | 689 | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY) | |||||||||||
CURRENT LIABILITIES: | |||||||||||
Short-term credit | 86 | 97 | |||||||||
Trade account payables | 76 | 42 | |||||||||
Short-term operating lease liabilities | 4 | 18 | 19 | ||||||||
Other account payables | 202 | 102 | |||||||||
Total current liabilities | 382 | 260 | |||||||||
NON-CURRENT LIABILITIES: | |||||||||||
Long-term loans from a major stockholder | 6 | 233 | 239 | ||||||||
Long-term operating lease liabilities | 6 | 25 | 38 | ||||||||
Other liabilities | 36 | 32 | |||||||||
Total long-term liabilities | 294 | 309 | |||||||||
Total liabilities | 676 | 569 | |||||||||
STOCKHOLDERS’ EQUITY (DEFICIENCY): | |||||||||||
Common stock, $0.01 par value - authorized: 51,000,000; issued and outstanding: 45,125,405 as of June 30, 2022 and 31,549,132 as of December 31, 2021 | 5 | 451 | 315 | ||||||||
Series A Convertible Preferred stock, $0.01 par value - Authorized: 1,000 shares; issued and outstanding: 453 shares as of June 30, 2022 and no shares as of December 31, 2021 | - | - | |||||||||
Series C Convertible Preferred stock, $0.01 par value - Authorized: 250 shares; issued and outstanding: 250 shares as of June 30, 2022 and no shares as of December 31, 2021 | - | - | |||||||||
Series D Convertible Preferred stock, $0.01 par value - Authorized: 110,000 shares; issued and outstanding: 110,000 shares as of June 30, 2022 and December 31, 2021 | 1 | 1 | |||||||||
Capital reserve from transaction with a major stockholder | 25 | 15 | |||||||||
Additional paid in capital | 55 | 186 | |||||||||
Accumulated deficit | (802 | ) | (397 | ) | |||||||
Total stockholders’ deficiency | (270 | ) | 120 | ||||||||
Total liabilities and stockholders’ equity (deficiency) | 406 | 689 |
Six Months ended June 30 | Three Months ended June 30 | |||||||||||||||
2 0 2 2 | 2 0 2 1 | 2 0 2 2 | 2 0 2 1 | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Revenues | 78 | 4 | 61 | 4 | ||||||||||||
Costs of revenues | 21 | 1 | 16 | 1 | ||||||||||||
- | - | |||||||||||||||
Gross profit | 57 | 3 | 45 | 3 | ||||||||||||
Operating expenses | ||||||||||||||||
Sales and marketing | 196 | 18 | 87 | 8 | ||||||||||||
General and administrative | 280 | 55 | 178 | 35 | ||||||||||||
Total operating expenses | 476 | 73 | 265 | 43 | ||||||||||||
Operating loss | (419 | ) | (70 | ) | (220 | ) | (40 | ) | ||||||||
Financial expenses (expenses)/ Income, net | 14 | (9 | ) | 19 | (6 | ) | ||||||||||
Net Loss and Total Comprehensive Loss | (405 | ) | (79 | ) | (201 | ) | (46 | ) | ||||||||
Loss per share: | ||||||||||||||||
Basic and diluted net loss per common stock | (0.0041 | ) | (0.0010 | ) | (0.0021 | ) | (0.0006 | ) | ||||||||
Weighted average number of shares of Common Stock used in calculation of net loss per common stock: | 31,624,556 | 26,109,483 | 31,699,979 | 26,109,483 |
Shares of Common Stock | Preferred Stock A | Preferred Stock C | Preferred Stock D | Capital reserve from transaction with related parties | Additional Paid in Capital | Accumulated deficiency | Total | |||||||||||||||||||||||||||||||||||||||||
* | Number | $ | Number | $ | Number | $ | Number | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2020 | 26,109,483 | 261 | 91,034 | 1 | 2 | (261 | ) | (68 | ) | (65 | ) | |||||||||||||||||||||||||||||||||||||
Transactions with stockholders (Note 6) | 4 | 4 | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss | (79 | ) | (79 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2021 | 26,109,483 | 261 | 91,034 | 1 | 6 | (261 | ) | (147 | ) | (140 | ) | |||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2021 | 26,109,483 | 261 | 91,034 | 1 | 4 | (261 | ) | (101 | ) | (96 | ) | |||||||||||||||||||||||||||||||||||||
Transactions with stockholders (Note 6) | - | - | 2 | - | 2 | |||||||||||||||||||||||||||||||||||||||||||
Net loss | - | - | (46 | ) | (46 | ) | ||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2021 | 26,109,483 | 261 | 91,034 | 1 | 6 | (261 | ) | (147 | ) | (140 | ) |
ARTEMIS THERAPEUTICS, INC.
Shares of Common Stock | Preferred Stock A | Preferred Stock C | Preferred Stock D | Capital reserve from transaction with related parties | Additional Paid in Capital | Accumulated deficiency | Total | |||||||||||||||||||||||||||||||||||||||||
Number | $ | Number | $ | Number | $ | Number | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
* | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2021 | 31,549,132 | 315 | 110,000 | 1 | 15 | 186 | (397 | ) | 120 | |||||||||||||||||||||||||||||||||||||||
Stock based compensation on stock options granted to a service provider | 2,242,509 | 23 | 42 | 65 | ||||||||||||||||||||||||||||||||||||||||||||
Effect of reverse recapitalization transaction | 11,333,764 | 113 | 453 | - | 250 | - | (173 | ) | (60 | ) | ||||||||||||||||||||||||||||||||||||||
Transactions with stockholders (Note 6) | 10 | 10 | ||||||||||||||||||||||||||||||||||||||||||||||
Net Loss | (405 | ) | (405 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2022 | 45,125,405 | 451 | 453 | - | 250 | - | 110,000 | 1 | 25 | 55 | (802 | ) | (270 | ) |
ARTEMIS THERAPEUTICS, INC.
Shares of Common Stock | Preferred Stock A | Preferred Stock C | Preferred Stock D | Capital reserve from transaction with related parties | Additional Paid in Capital | Accumulated deficiency | Total | |||||||||||||||||||||||||||||||||||||||||
Number | $ | Number | $ | Number | $ | Number | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
* | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2022 | 31,549,132 | 315 | 110,000 | 1 | 19 | 186 | (601 | ) | (80 | ) | ||||||||||||||||||||||||||||||||||||||
Stock based compensation on stock option to a service provider | - | 65 | 65 | |||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options by a services provider | 2,242,509 | 23 | (23 | ) | - | |||||||||||||||||||||||||||||||||||||||||||
Effect of reverse recapitalization transaction | 11,333,764 | 113 | 453 | - | 250 | - | (173 | ) | (60 | ) | ||||||||||||||||||||||||||||||||||||||
Transactions with stockholders (Note 6) | - | - | 6 | - | 6 | |||||||||||||||||||||||||||||||||||||||||||
Net Loss | - | - | - | (201 | ) | (201 | ) | |||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2022 | 45,125,405 | 451 | 453 | - | 250 | - | 110,000 | 1 | 25 | 55 | (802 | ) | (270 | ) |
Six Months ended June 30 | ||||||||
2 0 2 2 | 2 0 2 1 | |||||||
$ | $ | |||||||
Cash flows from operating activities: | ||||||||
Net loss | (405 | ) | (79 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 7 | - | ||||||
Decrease in operating lease liabilities | (6 | ) | - | |||||
Share-based compensation on stock options granted to a service provider | 65 | - | ||||||
Decrease in other liabilities | (3 | ) | - | |||||
Accrued interest from stockholder loans from a major stockholder | 10 | 4 | ||||||
Increase in trade account receivable and other receivables | (33 | ) | (13 | ) | ||||
Increase in trade accounts payable and other account payables | 69 | 4 | ||||||
Increase (decrease) in inventory | 8 | (15 | ) | |||||
Net cash used in operating activities | (288 | ) | (99 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchase of property and equipment | (18 | ) | (17 | ) | ||||
Net cash used in investing activities | (18 | ) | (17 | ) | ||||
Cash flows from financing activities: | ||||||||
Short-term credit | (11 | ) | 45 | |||||
Loans received from a major stockholder | (5 | ) | 68 | |||||
Net cash provided by financing activities | (16 | ) | 113 | |||||
Decrease in cash and cash equivalents | (322 | ) | (3 | ) | ||||
Cash and cash equivalents at beginning of period | 471 | 3 | ||||||
Cash and cash equivalents at end of period | $ | 149 | - | |||||
Non-cash activities: | ||||||||
Intangible assets recognized with corresponding other liability | 6 | - | ||||||
Reverse recapitalization effect on equity | (60 | ) |
Artemis Therapeutics Inc. (“the Company”) was originally incorporated under the laws of the State of Nevada, on April 22, 1997. Based on the lack of business activities since January 10, 2019, the Company was classified as a “shell” company as defined by the Securities and Exchange Commission (the “SEC”).
As of June 30, following the completion of the Share Exchange Agreement as detailed below, the Company is no longer classified as “shell” Company.
On March 6, 2022, the Company entered into a Share Exchange Agreement, as amended on June 30, 2022 (the “Share Exchange Agreement”) with Manuka Ltd., and the shareholders of Manuka Ltd., a company incorporated in Israel and engaged in developing and manufacturing skincare products based on Mānuka honey and bee venom.
In furtherance of the Share Exchange Agreement, on June 30, 2022, the Company acquired 100% of the outstanding shares of Manuka Ltd. (the “Reverse Recapitalization Transaction”). Pursuant to the Share Exchange Agreement, in exchange for all of the outstanding shares of Manuka Ltd., the Company issued to the shareholders of Manuka Ltd. a total of 33,791,641 (including shares issued to service provider of 2,242,509) common stock and 110,000 preferred D shares, convertible into 66,000,000 shares of common stock of the Company, representing 89% of the total shares issued and outstanding after giving effect to the Reverse Recapitalization Transaction. As part of the share exchange agreement, Manuka Ltd purchased net liabilities of the Company in the amount of $60 thousand. As a result of the Reverse Recapitalization Transaction, Manuka Ltd. became a wholly owned subsidiary of the Company. As the shareholders of Manuka Ltd. received the largest ownership interest in the Company, Manuka Ltd. was determined to be the “accounting acquirer” in the reverse recapitalization. As a result, the historical financial statements of the Company were replaced with the financial statement of Manuka Ltd. for all periods presented, except for the adjustments to reflect the legal capital of the Company.
As of June 30, 2022, the term Company refers to Artemis as adjusted to reflect the financial statements of Manuka.
The Company’s Common Stock is not listed on any national stock exchange but is quoted on the OTC Pink Market under the symbol “ATMS.”
NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. | Accounting principles: | |
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of the SEC regulations. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included (consisting only of normal recurring adjustments except as otherwise discussed).
These financial statements and accompanying notes should be read in conjunction with the 2021 consolidated financial statements and notes thereto included.
|
B. | Use of estimates in the preparation of financial statements: The preparation of 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 date of the financial statements and accompanying notes and reported amounts of revenues and expenses during the reported periods, such as useful life of intangible assets. Actual results could differ from those estimates. | |
C. | Impact of recently issued and adopted accounting standards: Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed financial statements. |
ARTEMIS THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
(USD in thousands)
June 30, | December 31, | |||||||
2 0 2 2 | 2 0 2 1 | |||||||
Raw materials | 24 | 32 | ||||||
Finished goods | 42 | 42 | ||||||
66 | 74 |
Six Months ended June 30 | ||||||||
2 0 2 2 | 2 0 2 1 | |||||||
Operating lease cost | 11 | - | ||||||
Total lease costs | 11 | - |
B. | Supplemental balance sheet information related to operating leases is as follows: |
June 30, | December 31, | |||||||
2 0 2 2 | 2 0 2 1 | |||||||
Operating lease right-of-use assets | 47 | 55 | ||||||
Operating lease liabilities, current | 18 | 19 | ||||||
Operating lease liabilities, long-term | 25 | 38 | ||||||
Weighted average remaining lease term (in years) | 2.25 | 2.75 | ||||||
Weighted average discount rate | 7.85 | % | 7.85 | % |
ARTEMIS THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
NOTE 4 -LEASES (Cont.)
C. | Future lease payments under operating leases The maturity analysis of operating lease liabilities as of June 30, 2022, are as follows (unaudited): |
June 30, | ||||
2 0 2 2 | ||||
2022 | 10 | |||
2023 | 21 | |||
2024 | 16 | |||
Total undiscounted lease payments | 47 | |||
Less: Transactions with stockholders | (4 | ) | ||
Lease liabilities | 43 |
On December 20, 2021, the Company entered into a securities purchase agreement (the “SPA”) with certain investors. Pursuant to the SPA, the Company agreed to sell 5,439,650 shares of common stock and 18,966 Series D Convertible Preferred Stock to the investors for aggregate consideration of $500 thousands following the consummation of the transactions contemplated by the investor’s holdings of the Company, representing 17.24% of the issued capital of the Company on a fully diluted basis.
As detailed in Note 1, as part of the Recapitalization Transaction on June 30, 2022, the Company issued 33,791,641 shares of common stock and 110,000 shares that are designated as Series D Convertible Preferred Stock in exchange for approximately 89% of the issued and outstanding ordinary shares and all the preferred shares of Manuka Ltd. The number of shares prior to the Recapitalization Transaction have been retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the Recapitalization Transaction.
ARTEMIS THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
The Series D Convertible Preferred shares confer upon their holders the right receive notice to participate and vote in general meetings of stockholders of the Company on an as converted basis, the right to receive dividends when paid to holders of common stock of the Company on an as-converted basis and the right to receive a distribution of any surplus of assets upon liquidation of the Company before any distribution or payment shall be made to the holders of any junior securities. Each share of Series D Convertible Preferred shall be convertible into that number of shares of Common Stock determined by dividing the Stated Value by the Conversion Price. Each share of the Series D Preferred has a par value of $0.01 and convertible into 600 shares of Common Stock.
On January 19, 2022, the Company entered into an agreement with a services provider according to which the Company granted the services provider options to purchase 2.25% of the Company’s issued and outstanding Common Stock with exercise price equal to the par value of the shares. The stock option will be fully exercisable a moment before the closing date of the Share Exchange Agreement and can be exercised no later than the closing date. On June 30, 2022 the services provider exercised the stock option and as a result of the Share Exchange Agreement was issued 2,242,509 common stock of the Company.
The Company considered whether the loans it received from its major stockholder vare beneficial and hence such benefit should be recorded in capital reserve from the transaction with a related party.
ARTEMIS THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
NOTE 6 -RELATED PARTY BALANCES AND TRANSACTIONS (Cont.)
A.Balances with related parties:
(USD in thousands)
June 30, | December 31, | |||||||
2 0 2 2 | 2 0 2 1 | |||||||
Long-term loans from a major stockholder | 233 | 239 | ||||||
Trade account payables (*) | 69 | - |
B.Transactions with related parties (unaudited):
(USD in thousands)
Six Months ended June 30 | ||||||||
2 0 2 2 | 2 0 2 1 | |||||||
Management fees to a major stockholder | 32 | 25 | ||||||
Sales and marketing (*) | 65 | - | ||||||
Interest on loans from a major stockholder | 10 | 4 | ||||||
Stockholder’s Salaries | 36 | - |
(*) refer to marketing services provided by one of the Company’s stockholders.
Page | |
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 1197) | F-2 - F-3 |
F-4 | |
F-5 | |
F-6 | |
F-7 | |
F-8 - F-17 |
• | We have asked for access to bank statements and other information to evaluate the ability to support the Company for the next twelve months. |
• | Reading public information to try to corroborate the sources of the capitalization of the major stockholder. |
We have served as the Company’s auditor since 2020.
December 31, | Period from March 22, (Inception) to December 31, | |||||||||||
Note | 2 0 2 1 | 2 0 2 0 | ||||||||||
$ | $ | |||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS | ||||||||||||
Cash and cash equivalents | 471 | 3 | ||||||||||
Trade receivables | - | - | ||||||||||
Other receivables | 20 | 4 | ||||||||||
Inventory | 3 | 74 | - | |||||||||
Total current assets | 565 | 7 | ||||||||||
NON-CURRENT ASSETS: | ||||||||||||
Property and equipment, net | 5 | 37 | 1 | |||||||||
Operating lease right-of-use assets | 7 | 55 | - | |||||||||
Intangible assets, net | 6 | 32 | - | |||||||||
Total long-term assets | 124 | 1 | ||||||||||
TOTAL ASSETS | 689 | 8 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY) | ||||||||||||
CURRENT LIABILITIES: | ||||||||||||
Short-term credit | 97 | - | ||||||||||
Trade account payables | 42 | 9 | ||||||||||
Short-term operating lease liabilities | 7 | 19 | - | |||||||||
Other account payables | 102 | 2 | ||||||||||
Total current liabilities | 260 | 11 | ||||||||||
NON-CURRENT LIABILITIES: | ||||||||||||
Long-term loans from a major stockholder | 9 | 239 | 62 | |||||||||
Long-term operating lease liabilities | 7 | 38 | - | |||||||||
Other liabilities | 4 | 32 | - | |||||||||
Total long-term liabilities | 309 | 62 | ||||||||||
Total liabilities | 569 | 73 | ||||||||||
STOCKHOLDERS’ EQUITY (DEFICIENCY): | ||||||||||||
Common stock of $0.01 par value – Authorized: 51,000,000 shares issued and outstanding 31,549,132 as of December 31, 2021 and 26,109,483 as of December 2020; | 8 | 315 | 261 | |||||||||
Series D Convertible Preferred stock, $0.01 par value - Authorized: 110,000 shares; issued and outstanding: 110,000 shares as of December 31, 2021 and 91,034 shares as December 31, 2020 | 1 | 1 | ||||||||||
Capital reserve from transaction with a major stockholder | 15 | 2 | ||||||||||
Additional paid in capital | 186 | (261 | ) | |||||||||
Accumulated deficit | (397 | ) | (68 | ) | ||||||||
Total shareholders’ deficiency | 120 | (65 | ) | |||||||||
Total liabilities and stockholders’ equity (deficiency) | 689 | 8 |
The accompanying notes are an integral part of the financial statements.
Year ended December 31, | Period from March 22, (Inception) to December 31, | |||||||
2 0 2 1 | 2 0 2 0 | |||||||
$ | $ | |||||||
Revenues | 7 | - | ||||||
Costs of revenues | 1 | - | ||||||
Gross profit | 6 | - | ||||||
Operating expenses | ||||||||
Sales and marketing | 66 | 38 | ||||||
General and administrative | 230 | 23 | ||||||
Total operating expenses | 296 | 61 | ||||||
Operating loss | (290 | ) | (61 | ) | ||||
Financial expenses, net | (39 | ) | (7 | ) | ||||
Net Loss and Total Comprehensive Loss | (329 | ) | (68 | ) | ||||
Loss per share: | ||||||||
Basic and diluted net loss per common stock | (0.0041 | ) | (0.0011 | ) | ||||
Weighted average number of common stocks used in calculation of net loss per common stock (*): | ||||||||
Basic and diluted | 26,139,289 | 20,315,323 |
Common Stock | Preferred Stock D | Capital Reserve | Additional Paid In Capital | Accumulated Deficit | Total | |||||||||||||||||||||||||||
Number | $ | Number | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Balance as of March 22, 2020 (*) | 26,109,483 | 261 | 91,034 | 1 | (261 | ) | - | 1 | ||||||||||||||||||||||||
Transactions with shareholder (Note 8) | 2 | - | 2 | |||||||||||||||||||||||||||||
Net Loss | (68 | ) | (68 | ) | ||||||||||||||||||||||||||||
Balance as of December 31, 2020 | 26,109,483 | 261 | 91,034 | 1 | 2 | (261 | ) | (68 | ) | (65 | ) | |||||||||||||||||||||
Issuance of Common Stock | 5,439,650 | 54 | 18,966 | (** | ) | 447 | 501 | |||||||||||||||||||||||||
Transactions with shareholders (Note 8) | 13 | 13 | ||||||||||||||||||||||||||||||
Net Loss | (329 | ) | (329 | ) | ||||||||||||||||||||||||||||
Balance as of December 31, 2021 | 31,549,132 | 315 | 110,000 | 1 | 15 | 186 | (397 | ) | 120 |
Year ended December 31, | Period from March 22, (inception) to December 31, | |||||||
2 0 2 1 | 2 0 2 0 | |||||||
$ | $ | |||||||
Cash flows from operating activities: | ||||||||
Net loss | (329 | ) | (68 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation | 3 | (* | ) | |||||
Increase in operating lease liabilities | 2 | - | ||||||
Increase in other liabilities | (* | ) | - | |||||
Accrued interest from shareholder loans | 13 | 2 | ||||||
Increase in trade receivable and other receivable s | (15 | ) | (4 | ) | ||||
Increase in trade account payables and other accounts payable. | 121 | 12 | ||||||
Increase in inventory | (74 | ) | - | |||||
Net cash used in operating activities | (279 | ) | (58 | ) | ||||
Cash flows used in investing activities: | ||||||||
Purchase of property and equipment | (27 | ) | (1 | ) | ||||
Net cash used in investing activities | (27 | ) | (1 | ) | ||||
Cash flows provided by financing activities: | ||||||||
Short-term credit | 96 | - | ||||||
Issuance of common stock | 501 | (* | ) | |||||
Loans received from a major stockholder | 177 | 62 | ||||||
Net cash provided by financing activities | 774 | 62 | ||||||
Increase in cash and cash equivalents | 468 | 3 | ||||||
Cash and cash equivalents at beginning of period | 3 | - | ||||||
Cash and cash equivalents at end of period | 471 | 3 | ||||||
Non-cash activities: | ||||||||
Right-of-use asset recognized with corresponding lease liability | 60 | - | ||||||
Intangible assets recognized with corresponding other liability | 32 | - | ||||||
Purchase of property and equipment in credit | 12 | - |
NOTE 1 -DESCRIPTION OF BUSINESS AND GENERAL |
A. | Artemis Therapeutics Inc. (“the Company”) was originally incorporated under the laws of the State of Nevada, on April 22, 1997. Based on the lack of Company business activities since January 10, 2019, the Company was classified as a “shell” company as defined by the Securities and Exchange Commission (the “SEC”). |
B. | On March 6, 2022, the Company entered into a Share Exchange Agreement, as amended on June 30, 2022 (the “Share Exchange Agreement”) with Manuka Ltd., and the shareholders of Manuka Ltd., a Company incorporated in Israel and engaged in developing and manufacturing skincare products based on Mānuka honey and bee venom. | |
The Share Exchange Agreement was consummated on June 30, 2022 and the Company acquired 100% of the outstanding shares of Manuka Ltd. (the “Reverse Recapitalization Transaction”). Pursuant to the Share Exchange Agreement, in exchange for all of the outstanding shares of Manuka Ltd., the Company issued to the shareholders of Manuka Ltd. a total of 33,791,641 (including shares issued to service provider of 2,242,509) common stock and 110,000 preferred D shares, convertible into 66,000,000 shares of common stock of the Company, representing 89% of the total shares issued and outstanding after giving effect to the Reverse Recapitalization Transaction. As a result of the Reverse Recapitalization Transaction, Manuka Ltd. became a wholly owned subsidiary of the Company. As the shareholders of Manuka Ltd. received the largest ownership interest in the Company, Manuka Ltd. was determined to be the “accounting acquirer” in the reverse recapitalization. As a result, the historical financial statements of the Company were replaced with the financial statement of Manuka Ltd. for all periods presented. The financial statements reflect the financial statements of Manuka Ltd, recasted for the change in the equity structure. |
NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
A. | Accounting principles: |
B. | Use of estimates in the preparation of financial statements: |
NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
C. | Functional currency: |
D. | Cash and cash equivalents: |
E. | Inventory: |
F. | Property and equipment: |
% | |
Computers and electronic equipment | 33 |
Capitalization of website development costs | 20 |
Office furniture and equipment | 7 |
NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
G. | Impairment of long-lived assets: |
H. | Basic and diluted net loss per share: |
I. | Income Tax: |
J. | Revenue recognition: |
NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
K. | Concentration of credit risk: |
L. | Commitments and contingencies: |
M. | Fair value measurements: |
N. | Leases: |
NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
N. | Leases (Cont.): |
O. | Impact of recently issued and adopted accounting standards: |
P. | New accounting pronouncements not yet effective: |
December 31, | Period from March 22, (Inception) to December 31, | |||||||
2021 | 2020 | |||||||
Raw materials | 32 | - | ||||||
Finished goods | 42 | - | ||||||
74 | - |
The Company did not record inventory write-offs during the years ended December 31, 2021 and the period from March 22, (Inception) to December 31, 2020.
NOTE 4 -COMMITMENTS AND CONTINGENT LIABILITIES |
NOTE 5 -PROPERTY AND EQUIPMENT, NET |
December 31, | Period from March 22, (Inception) to December 31, | |||||||
2021 | 2020 | |||||||
Cost: | ||||||||
Computers and electronic equipment | 6 | 1 | ||||||
Capitalization of website development costs | 34 | - | ||||||
40 | 1 | |||||||
Accumulated depreciation: | ||||||||
Computers and electronic equipment | (1 | ) | (* | ) | ||||
Capitalization of website development costs | (3 | ) | - | |||||
(4 | ) | (* | ) | |||||
Depreciated cost | 36 | 1 |
NOTE 6 -INTANGIBLES, NET |
December 31, 2021 | ||||||||||||||||||||
Estimated Useful Life (in years) | Gross Book Value | Accumulated Amortization | Net Book Value | Weighted Average Remaining Useful Life in years) | ||||||||||||||||
Acquisition of IP | 10 | 32 | - | 32 | 10 |
NOTE 7 -LEASES |
December 31, | Period from March 22, (Inception) to December 31, | |||||||
2021 | 2020 | |||||||
Operating lease cost | 6 | - | ||||||
Total lease costs | 6 | - |
a. | Supplemental balance sheet information related to operating leases is as follows: |
December 31, | Period from March 22, (Inception) to December 31, | |||||||
2021 | 2020 | |||||||
Operating lease ROU assets | 55 | - | ||||||
Operating lease liabilities, current | 19 | - | ||||||
Operating lease liabilities, long-term | 38 | - | ||||||
Weighted average remaining lease term (in years) | 2.75 | - | ||||||
Weighted average discount rate | 7.85 | % | - |
NOTE 7 -LEASES (cont.) |
b. | Future lease payments under operating leases as of December 31, 2021, are as follows: |
December 31, | ||||
2021 | ||||
2022 | 23 | |||
2023 | 24 | |||
2024 | 17 | |||
Total undiscounted lease payments | 64 | |||
Less: Transactions with stockholders | (7 | ) | ||
Lease liabilities | 57 |
NOTE 8 -STOCKHOLDERS’ EQUITY |
A. | Stockholders’ Rights: |
B. | Issuance of Common Stock: |
As detailed in Note 1, as part of the Reverse Recapitalization Transaction on June 30, 2022, the Company issued 33,791,641 shares of common stock (inclusive of 5,439,650 shares issued to certain investors as described above) and 110,000 shares (inclusive of 18,966 shares issued to certain investors as described above) that are designated as Series D Convertible Preferred Stock in exchange for approximately 89% of the issued and outstanding ordinary shares and all the preferred shares of Manuka Ltd. The number of shares prior to the Reverse Recapitalization Transaction have been retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the Recapitalization Transaction.
C. | Preferred Stock: |
NOTE 9 -RELATED PARTY BALANCES AND TRANSACTIONS |
a. | Balances with a related party: |
December 31, | Period from March 22, (Inception) to December 31, | |||||||
2021 | 2020 | |||||||
Long-term loans from a major stockholder | 239 | 62 |
b. | Transactions with a related party: |
December 31, | Period from March 22, (Inception) to December 31, | |||||||
2021 | 2020 | |||||||
Management fees to a major stockholder | 49 | - | ||||||
Interest on long-term loans from a major stockholder (reflected in stockholders’ equity) | 13 | 2 |
NOTE 10 -TAX ON INCOME |
A. | Tax rates applicable to the income of the Israeli companies: |
B. | As of December 31, 2021, the Company had total net operating losses in Israel of approximately $393 thousand, which may be carried forward and offset against taxable income in the future. |
C. | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows: |
December 31 | ||||||||
2021 | 2020 | |||||||
Thousands U.S. $ | ||||||||
Operating loss carryforward | 361 | 64 | ||||||
Net deferred tax asset before valuation allowance | 85 | 15 | ||||||
Valuation allowance | (85 | ) | (15 | ) | ||||
Net deferred tax asset | - | - |
D. | Available Carryforwards tax losses: |
E. | Due to the Company’s cumulative losses, the effect of ASC 740 as codified from ASC 740-10 is not material. |
NOTE 11 -SUBSEQUENT EVENTS |
ITEM 13. | OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. |
Amount | ||||
SEC registration fee | $ | 1,853.2 | ||
Printer fees and expenses | $ | 1,000 | ||
Legal fees and expenses | $ | 10,000 | ||
Accountant’s fees and expenses | $ | 10,000 | ||
Miscellaneous | $ | 1,500 | ||
Total | $ | 24,353.2 |
ITEM 14. | INDEMNIFICATION OF DIRECTORS AND OFFICERS. |
● | prior to the time of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; | |
● | upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding (1) shares owned by persons who are directors and also officers and (2) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; and | |
● | on or subsequent to the time of the transaction, the business combination is approved by the board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder. |
ITEM 15. | RECENT SALES OF UNREGISTERED SECURITIES |
ITEM 16. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
5.1# | Opinion of Sullivan & Worcester LLP. | |
23.2# | Consent of Sullivan & Worcester LLP (included in Exhibit 5.1). | |
101.1 | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Interim Condensed Consolidated Balance Sheets, (ii) the Interim Condensed Consolidated Statements of Comprehensive Loss, (iii) the Condensed Consolidated Statements of Stockholders Equity, (iv) the Interim Condensed Consolidated Statements of Cash Flows and (v) related notes to these financial statements, tagged as blocks of text and in detail.** | |
101.3 | The following materials from the Registrant, formatted in XBRL (Extensible Business Reporting Language): (i) Balance Sheets as of December 31, 2021 and 2020, (ii) Statements of Comprehensive Loss for the years ended December 31, 2021 and 2020, (iii) Statements of Changes in Stockholders Equity for the years ended December 31, 2021 and 2020, (iv) Statements of Cash Flows for the years ended December 31, 2021 and 2020, and (v) related notes to these financial statements, tagged as blocks of text and in detail.** | |
^ | Certain identified information in the exhibit has been excluded from the exhibit because it is both (i) not material and (ii) would likely cause competitive harm to the Company if publicly disclosed. The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request. | |
* | Previously filed. | |
** | Filed herewith. | |
# | To be filed by an amendment. |
ITEM 17. | UNDERTAKINGS. |
(i) | To include any prospectus required by Section 10(a)(3) of the Securities Act; |
(ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(i) | Each prospectus filed by the Registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and | |
(ii) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. |
ARTEMIS THERAPEUTICS, INC. | |||
By: | /s/ Shimon Citron | ||
Name: | Shimon Citron | ||
Title: | Chief Executive Officer and Director |
Person | Capacity | Date | ||
/s/ Shimon Citron | Chief Executive Officer and Director | September 21, 2022 | ||
Shimon Citron | (Principal Executive Officer) | |||
/s/ David Dana | Chief Financial Officer | September 21, 2022 | ||
David Dana | (Principal Financial and Accounting Officer) |