Manuka, Inc. - Quarter Report: 2022 March (Form 10-Q)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

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

For the quarterly period ended March 31, 2022

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

(Commission file number 0-24431)

________________

ARTEMIS THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	84-1417774
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

18 East 16th Street, Suite 307, New York, NY	10003
(Address of principal executive offices)	(Zip Code)

(646) 233-1454

(Registrant’s telephone number, including area code)

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ATMS	OTCQB

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

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


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

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

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☒ No ☐

The number of shares of Common Stock of the registrant outstanding was 5,153,461 as of May 23, 2022.

ARTEMIS THERAPEUTICS, INC.

INDEX TO FORM 10-Q

		PAGE

PART I.	FINANCIAL INFORMATION	3

Item 1.	Financial Statements	3

	Interim Condensed Consolidated Balance Sheet as of March 31, 2022 (unaudited) and December 31, 2021 (audited)	4

	Interim Condensed Consolidated Statement of Comprehensive Loss (unaudited) for the three months ended March 31, 2022 and 2021	5

	Interim Condensed Statements of Stockholders’ Equity (unaudited) for the three months ended March 31, 2022 and 2021	6

	Interim Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2022 and 2021	7

	Notes to Interim Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 4.	Controls and Procedures	22

PART II.	OTHER INFORMATION	23

Item 6.	Exhibits	23

SIGNATURES		24

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Artemis Therapeutics, Inc.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2022

U.S. DOLLARS IN THOUSANDS

(UNAUDITED)

INDEX

	PAGE

Interim Condensed Consolidated Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021 (audited)	4

Interim Condensed Consolidated Statements of Comprehensive Loss (unaudited) for the three months ended March 31, 2022 and 2021	5

Interim Condensed Statements of Stockholders’ Equity (unaudited) for three months ended March 31, 2022 and 2021	6

Interim Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021	7

Notes to Interim Condensed Consolidated Financial Statements	8-18

Artemis Therapeutics, Inc.

Interim Condensed Consolidated Balance Sheets

(USD in thousands, except share data)

			As of March 31,			As of December 31,
	Note		2022 (Unaudited)			2021 (Audited)

ASSETS

Current assets
Cash and cash equivalents				2			1
Other accounts receivable and prepaid expenses				5			6
Total current assets				7			7

TOTAL ASSETS				7			7

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities
Accrued expenses and other payables				333			307
Third party loan		9		30			30
Related parties		8,9		166			166
Total current liabilities				529			503

Total Liabilities				529			503

Shareholders’ equity
Series A Convertible Preferred stock, $0.01 par value - Authorized: 1,000 shares; issued and outstanding: 453 shares as of March 31, 2022 and December 31, 2021				(*	)		(*	)
Series C Convertible Preferred stock, $0.01 par value - Authorized: 250 shares; issued and outstanding: 250 shares as of March 31, 2022 and December 31, 2021				(*	)		(*	)
Common stock, $0.01 par value - authorized: 51,000,000; issued and outstanding: 5,153,461 as of March 31, 2022 and December 31, 2021				52			52
Additional paid in capital		7		1,941			1,937
Accumulated deficit				(2,515	)		(2,485	)
Total stockholders' equity				(522	)		(496	)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY				7			7

(*) Represents an amount lower than $1,000 USD

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

Artemis Therapeutics, Inc.

Interim Condensed Consolidated Statements of Comprehensive (Loss)
(USD in thousands, except share data)

			Three Months Ended March 31,
			2022			2021
	Note		(Unaudited)

General and administrative				28			35

Operating loss				28			35
Finance expense				2			1
Income tax benefit							-
Net loss				30			36

Net loss per share, basic and diluted		6		(0.005	)		(0.006	)

Weighted average number of common stock used in calculation of net loss per share:
Basic and diluted				5,153,461			5,153,461

The accompanying notes are an integral part of these interim condensed consolidated financial statements

Artemis Therapeutics, Inc.

Interim Condensed Statements of Stockholders’ Equity (Unaudited)

(USD in thousands)

	Common Stock				Preferred Stock A					Preferred Stock C					Additional paid-in Capital		Accumulated deficiency			Total stockholders' Equity
	Number		USD		Number		Amount			Number		Amount			Additional paid-in Capital		Accumulated deficiency			Total stockholders' Equity

Balance as of December 31, 2021		5,153,461		52		453		(*	)		250		(*	)		1,937		(2,485	)		(496	)

Share based compensation		-		-		-		-			-		-			4					4

Net loss		-		-		-		-			-		-					(30	)		(30	)

Balance as of March 31, 2022		5,153,461		52		453		(*	)		250		(*	)		1,941		(2,515	)		(522	)

	Common Stock				Preferred Stock A					Preferred Stock C					Additional paid-in Capital		Accumulated deficiency			Total stockholders' Equity
	Number		USD		Number		Amount			Number		Amount			Additional paid-in Capital		Accumulated deficiency			Total stockholders' Equity

Balance as of December 31 , 2020		5,153,461		52		453		(*	)		250		(*	)		1,921		(2,318	)		(345	)

Share based compensation																4					4

Net loss																		(36	)		(36	)

Balance as of March 31, 2021		5,153,461		52		453		(*	)		250		(*	)		1,925		(2,354	)		(377	)

(*) Represents an amount lower than $1,000 USD

The accompanying notes are an integral part of these interim condensed consolidated financial statements

Artemis Therapeutics, Inc.

Interim Condensed Consolidated Statement of Cash Flows (Unaudited)

(USD in thousands)

	Three Months Ended March 31,
	2022			2021

Net cash used in operating activities
Net loss		(30	)		(36	)

Share based compensation expenses		4			4
Income tax refund
Decrease in other accounts receivable and prepaid expenses		1			7
Increase in accrued expenses and other payables		26			19
Increase in related party liabilities					7

Net cash used in operating activities		1			1

Cash flows from financing activities
Third party loan		-			-
Loan from related parties		-			-

Net cash provided by financing activities		-			-

Increase in cash and cash equivalents		1			1
Cash and cash equivalents at the beginning of the period		1			1

Cash and cash equivalents at the end of the period		2			2

The accompanying notes are an integral part of these interim condensed consolidated financial statements

Artemis Therapeutics, Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(USD in thousands)

NOTE 1 - GENERAL

Description of Business

New York Global Innovations Inc. (the “Predecessor Company”) was originally incorporated under the laws of the State of Nevada, on April 22, 1997. On July 8, 2003, the Predecessor Company effected a reincorporation from Nevada to Delaware through a merger with and into its wholly-owned subsidiary, Inksure Technologies (Delaware) Inc., which was incorporated on September 30, 2003. The surviving corporation in the merger was Inksure Technologies (Delaware) Inc., which thereupon renamed itself Inksure Technologies Inc. In 2014, following the sale of its assets to Spectra Systems Corporation, the Predecessor Company changed its name to New York Global Innovations Inc. On August 23, 2016, the Predecessor Company consummated an agreement and plan of merger (the “Merger Agreement”) with Artemis Pharma Inc.

The Merger between the Predecessor Company and Artemis was accounted for as a reverse recapitalization. As the stockholders of Artemis received the largest ownership interest in the Predecessor Company, Artemis was determined to be the "accounting acquirer" in the reverse acquisition. As a result, the historical financial statements of the Predecessor Company were replaced with the historical financial statements of Artemis. Following the Merger, the Predecessor Company and its subsidiary, Artemis, are collectively referred to as the "Company."

Based on the lack of Company business activities since January 10, 2019, our Company is classified as a “shell” company as defined by the Securities and Exchange Commission (the “SEC”).

Establishment of Artemis (the "accounting acquirer"):

Artemis was incorporated in the State of Delaware on April 19, 2016. Until January 10, 2019, the Company was engaged in the development of agents for the prevention and treatment of severe and potentially life-threatening infectious diseases.

On January 10, 2019, Artemis received a notice regarding the immediate termination of a certain license agreement, dated May 31, 2016 (the “License Agreement”), executed by and between the Company, Hadasit Medical Research Services and Development Ltd. (“Hadasit”) and the Hong Kong University of Science and Technology R and D Corporation Limited (“RDC”). Artemis relied primarily on the License Agreement with respect to the development of Artemisone, its lead product candidate. Since the termination of the License Agreement, Artemis no longer has any operating business.

Artemis Therapeutics, Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(USD in thousands)

NOTE 1 - GENERAL (Cont.)

Going Concern:

To date, Artemis has not generated revenues from its activities and has incurred substantial operating losses. Management expects Artemis to continue to generate substantial operating losses and to continue to fund its operations primarily through additional raises of capital.

Such conditions raise substantial doubts about the Company’s ability to continue as a going concern. Management’s plan includes raising funds from outside potential investors. However, there is no assurance such funding will be available to the Company or that it will be obtained on terms favorable to the Company or will provide the Company with sufficient funds to meet its objectives. These financial statements do not include any adjustments relating to the recoverability and classification of assets, carrying amounts or the amount and classification of liabilities that may be required should the Company be unable to continue as a going concern.

Additionally, as discussed above, on January 10, 2019, Artemis received a notice regarding the immediate termination of the License Agreement.

Since the termination of the license agreement, Artemis no longer has any operating business and is classified as a “shell” company as defined by the Securities and Exchange Commission (the “SEC”).

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Unaudited Interim Financial Statements

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“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 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).

Use of estimates in the preparation of financial statements:

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect reported amounts and disclosures made. Actual results could differ from those estimates.

Cash and cash equivalents

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

Artemis Therapeutics, Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(USD in thousands)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Fair value of financial instruments

The carrying values of cash and cash equivalents, other receivables and other accounts payable approximate their fair value due to the short-term maturity of these instruments.

The Company measures the fair value of certain of its financial instruments (such as the derivative warrant liabilities) on a recurring basis. The method of determining the fair value of derivative warrant liabilities is discussed in Note 7B.

A fair value hierarchy is used to rank the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets and liabilities.

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets and liabilities, unadjusted quoted prices in the markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Financial statement in U.S. dollars:

The functional currency of the Company is the U.S dollar ("dollar") since the dollar is the currency of the primary economic environment in which the Company has operated and expects to continue to operate in the foreseeable future.

Transactions and balances denominated in dollars are presented at their original amounts. Transactions and balances denominated in foreign currencies have been re-measured to dollars in accordance with the provisions of Accounting Standards Codification (“ASC”) 830-10, "Foreign Currency Translation".

All transaction gains and losses from re-measurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the statement of operations as financial income or expenses, as appropriate.

Basic and diluted net loss per share

Basic loss per share is computed by dividing the net loss applicable to holders of common stock by the weighted average number of shares of common stock outstanding during the year. Diluted loss per share is computed by dividing the net loss applicable to holders of common stock by the weighted average number of shares of common stock outstanding plus the number of additional shares of common stock that would have been outstanding if all potentially dilutive common stock had been issued, using the treasury stock method, in accordance with Accounting Standards Codification (“ASC”) 260-10 “Earnings per Share.” Potentially dilutive shares of common stock were excluded from the diluted loss per share calculation because they were anti-dilutive.

The weighted average number of shares outstanding has been retroactively restated for the equivalent number of shares received by the accounting acquirer as a result of the reverse merger as if these shares had been outstanding as of the beginning of the earliest period presented.

Artemis Therapeutics, Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(USD in thousands)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Income Tax

The Company accounts for income taxes in accordance with ASC 740, “Income Taxes.” This topic prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities. As such, deferred taxes are computed based on the tax rates anticipated (under applicable law as of the balance sheet date) to be in effect when the deferred taxes are expected to be paid or realized.

Share-based compensation

The Company applies ASC 718-10, “Share-Based Payment,” which requires the measurement and recognition of compensation expenses for all share-based payment awards made to service providers, employees and directors including stock options under the Company's stock plans based on estimated fair values.

ASC 718-10 requires companies to estimate the fair value of stock options using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's statement of operations.

The Company estimates the fair value of stock options granted as share-based payment awards using a Black-Scholes options pricing model. The option-pricing model requires a number of assumptions, of which the most significant are share price, expected volatility and the expected option term (the time from the grant date until the options are exercised or expire). Expected volatility is estimated based on the volatility of similar companies in the technology sector for equity awards granted prior to the Merger and on the Company's trading share price for equity awards granted subsequent to the Merger. The Company has historically not paid dividends and has no foreseeable plans to issue dividends. The risk-free interest rate is based on the yield from governmental zero-coupon bonds with an equivalent term. The expected stock option term is calculated for stock options granted to employees and directors using the "simplified" method. Grants to non-employees are based on the contractual term. Changes in the determination of each of the inputs can affect the fair value of the stock options granted and the results of operations of the Company.

Artemis Therapeutics, Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(USD in thousands)

NOTE 4 - INCOME TAX

Tax rates applicable to the income

U.S. corporate tax

The maximum statutory federal tax rate in the U.S. is 21%. The Company is not subject to current federal taxes, as it has incurred losses.

Israel corporate tax

The Company's subsidiary in Israel is subject to income tax at a regular corporate tax of 23%.

Deferred income taxes

As the Company has not yet generated revenues, it is more likely than not that sufficient taxable income will not be available for the tax losses to be utilized in the future. Therefore, a valuation allowance was recorded to reduce the deferred tax assets to its recoverable amounts.

	As of March 31, 2022		As of December 31, 2021

Deferred tax assets:
Deferred taxes due to carryforward losses		2,948		2,941

Valuation allowance		2,948		2,941

Net deferred tax asset		-		-

Tax loss carry-forwards

Net operating loss carry-forwards as of March 31, 2022 and December 31, 2021 are as follows:

	As of March 31, 2022		As of December 31, 2021
Israel		5,030		5,019
United States (*)		8,528		8,509

		13,558		13,528

Net operating losses in Israel may be carried forward indefinitely. Net operating losses in the U.S. are available through 2027.

(*) Utilization of U.S. net operating losses may be subject to substantial annual limitation due to the “change in ownership” provisions of the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization.

Artemis Therapeutics, Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(USD in thousands)

NOTE 5 - WARRANTS ISSUED TO INVESTORS

The Company issued warrants to purchase common stock to investors. The below table lists these warrants and their material terms.

Issuance date	Number of warrants outstanding as of March 31, 2022		Exercise price		Exercisable through

October 2017		275,000	$	2.00	October 2022

The warrants contain a full ratchet anti-dilution price protection (See note 7B).

NOTE 6 - Computation of Net Loss per Share

Basic loss per share is computed by dividing the net loss, as adjusted, to include the dividend participation rights of preferred shares outstanding during the relevant fiscal year, by the weighted average number of shares of common stock outstanding during the relevant fiscal year. Diluted loss per share is computed by dividing the net loss, as adjusted, to include the dividend participation rights of preferred shares outstanding during the relevant fiscal year as well as of preferred shares that would have been outstanding if all potentially dilutive preferred shares had been issued, by the weighted average number of shares of common stock outstanding during the relevant fiscal year, plus the number of shares of common stock that would have been outstanding if all potentially dilutive common stock had been issued, using the treasury stock method, in accordance with ASC 260-10 “Earnings per Share”.

The loss and weighted average number of common stock used in the calculation of basic loss per share are as follows (in thousands, except share and per share data):

	Three Months Ended March 31
	2022			2021
	Unaudited
Net loss available to stockholders of the company		(30	)		(36	)
Net loss attributable to stockholders of preferred shares		(4	)		(5	)

Net loss used in the calculation of basic loss per share		(26	)		(31	)

Net loss per share		(0.005	)		(0.006	)

Weighted average number of common stock used in the calculation of net loss per share		5,153,461			5,153,461

Artemis Therapeutics, Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(USD in thousands)

NOTE 7 - STOCK CAPITAL

Stockholders Rights:

Shares of common stock confer upon their holders the right to receive notice to participate and vote in general meetings of stockholders of the Company, the right to receive dividends, if declared, and the right to receive a distribution of any surplus of assets upon liquidation of the Company.

The Series A Convertible Preferred shares confer upon their holders 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 common stock.

The Series C Convertible Preferred shares confer upon their holders the right to receive dividends when paid to holders of common stock of the Company on an as-converted basis. The shares of Series C Convertible Preferred Stock have 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 other securities.

Issuance of Shares

On August 19, 2016 and prior to consummation of the merger, Artemis issued 524 shares of common stock (221,307 shares as adjusted to reflect the reverse recapitalization and reverse stock split) for an aggregate purchase price of $127, which was received in October 2016.

In August 2016, immediately upon consummation of the Merger, the Company issued 68,321 shares of the Company’s common stock, as well as 453 shares of the Company’s newly designated Series A Convertible Preferred Stock convertible into 658,498 shares of common stock, to an investor for an aggregate purchase price of $481,000 (net of issuance expenses).

In October 2017, the Company issued 300,000 shares of the Company’s common stock, warrants to purchase 275,000 shares of common stock, as well as 250 shares newly designated Series C Convertible Preferred Stock to investors for an aggregate purchase price of $550,000 less issuance expenses. Each share of Series C Convertible Preferred Stock is convertible into 1,000 shares of common stock, subject to adjustments in the event of future financing at a price of less than the conversion price. Preferred shares confer upon their holders the right to receive dividends when paid to holders of common stock of the Company on an as-converted basis. The holders of shares of Series C Convertible Preferred Stock have 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 other securities.

Artemis Therapeutics, Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(USD in thousands)

NOTE 7 - STOCK CAPITAL (Cont.)

Issuance of Shares (Cont.)

The warrants to purchase 275,000 shares of the Company’s common stock contain a full ratchet anti-dilution price protection so that, in most situations upon the issuance of any common stock or securities convertible into common stock at a price below the then-existing exercise price of the outstanding warrants, the warrant exercise price will be reset to the lower common stock sales price.

As such anti-dilution price protection did not meet the specific conditions for equity classification as of the date of issuance of the warrants, the Company was required to classify the fair value of these warrants as a liability, with changes in fair value to be recorded as income (loss) due to change in fair value of warrant liability. The estimated fair value of such derivative warrant liability at issuance date, was approximately $319.

Artemis Therapeutics, Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(USD in thousands)

NOTE 7 - STOCK CAPITAL (Cont.)

Options issued to employees and consultants

A summary of the Company's option activity and related information is found below.

	For the three months ended March 31, 2022
	Number of stock options		Weighted average exercise price		Aggregate intrinsic value

Outstanding at beginning of period		141,528		0.46		86,036
Granted		-		-		-
Exercised		-		-		-
Cancelled		-		-		-

Outstanding at end of period		141,528		0.46		86,036
Options exercisable at period end		141,528		0.46		86,036

Artemis Therapeutics, Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(USD in thousands)

NOTE 7 - STOCK CAPITAL (Cont.)

Options issued to employees and consultants (Cont.)

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the fair market value of the Company’s common stock on March 31, 2022 and the exercise price, multiplied by the number of in-the-money stock options on those dates) that would have been received by the stock option holders had all stock option holders exercised their stock options on those dates.

The stock options outstanding as of March 31, 2022, and December 31, 2021, have been separated into exercise price, as follows:

Exercise price		Stock options outstanding as of March 31,		Stock options outstanding as of December 31,		Weighted average remaining contractual life – years as of March 31,		Weighted average remaining contractual life – years as of December 31,		Stock options exercisable as of March 31,		Stock options exercisable as of December 31,
$			2022		2021		2022		2021		2022		2021

	0.01		91,528		91,528		4.40		4.64		91,528		91,528
	1.30		50,000		50,000		5.96		6.21		50,000		48,958
	0.47		141,528		141,528		4.92		5.17		137,361		140,486

NOTE 8 - RELATED PARTIES

On May 15, 2019, the Company issued two unsecured promissory notes (each, a “Note” and collectively the “Notes”) in the aggregate principal amount of $100,000 to two related parties. $20,000 and $30,000 of the funds were received by the Company on March 22, 2019, and April 4, 2019, respectively. The balance of the funds was received in May 2019. Each Note accrues interest at a rate of 6% per annum until the Note is repaid in full. All payments of principal, interest and other amounts under each Note are payable by June 30, 2021 In addition, On November 4, 2021, the Company issued an unsecured promissory notes (each, a “Subsequent Note” and collectively the “Subsequent Notes”) in the aggregate principal amount of $30,000, with original issuance date of August 15, 2021. Each Note accrues interest at a rate of 10% per annum until the Note is repaid in full. All payments of principal, interest and other amounts under each Note are payable by December 19, 2021. The proceeds of the Notes were used by the Company for general working capital purposes. Related parties also includes $14,000 of Company operating expenses which were paid for by Nadav Kidron.

Artemis Therapeutics, Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(USD in thousands)

NOTE 9 - SUBSEQUENT EVENTS

On March 6, 2022, the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Manuka Ltd, an Israeli company (the “Manuka”) and the shareholders of Manuka (the “Shareholders”). Since its inception, Manuka’s business activities primarily consisted of distributing Manuka honey imported from New Zealand, developing and distributing supplements aimed at the beauty and skincare markets and, developing and manufacturing skincare products based on New Zealand’s manuka honey and bee venom, among other natural ingredients. The Share Exchange Agreement provides that, upon the terms, and subject to the conditions set forth therein, on the closing date (the “Closing”), the Company will acquire all of the outstanding shares of Manuka (the “Manuka Shares”) from the Shareholders in exchange for an aggregate of 92,446,687 shares of the Company’s common stock (the “Consideration Shares”), such that the Shareholders will hold, immediately following the Closing, eighty-nine percent (89%) of the Company’s issued and outstanding share capital. At Closing, should it be required as a condition by the Israeli Tax Authority to affect a tax ruling to approve the transactions contemplated by the Share Exchange Agreement (the “Tax Ruling”), the Manuka Shares and the Consideration Shares will be placed in escrow with a third-party escrow agent pending the Closing. As required under Israeli law, following the Closing, and upon receipt of regulatory approvals, Manuka will become the Company’s wholly owned subsidiary. Following the Closing, (i) the Manuka Shares will be released to the Company and (ii) the Consideration Shares will be released to the Shareholders. To the extent required pursuant to the Tax Ruling, prior to the Closing, the parties will engage a trustee (the “103K Trustee”) under a separate trust agreement (the “Trust Agreement”), who shall hold in trust (i) all Manuka Shares for the benefit of the Company, and (ii) all Consideration Shares for the benefit of Shareholders, with the foregoing being respectively released to the designated beneficiary pursuant to the terms of the Trust Agreement and the Tax Ruling. The Share Exchange Agreement contains customary representations and warranties from each party to the agreement, and each party has agreed to customary covenants, including, among others, covenants relating to (1) the conduct of each of Manuka’s and the Company’s business during the period between the execution of the Share Exchange Agreement and the Closing, and (2) no transfer of Manuka Shares by the Shareholders during the period between the execution of the Share Exchange Agreement and the Closing.

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

In this section, “Management’s Discussion and Analysis of Financial Condition and Results of Operation,” references to “the Company” “we,” “us,” or “our,” refer to Artemis Therapeutics, Inc. and its consolidated subsidiaries and dollar amounts are in thousands, except as otherwise stated.

This Quarterly Report on Form 10-Q contains statements that may constitute “forward-looking statements.” Generally, forward-looking statements include words or phrases such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “projects,” “could,” “may,” “might,” “should,” “will,” the negative of such terms, and words and phrases of similar import. For example, when we discuss possible strategic alternatives, we are using forward-looking statements. Such statements are based on management’s current expectations and are subject to a number of risks and uncertainties, including, but not limited to, the risks detailed from time to time in our filings with the Securities and Exchange Commission, or the SEC. These risks and uncertainties could cause our actual results to differ materially from those described in our forward-looking statements. Any forward-looking statement represents our expectations or forecasts only as of the date it was made and should not be relied upon as representing its expectations or forecasts as of any subsequent date. Except as required by law, we undertake no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, even if our expectations or forecasts change.

The following discussion and analysis should be read in conjunction with the financial statements, related notes and other information included in this Quarterly Report on Form 10-Q and with the Risk Factors included in Part I, Item 1A of our Annual Report on Form 10-K.

OVERVIEW

Until January 10, 2019, we were engaged in the development of agents for the prevention and treatment of severe and potentially life-threatening infectious diseases. On January 10, 2019, we received a notice regarding the immediate termination of a certain license agreement, dated May 31, 2016 (the “License Agreement”), executed by and between the Company, Hadasit Medical Research Services and Development Ltd. and the Hong Kong University of Science and Technology R and D Corporation Limited. We relied primarily on the License Agreement with respect to the development of Artemisone, our former lead product candidate. Since the termination of the License Agreement, the Company no longer has any operating business.

We believe that we will continue to experience losses and increased negative working capital and negative cash flows in the near future and will not be able to return to positive cash flow without either obtaining additional financing in the near term or completing a business transaction. We have experienced difficulties accessing the equity and debt markets and raising capital and there can be no assurance that we will be able to raise such additional capital on favorable terms, or at all, or be able to complete a business transaction. If additional funds are raised through the issuance of equity securities or completing a business transaction, our existing stockholders will experience significant dilution. In order to conserve our cash and manage its liquidity, we have implemented cost-cutting initiatives including the reduction of employee headcount and overhead costs.

Our Board of Directors is exploring strategic alternatives, which may include future acquisitions, a merger with another company or the sale of the public shell company. In that regard, on March 6, 2022, the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Manuka Ltd, an Israeli company (the “Manuka”) and the shareholders of Manuka (the “Shareholders”). Since its inception, Manuka’s business activities primarily consisted of distributing Manuka honey imported from New Zealand, developing and distributing supplements aimed at the beauty and skincare markets and, developing and manufacturing skincare products based on New Zealand’s manuka honey and bee venom, among other natural ingredients. The Share Exchange Agreement provides that, upon the terms, and subject to the conditions set forth therein, on the closing date (the “Closing”), the Company will acquire all of the outstanding shares of Manuka (the “Manuka Shares”) from the Shareholders in exchange for an aggregate of 92,446,687 shares of the Company’s common stock (the “Consideration Shares”), such that the Shareholders will hold, immediately following the Closing, eighty-nine percent (89%) of the Company’s issued and outstanding share capital. At Closing, should it be required as a condition by the Israeli Tax Authority to affect a tax ruling to approve the transactions contemplated by the Share Exchange Agreement (the “Tax Ruling”), the Manuka Shares and the Consideration Shares will be placed in escrow with a third-party escrow agent pending the Closing. As required under Israeli law, following the Closing, and upon receipt of regulatory approvals, Manuka will become the Company’s wholly owned subsidiary. Following the Closing, (i) the Manuka Shares will be released to the Company and (ii) the Consideration Shares will be released to the Shareholders. To the extent required pursuant to the Tax Ruling, prior to the Closing, the parties will engage a trustee (the “103K Trustee”) under a separate trust agreement (the “Trust Agreement”), who shall hold in trust (i) all Manuka Shares for the benefit of the Company, and (ii) all Consideration Shares for the benefit of Shareholders, with the foregoing being respectively released to the designated beneficiary pursuant to the terms of the Trust Agreement and the Tax Ruling. The Share Exchange Agreement contains customary representations and warranties from each party to the agreement, and each party has agreed to customary covenants, including, among others, covenants relating to (1) the conduct of each of Manuka’s and the Company’s business during the period between the execution of the Share Exchange Agreement and the Closing, and (2) no transfer of Manuka Shares by the Shareholders during the period between the execution of the Share Exchange Agreement and the Closing. There is no guarantee that the Company will be able to close the Share Exchange Agreement or conduct the Closing.

THREE MONTHS ENDED MARCH 31, 2022 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2021 (dollars in thousands)

REVENUES. We did not have any revenue-producing operations for the three months ended March 31, 2022 or for the three months ended March 31, 2021.

PROFIT FROM SALE OF OPERATIONS, NET. We did not incur a profit from the sale of operations in the three months ended March 31, 2022 or the three months ended March 31, 2021.

COST OF REVENUES. We had no cost of revenues for the three months ended March 31, 2022 or for the three months ended March 31, 2021, due to the fact that we had no revenue-producing operations.

RESEARCH AND DEVELOPMENT EXPENSES. We incurred no research and development expenses for the three months ended March 31, 2022 or for the three months ended March 31, 2021, due to the termination of the License Agreement resulting in the Company no longer having business operations.

SELLING AND MARKETING EXPENSES. We did not incur any selling and marketing expenses for the three months ended March 31, 2022, or for the three months ended March 31, 2021,due to us no longer having business operations.

GENERAL AND ADMINISTRATIVE EXPENSES. We incurred $28 in general and administrative expenses for the three months ended March 31, 2022 compared to $35 for the three months ended March 31, 2021, which consisted primarily of compensation costs for administrative, finance and general management personnel, legal, accounting and administrative costs and option expenses. The decrease in general and administrative expenses is primarily due to a decrease in legal expenses for the three months ended March 31, 2022 and due to us no longer having business operations.

FINANCIAL (EXPENSE) INCOME, NET. We incurred $2 in financial expense for the three months ended March 31, 2022 compared to $1 for the three months ended March 31, 2021.

OTHER EXPENSES. We incurred no other expenses in the three months ended March 31, 2022 or March 31, 2021.

NET LOSS. We incurred a net loss of $30 for the three months ended March 31, 2022 and $36 for the three months ended March 31, 2021. The decrease in net loss is primarily due to a decrease of $7 in general and administrative expenses and an increase of $1 in financial expenses.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2022, we had an accumulated deficit of $2,515 and a negative working capital (current assets less current liabilities) of $522. Losses will probably continue for the foreseeable future.

We do not have any material capital commitments for capital expenditures as of March 31, 2022.

We have sustained significant operating losses in recent periods, which have resulted in a significant reduction in our cash reserves. Due to the termination of the License Agreement, the Company no longer has any business operations. The Company believes that it will continue to experience losses and negative cash flows in the near future and will not be able to return to positive cash flow without obtaining additional financing in the near term or entering into a business transaction. The Company has experienced difficulties accessing the equity and debt markets and raising capital or entering into a business transaction, and there can be no assurance that the Company will be able to raise such additional capital on favorable terms or at all or entering into a business transaction. If additional funds are raised through the issuance of equity securities or entering into a business transaction, the Company’s existing stockholders will experience significant further dilution. In order to conserve the Company’s cash and manage its liquidity, the Company has implemented cost-cutting initiatives including the reduction of employee headcount and overhead costs.

On May 15, 2019, the Company issued two unsecured promissory notes in the aggregate principal amount of $100,000. In that regard, one Note, with a principal aggregate balance of $50,000, was issued to KNRY Ltd., an entity related to Nadav Kidron, the natural person with voting and dispositive power over the securities held by Tonak Ltd., the Company’s largest shareholder. $20,000 of the funds relating to KNRY Ltd.’s Note were received by the Company on March 22, 2019. The balance of the funds relating to KNRY Ltd.’s Note was received by the Company on April 4, 2019. In addition, one Note, with an aggregate principal balance of $50,000, was issued to Cutter Mill Capital LLC, an existing shareholder of the Company. Each Note accrues interest at a rate of 6% per annum until the Note is repaid in full. All payments of principal, interest and other amounts under each Note are payable by June 30, 2021. The proceeds of the Notes were used by the Company for general working capital purposes.

In addition, on November 4, 2021, the Company issued two Subsequent Notes in the aggregate principal amount of $60,000, with original issuance dates of August 15, 2021 and September 19, 2021. In that regard, one Subsequent Note, with a principal aggregate balance of $30,000, was issued to KNRY Ltd., an entity related to Nadav Kidron, the natural person with voting and dispositive power over the securities held by Tonak Ltd., the Company’s largest shareholder and one Subsequent Note, with an aggregate principal balance of $30,000, was issued to Harmony (H.A.) Investments Ltd. Each Subsequent Note accrues interest at a rate of 10% per annum until the Subsequent Note is repaid in full. All payments of principal, interest and other amounts under each Subsequent Note are payable by December 19, 2021. The proceeds of the Notes were used by the Company for general working capital purposes.

The Company is currently in default on the Notes and the Subsequent Notes and intends to negotiate an extension for their repayment, however there is no guarantee that we will be successful in doing so.

As of March 31, 2022, we had accumulated liabilities of $529.

As of March 31, 2022, we had cash and cash equivalents of $2 and negative cash flows from operating activities of $1 for the period then ended. The negative cash flow from operating activities in the period ended March 31, 2022 is attributable mainly to the net loss of $30, share-based compensation expenses of $4, a decrease in other accounts receivable and prepaid expenses of $1 and an increase in accrued expenses and other payables of $26.

OFF BALANCE SHEET ARRANGEMENTS

None.

ITEM 4. CONTROLS AND PROCEDURES

Under the direction of the Chief Financial Officer, we evaluated our disclosure controls and procedures. Based on the evaluation, and as a result of the material weaknesses described below, the Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 31, 2022.

No change in our internal control over financial reporting occurred during the quarter ended March 31, 2022, that has materially affected, or is reasonably likely to materially affect, such internal control over financial reporting.

Our management has worked, and continues to work, to strengthen our internal control over financial reporting. We are committed to ensuring that such controls are designed and operating effectively. We intend to remediate the material weakness in internal controls identified in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, subject to possessing sufficient financial means to do so, by hiring internal staff to our financial department to assist our Chief Financial Officer as well as intend to form an audit committee comprised of independent directors with sufficient financial reporting experience.

PART II. OTHER INFORMATION

ITEM 6. EXHIBITS

The following exhibits are being filed or furnished with this Report:

EXHIBIT NUMBER		DESCRIPTION

10.1*		Share Exchange Agreement by and between Artemis Therapeutics, Inc., Manuka Ltd., an Israeli company and the shareholders of Manuka Ltd., dated March 6, 2022.

31.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to rule 13a-14(a).*

32.1		Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350.**

101.1		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 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 Shareholders 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.*

104		Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).

* Filed herewith

**Furnished herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	ARTEMIS THERAPEUTICS, INC.

Dated: May 23, 2022	By:	/s/ Chanan Morris
		Chanan Morris
		Chief Financial Officer
		(Principal Executive Officer and Principal Financial and Accounting Officer)