Manuka, Inc. - Quarter Report: 2023 March (Form 10-Q)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2023

☐ 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)

3 Eliezer Vardinon St., Petach Tikva, Israel	4959507
(Address of principal executive offices)	(Zip Code)

(646) 233-1454

(Registrant’s telephone number, including area code)

Not Applicable

(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	OTC Pink Open Market

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 ☒

As of May 18, 2023, the registrant had 112,033,909 shares of common stock, par value $0.01, of the registrant issued and outstanding.

In this Quarterly Report, unless otherwise specified, all dollar amounts are expressed in United States dollars. Except as otherwise indicated by the context, references in this Quarterly Report to “Company”, “Artemis,”, “Manuka”, “we,” “us” and “our” are references to Artemis Therapeutics, Inc., a Delaware corporation, together with its consolidated subsidiaries.

ARTEMIS THERAPEUTICS, INC.

INDEX TO FORM 10-Q

		PAGE

Cautionary Note Regarding Forward-Looking Statements		1

PART I.	FINANCIAL INFORMATION	2

Item 1.	Financial Statements	2

	Interim Condensed Consolidated Balance Sheet as of March 31, 2023 (unaudited) and December 31, 2022 (audited)	3

	Interim Condensed Consolidated Statement of Comprehensive Loss (unaudited) for the three months ended March 31, 2023 and 2022	4

	Interim Condensed Statements of Stockholders’ Equity (unaudited) for the three months ended March 31, 2023 and 2022	5

	Interim Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2023 and 2022	7

	Notes to Interim Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14

Item 3.	Quantitative and Qualitive Disclosures Amount Market Risk	16

Item 4.	Controls and Procedures	16

PART II.	OTHER INFORMATION	17

Item 6.	Exhibits	17

SIGNATURES		18

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information set forth in this Quarterly Report on Form 10-Q, including in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere herein may address or relate to future events and expectations and as such constitutes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

Words such as “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements. Such forward-looking statements may include projections with respect to market size and acceptance, revenues and earnings, marketing and sales strategies, and business operations. Although forward-looking statements in this report reflect the good faith judgment of management, forward-looking statements are inherently subject to known and unknown risks, business, economic and other risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, other than as may be required by applicable law or regulation. Readers are urged to carefully review and consider the various disclosures made by us in our reports filed with the Securities and Exchange Commission (the “SEC”), which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:

•

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 requirement

•

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.

The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with that may cause our actual results to differ from those anticipated in our forward-looking statements.

All forward-looking statements included in this prospectus are based on information available to us on the date of this prospectus. Except to the extent required by applicable laws or rules, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained above and throughout this prospectus.

Moreover, new risks regularly emerge, and it is not possible for our management to predict or articulate all the risks we face, nor can we assess the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from those contained in any forward-looking statements. All forward-looking statements included in this prospectus are based on information available to us on the date of this prospectus. Except to the extent required by applicable laws or rules, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained above and throughout this prospectus.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ARTEMIS THERAPEUTICS, INC.

INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AS OF

March 31, 2023

IN THOUSANDS U.S. DOLLARS

INDEX

	Page


INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS	3

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS	4

INTERIM CONDENSED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY	5-6

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS	7

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS	8-13

ARTEMIS THERAPEUTICS, INC.

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

UNAUDITED

IN THOUSANDS U.S. DOLLARS

		March 31			December 31
	Note	2 0 2 3			2 0 2 2

ASSETS
CURRENT ASSETS:
Cash and cash equivalents			109			55
Trade receivables			14			14
Other receivables			21			27
Inventory	3		35			47
Total current assets			179			143

NON-CURRENT ASSETS:
Property and equipment, net			46			50
Operating lease right-of-use assets	4		32			37
Intangible assets, net			34			35
Total long-term assets			112			122

TOTAL ASSETS			291			265

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES:
Short-term credit			236			86
Trade accounts payable			637			571
Short-term operating lease liabilities	4		19			19
Other accounts payable			286			328
Total current liabilities			1,178			1,004

NON-CURRENT LIABILITIES:
Long-term loan from a related party	6		232			236
Long-term operating lease liabilities	4		10			15
Other liabilities			35			36
Total long-term liabilities			277			287

Total liabilities			1,455			1,291
STOCKHOLDERS' DEFICIENCY:
Common stock of $0.01 par value – Authorized: 150,000,000, issue and outstanding 112,033,909 as of March 31, 2023 and as of December 2022;	5		1,120			1,120
Capital reserve from transaction with a major stockholder			44			37
Stock based compensation			286			182
Additional paid in capital			-			-
Accumulated deficit			(2,614	)		(2,365	)
Total stockholders' deficiency			(1,164	)		(1,026	)

Total liabilities and stockholders' deficiency			291			265

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

ARTEMIS THERAPEUTICS, INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

UNAUDITED

IN THOUSANDS U.S. DOLLARS

	Three Months ended March 31
	2 0 2 3			2 0 2 2

Revenues		173			16
Costs of revenues		29			4

Gross profit		144			12

Operating expenses
Sales and marketing		195			109
General and administrative		213			102

Total operating expenses		408			211

Operating loss		(264	)		(199	)

Financial income (expenses), net		15			(4	)

Net Loss and Total Comprehensive Loss		(249	)		(203	)

Loss per share:

Basic and diluted net loss per common stock		(0.00	)		(0.00	)

Weighted average number of shares of Common Stock used in calculation of net loss per share of Common Stock:		112,033,909			31,549,132

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

ARTEMIS THERAPEUTICS, INC.

INTERIM CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

UNAUDITED

IN THOUSANDS U.S. DOLLARS

	Shares of Common Stock				Capital reserve from transaction with related parties		Stock based compensation		Additional Paid in Capital		Accumulated deficiency			Total
	Number		$		$		$		$		$			$
Balance as of December 31, 2022		112,033,909		1,120		37		182		-		(2,365	)		(1,026	)

Stock base compensation								104							104
Transactions with stockholders (Note 6)						7									7
Net Loss												(249	)		(249	)
Balance as of March 31, 2023		112,033,909		1,120		44		286		-		(2,614	)		(1,164	)

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

ARTEMIS THERAPEUTICS, INC.

INTERIM CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

UNAUDITED

IN THOUSANDS U.S. DOLLARS

	Shares of Common Stock				Preferred Stock D				Capital reserve from transaction with related parties		Additional Paid in Capital		Accumulated deficiency			Total
*	Number		$		Number		$		$		$		$			$
Balance as of December 31, 2021		31,549,132		315		110,000		1		15		186		(397	)		120

Transactions with stockholders (Note 6)										4							4
Net Loss														(203	)		(203	)
Balance as of March 31, 2022		31,549,132		315		110,000		1		19		186		(600	)		(79	)

*Number of shares has been retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the reverse recapitalization transaction (refer to Note 1).

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

ARTEMIS THERAPEUTICS, INC.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

UNAUDITED

IN THOUSANDS U.S. DOLLARS

	Three Months ended March 31
	2 0 2 3			2 0 2 2

Cash flows from operating activities:
Net loss		(249	)		(203	)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization		4			2
Stock based compensation		104			-
Decrease (increase) in intangible assets		1			(5	)
Increase in operating lease liabilities		-			5
Decrease in other liabilities		(1	)		-
Exchange rate differences from stockholders' loans		(4	)		-
Accrued interest from stockholder loans from a major stockholder		7			4
Increase in trade account receivable and other receivables		6			(23	)
Increase in trade accounts payable and other accounts payable		24			63
Decrease (increase) in inventory		12			-
Net cash used in operating activities		(96	)		(157	)

Cash flows from investing activities:
Purchase of property and equipment		-			(10	)

Net cash used in investing activities		-			(10	)

Cash flows from financing activities:
Short-term credit		150			(3	)
Loans received from a major stockholder		-			16

Net cash provided by financing activities		150			13

Decrease in cash and cash equivalents		54			(154	)

Cash and cash equivalents at beginning of period		55			471

Cash and cash equivalents at end of period		109			317

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

ARTEMIS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 1

DESCRIPTION OF BUSINESS AND GENERAL

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”).

Following the completion of the transactions contemplated by the Share Exchange Agreement (as defined and detailed below), the Company is no longer classified as a “shell” Company.

On March 6, 2022, the Company signed a Share Exchange Agreement, as amended (the “Share Exchange Agreement”), with Manuka Ltd., a limited liability company organized under the laws of the State of Israel, (“Manuka”), pursuant to which Manuka became the Company‘s wholly owned subsidiary.

Since its inception, Manuka’s business activities primarily consisted of 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. All of Manuka’s products are marketed and sold solely on its website. Manuka's skincare products are manufactured in Israel.

As of March 31, 2023, the term Company refers to Artemis Therapeutics Inc. as adjusted to reflect the financial statements of Manuka Ltd.

The number of shares included within these financial statements have been retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the Reverse Recapitalization Transaction.

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.”

The Company is in its early stages and has incurred substantial operating losses. There is uncertainty regarding the future of its operations. Moreover, the Company is thinly capitalized and has not yet generated cash from operations. Management expects the Company to continue to generate substantial operating losses and to continue to fund its operations primarily through additional raises of capital and through its credit line. Such conditions raise substantial doubts about the Company’s ability to continue as a going concern. Management’s plan includes raising funds from existing and 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.

ARTEMIS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS

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 2022 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. 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.

NOTE 3

INVENTORIES

Composition:

(USD in thousands)

	March 31,		December 31,
	2 0 2 3		2 0 2 2

Raw materials		23		24
Finished goods		12		23
		35		47

ARTEMIS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 4

LEASES

On August 10, 2021, the Company entered into an operating lease agreement for its office. The Company signed a new agreement for its current office and manufacturing facilities lease, which originally was to end in 2022. The lease agreement is for one year starting in October 2021 with two options to extend the lease by an additional one year for each option until September 30, 2024. On October 1, 2022, the company exercised the first option to extend the lease for another year and the Company is reasonably certain that it will exercise its additional option starting in October 2023.

A. The components of operating lease costs were as follows:

(USD in thousands)

	Three Months ended March 31
	2 0 2 3		2 0 2 2

Operating lease cost		5		5
Total lease costs		5		5

B. Supplemental balance sheet information related to operating leases is as follows:

(USD in thousands)

	March 31,			December 31,
	2 0 2 3			2 0 2 2

Operating lease right-of-use assets		32			37
Operating lease liabilities, current		19			19
Operating lease liabilities, long-term		10			15
Weighted average remaining lease term (in years)		1.5			1.75
Weighted average discount rate		7.85	%		7.85	%

C. Future lease payments under operating leases as of March 31, 2023, are as follows:

(USD in thousands)

	March 31,
	2 0 2 3

2023		15
2024		15
Total undiscounted lease payments		30
Less: imputed interest		(1	)
Present value of lease liabilities		29

ARTEMIS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 5

STOCKHOLDERS' EQUITY

A. 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. 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.

B. Stock Option:

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 shares of common stock of the Company.

In July 2022, the Company granted 370,014 stock options to one of its officers, with an exercise price per share of $0.0624 for a vesting period of 36 months commencing on April 1, 2022, with one third (1/3) of the total number of options vesting on the first anniversary of the Start Date (the “Cliff Date”) and one twelfth (1/12) of the options vesting every three months following the Cliff Date.

A summary of the Company’s option activity related to options to employees and directors, and related information as of March 31, 2023, is as follows:

	For the three months ended March 31, 2023
	Number of stock options		Weighted average exercise price		Aggregate intrinsic value

Outstanding at beginning of period		370,014		0.0624		406,127
Granted		-		-		-
Exercised		-		-		-
Cancelled		-		-		-

Outstanding at end of period		370,014		0.0624		198,179
Options exercisable at period end		123,338		0.0624		66,060

ARTEMIS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 5

STOCKHOLDERS' EQUITY (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 shares on March 31, 2023, multiplied by the number of in-the-money options on those dates) that would have been received by the option holders had all option holders exercised their options on those dates.

Compensation expense recorded by the Company in respect of its stock-based employees and directors compensation awards in accordance with Accounting Standards Codification 718-10 for the three months ended March 31, 2023, amounted to $104 thousand.

As of March 31, 2023, there was $572 thousand of total unrecognized compensation costs related to non-vested options. The costs are expected to be recognized over a weighted average period of two years.

NOTE 6

RELATED PARTY BALANCES AND TRANSACTIONS

During 2020 and 2021 and 2022, and the three months ended on March 31, 2023, the founder of Manuka Ltd., Mr. Shimon Citron, a director, Chief Executive Officer and a major stockholder, provided the Company with several loans at an aggregate amount of $232 thousand as of March 31, 2023. The loans bear no interest and are linked to the Israeli Consumer Prices Index. The repayment date has not been determined.

The Company considered whether the loans it received from its major stockholder are beneficial and hence such benefit should be recorded in capital reserve from the transaction with a related party.

The Company estimated the value of the benefit as the difference between the interest rate stipulated in the contract and the interest rate commensurate with such loans expected in an arms-length transaction (inclusive adjustment to the size of the loan and the fact that it is unsecured, which the Company’s management considers being the best estimate of the Company’s interest rate close to the date of receiving loans from a stockholders). Accordingly, as a result of the fact that the stockholder’s loan bears no interest and with no maturity date, the benefit is determined each year at the beginning of the year, as the discount of the loans at the effective interest rate (determined above) determined to be approximately 8.85%. The benefit for the three months ended March 31, 2023 and 2022 were $7 and $4 in thousand, respectively.

A. Balances with related parties:

(USD in thousands)	March 31,		December 31,
	2 0 2 3		2 0 2 2

Long-term Loan from a related party		232		255
Trade accounts payable (*)		535		75

ARTEMIS THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 6

RELATED PARTY BALANCES AND TRANSACTIONS (Cont.):

B. Transactions with related parties (unaudited):

(USD in thousands)	Three Months ended March 31
	2 0 2 3		2 0 2 2

Management fees to a major stockholder		-		35
Sales and marketing (*)		138		56
Interest on loans from a major stockholder		7		4
Stockholder’s Salaries		31		-

(*) refer to marketing services provided by one of the Company’s stockholders.

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.

The following management’s discussion and analysis should be read in conjunction with our financial statements, related notes and other information included in this Quarterly Report on Form 10-Q with the Risk Factors included in Part I, Item 1A of our Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2022. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements”.

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, one of our former lead product candidate. Upon the termination of the License Agreement, the Company ceased having an operating business.

From January 10, 2019 through June 30, 2022, we had no business operations and have classified as a “shell” company, as such term is defined in Rule 405 of the Securities Act and Rule 12b-2 of the Exchange Act.

On March 6, 2022, we signed a Share Exchange Agreement, as amended (the “Share Exchange Agreement”), with Manuka Ltd., a limited liability company organized under the laws of the State of Israel, having an office for the transaction of business at 3 Eliezer Vardinon St., Petach Tikva, 4959507, Israel (“Manuka”), pursuant to which Manuka became our wholly owned subsidiary. Since its inception, Manuka’s business activities primarily consisted of 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. All of Manuka’s products are marketed and sold solely on its website. Manuka's skincare products are manufactured in Israel. The transactions contemplated by the Share Exchange Agreement closed on June 30, 2022 (the “Closing”) and following the Closing, we adopted the business of Manuka.

Pursuant to the terms of the Share Exchange Agreement, we acquired all of the outstanding shares of Manuka (the “Manuka Shares”) from Manuka’s shareholders in exchange for an aggregate amount of 33,791,641 common stock (including 2,242,509 shares issued to services provider) of our common stock of and 110,000 shares of our Series D Preferred stock (convertible into 66,000,000 shares of our common stock) (collectively, the “Consideration Shares”), such that Manuka’s shareholders held, immediately following the closing, eighty-nine percent (89%) of our issued and outstanding share capital (including and assuming the full conversion of the Series D Preferred stock).

In addition, on June 30, 2022, we entered into various debt forgiveness agreements with various existing stockholders, including Tonak Ltd., for the forgiveness of an aggregate of $306,117 in outstanding debt in exchange for the issuance of 3,031,567 shares of Artemis’ common stock. On June 30, 2022, we entered into various warrant exchange agreements for the exchange of certain warrants to purchase shares of our common stock, originally issued in October 2017, in exchange for an aggregate of 2,342,802 shares of our common stock. Finally, on June 30, 2022, we entered into a debt forgiveness agreement and warrant exchange agreement with Cutter Mill Capital, pursuant to which we agreed to issue 894,169 shares of our common stock.

We are a beauty company that develops and distributes premium-quality skincare products, that are based on Manuka honey and bee venom. Since our inception, Manuka’s business activities primarily consisted of developing and manufacturing skincare products based on Manuka honey and bee venom from New Zealand, among other natural ingredients, marketed and sold solely on our website in Israel, www.bmanuka.co.il, and to be marketed and sold globally at www.bmanuka.com.

Our Common Stock is quoted on the OTC Pink Open Market under the symbol “ATMS.”

THREE MONTHS ENDED MARCH 31, 2023, COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2022

Revenues. During the three months ended March 31, 2023, we generated revenues of $173 thousand, compared to $16 thousand for the three months ended March 31, 2022. The reason for the increase in revenues for the three months ended March 31, 2023, was mainly due to the deployment of 5 new products and our marketing and sales efforts, as well as an increase in sales and repeat customers.

Sales and Marketing Expenses. During the three months ended March 31, 2023, we had sales and marketing expenses of $195 thousand compared to $109 thousand for the three months ended March 31, 2022. The increase in our sales and marketing expenses for the three months ended March 31, 2023, is mainly due to our efforts to increase our sales and generate new customers.

General and Administrative. Our general and administrative expenses for the three months ended March 31, 2023, which consisted primarily of professional services and salaries, and stock-based compensation amounted to $213 thousand, compared to $102 thousand for the three months ended March 31, 2022. The increase in the general and administrative expenses for the three months ended March 31, 2023, was mainly due to an increase in share-based compensation expenses.

Financial Expense. For the three months ended March 31, 2023, we had financial income, net of $15 thousand compared to financial expense of $4 thousand for the three months ended March 31, 2022. The reason for the decrease in financial expenses for the three months ended March 31, 2023, was due to changes in exchange rates and translation differences.

Net Loss. We incurred a net loss of $249 thousand for the three months ended March 31, 2023, as compared to a net loss of $203 thousand for the three months ended March 31, 2022, the reason for the increase in net loss is mainly due to the increase in our marketing and sales efforts to increase the number of customers as well as an increase in stock-based compensation expenses.

LIQUIDITY AND CAPITAL RESOURCES

We had $109 thousand in cash on March 31, 2023, versus $317 thousand in cash on March 31, 2022. Cash used by operations for the three months ended March 31, 2023, was $96 thousand as compared to $157 for the three months ended March 31, 2022. The reason for the decrease in cash is that we are operating our business at a loss, while we continue to market our products.

Net cash provided by financing activities was $150 thousand for the three months ended March 31, 2023, as compared to net cash provided by financing activities of $13 thousand for the three months ended March 31, 2022. The increase is mainly due to an increase in our credit line. In that regard, in January 2023, we increased our existing credit line by $138 thousand, from $83 thousand to $221 thousand.

Cash Flows

	Three Months ended March 31
(USD in thousands)	2 0 2 3			2 0 2 2
	$			$
Cash flows from operating activities:
Net loss		(249	)		(203	)
Net cash used in operating activities		(96	)		(157	)
Cash flows from investing activities:
Net cash used in investing activities		-			(10	)
Cash flows from financing activities:
Net cash provided by financing activities		150			13
Cash and cash equivalents at beginning of period		55			471

Cash and cash equivalents at end of period		109			317
Non-cash activities:
Intangible assets recognized with corresponding other liability		-			6
Reverse recapitalization effect on equity		-			-

Net cash used in operating activities

Net cash used in operating activities was $96 thousand for the three months ended March 31, 2023, a decrease of 38%, compared to $157 thousand used in operations for the same period in 2022. The cash used for operations decreased mainly due to the adjustment of the increase in share-based compensation.

Net cash used in investing activities

Net cash used for investing activities was $0 thousand for the three months ended March 31, 2023, a decrease of $10 thousand, compared to $10 thousand for the same period in 2022. Cash used for investing activities decreased mainly due to a decrease in fixed assets (purchase of property and equipment) during the three months ended March 31, 2023.

Net cash provided by financing activities

Net cash provided by financing activities was $150 thousand for the three months ended March 31, 2023, compared to $13 thousand net cash provided by financing activities during the same period in 2022. The increase in financing activities is mainly due to an increase in short-term bank credit.

Inflation and Price Changes

Our functional and reporting currency is the U.S. dollar. We incur some of our expenses in other currencies. As a result, we are exposed to the risk that the rate of inflation in countries in which we are active other than the United States will exceed the rate of devaluation of such countries’ currencies in relation to the dollar or that the timing of any such devaluation will lag behind inflation in such countries. To date, we have been affected by changes in the rate of inflation or the exchange rates of other countries’ currencies compared to the dollar, and we cannot assure you that we will not be adversely affected in the future.

For three months ended March 31, 2023, and three months ended March 31, 2022, the rate of inflation in Israel was 1.19% and 1.46%, respectively, the Dollar exchange rate in value Shekels increased in value by approximately 2.72% as of March 31, 2023 and 2.12%, respectively, as of March 31, 2022.

CURRENT OUTLOOK

We are in our early stages and have incurred substantial operating losses. There is uncertainty regarding the future of our operations. Moreover, we are thinly capitalized and have not yet generated cash from operations. Management expects us to continue to generate substantial operating losses and to continue to fund our operations primarily through additional raises of capital and through its credit line. Such conditions raise substantial doubts about our ability to continue as a going concern. Management’s plan includes raising funds from existing and potential investors. However, there is no assurance such funding will be available to us or that it will be obtained on terms favorable to us or will us with sufficient funds to meet our 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 we be unable to continue as a going concern.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company and therefore are not required to provide the information for this item of Form 10-Q.

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, 2023.

No change in our internal control over financial reporting occurred during the quarter ended March 31, 2023, that has materially affected, or is reasonably likely to materially affect, such internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 6. EXHIBITS

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

EXHIBIT NUMBER		DESCRIPTION

31.1		Certification of Principal Executive Officer pursuant to rule 13a-14(a) and 15d-14(a).*

31.2		Certification of Principal Financial Officer pursuant to rule 13a-14(a) and 15d-14(a).*

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

32.2		Certification of 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, 2023 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.*

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.

Date: May 18, 2023	By:	/s/ Shimon Citron
	Name:	Shimon Citron
	Title:	Chief Executive Officer (Principal Executive Officer)

Date: May 18, 2023	By:	/s/ David Dana
	Name:	David Dana
	Title:	Chief Financial Officer (Principal Financial Officer)