Viewbix Inc. - Quarter Report: 2017 March (Form 10-Q)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________

FORM 10-Q
___________________

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

For the quarterly period ended March 31, 2017

Commission file number: 0-15476

Emerald Medical Applications Corp.
(Exact Name Of Registrant As Specified In Its Charter)

Delaware	68-0080601
(State of Incorporation)	(I.R.S. Employer Identification No.)

7 Imber Street, Petach Tikva, Israel	4951141
(Address of Principal Executive Offices)	(ZIP Code)

Registrant's Telephone Number, Including Area Code: +(972) 3-744-4505

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act) or a smaller reporting company.

Large accelerated filer ¨

Accelerated filer ¨

Non-Accelerated filer ¨

Smaller reporting company x

On May 22, 2016, the Registrant had 21,278,291 shares of common stock outstanding.

TABLE OF CONTENTS

Item	Description

	PART I - FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS	3
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS	8
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	12
ITEM 4.	CONTROLS AND PROCEDURES	12

	PART II - OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	13
ITEM 1A.	RISK FACTORS	13
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	13
ITEM 3.	DEFAULT UPON SENIOR SECURITIES	13
ITEM 4.	MINE SAFETY DISCLOSURE	13
ITEM 5.	OTHER INFORMATION	13
ITEM 6.	EXHIBITS	13

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS Back to Table of Contents

Balance Sheets - March 31, 2017 (Unaudited) and December 31, 2016	3
Statements of Operations - Three Months Ended March 31, 2017 and 2016 (Unaudited)	4
Statements of Comprehensive Income (Loss) - Three Months Ended March 31, 2017 and 2016 (Unaudited)	5
Statements of Cash Flows - Three Months Ended March 31, 2017 and 2016 (Unaudited)	6
Notes to Unaudited Interim Financial Statements	7

Emerald Medical Applications Corp.
Balance Sheets
As of March 31, 2017 (Unaudited) and December 31, 2016
Back to Table of Contents

	March 31, 2017		December 31, 2016
Assets
Current assets:
Cash and cash equivalents	$	122,992	$	4,486
Other receivable		11,520		9,356
Total current assets		134,512		13,842

Fixed assets, net
Restricted cash		12,618		11,925
Fixed assets, net of accumulated depreciation of $25,967 at March 31, 2017 and $21,029 at December 31, 2016		29,169		31,803
Total assets	$	176,299	$	57,570

Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Accounts payable and accrued liabilities	$	225,094	$	198,795
Accounts payable - related party		82,645		125,962
Employee payable		69,935		161,341
Accrued interest payable		47,468		32,768
Short term note payable		31,470		29,743
Convertible notes, net of discount of $121,667 at March 31, 2017 and $305,417 at December 31, 2016		593,338		409,588
Total current liabilities		1,049,950		958,197
Total liabilities		1,049,950		958,197

Stockholders' equity (deficit)
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; none issued.		-		-
Common stock, $0.0001 par value; 490,000,000 shares authorized;
21,247,041 and 19,931,478 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively.		2,126		1,994
Accumulated other comprehensive income		(19,337)		(19,337)
Additional paid-in capital		14,411,688		13,826,957
Accumulated deficit		(15,268,128)		(14,710,241)
Total stockholders' deficit		(873,651)		(900,627)
Total liabilities and stockholders' equity (deficit)	$	176,299	$	57,570

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

Emerald Medical Applications Corp.
Statements of Operations
For the Three Months ended March 31, 2017 and 2016
(Unaudited)
Back to Table of Contents

		Three months		Three months
		ended		ended
		March 31, 2017		March 31, 2016

Revenues	$	-	$	-

Expenses:
Research and development		178,887		103,348
General and administrative expenses		158,165		1,799,520
Total operating expenses		337,052		1,902,868

Loss from operations		(337,052)		(1,902,868)

Finance income (expense):
Finance income (expense)		(220,835)		2,638
Total finance income (expense)		(220,835)		2,638

Net loss	$	(557,887)	$	(1,900,230)

Basic and diluted (net loss per share)	$	(0.03)	$	(0.11)
Weighted average shares outstanding - basic and diluted		20,443,063		17,351,957

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

Emerald Medical Applications Corp.
Statements of Comprehensive Income (Loss)
For the Three Months Ended March 31, 2017 and 2016
(Unaudited)
Back to Table of Contents

		Three months		Three months
		ended		ended
		March 31, 2017		March 31, 2016
Net loss	$	(557,887)	$	(1,900,230)
Change in unrealized foreign currency translation gain (loss)		-		(4,838)
Total comprehensive loss	$	(557,887)	$	(1,905,068)

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

Emerald Medical Applications Corp.
Statements of Cash Flows
For the Three Months Ended March 31, 2017 and 2016
(Unaudited)
Back to Table of Contents

		Three months		Three months
		ended		ended
		March 31, 2017		March 31, 2017
Operating Activities:

Net loss	$	(557,887)	$	(1,900,230)
Depreciation expense		3,488		2,509
Amortization of debt discount		183,750		1,438
Shares issued for services		-		1,445,653
Options issued for services		-		63,824
Employee option expenses		58,650		210,490
Adjustments to reconcile net (loss) to net cash (used in) operating activities:
Decrease in accounts payable and accrued expenses		(33,699)		(14,724)
Decrease in employees payable		(31,406)		-
Decrease in amounts due from related party		(41,590)		-
Increase in accrued interest		14,700		(7,759)
Increase (decrease) in other receivables		(2,166)		25,797
Net cash used in operating activities		(406,160)		(173,002)

Investing Activities:
Increase in restricted cash		(693)		-
Purchase of fixed assets		(854)		-
Net cash provided by investing activities		(1,547)		-

Financing Activities:
Proceeds from sale of common stock (net of issuance expenses)		526,213		-
Proceeds from issuance of convertible debt		-		75,000
Issuance of non-convertible note		-		82,250
Net cash provided by financing activities		526,213		157,250

Effect of exchange rates on cash and cash equivalents		-		(4,838)

Net increase (decrease) in cash		118,506		(20,570)
Cash and cash equivalents - beginning of period		4,486		115,449
Cash and cash equivalents - end of period	$	122,992	$	94,859

Non-cash transactions:
BCF due to convertible note payable	$	-	$	75,000
Cashless conversion of class B warrants	$	-	$	193

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

Emerald Medical Applications Corp
Notes to Unaudited Interim Financial Statements
March 31, 2017
Back to Table of Contents

Note 1. The Company and Significant Accounting Policies.

Organizational Background:

Emerald Medical Applications Corp (the "Registrant"), was incorporated in the State of Ohio in 1989 under a predecessor name, Zaxis International Inc. ("Zaxis"). On August 25, 1995, Zaxis merged with a subsidiary of The InFerGene Company, a Delaware corporation, which entity changed its name to Zaxis International Inc. and the Company was reincorporated in Delaware as Zaxis. On December 30, 2014, Zaxis entered into a non-binding Memorandum of Understanding with Emerald Medical Applications Ltd., which was then a private limited liability company incorporated under the laws of the State of Israel ("Emerald").

On March 16, 2015, Zaxis and Emerald Ltd executed the Share Exchange Agreement. Pursuant, which closed on July 14, 2015 and was accounted for as a reverse recapitalization. As a result, the historical financial statements of the Registrant were replaced with the historical financial statements of Emerald.

The Company and its subsidiary Emerald, are collectively referred to as the "Company".

Emerald Applications Ltd, a wholly-owned subsidiary of the Registrant effective July 14, 2015, was organized as a privately-owned company under the laws of the State of Israel on February 17, 2010. Emerald is a mobile digital health startup company engaged in the development, sale and service of imaging solutions utilizing its proprietary DermaCompare software that it developed for use in derma imaging and analytics ("DermaCompare"). Emerald believes that its proprietary DermaCompare software represents an advancement in skin cancer screening that should enable physicians to more readily identify and monitor changes in their patients' skin characteristics.

Emerald's DermaCompare solution allows dermatologists and other medical care professionals, using a set of 25 total body photography ("TBP"), to capture sets of skin lesion images with, among other devices, digital cameras, camera-equipped smart phones or tablets. These images are then transmitted online and are remotely analyzed by professionals using our DermaCompare software.

Our sales and marketing plan, which has already commenced, is to sell licenses for our DermaCompare imaging software to: NHSs, HMOs, health insurance companies, hospitals and medical clinics through distributers, health care channel partners or directly through independent salespersons and/or web purchase to dermatologists and other physicians (GPs) that we expect to purchase licenses based on the number of potential numbers of patients.

Basis of Presentation and significant Accounting Policies:

The accompanying consolidated financial statements include the accounts of the Company or in the first person notations "we," "us" and "our") and its wholly owned subsidiary prepared in accordance with accounting principles generally accepted in the United States of America and with the instructions to Form 10-Q. The financial statements presented herein have not been audited by an independent registered public accounting firm, but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the financial condition, results of operations and cash flows for the period. However, these results are not necessarily indicative of results for any other interim period or for the full fiscal year. The preparation of financial statements in conformity with generally accepted accounting principles requires us to make certain estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual amounts could differ from these estimates.

Certain information and footnote disclosures normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the Securities and Exchange Commission ("SEC"). The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

Note 2. Stockholders' Equity.

Recent Issuances of Common Stock

On July 7, 2016, the Company announced that it was awarded first prize of 500,000 Euros or approximately U$526,000, over 3,500 other competing tech companies in the Publicis Groupe 90 initiative at the inaugural edition of Viva Technology Paris. On February 24, 2017, the Registrant accepted a Reg S Subscription Agreement from Publicis 90 in consideration for the issuance to Publicis 90 of 1,315,563 restricted shares of the Registrant's common stock at a subscription price of $0.40 per share. The issuance was made in reliance upon the exemptions provided in Section 4(2) of the Securities Act of 1933, as amended (the "Act") and Regulation S promulgated by the SEC under the Act.

Warrants

The following table summarizes information of outstanding warrants as of March 31, 2017:

	Warrants	Warrant Term		Exercise Price	Exercisable
Investor - Class A Warrants (1)	5,918,719	2 years	$	0.80	5,918,719
Investor - Class B Warrants (2)	1,350,000	2 years	$	0.40	1,350,000
Investor - Class C Warrants (3)	5,072,492	(3)	$	(3)	5,536,246
Alimi Ahmed - Class E Warrants (4)	900,000	(4)	$	0.0001	900,000

(1) The Class A Warrants were issued in connection with a private placement in reliance upon Regulation S, pursuant to which the Registrant sold a total of 5,918,719units at a price of $0.40 per unit (the "Units"), each Unit comprised of one Share and one Class A Warrant exercisable at $0.80 per share with a term 24 months. While all of the Class A Warrants are exercisable within 60 days, in fact, none of these warrants will be exercised for the foreseeable future, based upon the exercise price of $0.80 per Share.
(2) The Class B Warrants were issued to consultants for bona fide services to the Company and are exercise, on a cashless basis at a price of $0.40 per Share for a period of two years.
(3) The Class C Unit Warrants were issued to consultants for bona fide services to the Company, and each Unit is exercisable at a price of $0.40 to purchase one Share of Common Stock and one Class A Warrant which, in turn, is exercisable to purchase one additional Share at a price of $0.80. The Class C Unit Warrants expire ninety (90) days after the effective date of this Registration Statement.
(4) The Class E Warrants were issued by the Registrant to Lior Wayn in connection with the Closing of the Share Exchange Agreement. The Class E Warrants are exercisable to purchase a total of 2,700,000 Shares, in three equal tranches of 900,000 Shares each (the "Tranches") at an exercise price of $0.0001 per Share, subject to and within 45 days of the Registrant achieving the milestones defined in the table below (the "Milestones").

Employee Stock Options

A summary of the Company's activity related to options to employees, executives and directors and related information is as follows:

	For the three month period ended March 31, 2017
	Number of Options	Weighted Average Exercise Price ($)	Aggregate Intrinsic Value ($)
Outstanding at December 31, 2016	4,193,397	0.11	-
Granted	-	-	-
Exercised	-	-	-
Cancelled	-	-	-
Outstanding at March 31, 2017	4,193,397	0.11	335,471
Vested and expected-to-vest at end of period	3,454,412	0.11	276,352

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 shares on March 31, 2017 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, 2017 have been separated into exercise prices, as follows:

($)	Stock options outstanding as of March 31, 2017	Weighted average remaining contractual life - years as of March 31, 2017	Stock options exercisable as of March 31, 2017
0.4	1,208,600	9.00	1,208,600
0.2	1,870,000	8.75	1,870,000
(*)	1,114,797	9.00	1,114,797
	4,193,397	9.00	4,193,397

(*) Less than $0.01

Compensation expense recorded by the Company in respect of its stock-based employee compensation awards in accordance with ASC 718-10 for the three month periods ended March 31, 2017 and 2016, were $58,650 and $210,490, respectively.

Note 3. Related Party Transactions.

There were no transactions with related parties during the three month period ended March 31, 2017.

During the three months ended Mach 31, 2016, the Company issued 1,195,000 shares to three acting directors, for services valued at a total value of $1,194,403, arrived at using the stock price on date of grant of $1.00 per Nasdaq.com.

Note 4. Commitments and Contingencies.

The Company received grants to fund research and development projects from the State of Israel according to guidelines and procedures of the Office of the Chief Scientist of the Ministry of Industry and Trade. According to the agreement, the Company is obligated to pay royalties on the sale of products developed with the participation of the Chief Scientist. The royalty rate is 3.5% of sales and the total royalties will not exceed the amount of the grants received. As of March 31, 2017 and December 31, 2016,total grants received amounted approximately $222 thousands.

The obligation to pay royalties is contingent upon the successful outcome of the Company's research and development projects and the attainment of sales. The Company has no obligation to pay royalties, if sales are not generated, and if the research and development project fails.

Note 5. Convertible Notes.

Convertible notes in the amount of $155,000 fell due during March 2017 and the remaining balance falls due during June 2017. The Company is currently in discussions to extend these notes and believe that these discussions will be successful.

Note 6. Income Taxes.

The Company is subject to income taxes under the Israeli and U.S. tax laws:

Corporate tax rates

The Company is subject to Israeli corporate tax rate of 25% in 2016, 24% in 2017 and 23% from 2018. The Company is subject to a blended U.S. tax rate (federal as well as state corporate tax) of 35%.

As of December 31, 2016, the Company generated net operating losses in Israel of approximately $ 2,775,621, which may be carried forward and offset against taxable income in the future for an indefinite period.

As of December 31, 2016, the Company generated net operating losses in the U.S. of approximately $ 14,937,342. Net operating losses in the United States are available through 2035. 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 and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization.

The Company is still in its development stage and has not yet generated revenues, therefore, 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.

		March 31, 2017		March 31, 2016
Net loss carry-forward	$	17,712,963	$	17,155,076
Total deferred tax assets		5,917,963		5,573,945
Valuation allowance		(5,917,963)		(5,730,945)
Net deferred tax asset	$	-	$	-

Note 7. Subsequent Events.

There were no subsequent events following the period ended March 31,2017 and throughout the date of the filing of Form 10-Q.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS Back to Table of Contents

Overview

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which refer to future events. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

Plan of Operations

We are a digital health startup company engaged in the development, sale and service of imaging solutions utilizing our proprietary DermaCompare software that we developed for use in derma imaging and analytics (our "DermaCompare" or "Product"). In our development of the DermaCompare technology, we utilized the knowledge learned from advanced military image processing and data analytics to improve the analysis of medical images for the benefit of patients and the medical community. We believe that our proprietary DermaCompare software represents an advancement in skin cancer screening that should enable physicians to more readily identify and monitor changes in their patients’ skin characteristics.

DermaCompare is Emerald’s first application of its technology, which we believe represents an advance in the early detection of skin cancer. DermaCompare is based on automated image analytics software using advanced algorithms for alignment, anchoring, identifying and detecting changes in the shapes, colors and sizes of skin lesions, which could potentially become Melanoma. We apply our DermaCompare technology in image capture, correction and intelligent data extraction in the market for derma imaging products.

Our DermaCompare solution allows dermatologists and other medical care professionals, using a set of 25 total body photography ("TBP"), to capture sets of skin lesion images with, among other devices, digital cameras, camera-equipped smart phones or tablets. These images are then transmitted online and are remotely analyzed by professionals using our DermaCompare software.

Our DermaCompare imaging software has 2 main modules:

	●	A SaaS cloud-based Dr. Module that can be launched on any desktop computer connected to the Internet; or
	●	Mobile APP for mass population uses can be installed on smart phones or tablets with iOS or Android operating systems.

Our future plans also contemplate the use of wearable computing and imaging devices such as Google glasses or other comparable devices.

In furtherance of our business plan, which has resulted in us becoming an operating company, we have entered into a series of agreements with unaffiliated third parties for the distribution of its DermaCompare Technology, as follows:

1. On August 12, 2013, Emerald entered into an exclusive distribution with Derma Italy Sri, organized under the laws of the Italy ("Derma Italy"), pursuant to which Derma Italy was granted exclusive distribution rights in Italy;
2. On December 1, 2013, Emerald entered into a distribution agreement with S. Bokhorst - Creatiekracht, organized under the laws of the Netherlands, pursuant to which S. Bokhorst was granted exclusive distribution in the Netherlands;
3. On February 6, 2014, Emerald entered into a distribution agreement with Medical Edge Pty Ltd, organized under the laws of Australia ("Medical Edge"), pursuant to which Medical Edge was granted exclusive distribution rights in the markets of Australia, New Zealand and Oceania;
4. On January 14, 2015, Emerald entered into a Project Agreement with Realize S.A. and Ubitech, entities engaged in IT related to medical technology in Greece, and MEDISP and MPUoP, academic and research institutes in Greece (collectively, the "Greek Partners"). Emerald and the Greek Partners anticipate imminent grants from the Office of Chief Scientist of the State of Israel and the General Secretariat for Research and Technology of Greece, respectively, the proceeds of which will be used for development of enhanced smartphone applications for diagnosis of early stage Melanoma.

During the three months ended March 31, 2017 and the year ended December 31, 2016, we raised $1,516,187 through the issuance of equity and debt and we may be expected to require up to an additional $1.5 million in capital during the next 12 months to fully implement our business plan and fund our operations.

Results of Operations during the three months ended March 31, 2017 as compared to the three months ended March 31, 2016

We have not generated any revenues during the three months ended March 31, 2017 and 2016. During the three month period ended March 31, 2017 and 2016 we incurred $557,887 and $1,900,230, respectively, in net losses.

Our research and development expenses increased to $178,887 for the three months ended March 31, 2017 as compared to $103,348 during the same period in the prior year. The increase was due to continued research and development expenses of Emerald Medical Applications Ltd.

Our general and administrative expenses decreased to $158,165 for the three months ended March 31, 2016 as compared to $1,799,520 during the same period in the prior year. The significant decrease was due to increased expenses relating to the merger between the Company and Emerald Medical Applications Ltd. as well as share based compensation that were incurred during the three months ended March 31, 2016.

Interest expense increased to $220,835 for the three months ended March 31, 2017 as compared income of to $2,638 during the same period in the prior year due to increased loans and convertible notes.

Depreciation expense increased to $3,488 for the three months ended March 31, 2017 as compared to $2,509 during the same period in the prior year due to additional fixed assets purchased during the year.

Liquidity and Capital Resources

Our balance sheet as of March 31, 2017 reflects current assets of $134,512 consisting of cash of $122,992 and other receivables of $11,520. As of December 31, 2016, we had current assets of $13,842 consisting of cash of $4,486, and other receivables of $9,356. We had fixed assets, net of accumulated depreciation of $29,169, as of March 31, 2017 and $31,803 as of December 31, 2016.

As of March 31, 2017, we had total current liabilities of $1,049,950 consisting of $225,094 in accounts payable and accrued liabilities, $82,645 in accounts payable to related parties, $69,935employee payable, $47,468 accrued interest payable, $593,338 in convertible notes payable and $31,470 in short term notes payable.

We had negative working capital of $873,651 as of March 31, 2017 compared to negative working capital $900,627 at December 31, 2016. Our total liabilities as of March 31, 2017 were $1,049,950 compared to $958,197 at December 31, 2016.

During the period ended March 31, 2017, we had negative cash flow from operations of $406,160, which was the result of a net loss of $557,887, increase in accrued interest of $14,700, $3,488 depreciation expense, $58,650 shares issued for services, $183,750 for amortization of debt discount, offset by $2,166 decrease in other receivables, $33,699 decrease in accounts payable and accrued liabilities, $31,406 decrease in employee payable, and $41,590 decrease in amounts due from related party.

During the three months ended March 31, 2017, we had negative cash flow from investing activities of $1,547, which was the result of an increase in restricted cash of $693 and the acquisition of fixed assets valued in the amount of $854.

During the period ended March 31, 2017, we had positive cash flow from financing activities of $526,213 which was the result of $526,213 proceeds from issuance of equity.

There are no limitations in the Company's certificate of incorporation on the Company's ability to borrow funds or raise funds through the issuance of restricted common stock to effect a business combination. The Company's limited resources and lack of having cash-generating business operations may make it difficult to borrow funds or raise capital. The Company's limitations to borrow funds or raise funds through the issuance of restricted capital stock required to effect or facilitate a business combination may have a material adverse effect on the Company's financial condition and future prospects, including the ability to complete a business combination. To the extent that debt financing ultimately proves to be available, any borrowing will subject us to various risks traditionally associated with indebtedness, including the risks of interest rate fluctuations and insufficiency of cash flow to pay principal and interest, including debt of an acquired business.

The Company has only limited capital. Additional financing is necessary for the Company to continue as a going concern. Our independent auditors have unqualified audit opinion for the period ended March 31, 2017 with an explanatory paragraph on going concern.

In view of these matters, realization of a major portion of the assets in the accompanying balance sheet is dependent upon continued operations of the Company. Management believes that actions presently being taken to obtain additional equity financing will provide the opportunity to continue as a going concern.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Back to Table of Contents

We have not entered into, and do not expect to enter into, financial instruments for trading or hedging purposes.

ITEM 4. CONTROLS AND PROCEDURES Back to Table of Contents

Evaluation of Disclosure Controls and Procedures

As of March 31, 2017, the Company's chief executive officer and chief financial officer conducted an evaluation regarding the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act. Based upon the evaluation of these controls and procedures required by Rules 13a-15 or 15d-15, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were ineffective as of the end of March 31, 2017 under the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013).

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting or in other factors identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the quarter ended March 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS Back to Table of Contents

None.

ITEM 1A. RISK FACTORS Back to Table of Contents

See risk factors discussed in Part I, "Item 1. Description of Business, subheading Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2016.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Back to Table of Contents

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES Back to Table of Contents

None.

ITEM 4. MINE SAFETY DISCLOSURE Back to Table of Contents

None.

ITEM 5. OTHER INFORMATION Back to Table of Contents

None.

ITEM 6. EXHIBITS Back to Table of Contents

(a) The following documents are filed as exhibits to this report on Form 10-Q or incorporated by reference herein.

Exhibit No.	Description
31.1	Certification of CEO pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of CFO pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of CEO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned.

EMERALD MEDICAL APPLICATIONS CORP.

By: /s/ Alimi Ahmed
Alimi Ahmed
Chief Executive Officer
(Principal Executive Officer)
Date: May 22, 2017

By: /s/ Gadi Levin
Gadi Levin
Chief Financial Officer
(Principal Financial and Principal Accounting Officer)
Date: May 22, 2017