000-24431
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84-1417774
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(Commission File Number)
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(IRS Employer Identification No.)
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18 East 16th Street, Suite 307, New York,
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10003
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(Address of Principal Executive Offices)
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(Zip Code)
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Written communications pursuant to Rule 425 under the Section Act (17 CFR 230.425).
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)).
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, par value $0.01 |
ATMS
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Emerging growth company ☐
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Face Serum with Manuka Honey and Bee Venom.
This product supports blurring and reduces skin wrinkles. It regenerates skin cells and gives a young and vital appearance to the skin. The bee venom encourages natural skin revival, boosts production of Collagen, enhances skin elasticity
and has healing properties for damages skin cells.
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Face Serum with Enhanced Vitamin C. The
single product without bee venom but with enhanced quantity of Vitamin C. Provides a hearty dose of moisture for a firm skin appearance and reduction of wrinkles.
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Day Cream. Nourishes the skin, protects,
and guards its flexibility. Bee venom contributes to the toning of the skin for a smooth, radiant and healthy appearance, with the addition of hyaluronic acid for restoring skin vitality.
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Night Nourishing Cream with Manuka Honey and Nee
Venom. This product contains a significant number of amino acids, vitamins, and minerals. It also includes bee venom that contributes to the toning of the skin for a smooth, radiant and healthy appearance, with the addition of
hyaluronic acid for restoring skin vitality.
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Eye Cream with Manuka Honey and Bee Venom.
This product treats and softens the sensitive area around the eyes. It has properties for nourishing the skin to protect and guard its flexibility. Bee venom contributes to the toning of the skin for a smooth, radiant and healthy
appearance, with the addition of hyaluronic acid for restoring skin vitality.
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Face Cleanser Gel. This is a light and
refreshing face cleanser, with Mānuka honey and bee venom.
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Pure Mānuka honey for direct consumer consumption.
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Skincare products based on Mānuka honey and bee venom; and,
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Gummy supplements (nutraceuticals) for skin, hair, and nails.
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1. |
Drive growth across skincare and health enthusiast
consumer communities. Manuka intends to target skincare and wellness groups across multiple demographics and shopping behaviors. Manuka believes it can drive customer acquisition across both skincare and wellness enthusiasts and
up through advertising on social medias platforms, such as Facebook and Instagram as well as on, Youtube, TikTok and Google, thus driving Manuka’s leadership as a diversity-forward brand.
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2. |
Deliver world class skincare and gummies products
based on Manuka honey. Mānuka honey and bee venom that is included in Manuka’s skincare products, are the focus of Manuka’s value proposition and
represents a core differentiator within the market. Manuka engages skincare and wellness clientele to discover the unique ingredients and health benefits of its leading component, Mānuka honey, with a combination focused on innovation and leading trends, differentiation, and exclusivity. Manuka believes that its selection of merchandise and affordable pricing, offer a unique shopping
experience for its customers.
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3. |
Digital engagement. Manuka’s strategic
vision is to build a leading digital experience that engages with its customers through its differentiated products, personalization, convenience, and interactive experiences.
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4. |
Deliver operational excellence and drive
efficiencies. Its strategic vision is to manage end-to-end speed, quality, and efficiency to deliver exceptional customer experiences, while leveraging efficiencies of scale to drive profit improvement.
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5. |
Invest in talent that drives a winning culture. Leadership,
culture, and engagement of Manuka’s executives are key drivers of its performance. Manuka has an experienced management team that brings a creative and experienced online sales approach and a disciplined operating philosophy to Manuka’s
business.
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risks that Manuka may not have sufficient capital to achieve its growth strategy;
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risks that Manuka may not develop its product and service offerings in a manner that enables us to be profitable and meet its customers’ requirements;
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risks that its growth strategy may not be successful; and
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risks that fluctuations in its operating results will be significant relative to its revenues.
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continue its research and preclinical and clinical development of its products;
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advance its programs into more expensive clinical studies;
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initiate additional preclinical, clinical, or other studies for its product candidates;
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change or add additional manufacturers or suppliers;
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seek regulatory and marketing approvals for our product that successfully complete regulatory approvals;
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establish a sales, marketing, and distribution infrastructure to commercialize any products for which Manuka may obtain
marketing approval;
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make milestone or other payments under any license agreements;
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seek to maintain, protect, and expand its intellectual property portfolio;
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seek to attract and retain skilled personnel;
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create additional infrastructure to support its operations as a public company and its product development and planned future
commercialization efforts; and
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experience any delays or encounter issues with any of the above, including but not limited to failed studies, complex results,
safety issues, or other regulatory challenges that require longer follow-up of existing studies, additional major studies, or additional supportive studies in order to pursue marketing approval.
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The increased concentration of the ownership of our shares by a limited number of affiliated stockholders following the Merger
may limit interest in our securities;
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variations in quarterly operating results from the expectations of securities analysts or investors;
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revisions in securities analysts’ estimates or reductions in security analysts’ coverage;
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announcements of new products or services by us or our competitors;
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reductions in the market share of our products;
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announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital
commitments;
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general technological, market or economic trends;
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investor perception of our industry or prospects;
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insider selling or buying;
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investors entering into short sale contracts;
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regulatory developments affecting our industry; and
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additions or departures of key personnel.
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changes in our industry;
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our ability to obtain working capital financing;
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additions or departures of key personnel;
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limited “public float” in the hands of a small number of persons whose sales or lack of sales could result in positive or
negative pricing pressure on the market price for our common stock;
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sales of our common stock;
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our ability to execute our business plan;
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operating results that fall below expectations;
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loss of any strategic relationship;
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regulatory developments;
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economic and other external factors; and
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period-to-period fluctuations in our financial results.
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Name and Address
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Beneficial
Ownership |
Percent of
Class(1) |
||||||
Stockholders of 5% or more
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||||||||
Chomsky Group(2)
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16,819,232
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15.00
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%
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|||||
Officers and Directors
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||||||||
Shimon Citron(3)
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80,729,871
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72.00
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%
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Name
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Age
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Position
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Shimon Citron
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67
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Chief Executive Officer, Director
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Name and Principal Position
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Year
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Salary
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Bonus
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Equity
Awards |
Option
Awards |
All Other
Compensation |
Total
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|||||||||||||||||||||
Shimon Citron, CEO
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2020-2021
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--
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--
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--
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--
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$
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48,808
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(1)
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$
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48,808
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||||||||||||||||||
2022
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$
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7,214
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--
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--
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--
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$
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4,328
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$
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11,542
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(2)
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•
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prior to the time of the transaction, the board of directors of the corporation approved either the business combination or
the transaction which resulted in the stockholder becoming an interested stockholder;
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•
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upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the stockholder owned
at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding (1) shares owned by persons who are directors and also officers
and (2) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; and
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•
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on or subsequent to the time of the transaction, the business combination is approved by the board and authorized at an annual
or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.
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For the Three Months Ended
March 31, |
|||||||
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2022
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2021
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||||||
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(in thousands)
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|||||||
Sales and marketing expenses, net
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$
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109
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$
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10
|
||||
General and administrative expenses
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102
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21
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||||||
Operating loss
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(198
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)
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(31
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)
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Financial expenses
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(5
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)
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(2
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)
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Net loss
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$
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(203
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)
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$
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(33
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)
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Loss attributable to holders of Ordinary Shares
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(1.68
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)
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(0.33
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)
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For the Year Ended
December 31, |
|||||||
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2021
|
2020
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||||||
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(in thousands)
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|||||||
Sales and marketing expenses, net
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$
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67
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$
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38
|
||||
General and administrative expenses
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230
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23
|
||||||
Operating loss
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(290
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)
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(61
|
)
|
||||
Financial expenses
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(39
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)
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(7
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)
|
||||
Net loss
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$
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(330
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)
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$
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(68
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)
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||
Loss attributable to holders of Ordinary Shares
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(3.28
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)
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(0.68
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)
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For the Year Ended
December 31, |
For the Three Months Ended
March 31, |
||||||||||||||
(in thousands)
|
2021
|
2020
|
2022
|
2021
|
||||||||||||
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||||||||||||||||
Net cash used in operating activities
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$
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(280
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)
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$
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(58
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)
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$
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(157
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)
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$
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(49
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)
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Net cash used in investing activities
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$
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(27
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)
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$
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(1
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)
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$
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(10
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)
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$
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-
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|||||
Net cash provided by financing activities
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775
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62
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13
|
46
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||||||||||||
Net increase (decrease) in cash and cash equivalents
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468
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3
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(154
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)
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(3
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)
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• |
hiring additional accounting staff with adequate US GAAP and SEC reporting experience to address complex US GAAP technical accounting issues and to prepare and review
the financial statements and related disclosures in accordance with US GAAP and SEC financial reporting requirements;
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• |
formulating a formal and regular training program for accounting personnel to equip them with sufficient knowledge and practical experience of preparing financial
statements under US GAAP and SEC reporting requirements, including mandatory requirements for accounting staff to attend US GAAP course programs offered by third-party organization or accounting firm on a periodically basis; and
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establishing clear roles and responsibilities for accounting and financial reporting staff to develop and implement formal comprehensive financial period-end closing
policies and procedures to ensure all transactions are properly recorded and disclosed.
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(a)
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Financial Statements of Business Acquired.
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(b)
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Pro Forma Financials
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(d)
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Exhibits
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ARTEMIS THERAPEUTICS, INC.
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Dated: July 5, 2022
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By:
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/s/ Shimon Citron | |||
Name: Shimon Citron
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Title: Chief Executive Officer
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Name: Chanan Morris
Title: Chief Financial Officer
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ARTEMIS THERAPEUTICS, INC.
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By:
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Name: | |||
Title: | |||
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Shareholders
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SHIMON CITRON
(please check one box)
___ U.S. Accredited
Investor
X Non U.S. Person as
defined under Regulation S
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SIGAL CITRON
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(please check one box)
___ U.S. Accredited
Investor
X Non U.S. Person as
defined under Regulation S
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ADLER CHOMSKI MARKETING COMMUNICATION LTD
(please check one box)
___ U.S. Accredited
Investor
X Non U.S. Person as
defined under Regulation S
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EYAL CHOMSKY HOLDINGS LTD
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(please check one box)
___ U.S. Accredited
Investor
X Non U.S. Person as
defined under Regulation S
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HARMONY (H.A.) INVESTMENTS LTD
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(please check one box)
___ U.S. Accredited
Investor
X Non U.S. Person as
defined under Regulation S
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Exhibit 10.3
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO MANUKA LTD. IF PUBLICLY DISCLOSED. OMISSIONS ARE DENOTED IN BRACKETS WITH ASTERISKS THROUGHOUT THIS EXHIBIT.
AGREEMENT
This Agreement (the “Agreement”) is made as of July 20, 2021 (the “Effective Date”) by and between Waitemata Manuka Honey Direct Ltd (“WMHD”), and Waitemata Honey Co Ltd (“WHC”), organized under the laws of New Zealand, with offices at 8 Te Kea Place, Rosedale Industrial Centre, Auckland, NZ (jointly referred to as the “Companies”) and MANUKA LTD, a limited company organized and existing under the laws of the State of Israel, with offices at 19 Haim Bar-Lev St., Ramat-Gan, Israel (the “Reseller”).
WHEREAS the Companies manufacture and sell products from manuka honey (the “Products”); and WHEREAS it has been agreed between the parties that the Reseller shall purchase the Products from WMHD and resell them to its customers, as set forth herein; NOW THEREFORE, in consideration of the mutual promises and undertakings contained herein, the parties hereby agree, covenant, declare and warrant as follows:
1. | Preamble, Headings and Appendices. The preamble and appendices to this Agreement shall form an integral part thereof. The headings in this Agreement are inserted for convenience only and shall not be used in any manner in the interpretation of this Agreement. |
2. | Framework Agreement. This Agreement sets forth the terms and conditions under which the Reseller will, from time to time, purchase the Products from WMHD for the purpose of reselling them to its customers (the “Customers”). Unless otherwise agreed to in writing, the terms and conditions of this Agreement shall exclusively govern the transactions resulting from any order for the Products issued by the Reseller to WMHD and accordingly, except for the quantities of the Products ordered and reasonable invoicing instructions, the terms of a purchase order used by either party shall not derogate, in any manner, from the foregoing. The Reseller shall have the right to purchase the Products from the Companies as private label products, and to sell the Products under its own branding while the Products are bearing the labels containing the Reseller’s name and logo, along with the Companies’ name and address under ‘Manufactured by...” as well as the UMFHA license number. For further clarity, it’s agreed between the parties that the label shall comply with any and all requirements as laid out by Israel MOH and New Zealand’s Ministry of Primary Industries (MPI). A sample of the label is attached hereto as Appendix B.* |
3. | Manufacturing the Products |
3.1 | The Companies agree to comply with all laws, regulations and standards, applicable to the manufacture of the Products, and will obtain and maintain all applicable permits and licenses required in connection with its obligations under this Agreement. Without derogating from the generality of the foregoing, the Companies undertake to manufacture the Products in accordance with the terms of the Certification (as defined below). |
3.2 | Since the Israeli Ministry of Health requires that any honey products imported to Israel shall be manufactured by manufacturers holding ISO (International Organization for Standardization) or BRC (British Retail Consortium) certificate (the “Certification”), it has been agreed between the parties that the Companies shall take the required actions needed in order to obtain such Certification, that the Reseller shall bear the costs of such Certification up to 10,000 New Zealand Dollars and that such costs that shall be paid by the Reseller shall be offset from the payments due to the WMHD for the Products to be purchased by the Reseller from time to time as set out below. The Companies shall choose whether to obtain ISO Certification or BRC Certification. |
3.3 | The Companies hereby confirm that Reseller has advanced the Companies a down payment in the amount of 2,000 New Zealand Dollars on account of the Certification’s costs, and that the Reseller shall pay the Companies additional payments (up to an aggregate amount of 10,000 New Zealand Dollars) upon the presentation of receipts evidencing the payments made by the Companies in order to obtain said Certification. The Companies undertake to start the Certification process promptly following the execution of this Agreement and to make its best efforts in order to complete such process as soon as practicably possible. |
* The label is still a work in progress
3.4 | In the event that the Companies shall decide to withdraw from the Certification process and/or to stop it before its completion, they shall return the Reseller, within 7 working-days as of the Reseller’s request, all the payments paid to the Companies by the Reseller prior to such withdrawal/stop. |
3.5 | The parties further agree that, with respect to each shipment of the Products to be ordered by the Reseller from the WHMD from time to time, an amount equal to 10% of the ex-works order value, as evidenced in a duly presented invoice, shall be deducted from the payments due to WMHD by the Reseller for such shipment, until the aggregate amount of such deductions shall equal the total aggregate payments made by the Reseller to the Companies in order to finance the Certification. |
4. | Purchase Orders. The Reseller shall order the Products from the WMHD, from time to time, by issuing purchase orders (the “Purchase Order(s)”), which Purchase Orders are to be placed by e-mail. Each Purchase Order shall include, as appropriate: (i) description and quantity of each Product ordered; (ii) requested shipment date; (iii) requested shipment address; (iv) shipping and insurance instructions; and/or (v) any additional required information as applicable. Each Purchase Order shall be deemed approved by WMHD within 10 working-days from the date it has been sent to the WMHD by the Reseller, unless WMHD has notified the Reseller, in writing, that it disagrees with the content of such Purchase Order until the lapse of such 10-days period. WMHD may not disagree to any term set forth in the Purchase Order that is consistent with the terms of this Agreement. |
5. | Packing and Labeling the Products. The Companies undertake that all the Products shall be packed in a manner which is suitable for protection of said Products during their shipment and storage and in accordance with the reasonable shipping and storage directions of the Reseller. Damage to any Products resulting from improper packing will be charged to the Company. All Products shall be marked and labeled in accordance with the instructions of the Reseller, and the Reseller shall provide the Companies with the graphics and design of the labels to be placed on the Products. Without derogating from the generality of the foregoing, WHC shall stamp on each Product the relevant production data that shall enable tracing of such Product’s manufacture, including without derogating from the generality of the foregoing, manufacturer name, manufacturing location, manufacturing date and batch number. |
6. | Shipment Documents. The Companies shall attach to each shipment of the Products, the documents that shall be required by the relevant International Courier and the tax authorities, such as invoice, packing list, bill of lading, the applicable quality standard documents etc. |
7. | Delivery. The Products ordered hereunder shall be manufactured by WHC and ready for shipment not later than the delivery dates set forth in Appendix A hereto (the “Delivery Schedule”). The Companies shall use all reasonable efforts to deliver the Products to the Reseller in accordance with the shipment terms specified in each Purchase Order, or as otherwise agreed in writing, not later than the dates set out in the Delivery Schedule. |
8. | Late Delivery. It is agreed that time is important in the performance of this Agreement by the Companies and the Companies shall do their best to adhere to the Delivery Schedule. However, it is noted that shipping arrangements between New Zealand and Israel can be uncertain and agreed delivery dates are to be read as statements of best intention. Additionally, vagaries of weather and general growing conditions and seasonal variations may interfere with the best endeavors to meet production and delivery dates. There will be no penalties if best endeavors have been exercised to mitigate these matters. It is acknowledged that goodwill and transparent communication is important in handling these matters if they arise. |
9. | Products Inspection. The Reseller shall conduct a visual and physical inspection of the Products after it shall receive them and shall provide the Companies with written notice of any defects or damage to the delivered Products, including any claimed non-conformance with the relevant Purchase Order. For the avoidance of doubt, the Reseller shall have no obligation to conduct analysis of the Products. In the event that any Product delivered to the Reseller is damaged and/or defected and/or non-compliant with this Agreement and/or the applicable Purchase Order, as more fully described in clause 10 below, WMHD shall fully refund the Reseller, within 10 working-days as of the Companies receipt of the Reseller’s presentation of proof of damage with any payments paid by the Reseller for such damaged or non-compliant Product. For the sake of clarity, the terms ‘Product’ or ‘Products’ in this section 9 do not refer to a whole shipment, but to damaged items within a shipment. |
10. | Products’ Warranty. The Companies warrant that the Products that shall be purchased by the Reseller shall be of excellent quality, shall be free from any third-party rights and/or claims, shall have a shelf life of at least 4 (four) years as of the delivery thereof to the Reseller, and shall be free from defects or damages. A Product shall be deemed defective and/or damaged in the following events: (a) broken jar, (b) broken or open jar’s seal, (c) defective label, (d) spoiled Product. In that event the Reseller shall notify the Companies of any defective/damaged Product, the Companies shall fully refund the Reseller with the payment made by the Reseller for such Product. Photographic evidence shall be sent to the Companies before any refunds are actioned as Honey cannot be sent back to NZ. |
11. | Consideration. In consideration for the purchased Products, the Reseller shall pay WMHD the payments set forth in Appendix A hereto (the “Consideration”). Any change to the Consideration shall require the prior written consent of both parties, and in event shall not apply to any Purchase Order already executed by the parties prior to such change notice. The Reseller shall pay the Consideration to WMHD pursuant to the payment terms set forth in Appendix A. The prices in Appendix A are ex-works prices. In addition to those costs there will be shipping costs that may include freight, duties, taxes and other costs associated with the export and importation of Product into Israel. It is agreed that such extra costs are borne by the Reseller. For the sake of clarity, those costs incurred in New Zealand will be added to the invoices issued by WMHD, and those costs incurred in Israel will be borne by the Reseller. |
12. | Taxes and Duties. Each party shall bear its own taxes. |
13. | Term. The term of this Agreement shall commence as of the Effective Date and shall terminate upon the lapse of sixty (60) months thereafter (the “Term”). Upon the expiration of the Term, the Agreement shall renew automatically for successive twenty-four (24) months’ periods, unless either party has provided the other party with a written notice of its election not to renew the Agreement at least thirty (30) days prior to the end of the Term or any renewal thereof. |
14. | Miscellaneous |
14.1 | Entire Agreement. This Agreement represents the entire agreement between the parties on the subject matter hereof and supersedes all prior discussions, agreements and understandings of every kind and nature between them. No modification of this Agreement will be effective unless in writing, signed by both parties. |
14.2 | Force Majeure. Neither party shall be liable for any failure or delay in performing its obligations under this Agreement, that is caused by flood, fire, earthquakes, epidemic, strike, war, governmental action or other cause reasonably beyond the control of the party, provided that such party takes diligent action to perform its obligations as promptly as possible after the condition has abated. |
14.3 | Governing Law/Jurisdiction. This Agreement shall be exclusively governed by, interpreted and construed in accordance with the laws of New Zealand, the competent court in Auckland. New Zealand shall have sole and exclusive jurisdiction regarding any dispute or claim arising hereunder. |
14.4 | Severability. Any provision hereof which is found to be invalid, illegal or unenforceable under any applicable laws, shall be amended to the extent required to render it valid, legal and enforceable under such laws (or deleted if no such amendment is feasible), and such amendment or deletion shall not affect the enforceability of the other provisions hereof. |
14.5 | Waiver. The parties agree that failure of either party at any time to require performance by the other party of any of the provisions herein shall not operate as a waiver of the right of that party to request strict performance of the same or like provisions, or any other provisions hereof, at a later time. |
14.6 | Notice. Notice as required hereunder shall be delivered by hand, by courier service, by e-mail, or by registered or certified mail, return receipt requested, postage prepaid. A notice shall be addressed to the other party at the address listed above, or to another address, which may subsequently be specified in writing by a party. A notice shall be effective one (1) working day after being delivered by hand, courier service or by e-mail, and fifteen (15) working days after being sent by registered mail. |
14.7 | Assignment. Neither party may assign any right or obligation hereunder without the prior written consent of the other party. |
14.8 | Counterparts. This Agreement may be executed in any number of counterparts, all of which together will constitute one and the same Agreement. |
14.9 | Binding Signature. Each of the undersigned hereby represents and warrants that it is authorized to sign this Agreement on behalf of the party for which it is signing, and that said party authorized and approved this Agreement. |
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above:
Waitemata Manuka Honey Direct Ltd | MANUKA LTD | |||
By: | ![]() |
By: | ![]() |
Name: | John Martin | Name: | MANUKA LTD. | ||
Title: | Director | Title: | VAT 516179181 |
Waitemata Honey Co Ltd | ![]() |
||
By: | ![]() |
||
Name: | Neil Stuckey | ||
Title: | Director | ||
Appendix A
[**]
Between:
|
Manuka Ltd.
Private Company No. 516179181
Of 3 Eliezer Vardinon St.
Petach Tikva, Israel
(Hereinafter: “The Company”)
|
And between:
|
Chic Cosmetics Industries 1989 Ltd.
Private Company No. 511383648
Of 26-28 Hayarkon St. Yavne, Israel
(Hereinafter: “The Manufacturer”)
|
Whereas |
the Company is engaged in the marketing and the sale of various products, including cosmetic products which contain ingredients of the Manuka Plant, and the
Manufacturer is inter alia engaged in the production of various cosmetic products and in the development of formulas of various cosmetic products;
|
And whereas |
the parties agree that the Manufacturer will provide services to the Company which will include the development of specific formulas of products according to
characteristics that will be defined by the Company followed by a serial production of these products (hereinafter: “The Services”), and
the parties request to arrange and to anchor in writing all the terms and the provisions that relate to the rendering of the services to the Company by the Manufacturer as well as the entirety of their contractual relations – as specified
in this agreement below;
|
1. |
The preamble to this agreement is an integral part thereof and one of its terms. The appendices to the agreement are an integral part of the agreement and one of its
terms, even if they were attached to the agreement after it was signed.
|
2. |
The Manufacturer will provide the Company with services according to the work orders that the Company will issue to the Manufacturer from time to time. The services
will inter alia include the following actions: (a) The development of the formulas of various products according to the specifications that the Company will give to the Manufacturer from time to time (hereinafter: “The Formulas”); and (b) Serial production of the products whose formulas have been prepared and are complete. With respect to the serial production of the
products, the parties will agree about the terms regarding each order.
|
3. |
The Company declares and undertakes as follows: It has all the permits, the licenses and the certificates which are required by any competent governmental and/or
municipal entity and according to the law for the fulfilment of its obligations according to this agreement; it will comply with the provisions of the law with respect to the fulfilment of its obligations according to this agreement; and it
will act – by itself and on its account – towards the obtainment of every new certificate, permit or license, as far as they are required, and towards saving those that it has and are fully valid throughout the entire period of the
agreement as mentioned above.
|
4. |
It is hereby clarified as follows: This agreement is an agreement between a customer and an independent contractor of services, and it is not a work contract; each
party is the owner of an independent business; and there are and there will be between the parties no employee-employer relations, relations of authorization, relations of agency or relations of partnership, etc. for any purpose whatsoever.
|
5. |
The Manufacturer will only be allowed to make use of the formulas that it will develop for the Company for the benefit of the manufacture of the products for the
Company, and the Manufacturer will not be allowed to transfer and/or to disclose the formulas to any party whatsoever, unless the Company approves it in advance and in writing.
|
6. |
The Company will have the option to purchase the formulas from the Manufacturer according to the terms that are specified in Appendix A to this agreement (hereinafter: “The Warrant”).
|
7. |
The Company will act – through a third party – towards the submittal of all the documents that are required for the obtainment of a license and the registration of
the products with the relevant authorities. The Company will bear the cost of the issue of the licenses with respect to each and every product. The Manufacturer will assist the Company in the process of the obtainment of the licenses, and
it will provide it with information and with the relevant documents which will be at the Manufacturer’s disposal. It is clarified that the responsibility for the issue of the licenses applies to the Company.
|
8. |
In exchange for the rendering of the services, the Company will pay to the Manufacturer the consideration which will be from time to time agreed upon between the
parties according to the payment terms that will be agreed upon between the parties.
|
9. |
This agreement will be valid for an indefinite period. Each party will be allowed to terminate the agreement through giving a written notice of at least 180 days to
the other party. It is clarified that the cancellation of the agreement will not derogate from the validity of the warrant.
|
10. |
In this agreement, the meaning of the term “The Rights of Individual
Property” is the rights of the intellectual property and/or the copyright and/or the rights whose nature is similar to intellectual property and/or copyrights of any kind and type whatsoever with respect to the products, their
composition, their formulas, their production method, their production portfolios and any knowhow that relates thereto, including commercial secrets, trademarks, copyrights and rights of any industrial or intellectual property whatsoever,
including inventions, progresses, developments, improvements, ideas and applications which relate to the Company’s products and/or individual property including all the rights in the formulas and in any future development of the formulas as
well as all the rights in the developments, in the alterations and in the modifications that will be carried out in the formulas as part of the execution of the services according to this agreement, whether they were completed or not.
|
11. |
It is agreed that up to the date on which the Company will purchase from the Manufacturer the rights in the formulas that the Manufacturer will develop for the
Company as stated in the warrant, the Manufacturer will not be obligated to give the formulas to the Company. If the Company exercised the option for the purchase of any of the formulas according to the provisions of the warrant, the
Manufacturer will give to the Company the formulas with respect to which the option will be exercised by the Company, and the Company will be allowed to act as if it were their owner, including to indefinitely act towards their exercise and
their commercialization around the world, and the Manufacturer will not assign to the Company and will waive any right regarding the rights of the intellectual property (as stated in the deed of transfer that is attached to the warrant as
an appendix).
|
12. |
It is hereby agreed that the Manufacturer will not be allowed to manufacture - for itself and/or for any other party whatsoever - the products that the parties will
manufacture and/or develop as part of the fulfilment of the provisions of this agreement and/or to transfer the intellectual property to any party whatsoever and/or make any use of the intellectual property, excluding as stated in this
agreement – even if the Company does not exercise the option for the purchase of any of the formulas. It is also agreed that the Manufacturer will not be allowed to make any change in the formulas and in the specifications of products that
will be manufactured and/or planned by any of the parties as well as any change whose purpose is the manufacture of other products through those formulas and/or specifications.
|
13. |
Each party undertakes to keep in full and absolute confidentiality, not to transfer to third parties (and to make sure that all its employees and/or people who act by
virtue thereof and/or on its behalf and/or companies that are related thereto will act as mentioned above) and not to make any use of any knowhow, information and/or commercial, financial and/or professional secrets which are related to the
activities of the other party. The parties will only be allowed to make use of the aforementioned information as far as it is required for the execution of this agreement. The aforesaid will not apply to information that is public knowledge
or to information that was independently developed by the disclosing party or of which it became aware in a legal manner rather than while violating the duty of confidentiality.
|
14. |
Each party undertakes to purchase insurance which will cover the liabilities that apply thereto with respect to the products.
|
15. |
This agreement summarizes all the agreements of the parties with respect to the issues that are settled therein, and there will be no relevance to any negotiation,
understanding, consent, undertaking or representation that were between the parties, as far as they were - whether explicitly or implicitly, whether in writing or orally – prior to the signing of this agreement with respect to those issues.
No change, amendment and/or renunciation of the provisions of this agreement will be valid, unless they were carried out in a document that was signed by both parties.
|
16. |
It is hereby agreed that the unique and exclusive judicial competence with respect to this agreement is only granted to the courts that are competent therefor in
Tel-Aviv-Jaffa, and the parties explicitly reject the local competence of other courts in Israel.
|
17. |
The notifications of the parties by virtue of this agreement will be carried out in writing and will be sent to the addresses of the parties which are specified in
the preamble to the agreement or to any other address which was given by the other party to the sending party in writing, at least 24 hours before the notification was sent. Any notification that one party will send to the other via
registered mail will be considered as if it was received by the other party 72 hours from the time on which the notification was sent; if it was delivered by hand – at the time of its delivery; and if it was sent via e-mail – on the date on
which it was sent.
|
( - )
Manuka Ltd.
Private Company No. 516791181
The Company
|
( - )
Chic Cosmetic Industries 1989 Ltd.
The Manufacturer
|
1. |
In this warrant, the following terms will have the meaning that is stated next to them: “The Formulas” – the formulas of the following products:
|
Product name
|
Ministry of Health License No.
|
Face serum with bee venom
|
1/143243/20
|
Face serum with strengthened Vitamin C
|
1/151858/21
|
Day cream
|
1/151084/21
|
Nourishing night cream
|
1/149720/21
|
Facial cleansing gel
|
1/151083/21
|
Eye cream
|
1/151085/21
|
2. |
The Manufacturer grants the Company with the option to purchase the formulas and/or any thereof from the Manufacturer against the payment of the consideration of the
exercise. The option will be valid for a period of 10 (ten) years which commences on the date on which this warrant is signed.
|
3. |
The option will be exercisable with respect to all the formulas and/or with respect to each of them, and the Company will be allowed to exercise the option in
installments with respect to each of the formulas.
|
4. |
The Company will exercise the option through sending a written notification to the Manufacturer, under which the Company will notify the Manufacturer about its intent
to exercise the option and the formula and/or the formulas with respect to which it exercises the option (hereinafter: “The Notification of the
Exercise”).
|
5. |
If the Company sent a notification of exercise and paid the consideration of the exercise to the Manufacturer, the Manufacturer will give to the Company the formulas
with respect to which the notification of the exercise was sent, while they match the formulas that were submitted and were approved by the Israel Ministry of Health, and the provisions that are specified below will apply:
|
5.1
|
The formulas will be given to the Company as follows: A computerized file that will include the complete specification of the
formulas and any information that is required for the manufacture of the products through them;
|
5.2
|
The Manufacturer will sign a deed of the transfer of the intellectual property rights according to the version that is
attached to this warrant as Appendix 5 with respect to the formulas for which the notification of the exercise was sent;
|
5.3
|
It is clarified that the Company will pay to the Manufacturer the consideration of the exercise for the formulas which are the
subject of the notification of the exercise plus V.A.T. against a legal tax invoice.
|
1. |
Notifications under this warrant or with respect thereto will be carried out in writing and will be sent according to the provisions of the agreement to which this
warrant is attached as an appendix.
|
2. |
This warrant summarizes all the consents of the parties with respect to the granting of the option to the Company. Any change, amendment and/or renunciation of the
provisions of this warrant will only be valid if they were carried out in a document that was signed by both parties. The unique and exclusive judicial competence with respect to this warrant is only granted to the courts that are competent
therefor in Tel-Aviv-Jaffa, and the parties explicitly reject the local competence of other courts in Israel.
|
Whereas
|
we, the undersigned, Chic Cosmetics Industries 1989 Ltd. (Private Company No. 511383648) (hereinafter: “The Transferor”) entered into an agreement (hereinafter: “The Agreement”) with Manuka Ltd. (Private Company No. 516179181) (hereinafter: “The Transferee”) under
which it was inter alia agreed that we will provide services to the transferee which include the development of formulas (hereinafter: “The
Formulas”) for the manufacture of various products (hereinafter: “The Products”);
|
And whereas
|
the parties agreed that the Transferor will transfer to the Transferee all the rights that the Transferor has in the intellectual property (as this term is defined below) (hereinafter: “The Intellectual Property”) with respect to the following product: [the name of the formula and the Ministry of Health License
Number] (hereinafter: “The Product”) in a way
that the intellectual property rights will be exclusively owned by the Transferee after the aforementioned execution of the transfer of rights;
|
( - )
Chic Cosmetic Industries 1989 Ltd.
The Transferor Name: Chic Cosmetic Industries 1989 Ltd.
Date:
|
( - )
Manuka Ltd.
Private Company No. 516791181
The Transferee
Name: Manuka Ltd.
Dated:
|
Exhibit 10.5
This is a translation into English of the official Hebrew version of the an Import License issued by the Israel Ministry of Health to Manuka Ltd. In the event of a conflict between the English and Hebrew texts, the Hebrew text shall prevail.
The cargo will not be released from the port without the authorization of the quarantine station | State of Israel | Ministry of Health |
Do not use this certificate for advertising | Food Control Services |
Preliminary
Preliminary certificate for import: 541618 Date of origin: February 28, 2022
Date of issue: February 28, 2022 This certificate is valid until February 28, 2023
Name: Manuka Ltd. Addresses: 19 Haim Bar Lev St., Ramat Gan 5265368, Israel
Telephone: +972-54-3431744
Registration Certificate No. 12753
Product name |
Product
name in |
Tradename |
Product
|
Contents / weight |
Honey | Honey | Manuka Honey | Marketing | Varies |
Name
of |
Country
of |
Supplier’s name |
Supplier’s country |
Package type |
Waitemata Honey Co. Limited |
New Zealand | Waitemata Honey Co. Limited |
New Zealand | Other |
The shipment will be accompanied by test results | ☑ Chemical ☑ Toxicological ☑ Microbiological |
Marking requirements | ☑
Requires marking in Hebrew
☑ Labels in the Hebrew Language must be submitted in the port ☑ Marketing for autonomy only ☑ Sticking the label in the importer’s warehouse |
1
Professional obligations:
3. This certificate is valid as long as no change is implemented in any of the details that are included therein as approved by the certificate provider. |
4. This certificate does not exempt the recipient of the certificate from the provisions of any other law. |
2
1. |
Surrender of the Warrant. Within 2 days from the date of this Agreement,
the Holder shall surrender the Warrant for cancellation by delivery of the original Warrant (or a lost warrant affidavit with customary indemnity) to the Company at its office or to the Company’s counsel, Sullivan & Worcester, LLP, 1633
Broadway, New York, NY 10019, Attention: Oded Har-Even, Esq. The Company and Holder further agrees that if the Warrant has been lost, mutilated or destroyed, an affidavit to such effect and indemnity reasonably acceptable to the Company,
and the Warrant shall be deemed cancelled and of no further force or effect and shall thereafter represent only the right to receive the Shares even if the Holder fails to surrender the Warrant.
|
2. |
Issuance of Replacement Shares. In connection with the surrender of the
Warrant by the Holder, as set forth herein, and in order to induce the Holder to surrender the Warrant, upon delivery of the items pursuant to Section 1 hereof, the Company shall issue the Holder an aggregate of _______ shares of Common Stock (the “Replacement Shares”).
|
3. |
Representations and Warranties of the Holder. The Holder shall be bound by
and observe all the provisions and conditions of the Securities Purchase Agreement applicable to the Holder and hereby confirms the accuracy of the representations and warranties of the Holder set forth in Section 3.2 of the Securities
Purchase Agreement in all material respects. In addition, the Holder represents and warrants that as of the date of this Agreement, the Holder has not sold the equity securities purchased with the Warrants pursuant to the Securities
Purchase Agreement.
|
4. |
Representations and Warranties of the Company. The Company hereby confirms
the accuracy of the representations and warranties of the Company set forth in Section 3.1 of the Securities Purchase Agreement in all material respects except as such representations and warranties may have been changed, supplemented or
amended by disclosure in SEC Reports filed subsequent to October 23, 2017.
|
5. |
Governing Law and Jurisdiction. This Agreement and the rights and
obligations of the parties hereunder shall be construed, enforced and interpreted according to the laws of the State of New York, without giving effect to its principles of conflict or choice of laws. Each party agrees that all legal
proceedings concerning the interpretations and enforcement of this Agreement and the transaction contemplated hereunder shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District Court for the Southern District of New York for the adjudication of any dispute hereunder or
in connection herewith.
|
6. |
Miscellaneous. This Agreement represents the entire agreement between the parties with respect to the subject matter hereof
and may not be modified or amended except by a written instrument duly executed by the parties. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and when a counterpart has been executed by each of the parties hereto, all of the counterparts, when taken together, shall constitute one and the same agreement. If one or more
provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.
|
1. |
Forgiven Debt. The Lender hereby waives, cancels and forgives payment by
Artemis of aggregate of $__ of indebtedness previously advanced by the Lender to Artemis and currently owed (the “Forgiven Debt”) in
consideration of, and conditioned upon the Lender’s receipt of an aggregate of ______ shares of Artemis’ common stock (the “Debt Forgiveness
Shares”). It is acknowledged and agreed that the Forgiven Debt is being waived, cancelled and forgiven by the Lender in its entirety in consideration of the issuance of the Debt Forgiveness Shares.
|
2. |
Issuance of the Debt Forgiveness Shares. Artemis hereby agrees to issue to
the Lender the Debt Forgiveness Shares in consideration of the waiver, cancellation and forgiveness of the Forgiven Debt, immediately upon the consummation of the Share Exchange Agreement, but in any event not later than two (2) business
days thereafter. Upon the issuance of the Debt Forgiveness Shares, the Forgiven Debt shall be deemed to be paid in full, released and discharged, all without any further action being required of the Lender or Artemis.
|
3. |
Representation of No Other Debt. The Lender represents and warrants that
Artemis does not have any other debts, liabilities or obligations to pay any amounts to the Lender other than the Forgiven Debt, all of which shall be waived, cancelled and forgiven as set forth herein.
|
4. |
Effectiveness of Agreement. This Agreement shall only be effective upon the
consummation of the transaction contemplated by the Share Exchange Agreement. If the transactions contemplated by the Share Exchange Agreement shall not be consummated, this Agreement and the provisions thereof (even though fully executed)
shall be void and of no force and effect whatsoever.
|
5. |
Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns. The parties may not assign this Agreement or any rights or obligations hereunder without the prior written consent.
|
6. |
No Third-Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person.
|
7. |
Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflicts of law thereof.
|
8. |
Entire Agreement. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes any prior understanding or representation of any kind preceding the date of this Agreement. This Agreement may only be amended or modified in a signed by both parties
hereto.
|
9. |
Execution. This Agreement may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign
the same counterpart. In the event that any signature is delivered by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such “.pdf” signature page were an original thereof.
|
10. |
Arm’s Length Transaction. The parties hereto have entered into this
Agreement and the transactions contemplated hereby on an arms-length basis.
|
11. |
Release. The Lender, singly, and for each present and former, direct and/or
indirect, parents, subsidiaries, affiliates, attorneys, agents, representatives, employees, consultants, brokers, officers, directors, equity and/or debt holders, managers, members, successors, predecessors, heirs and assigns (collectively
the “Lender Releasors”), hereby expressly and irrevocably release, waive and forever discharge and hold harmless each of the Company and
each of its present and former, direct and/or indirect, parents, subsidiaries, affiliates, attorneys, agents, representatives, employees, consultants, brokers, officers, directors, equity and/or debt holders, managers, members, successors,
predecessors, and assigns (collectively, the “Lender Released Parties”) regarding the Forgiven Debt from any and all actions, causes of
action, suits, losses, liabilities, rights, debts, dues, sums of money, accounts, reckonings, obligations, costs, expenses, liens, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses,
damages, judgments, extents, executions, claims, and demands, of every kind and nature whatsoever, whether now known or unknown, suspected or unsuspected, foreseen or unforeseen, matured or unmatured, suspected or unsuspected, in law,
admiralty or equity, which any of the Lender Releasors ever had, now have, or hereafter can, shall, or may have against any of the Lender Released Parties from the beginning of time through and including the date hereof.
|
12. |
Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and shall become effective when such counterparts have been signed by each party and delivered to the other parties; provided that a facsimile signature shall be
considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile, signature.
|
ARTEMIS THERAPEUTICS, INC.
|
|||
By:
|
|||
Name:
|
|||
Title:
|
|||
[LENDER]
|
|||
By:
|
|||
Name:
|
|||
Title:
|
Entity Name
|
|
Jurisdiction of Incorporation
|
Manuka Ltd.
|
|
Israel
|
•
|
We have asked for access to bank statements and other information to evaluate the ability to support the Company for the next
twelve months.
|
•
|
Reading public information to try to corroborate the sources of the capitalization of the major shareholder. |
/s/ Brightman Almagor Zohar & Co.
|
|
Page
|
|
1
|
|
2
|
|
3
|
|
4
|
|
5-14
|
Year ended
December 31
|
Period from March 22, (Inception) to December 31
|
|||||||
2 0 2 1
|
2 0 2 0
|
|||||||
$
|
$
|
|||||||
Revenues
|
7,057
|
-
|
||||||
Costs of revenues
|
793
|
-
|
||||||
Gross profit
|
6,264
|
-
|
||||||
Operating expenses
|
||||||||
Sales and marketing
|
66,648
|
38,392
|
||||||
General and administrative
|
229,947
|
22,579
|
||||||
Total operating expenses
|
296,595
|
60,971
|
||||||
Operating loss
|
(290,331
|
)
|
(60,971
|
)
|
||||
Financial expenses, net
|
(39,456
|
)
|
(6,709
|
)
|
||||
Net Loss and Total Comprehensive Loss
|
(329,787
|
)
|
(67,680
|
)
|
||||
Loss per share:
|
||||||||
Basic and diluted net loss per share
|
(3.28
|
)
|
(0.68
|
)
|
||||
Weighted average number of Ordinary Shares used in calculation of net loss per Ordinary Share:
|
100,471
|
100,000
|
Ordinary Shares
|
Capital
Reserve
|
AdditionalPaid In Capital
|
Accumulated Deficit
|
Total
|
||||||||||||||||||||
Number
|
$
|
$
|
$
|
$
|
$
|
|||||||||||||||||||
Balance as of March 22, 2020 (*)
|
100,000
|
278
|
-
|
-
|
278
|
|||||||||||||||||||
Transactions with shareholders (Note 8)
|
-
|
-
|
2,065
|
-
|
2,065
|
|||||||||||||||||||
Net Loss
|
-
|
-
|
-
|
(67,680
|
)
|
(67,680
|
)
|
|||||||||||||||||
Balance as of December 31, 2020
|
100,000
|
278
|
2,065
|
-
|
(67,680
|
)
|
(65,337
|
)
|
||||||||||||||||
Issuance of Ordinary Shares
|
20,834
|
67
|
501,831
|
-
|
501,898
|
|||||||||||||||||||
Transactions with shareholders (Note 8)
|
-
|
-
|
12,741
|
-
|
12,741
|
|||||||||||||||||||
Net Loss
|
-
|
-
|
-
|
(329,787
|
)
|
(329,787
|
)
|
|||||||||||||||||
Balance as of December 31, 2021
|
120,834
|
345
|
14,806
|
501,831
|
(397,467
|
)
|
119,515
|
Year ended
December 31
|
Period from March 22, (inception) to December 31,
|
|||||||
2 0 2 1
|
2 0 2 0
|
|||||||
$
|
$
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
(329,787
|
)
|
(67,680
|
)
|
||||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation
|
3,422
|
93
|
||||||
Increase in operating lease liabilities
|
2,084
|
-
|
||||||
Increase in other liabilities
|
113
|
-
|
||||||
Accrued interest from shareholder loans
|
12,741
|
2,065
|
||||||
Increase in accounts receivable and prepaid expenses
|
(15,374
|
)
|
(4,274
|
)
|
||||
Increase in accounts payable and accrued expenses
|
120,910
|
11,466
|
||||||
Increase in inventory
|
(73,972
|
)
|
-
|
|||||
Net cash used in operating activities
|
(279,863
|
)
|
(58,330
|
)
|
||||
Cash flows used in investing activities:
|
||||||||
Purchase of property and equipment
|
(27,309
|
)
|
(1,166
|
)
|
||||
Net cash used in investing activities
|
(27,309
|
)
|
(1,166
|
)
|
||||
Cash flows provided by financing activities:
|
||||||||
Short-term credit
|
96,608
|
-
|
||||||
Issuance of Ordinary Shares
|
501,898
|
278
|
||||||
Loan received from shareholders
|
176,686
|
62,272
|
||||||
Net cash provided by financing activities
|
775,192
|
62,550
|
||||||
Increase in cash and cash equivalents
|
468,020
|
3,054
|
||||||
Cash and cash equivalents at beginning of period
|
3,054
|
-
|
||||||
Cash and cash equivalents at end of period
|
$
|
471,074
|
$
|
3,054
|
||||
Non-cash activities:
|
||||||||
Right-of-use asset recognized with corresponding lease liability
|
59,743
|
-
|
||||||
Intangible assets recognized with corresponding other liability
|
32,154
|
-
|
||||||
Purchase of property and equipment in credit
|
11,539
|
-
|
%
|
|
Computers and electronic equipment
|
33
|
Capitalization of website development costs
|
20
|
Office furniture and equipment
|
7
|
December 31,
|
||||||||
2021
|
2020
|
|||||||
Raw materials
|
31,098
|
-
|
||||||
Finished goods
|
42,874
|
-
|
||||||
73,972
|
-
|
December 31,
|
||||||||
|
2021
|
2020
|
||||||
Cost:
|
||||||||
Computers and electronic equipment
|
5,752
|
1,166
|
||||||
Capitalization of website development costs
|
34,263
|
-
|
||||||
40,015
|
1,166
|
|||||||
Accumulated depreciation:
|
||||||||
Computers and electronic equipment
|
(700
|
)
|
(93
|
)
|
||||
Capitalization of website development costs
|
(2,815
|
)
|
- |
|||||
(3,515
|
)
|
(93
|
)
|
|||||
Depreciated cost
|
36,500
|
1,073
|
December 31, 2021
|
||||||||||||||||||||
Estimated Useful Life
(in years) |
Gross Book
Value
|
Accumulated Amortization
|
Net Book
Value
|
Weighted Average Remaining Useful Life (in years)
|
||||||||||||||||
Acquisition of IP
|
10
|
32,154
|
-
|
32,154
|
10
|
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. The Company is reasonably certain that it will exercise the two additional options starting in October 2022.
|
The components of operating lease costs were as follows:
|
December 31,
|
Period from March 22, (inception) to December 31,
|
|||||||
2021
|
2020
|
|||||||
Operating lease cost
|
5,511
|
-
|
||||||
Total lease costs
|
5,511
|
-
|
a. |
Supplemental balance sheet information related to operating leases is as follows:
|
December 31,
|
||||||||
2021
|
2020
|
|||||||
Operating lease ROU assets
|
55,402
|
-
|
||||||
Operating lease liabilities, current
|
19,118
|
-
|
||||||
Operating lease liabilities, long-term
|
38,369
|
-
|
||||||
Weighted average remaining lease term (in years)
|
2.75
|
-
|
||||||
Weighted average discount rate
|
7.85
|
%
|
-
|
b. |
Future lease payments under operating leases as of December 31, 2021, are as follows:
|
December 31,
|
||||
2021
|
||||
2022
|
22,958
|
|||
2023
|
23,537
|
|||
2024
|
17,653
|
|||
Total undiscounted lease payments
|
64,148
|
|||
Less: imputed interest
|
(6,661
|
)
|
||
Present value of lease liabilities
|
57,487
|
a. |
Balances with related parties:
|
December 31,
|
||||||||
2021
|
2020
|
|||||||
Long-term Loan from a related party
|
238,957
|
62,272
|
b. |
Transactions with related parties:
|
December 31,
|
Period from March 22, (inception) to December 31,
|
|||||||
2021
|
2020
|
|||||||
Management fees to a shareholder
|
48,808
|
-
|
||||||
Interest on loans from controlling shareholder
|
12,741
|
2,065
|
A. |
Tax rates applicable to the income of the Israeli companies:
|
B. |
As of December 31, 2021, the Company had total net operating losses in Israel of approximately $393 thousand, which may be carried forward and offset against taxable income in the future.
|
C. |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the
Company’s deferred tax assets are as follows:
|
D. |
Available Carryforwards tax losses:
As of December 31, 2021, the Company has an accumulated tax loss carryforward of approximately $371,000. Carryforward tax losses
in Israel are of unlimited duration.
|
E. |
Due to the Company’s cumulative losses, the effect of ASC 740 as codified from ASC 740-10 is not material.
|
Page
|
|
1
|
|
2
|
|
3
|
|
4
|
|
5-8
|
Three Months ended March 31
|
||||||||
2 0 2 2
|
2 0 2 1
|
|||||||
$
|
$
|
|||||||
Unaudited
|
||||||||
Revenues
|
16,377
|
-
|
||||||
Costs of revenues
|
3,940
|
-
|
||||||
-
|
||||||||
Gross profit
|
12,437
|
- |
||||||
Operating expenses
|
||||||||
Sales and marketing
|
109,202
|
10,050
|
||||||
General and administrative
|
101,814
|
20,801
|
||||||
Total operating expenses
|
211,016
|
30,851
|
||||||
Operating loss
|
(198,579
|
)
|
(30,851
|
)
|
||||
Financial expenses, net
|
(4,706
|
)
|
(1,942
|
)
|
||||
Net Loss and Total Comprehensive Loss
|
(203,285
|
)
|
(32,793
|
)
|
||||
Loss per share:
|
||||||||
Basic and diluted net loss per share
|
(1.68
|
)
|
(0.33
|
)
|
||||
Weighted average number of Ordinary Shares used in calculation of net loss per common share:
|
||||||||
120,834
|
100,000
|
Common Shares
|
Capital reserve from transaction with related parties
|
Additional Paid in Capital
|
Accumulated deficiency
|
Total
|
||||||||||||||||||||
Number
|
$ |
$
|
$
|
$
|
||||||||||||||||||||
Balance as of December 31, 2020
|
100,000
|
278
|
2,065
|
-
|
(67,680
|
)
|
(65,337
|
)
|
||||||||||||||||
Transactions with shareholders (Note 6)
|
1,728
|
1,728
|
||||||||||||||||||||||
Net Loss
|
(32,793
|
)
|
(32,793
|
)
|
||||||||||||||||||||
Balance as of March 31, 2021
|
||||||||||||||||||||||||
100,000
|
278
|
3,793
|
-
|
(100,473
|
)
|
(96,402
|
)
|
|||||||||||||||||
Balance as of December 31, 2021
|
120,834
|
345
|
14,806
|
501,831
|
(397,467
|
)
|
119,515
|
|||||||||||||||||
Transactions with shareholders (Note 6)
|
-
|
-
|
4,458
|
-
|
4,458
|
|||||||||||||||||||
Net Loss
|
-
|
-
|
-
|
(203,285
|
)
|
(203,285
|
)
|
|||||||||||||||||
Balance as of March 31, 2022
|
120,834
|
345
|
19,264
|
501,831
|
(600,752
|
)
|
(79,312
|
)
|
Three Months ended March 31
|
||||||||
2 0 2 2
|
2 0 2 1
|
|||||||
$
|
$
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
(203,285
|
)
|
(32,793
|
)
|
||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
||||||||
Depreciation
|
2,275
|
30
|
||||||
Increase (decrease) in operating lease liabilities
|
4,559
|
-
|
||||||
Decrease (increase) in Intangible assets
|
(5,466
|
)
|
-
|
|||||
Increase (decrease) in other liabilities
|
246
|
-
|
||||||
Accrued interest from shareholder loans
|
4,458
|
1,728
|
||||||
Increase in accounts receivable and other receivables
|
(23,143
|
)
|
(20,704
|
)
|
||||
Increase in accounts payable and accrued expenses
|
63,399
|
2,297
|
||||||
Increase in inventory
|
(300
|
)
|
-
|
|||||
Net cash used in operating activities
|
(157,257
|
)
|
(49,442
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Purchase of property and equipment
|
(10,072
|
)
|
-
|
|||||
Net cash used in investing activities
|
(10,072
|
)
|
-
|
|||||
Cash flows from financing activities:
|
||||||||
Short-term credit
|
(2,683
|
)
|
18,220
|
|||||
Loan received from shareholders
|
15,757
|
28,168
|
||||||
Net cash provided by financing activities
|
13,074
|
46,388
|
||||||
Increase in cash and cash equivalents
|
(154,255
|
)
|
(3,054
|
)
|
||||
Cash and cash equivalents at beginning of period
|
471,074
|
3,054
|
||||||
Cash and cash equivalents at end of period
|
$
|
316,819
|
-
|
|||||
Non-cash activities:
|
||||||||
Intangible assets recognized with corresponding other liability
|
5,466
|
-
|
March 31,
|
December 31,
|
|||||||
2022
|
2021
|
|||||||
Unaudited
|
||||||||
Raw materials
|
24,959
|
31,098
|
||||||
Finished goods
|
49,313
|
42,874
|
||||||
74,272
|
73,972
|
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 another one year for each option until
September 30, 2024. The Company is reasonably certain that it will exercise the additional two options starting in October 2022.
|
a. |
The components of operating lease costs were as follows (unaudited):
|
Three Months ended March 31,
|
||||||||
2022
|
2021
|
|||||||
Operating lease cost
|
5,495
|
-
|
||||||
Total lease costs
|
5,495
|
-
|
b. |
Supplemental balance sheet information related to operating leases is as follows (unaudited):
|
March 31,
|
December 31,
|
|||||||
2022
|
2021
|
|||||||
Operating lease right-of-use assets
|
50,976
|
55,402
|
||||||
Operating lease liabilities, current
|
19,281
|
19,118
|
||||||
Operating lease liabilities, long-term
|
32,514
|
38,369
|
||||||
Weighted average remaining lease term (in years)
|
2.50
|
2.75
|
||||||
Weighted average discount rate
|
7.85
|
%
|
7.85
|
%
|
c. |
Future lease payments under operating leases as of December 31, 2021, are as follows (unaudited):
|
March 31,
|
||||
2022
|
||||
2022
|
16,908
|
|||
2023
|
23,048
|
|||
2024
|
17,286
|
|||
Total undiscounted lease payments
|
57,242
|
|||
Less: imputed interest
|
(5,447
|
)
|
||
Present value of lease liabilities
|
51,795
|
a. |
Balances with related parties:
|
March 31,
|
December 31,
|
|||||||
2022
|
2021
|
|||||||
Unaudited
|
||||||||
Long-term Loan from a related party
|
254,716
|
238,957
|
b. |
Transactions with related parties (unaudited):
|
Three Months ended March 31,
|
||||||||
2022
|
2021
|
|||||||
Trade account payables
|
75,444
|
-
|
||||||
Management fees to a shareholder
|
35,336
|
9,181
|
||||||
Sales and marketing
|
56,524
|
-
|
||||||
Interest on loans from controlling shareholder
|
4,458
|
1,728
|
|
•
|
|
the reverse recapitalization between Artemis and the Company.
|
|
•
|
|
the accompanying notes to the unaudited pro forma condensed combined financial statements;
|
|
•
|
|
the historical unaudited financial statements of the Company as of March 31, 2022 and the related notes included elsewhere in
this Form 8-K; and
|
|
•
|
|
the historical unaudited financial statements of Artemis as of March 31, 2022 and the related notes included in Artemis’s
interim report on Form 10-Q ;
|
|
•
|
|
the Company’s existing stockholders will have the largest voting interest in the combined company; and
|
|
•
|
|
the Company’s former executive management will make up all of the management of the combined entity;
|
Name of Shareholder
|
Common Stock
|
Preferred Shares Series A
|
Preferred Shares Series C
|
Preferred Shares Series D
|
Settlement of debt (Note A)
|
Warrants converted to shares (Note B)
|
Share based compensation to executives
(Note C)
|
Share-based to service provider
(Note D) |
||||||||||||||||||||||||
|
Number of shares
|
USD(*)
|
||||||||||||||||||||||||||||||
Outstanding shares as of June 5, 2022
|
5,153,461
|
453
|
250
|
|||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Issuance of shares upon closing:
|
||||||||||||||||||||||||||||||||
Tonak Ltd.
|
1,573,582
|
45,729
|
||||||||||||||||||||||||||||||
Israel Alfassi
|
25,000
|
727
|
||||||||||||||||||||||||||||||
Cutter Mill Capital LLC
|
894,169
|
25,985
|
||||||||||||||||||||||||||||||
Globis Capital Partnership
|
976,167
|
28,368
|
||||||||||||||||||||||||||||||
Globis International Investments
|
546,654
|
15,886
|
||||||||||||||||||||||||||||||
Globis Overseas Fund
|
429,514
|
12,482
|
||||||||||||||||||||||||||||||
Brian M. Culley
|
195,233
|
5,674
|
||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Amiad Solomon
|
195,233
|
5,674
|
||||||||||||||||||||||||||||||
Harmony (H.A.) Investments Ltd.
|
2,711,069
|
13,617
|
65,169
|
|||||||||||||||||||||||||||||
Chanan Morris
|
780,934
|
22,694
|
||||||||||||||||||||||||||||||
Hadasit
|
95,256
|
2,768
|
||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Manuka Ltd
|
31,549,132
|
110,000
|
||||||||||||||||||||||||||||||
Total
|
45,125,405
|
453
|
250
|
110,000
|
88,099
|
68,084
|
23,421
|
65,169
|
|
A)
|
As part of the merger agreement, out of total current liabilities of $529,000 a total of $314,000 were settled by issuing
3,031,567 shares at total value of $88,099. The difference between
liabilities carrying amounts and the consideration given for settlement was recognized as income on settlement of liabilities in the amount of $225,901.
|
B)
|
As part of the merger agreement, warrants outstanding were converted to 2,342,801 shares. Based on the provision of ASU
2021-04 the amount $68,084 was recognized as dividend. It was assumed
that warrants outstanding prior to the merger had fair value of nil.
|
|
|
C)
|
As part of the merger agreement, warrants granted to employees that were outstanding prior to the merger were converted to
805,934 shares. Based on the provision of ASC 718 the amount $23,421 was
recognized as share-based compensation. It was assumed that warrants outstanding prior to the merger had fair value of nil.
|
|
D)
|
Includes the fair value of 2,242,509 shares granted to Harmony (H.A.) Investments Ltd as share-based payment to service
provider. Amount of $65,169 was recognized as expenses.
|
|
E)
|
As part of the merger agreement, it was agreed that shares of common stock of Artemis in the amount of 31,549,132 and
Series D Preferred stock in the amount of 110,000 will be issued to Manuka’s shareholders in exchange for their shares of Manuka. Such preferred shares are convertible into 66,000,000 shares of common stock of Artemis. The total
shares be given to Manuka is representing 87% of the issued and outstanding shares of Artemis post-merger.
|
|
|
|
|
F)
|
Represents amount of $150,000 of liabilities that current shareholder of Artemis has committed to repay in lieu of
Artemis.
|
|
|
|
|
G)
|
Represents the cancellation of the shares and APIC of Artemis at the same amount.
|
|
|
|
|
H)
|
As explained in E above, Manuka’s shareholder were issued ordinary and preferred shares. The amount of $339,764 represents
the amount of attributed to the preferred shares issued to Manuka’s shareholder. As explained above the shareholders equity of Manuka, as the accounting acquirer, has been recapitalized to reflect the new structure that includes both
preferred and shares of common stock. Allocation was done pro-ratably taking the into account that the preferred shares are convertible to 66,000,000
shares of common stock.
|
|
|
|
|
I)
|
Represents the elimination of the shareholders deficiency of Artemis. As the amount is negative it has been shown as
decrease in accumulated deficit.
|
|
|
|
|
J)
|
Represents the elimination of shares issued, as explained in Notes A,B and C, prior to consummation to shareholders of
Artemis as part of the elimination of the shareholders equity of Artemis due to it considered accounting acquiree.
|
|
|
|
|
K)
|
Represents the elimination of all adjustments to accumulated deficit of Artemis, as part of the elimination of the
shareholders equity of Artemis due to it considered accounting acquiree. This excludes the adjustment discussed in Note D above which is considered an expense of the accounting acquirer.
|
|
|
|
|
L)
|
Represents the elimination of the accumulated deficit of Artemis.
|