Recent Accounting Pronouncements

In June 2016, the FASBFinancial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments. This guidance replaces the current incurred loss impairment methodology. Under the new guidance, on initial recognition and at each reporting period, an entity is required to recognize an allowance that reflects its current estimate of credit losses expected to be incurred over the life of the financial instrument based on historical experience, current conditions and reasonable and supportable forecasts.

The guidance became effective on January 1, 2020, including interim periods within that year and requires a modified retrospective transition approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. Under the modified retrospective method of adoption, prior year reported results are not restated. The Company has performed its analysis of the impact on its financial instruments that are within the scope of this guidance and has concluded that there was no material impact to its consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Fair“Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value MeasurementMeasurement” (“ASU No. 2018-13”) as part of the FASB’s broader disclosure framework project. ASU No. 2018-13 removes, modifies and adds certain disclosures, providing greater focus on requirements that clearly communicate the most important information to the users of the financial statements with respect to fair value measurements. The adoption of ASU No. 2018-13 as of January 1, 2020 did not have a material impact on the Company’s consolidated financial statements.

NOTE 3 - INVESTMENT VALUED UNDER THE MEASUREMENT ALTERNATIVE

On June 22, 2020, the Company entered into a share purchase agreement with Nanomedic Technologies Ltd., an Israeli private company and a related party as further described below (“Nanomedic”) as part of an A-1 funding round open only to existing Nanomedic shareholders and their affiliates. Nanomedic developed SpinCare™, a system that integrates electrospinning technology into a portable, bedside device, offering immediate wound and burn care treatment. The Company paid $450,000 for A-1 preferred shares of Nanomedic and also received warrants forto purchase A-1 preferred shares. Such investment represents a holding of approximately 3.3% in Nanomedic. The round raised approximately $2.2 million in total. Citrine S A L Investment & Holdings Ltd and certain of its partnerships, all affiliates of the Company, were already beneficial shareholders of Nanomedic immediately prior to the A-1 funding round. Ilan Ben-Ishay, a director of the Company was already a beneficial shareholder of Nanomedic immediately prior to the A-1 funding round. Ora Meir Soffer, chairperson and CEO of the Company, was already a director of both Nanomedic and its Israeli parent company Nicast Ltd. immediately prior to the A-1 funding round, and she was also already a beneficial shareholder of Nanomedic immediately prior to the A-1 funding round.

The Company accounts for the investment in Nanomedic in accordance with the provisions of ASC 321, “Investments“Investments - Equity Securities”, and elected to use the measurement alternative therein. The investment will be re-measured upon future observable price change(s) in orderly transaction(s) or upon impairment, if any.

NOTE 4 - SALE OF NOVOMIC

As described in Note 1 above, on January 6, 2020, definitive agreements were executed for the sale of 90% of the shares in Novomic to Traistman Radziejewski Fundacja Ltd., which was completed on May 14, 2020. The remaining investment in Novomic (represents 10% holding) is not presented within the Company’s condensed consolidated balance sheet as of JuneSeptember 30, 2020, as it had no significant value as of that date. Starting on the deconsolidation date, the remaining investment in Novomic is accounted as an investment valued under the measurement alternative as described in Note 2 above.

The following table summarizes the assets and liabilities of Novomic as of the deconsolidation date:

NOTE 5 – CONVERTIBLE NOTES

On April 1, 2020 the Company entered into a Convertible Note Purchase Agreement (the “CL Agreement”) with Citrine S A L Investment & Holdings Ltd, WealthStone Private Equity Ltd, WealthStone Holdings Ltd, Golden Holdings Neto Ltd, Beezz Home Technologies Ltd, Citrine Biotech 5 LP, Citrine High Tech 6 LP, Citrine High Tech 7 LP, Citrine 8 LP, Citrine 9 LP and Citrine Biotech 10 LP (together, the “Buyer”), all of which are affiliated with the Company. Under the CL Agreement, the Buyer agreed to purchase and the Company agreed to issue and sell, for up to an aggregate principal amount of up to $1,800 thousand, notes convertible into shares of common stock of the Company (the “Notes”), forwith a drawdown period starting on April 1, 2020 and ending upon the earlier of (i) 6 months thereafter and (ii) the consummation of a public offering by the Company. The CL Agreement provides that the Notes will bear an annual interest rate of six percent (6%) and that the conversion price per share of Common Stock shall equal 85% multiplied by the market price (as defined in the Notes), representing a discount of 15%, and that each Note will mature 18 months following the payment date.

On April 19, 2020 and June 12, 2020, the Company provided draw down notices under the CL Agreement for amounts of $170,000$170 thousand and $1,000,000,$1 million, respectively, which were received in cash by the Company.

On June 12, 2020, the CL Agreement (hereafter “CL Agreement amendment”Amendment”) was amended to provide that for each draw down made by the Company under the CL Agreement, the Buyer shall be entitled to receive two types of warrants: A Warrants and B Warrants, with the A Warrants exercisable at any time between 6 and 12 months after issuance for an exercise price per share equal to 1.25 times the average of the closing prices of the 3 trading days preceding the draw down, and the B Warrants exercisable at any time between 6 and 24 months after issuance for an exercise price per share equal to 1.5 times the average of the closing prices of the 3 trading days preceding the draw down, and that the number of each of the A Warrants and the B Warrants issued will be equal to the draw down amount divided by the average of the closing prices of the 3 trading days preceding the draw down, and that these amended terms will apply in respect of all draw downs, including drawdowns made prior to the date of the amendment.

Conversion feature

In accordance with ASC 815-15-25 the conversion feature was considered an embedded derivative instrument, and is to be recorded at its fair value separately from the convertible notes, within current liabilities in the Company’s balance sheet. The conversion component is then marked to market each reporting period with the resulting gains or losses shown in the statements of operations.

The fair value of the conversion feature (hereafter “Convertible Component”) was estimated using the Monte Carlo Simulation Model to compute the Convertible Component’s fair value of $285,028$320,279 and derived service period of 1.51.2 years. The assumptions used to perform the Monte-Carlo simulation were consistent with those utilized in the Company’s Black-Scholes valuation for stock options, specifically: expected volatility of 65.69%101.62%, risk-free interest rate of return of 0.18%0.12% and dividend yield of 0.0%.

Warrants

As mentioned above, as part of the June 12, 2020 CL Agreement amendment,Amendment, the Company issued the Buyer 5,589,172 A warrants and 5,589,172 B warrants to purchase a total of 11,178,344 shares of common stock of the Company.

The fair value of such warrants as of the drawdowns dates was estimated at $301,665 using the Black-Scholes option-pricing model and is presented within the consolidated statements of changes in shareholders equity within the Company’s condensed consolidated balance sheet.(deficit).

The following are the data and assumptions used as of the balance sheet date:used:

Convertible Notes

The drawdowns notices amount, net of the Conversion feature and the Warrants amounts (hereafter “Convertible notes”), is $580,925.$580,925 as of the agreement date. The convertible isnotes are accounted for based onaccording to the effective interest method.

NOTE 6 – SHAREHOLDERS’ EQUITY

On January 29, 2020, holders of 10,344,828 Redeemable convertible Series A preferred stock, par value $0.0001, converted their shares into shares of common stock, par value $0.0001. See also Note 9h9 below.

The terms of the transaction for the issuance of 893,699,276 shares of common stock in total are described in Note 1 above. During February and March 2020, the Company issued 432,996,555 shares of common stock, par value $0.0001, to investors in respect of the transaction described in Note 1 above, for a total consideration of $45,000.

As of June 30,$45 thousand, and on November 12, 2020, 445,702,721the Company issued the remaining shares of common stock (out of the 893,699,276 mentioned above) have not been issued yet.(refer also to Note 10 below).

On March 5, 2020 the Company issued 15,000,000 shares of common stock par value $0.0001, to its legal advisor in respect of legal consulting services, with respect to the TechcareCitrine Global Transaction as well as other legal services, as agreed between the parties, which, as of JuneSeptember 30, 2020, is expected to be provided until June 30, 2021. The Company estimated the fair value of the shares issued based on the share price at the grant date at $4,785 thousand, of which $1,340$2,201 thousand and $479$861 thousand were recorded as share based compensation expense in the sixnine and three month periods ended JuneSeptember 30, 2020, respectively, and the remaining was recorded as prepaid share based payment. The prepaid services will be expensed over the attribution period of the remaining legal consulting services. Such expense is included in the Marketing, general and administrative expenses within the condensed consolidated statements of operations and comprehensive loss.

On May 14, 2020 the Company amended its Certificate of Incorporation to reflect the increase of its authorized capital by one billion shares of common stock.

NOTE 7 – STOCK OPTIONS

The following table presents the Company’s stock option activity for employees and directors of the Company for the sixnine months ended JuneSeptember 30, 2020:

NOTE 8 – AGREEMENTS WITH INTELICANNA LTD

Furthermore, on June 25, 2020, the Israeli Subsidiary entered into a services agreement with Intelicanna to provide business development and consulting services to Intelicanna, including assistance with raising financing (the “Services Agreement”) (references in this paragraph to the Company include the Israeli Subsidiary). The terms of the Services Agreement include: (1) the Company will, for a period of 18 months, assist Intelicanna to raise up to NIS 15 million for Intelicanna’s working capital purposes, whether through issuance of convertible securities or any other means; all sums raised must be approved in advance by the Company, and in accordance with a business plan presented to the Company from time to time; the Company will have no obligation under the Services Agreement to invest in Intelicanna, and no liability if its efforts to source financing for Intelicanna are unsuccessful; (2) in the event Intelicanna raises funds through assistance from the Company, the Company will be entitled to (i) cash consideration equal to 5% of any amount raised, whether directly from the Company, or from any of its affiliates or any unrelated third party, and (ii) options to acquire a number of shares of Intelicanna equal to 5% of the amount raised divided by the Exercise Price; the “Exercise Price” will be the price per share at which the amount was raised, or if it was not raised through issuance of shares, the price per share at which Intelicanna last raised funds through issuance of shares; and (3) for one or more periods of at least 90 days, each time at Intelicanna’s request which the Company may accept or decline at its discretion, the Company will provide business development and strategy-building services, including: consulting on strategy and business plan; assistance defining financing needs; helping identify ways to develop potential sources of finance; and ongoing consulting support to Intelicanna’s management team and board. Intelicanna will pay the Company a fee of NIS 2,500 per day for such services.

Also on June 25, 2020, to assist Intelicanna to raise the first NIS 1 million towards the up to NIS 15 million mentioned in the Services Agreement, the Company and the Israeli Subsidiary entered into an agreement to grant Intelicanna NIS 1 million in cash (approximately USD 290 thousand) in direct financing for working capital purposes. The financing will bear 6% annual interest and Intelicanna will make additional payments equalling 6% of its gross revenues between the date the financing is received and the date Intelicanna’s aggregate gross revenues thereafter equal NIS 2 million. If the total of the 6% interest plus the additional payments would result in a return of less than 12% in the year to the Company, the interest will be increased to bring the total return to 12%. Every three months Intelicanna must pay the interest, and after 12 months, it must repay the capital, plus the total of the additional payments due, plus any outstanding interest, and it must pay interest of 2% per month on any late payments, provided however that until the foregoing obligations are paid in full Intelicanna must pay 50% of its gross revenues to the Company upon receipt. If Intelicanna does not pay all amounts due within 18 months, it shall, at the Company’s option, issue to the Company a number of its shares equal to NIS 1.5 million divided by the lower of (i) VWAP of the three trading days prior to the lapse of the 18 months, and (ii) VWAP of the three trading days prior to the signing of the financing agreement. The financing must be paid by the Company to Intelicanna within 30 days of signing the financing agreement, subject to completion of due diligence to the Company’s satisfaction and to Intelicanna receiving a commercial growing license.

On July 9, 2020, the Company transferred to Intelicanna NIS 500 thousand (approximately $145 thousand) on account of the above loan. The Company elected the fair value option to account for the short-term loan.

Following the strategic partnership the Company entered with Intelicanna, on September 17, 2020 the Company issued to Intelicanna 2,143,470 shares of common stock in exchange for 619,589 of Intelicanna’s ordinary shares. The Company measures its investment in Intelicanna at fair value through profit or loss at level 2. The fair value reflects the value of Intelicanna’s stock price less discounts for lack of marketability since the parties may not sell the shares within the first six months after issuance. During the period, the change in traded securities’ fair value was in the amount of approximately $50 thousand.

Ilanit Halperin, a director and the Chief Financial Officer of the Company, is also the Chief Financial Officer of Intelicanna.

NOTE 9 – RELATED PARTIES

NOTE 10 – SUBSEQUENT EVENTS

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

Forward-looking Statements

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws, and is subject to the safe-harbor created by such Act and laws. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms, or other variations thereon or comparable terminology. The statements herein and their implications are merely predictions and therefore inherently subject to known and unknown risks, uncertainties, assumptions and other factors that may cause actual results, performance levels of activity, or our achievements, or industry results to be materially different from those contemplated by the forward-looking statements. Except as required by law, we undertake no obligation to release publicly the result of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Further information on potential factors that could affect our business is described under the heading “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.2019 as filed with the Securities and Exchange Commission, or the SEC, on May 11, 2020, and in Part II, Item 1A of our Quarterly Report on Form 10-Q for the six month ended, as filed with the SEC on August 14, 2020. Readers are also urged to carefully review and consider the various disclosures we have made in that report. As used in this quarterly report, the terms “we”, “us”, “our”, the “Company” and “Citrine” mean Citrine Global, Corp. and our wholly-owned subsidiary CTGL -Citrine Global Israel Ltd. unless otherwise indicated or as otherwise required by the context.

Overview and Recent Developments

The Company’s newOur business activity was introduced immediately upon the changeis comprised of control of the Company which occurred on February 27, 2020.

The Company’s new business activity comprises creating value and implementing expansion strategies for growth-stagepromising technology companies. The Company believesindustries with global growth potential in the high-tech and biotech fields. Our strategy combines comprehensive solutions that include supportive environments and the provision of, among other things, entrepreneurship and establishment of innovation centers for operations and R&D as well as financing and investment solutions, which includes strategic business development and assistance in building strategy to realize potential. Such wide spectrum of services is targeted at growing developing industries using an integrated strategy.

In accordance with our vision, to assist in the realization and growth of developing industries we believe the health wellness, food tech and Israeli medical cannabiswellness fields are demonstrating high growth potential and iswe are therefore primarily focused on these sectors. The Company aimsWe choose specific industries in which we have advantage and know-how in order to create eco-systems to empower innovative companies todeveloping industries become a global leaderssuccess and improve the health and quality of life of as many people as possible worldwide. One of our main tools to achieve this is our Innovation Centers.

Our unique platform of the innovation centers will be for creating ecosystems designed for operation, research and development, and commercialization of innovative technology industries with global growth potential. Each innovation center will focus on an innovative industry and will provide an operational solution that includes manufacturing, research and development, laboratories, clinical trials, a logistics center, distribution, import, export, and more. The Company aims to support local and global expansioncompanies that will be part of such target companies via an array of services customized to each company’s needs,the innovation centers will also benefit from assistance with strategic business planning to solving real estate-relatedstrategy building, financing, investments and finance issues. The Company offers multistrategy solutions combining strategic marketing, business development, real estatecollaborations between entrepreneurs, universities, and site management services and financing solutions. By offering such a wide spectrum of servicescompanies from all over the Company aims to help create an integrated strategy that supports its target companies in achieving their local and global expansion ambitions. The Company seeks to work proactively and collaboratively with the target companies in order to allow them to scale quickly and achieve their milestones. Further detail is provided in the notes to the financial statements.world.

DescriptionThe Company provides solutions to companies from Israel, USA, Canada, Europe and around the world through subsidiaries and local teams and professionals in each region in fields it has advantages. Citrine Global, Corp. operates in Israel through its wholly owned subsidiary, “CTGL -Citrine Global Israel Ltd.”, which focuses on Israeli technologies in the fields of health, wellness, food technology and medical cannabis. In Israel we identified the need for innovation centers in the medical cannabis and food technology industries and decided to establish the first centre in the field of cannabis through our subsidiary CTGL -Ctrine global Israel Ltd that owns 60% of “Cannovation Center Israel Ltd.”

Cannovation Center Israel Ltd. focuses on the medical cannabis industry as well as cannabidiol (CBD) and hemp infused products and edibles, botanical products, food supplements and cosmetics and intends to open a center focusing on these types of products and technologies. The planned center will include manufacturing plants, laboratories for QA, research & development, and clinical trial, facilities for recycling, logistics and distribution with import and export services, and more. We are working towards obtaining the support of The Israeli Ministry of Economy, The Israeli Innovation Authority and The Israeli Ministry of Health for the establishment of this innovation center in Israel. We view the Cannovation Center as an Israeli national project which would be a leading operational and research center and integrate partners and companies from Israel and worldwide. Our team, partners and shareholders have proven experience, and a rich network of contacts, in Israel and around the world in the fields of technology, high-tech, biotech, food technology, and medical cannabis, as well as investments, entrepreneurship, real estate, finance, and business and strategic development.

On January 6, 2020, our predecessor company, TechCare Corp., a Delaware corporation (the “TechCare”) and Citrine S A L Investment & Holdings Ltd., a wholly-owned subsidiary of the New BusinessCompany (“Citrine Investment”) entered into a Common Stock Purchase Agreement (the “Citrine Agreement”), which was later amended and restated on February 23, 2020 (the “AR Citrine Agreement”). Pursuant to the AR Citrine Agreement, TechCare agreed to sell Citrine Investment and its group of business partners, up to an aggregate of 893,699,276 shares of TechCare’s common stock, representing approximately 95% of TechCare’s fully diluted capital, in two tranches, with the initial tranche of up to 452,063,196 shares of the TechCare’s common stock to be sold conditioned upon (i) the resignation of the Company’s existing members of its board of directors (the “Board”), consisting of Oren Traistman and Yossef De-Levy, (ii) the appointment of each of Ora Meir Soffer, Ilan Ben Ishay and Ilanit Halperin as members of the Board, and (iii) the transfer of the TechCare’s signatory rights to all Company bank accounts in the name of Citrine Investment’s nominee (collectively, the “Pre-Closing”). In addition, the AR Citrine Agreement provides for the second tranche of up to the remaining number of shares of common stock that will result in Citrine, or its group of business partners, owning 95% of the TechCare’s fully diluted capital stock, to be sold conditioned upon the filing of the Company’s previously approved amendment to its First Amended and Restated Certificate of Incorporation to increase the Company’s authorized capital.

Following the recent change of control overAs described herein, since February 2020, the Company we startedhas appointed new personnel, entered into a new business. Our vision isconvertible loan and warrants agreement with affiliates, and has completed strategic transactions in respect of Novomic Ltd. (“Novomic”), Nanomedic Ltd, and Intelicanna Ltd. It has also established a wholly owned subsidiary and a 60% owned subsidiary, submitted an application in respect of the Cannovation Center, and recently submitted its formal application to belist its common stock on the Nasdaq Capital Market. The Board has approved a powerhousereverse stock split and the removal of the undesignated preferred stock from the Company’s authorized capital, all subject to the approval of the Company’s stockholders.

On January 6, 2020, definitive agreements were executed for high-growth technology companies via our businessthe sale of 90% of the shares in Novomic to Traistman Radziejewski Fundacja Ltd., which was completed on May 14, 2020, and financial expertise. To better align our name withfor the new business, we decidedissuance and sale of a number of shares equal after the issuance to change95% of the namefully diluted capital stock of the Company to Citrine S A L Investment & Holdings Ltd. and a group of related persons and entities (the “Citrine Global Corp. We filedTransaction”). Traistman Radziejewski Fundacja Ltd. is controlled by Oren Traistman, who was a Schedule 14(C)holder of over 5% of the Company’s issued share capital and a director of the Company until February 27, 2020. On February 23, 2020, the Company entered into an agreement amending and restating the January 6, 2020 agreement concerning the Citrine Global Transaction, which provided for the issuance and sale of the shares in stages. Pursuant to this agreement, on February 27, 2020 and March 5, 2020, 432,996,555 shares of common stock of the Company were issued to Citrine S A L Investment & Holdings Ltd. and its group of related persons and entities, resulting in a change of control of the Company. The amended and restated agreement provided for the issuance of 893,699,276 shares of common stock in total in consideration for $150 thousand, however, the Company was unable to complete the issuance of all these shares at that time because the Company did not have sufficient authorized capital to issue such shares of common stock. The Company’s certificate of incorporation was amended on May 14, 2020, increasing its authorized share capital by one billion shares of common stock, after filing an information statement in connection with the name change and expect the name change to take effect soon. On or about the same time, we expect to also start trading under a new ticker symbol. We will file a current report on Form 8-K once14C. On November 12, 2020, the new nameremaining 445,702,721 shares of common stock of the Company were issued to Citrine S A L Investment & Holdings Ltd. and new ticker symbol become effective.its group of related persons and entities.

We are focused on creating value and implementing expansion strategies for growth-stage technology companies.

We aim to support local and global expansion of our client companies. We plan to bolster high-growth technology companies via an array of services, with the ability to customize them to each company’s needs - from assistance with strategic business planning to solving real estate-related and finance issues.

We offer multi-strategy solutions combining strategic marketing, business development, real estate and site management services and financing solutions. Such wide spectrum of services is targeted at helping create an integrated strategy that supports our client companies in achieving their local and global expansion ambitions.

We seek to work proactively and collaboratively with our clients in order to allow them to scale quickly and achieve their milestones.

We believe the health, wellness and food tech fields are demonstrating high growth potential and are therefore primarily focused on these sectors. We plan on empowering innovative companies to become global leaders and improve the health and quality of life of as many people as possible worldwide.

Strategy

Multi-Strategy Solutions:

We offer a mix of business development services, site management and real estate support and financing solutions to help our client companies achieve their growth potential.

Potential client companies we review will only receive financing with our assistance after successful completion of due diligence and evaluation of legal, IP, financial, technological, business, equity/collateral secured loans, shares, sales, assets and real estate aspects in order to minimize risk.

The Company seeks to work proactively and collaboratively to achieve the best possible results. Through our offices and partners around the world, we believe we have the platform to achieve our goals. Our global network of partners and advisers has vast experience in working with start-ups and growth-stage companies helping them create strategic growth plans and present unique, strategic partnership options using a global professional network.

The Company’s partners and managers are all experienced investors and top-level managers that held high level positions in leading companies. They place at the Company’s disposal their network, experience and expertise and offer deep industry know-how in emerging technology markets, to achieve the growth goals and global success our client companies strive for.

The Company’s services range from assistance with strategic business planning to operational execution and financing, customized for the needs of each client company.

Business Development and Consulting:

Business development, creating synergistic partnerships, assisting managements build a strategy and set milestones, assist in finding M&A targets and in paving the way for a public offering.

We assist our client companies with:

● The Business – assisting the company management in building strategic analysis, business modelling, sales strategies, brand positioning, process development, and milestones for global success.

● Optimize Product Strategy - we bring marketing and industry experts to perfect product strategies.

● Ramp up Sales Force - having scaled businesses globally, our team assists in further sales ramp-up.

● Expand Globally - assisting the company management in building strategy and milestones for global success.

● Preparation for Investment - support with financial valuations, preliminary negotiations for investment, mergers, IPO and more.

● Local and International Networking - market development with the support of our partners and business network, we help our companies access international markets.

● The Board - provide board advisory support and assist in finding the right team.

● The Team - our extensive network allows us to find the right team and recruit top talent.

● Capital Raising - public and private capital raising.

● Public Capital - as a publicly traded company we help with solutions adapted to public trade.

● Streamline Operations - with a strong operational background, we assist in improving operations.

● Scale Infrastructure - we want our businesses to be references in terms of their infrastructure.

● Asset and Real Estate - provide solutions for companies’ real estate and sites to support their local and global expansion.

Real Estate:

Provide solutions for companies’ real estate-related needs: whether it is an office space, a lab or a greenhouse, we will assist the company in finding the right real estate at the right place and provide ongoing management services to these assets - all with the aim of enabling our client companies to focus on the core aspects of their business and create value for their shareholders.

Financing:

Assist client companies in finding potential sources of financing for their businesses, whether by connecting them to third party investors or, exceptionally, making an investment ourselves, or both.

Selection Criteria and Process:

Growth stage technology companies in the fields of healthcare and wellness with high growth potential.

Selection Criteria:

● The companies’ technology and IP

● The management team

● Financial model, market strategy and growth potential

● Addressable global market, competition and potential for international partnerships, mergers, and strategic investments

● Capability for providing collateral

● Substantial equity and revenue base

● Public companies – an advantage

The Company intends to initially focus on Israeli companies through its Israeli subsidiary CTGL - CITRINE GLOBAL ISRAEL LTD (company number 516201159) which was incorporated on June 3, 2020.

Key Target Markets

We primarily target growth-stage technology companies focused on health and wellness solutions.

Health and Wellness Market – Overview:

The health and wellness industry is growing consistently and rapidly on a global scale, consisting of over 10% of the global GDP. Health and wellbeing tops consumer agendas creating addressable target markets of trillions of dollars.^{On April 1,} The digital health market is projected to reach over $500 billion at a CAGR of nearly 30% by 2025, the biotech market is expected to reach $775 billion by 2024, and the wellness market is estimated at $4,500 billion.²

The healthcare industry, and specifically the biotech sector, seeks to solve many of the world’s medical problems.

¹ https://www.who.int/health_financing/documents/health-expenditure-report-2019.pdf?ua=1; https://www2.deloitte.com/global/en/pages/life-sciences-and-healthcare/articles/global-health-care-sector-outlook.html;

² https://www.gminsights.com/industry-analysis/digital-health-market; https://globalwellnessinstitute.org/industry-research/2018-global-wellness-economy-monitor/; https://www.grandviewresearch.com/industry-analysis/corporate-wellness-market

The wellness industry is defined as products and solutions that enable people to incorporate wellness activities and lifestyles into their daily life.

The industry is divided into the following main categories:

● therapeutics

● pharmaceuticals

● biologics

● botanicals

Improvements in health technology and scientific breakthrough innovations are changing treatment paradigms towards directions of:

● preventative

● diagnostic

● holistic patient care

Democratized knowledge is driving demand for innovative health and wellness products and services across all demographics and geographies.

Changing consumer behavior and disruptive technologies are enabling the rapid consumerization and personalization of healthcare.

There is an evolution from prescription drugs, doctor-administered diagnostics and medical treatments to a new marketplace centered around the well-being of people as individuals not patients, enabling and improving ‘quality of life’ in ways which can be seamlessly integrated into their daily routines.

For these reasons we decided to place our focus on personalized health and wellness.

Many of these innovations are being driven by a new generation of venture-backed, more consumer-orientated companies, often underserved by the traditional medical and pharma VC marketplace. There are also pronounced market asymmetries between the sources of some of the most important wellness innovations in parts of Europe and Israel and the large consumer-driven marketplaces for these innovations globally.

Health and Wellness Markets - Fields:

Medical Food:

● Vitamins and minerals

● Nutritional supplements

● Food allergies

● Personalized nutrition and functional foods

● Digestion and gut health

● Weight management

● Cannabis edibles

● Plant based alternatives

● Neutronics and personalized nutrition

Medical Cannabis:

● Cannabis plant genetics

● Pharmacological cannabis effects

● Cannabis cultivation methods

● Cannabis-infused edibles

● Cannabis-based medications

● Cannabis products development

● Cannabis wellness solutions development

● Cannabis personalized medicine solutions

Physical and Mental Wellbeing:

● Cognitive/brain wellbeing

● Physical therapies

● Injury prevention

● Relaxation management and meditation

● Brain health and neurosciences

● Mood and stress detection and management

● Hypertension

● Anxiety and depression

Anti-Aging and Improved Longevity:

● Skin health/repair

● Bone/joint health

● Personalized fitness and physical mobility

● Lifestyle management

● Fatigue abatement

● Sleep quality

● Pain management

● Mental alertness and dementia abatement

Consumer/Digital Healthcare:

● Preventive and personalized fitness tracking

● Continuous health monitoring and biofeedback

● Point of care testing and screening devices

● Personalized big data and e-health analytics

● Unregulated or minimally regulated wearables, implants

● Post hospital/surgery monitoring

Health and Wellness Markets - Trends and Drivers:

● Health and wellness industry drivers/trends turned into investment opportunities.

● Deregulation of healthcare industry: devolution from hospitals-to-clinics-to-self.

● Technical innovation driving change: consumerization, digitization and democratization of wellbeing.

● Increased awareness of food and nutrition: new generation of functional and personalized foods.

● Cognitive health just as important as physical health: alternative remedies and improved awareness.

● Increased lifespan places huge demands on current systems: anti-aging, lifestyle management, quality of life.

● New consumers’ preferences and behavior: non-surgical, nonprescription, self-administered, self-testing.

● New business models and connected ways of making payments: insurance coverage includes more wellbeing.

● New regulations allowing cannabis infused medications, products and edibles.

Geographies

The Company opens opportunities with an insider’s entree into fast-growing industries with access to strategic investment opportunities. All this under a credible institutional quality platform.

(graphic of potential future structure)

● Israel is truly a ‘start-up nation’ and has global leaders in almost any category of technology-driven innovation covered by the Company.³

● Europe has very active health and wellness innovation clusters in the Netherlands, UK, France, Nordic regions and Germany in particular.

● North America: - the USA is the market leader in health and wellness innovations and leads the world in M&A activity in this area for mature companies with proven revenues.

In December 2019, a strain of novel coronavirus (COVID-19) causing respiratory illness emerged in the city of Wuhan in the Hubei province of China, and in January 2020 the World Health Organization declared the COVID-19 outbreakCompany entered into a public health emergency. The COVID-19 has spread to many countries and is impacting the markets globally. Many countries, states and municipalities have enacted quarantining regulations which severely limit the ability of people to move and travel, and require non-essential businesses and organizations to close their physical offices. The situation created by COVID-19 worldwide has made it difficult and even impossible to meetConvertible Note Purchase Agreement (the “CL Agreement”) with different investors, parties and partners. The Company managed to adapt to the situation and built an alternative plan in a short time. Since it was difficult and even impossible to travel specifically to New York and Europe, and since the Company directors and executives are based in Israel, the Company took the decision to focus on Israel as first step, via its fully-owned subsidiary CTGL - CITRINE GLOBAL ISRAEL LTD (company number 516201159) which was incorporated on June 3, 2020.

CGTL - Citrine Global Israel Ltd

CGTL - Citrine Global Israel Ltd, which is wholly owned by the Company, targets Israeli startups and technology companies, and in particular public companies, in the fields of healthcare, wellness, foodtech and medical cannabis.

About Israel - the “Startup Nation” ⁴:

● Israel has earned the nickname “Startup Nation” for a very good reason: with a population of around 8.5 million, it has the largest number of startups per capita in the world, around one startup per 1,400 people. This phenomenon has caught the eyes of companies with global reach and global aspirations.

● The hi-tech ecosystem in Israel is currently focusing its attention on research and development in the areas of healthcare and biotech, including solutions for COVID-19 and the medical cannabis plant for medical purposes.

● Israel is known for its academic research yielding world renowned innovations and Nobel prize winners.

● In addition, the government recognizes the role of the high-tech industry as a main economic catalyst and supports innovations via funding and other models.

● Israel, as small as it may be, has attracted the interest of the world’s major technology companies, some of which have set up R&D centres in Israel.

³ https://apex.aero/2019/05/22/startup-nation-israel-become-silicon-valley

⁴ ibid.

CGTL - Citrine Global Israel Ltd – Strategy:

CGTL - Citrine Global Israel Ltd offers a unique, independent strategy that covers the whole spectrum of services and financing options to ensure the success of its chosen client companies, combining working capital financing, business escort, technological consulting services, real estate and infrastructure services for companies and a global network of experts and business contacts in the relevant fields.

CTGL - Citrine Global Israel Ltd – Professional Ecosystem:

CTGL - Citrine Global Israel Ltd has a network which includes serial entrepreneurs, leading business people, top scientists, researchers and industry leaders, and this helps it to promote its client companies towards success.

CTGL - Citrine Global Israel Ltd leverages the knowledge and experience of its affiliate Citrine S A L Investment & Holdings Ltd, whose wholly owned subsidiariesWealthStone Private Equity Ltd, WealthStone Holdings Ltd, Golden Holdings Neto Ltd, Beezz Home Technologies Ltd, Citrine S A LBiotech 5 LP, Citrine High Tech Ltd6 LP, Citrine High Tech 7 LP, Citrine 8 LP, Citrine 9 LP and Citrine S A L Biotech Ltd serve as general partners in investment funds10 LP (together, the “Buyer”), all of which are affiliated with the Company. Under the CL Agreement, the Buyer agreed to purchase and the Company agreed to issue and sell, for up to an aggregate principal amount of up to $1,800 thousand, notes convertible into shares of common stock of the Company (the “Notes”), with a drawdown period starting on April 1, 2020 and ending upon the earlier of (i) 6 months thereafter and (ii) the consummation of a public offering by the Company. The CL Agreement provides that have been operating for yearsthe Notes will bear an annual interest rate of six percent (6%) and that the conversion price per share of Common Stock shall equal 85% multiplied by the market price (as defined in the Israeli start up marketNotes), representing a discount of 15%, and have long term experiencethat each Note will mature 18 months following the payment date. On April 19, 2020 and June 12, 2020, the Company provided draw down notices under the CL Agreement for amounts of $170 thousand and $1 million, respectively, which were received in investingcash by the Company. On June 12, 2020, the CL Agreement (hereafter “CL Agreement Amendment”) was amended to provide that for each draw down made by the Company under the CL Agreement, the Buyer shall be entitled to receive two types of warrants: A Warrants and B Warrants, with the A Warrants exercisable at any time between 6 and 12 months after issuance for an exercise price per share equal to 1.25 times the average of the closing prices of the 3 trading days preceding the draw down, and the B Warrants exercisable at any time between 6 and 24 months after issuance for an exercise price per share equal to 1.5 times the average of the closing prices of the 3 trading days preceding the draw down, and that the number of each of the A Warrants and the B Warrants issued will be equal to the draw down amount divided by the average of the closing prices of the 3 trading days preceding the draw down, and that these amended terms will apply in and promoting many startup companies.respect of all draw downs, including drawdowns made prior to the date of the amendment.

CTGL - Citrine GlobalOn May 26, 2020, the board of directors of the Company appointed Ms. Ilanit Halperin as Chief Financial Officer of the Company, replacing Mr. Zviel Gedalihou, effective from May 27, 2020. The board of directors also appointed Ms. Halperin as Chief Financial Officer of the Company’s wholly-owned Israel Ltd also leveragessubsidiary, effective once incorporated.

On May 31, 2020, the knowledgeCompany entered into a strategic partnership with Intelicanna Ltd., an Israeli medical cannabis company listed on the Tel Aviv Stock Exchange with ticker symbol INTL (“Intelicanna”), via a share exchange agreement and experiencean agreement for future issuance of shares. The share exchange agreement provides that (i) the number of shares each party issues to the other will be calculated by dividing $500 thousand by the volume weighted average price (VWAP) of the issuing party’s shares in the three trading days preceding the signing of the agreement, (ii) the issuance by Intelicanna will take place upon, and subject to, receipt of approval from the Tel Aviv Stock Exchange, and the issuance by the Company will follow immediately thereafter, and (iii) the parties may not sell the shares within the first six months after issuance, and thereafter the parties may sell the shares issued to them if the shares become registered through a prospectus approved by the relevant securities authority, or under an exemption provided by applicable securities law, subject to a limit on the number of shares either party may sell per day. The agreement for future issuance of shares provides that a fall in a share price of a party, not exceeding 20%, measured six months after issuance of shares by both parties pursuant the share exchange agreement, will be offset by the issuance of additional shares to the other party to bring up to $500 thousand the total value of the shares issued to the other party.

Furthermore, on June 25, 2020, the Israeli Subsidiary entered into a services agreement with Intelicanna to provide business development and consulting services to Intelicanna, including assistance with raising financing (the “Services Agreement”) (references in this paragraph to the Company include the Israeli Subsidiary). The terms of the Services Agreement include: (1) the Company will, for a period of 18 months, assist Intelicanna to raise up to NIS 15 million for Intelicanna’s working capital purposes, whether through issuance of convertible securities or any other means; all sums raised must be approved in advance by the Company, and in accordance with a business plan presented to the Company from time to time; the Company will have no obligation under the Services Agreement to invest in Intelicanna, and no liability if its efforts to source financing for Intelicanna are unsuccessful; (2) in the event Intelicanna raises funds through assistance from the Company, the Company will be entitled to (i) cash consideration equal to 5% of any amount raised, whether directly from the Company, or from any of its affiliates comprisingor any unrelated third party, and (ii) options to acquire a number of shares of Intelicanna equal to 5% of the WealthStone Group,amount raised divided by the Exercise Price; the “Exercise Price” will be the price per share at which specializesthe amount was raised, or if it was not raised through issuance of shares, the price per share at which Intelicanna last raised funds through issuance of shares; and (3) for one or more periods of at least 90 days, each time at Intelicanna’s request which the Company may accept or decline at its discretion, the Company will provide business development and strategy-building services, including: consulting on strategy and business plan; assistance defining financing needs; helping identify ways to develop potential sources of finance; and ongoing consulting support to Intelicanna’s management team and board. Intelicanna will pay the Company a fee of NIS 2,500 per day for such services.

Also on June 25, 2020, to assist Intelicanna to raise the first NIS 1 million towards the up to NIS 15 million mentioned in real estate and hedge funds,the Services Agreement, the Company and the Neto Group, which specializesIsraeli Subsidiary entered into an agreement to grant Intelicanna NIS 1 million in insurancecash (approximately USD 290 thousand) in direct financing for working capital purposes. The financing will bear 6% annual interest and financial planning consultancy.Intelicanna will make additional payments equalling 6% of its gross revenues between the date the financing is received and the date Intelicanna’s aggregate gross revenues thereafter equal NIS 2 million. If the total of the 6% interest plus the additional payments would result in a return of less than 12% in the year to the Company, the interest will be increased to bring the total return to 12%. Every three months Intelicanna must pay the interest, and after 12 months, it must repay the capital, plus the total of the additional payments due, plus any outstanding interest, and it must pay interest of 2% per month on any late payments, provided however that until the foregoing obligations are paid in full Intelicanna must pay 50% of its gross revenues to the Company upon receipt. If Intelicanna does not pay all amounts due within 18 months, it shall, at the Company’s option, issue to the Company a number of its shares equal to NIS 1.5 million divided by the lower of (i) VWAP of the three trading days prior to the lapse of the 18 months, and (ii) VWAP of the three trading days prior to the signing of the financing agreement. The financing must be paid by the Company to Intelicanna within 30 days of signing the financing agreement, subject to completion of due diligence to the Company’s satisfaction and to Intelicanna receiving a commercial growing license.

CTGL - Citrine Global Israel Ltd - Target Market: Medical Foods:On July 9, 2020, the Company transferred to Intelicanna NIS 500 thousand (approximately $145 thousand) on account of the above loan. Following the strategic partnership the Company entered with Intelicanna.

The medical foods market covers fields including: vitaminsOn September 17, 2020 the Company issued to Intelicanna 2,143,470 shares of common stock in exchange for 619,589 of Intelicanna’s ordinary shares. Ilanit Halperin, a director and minerals; nutritional supplements; food allergies; personalized nutrition and functional foods; digestion and gut health; weight management; cannabis edibles; plant based alternatives; neutronics and personalized nutrition.the Chief Financial Officer of the Company, is also the Chief Financial Officer of Intelicanna.

On June 3, 2020 The global medical foods market is expected to be worth $30.4 billion by 2027, growing from $18.4 billion in 2019 atCompany established a CAGR of 6.3%. ⁵

Medical food market drivers include:

● Rise in geriatric population

● Growing incidences of chronic diseases

● Increasing awareness regarding clinical nutrition amongst patients and healthcare professionals

In the past, meal replacements were mainly consumed by the elderly or the ill, frequently suffering from nutritional deficiencies. This has changed in recent years, with the marketing of meal replacements increasingly targeting healthy adults.

In addition, we see the emergence of cannabis-enhanced health edibles and drinks, that is expected to continuously grow by more than 250% by 2021. ⁶

⁵ https://www.grandviewresearch.com/industry-analysis/medical-foods-market

⁶ https://www.grandviewresearch.com/industry-analysis/medical-foods-market; https://www.grandviewresearch.com/press-release/global-medical-foods-mark

CTGL - Citrine Global Israel Ltd Target Market: Regulated Medical Cannabis:

The medical cannabis market covers fields including: cannabis plant genetics; pharmacological cannabis effects; cannabis cultivation methods; cannabis-infused edibles; cannabis-based medications; cannabis products development; cannabis wellness solutions development; cannabis personalized medicine solutions.

Medical cannabis solutions have been approved for medical use in many countries and have been shown to benefit more than 40 serious medical conditions, including:

● Cancer

● Multiple sclerosis

● Parkinsons

● Epilepsy

● Chronic pain

● Post trauma

● Chronic digestive problems, Crohn’s Disease

● Anxiety and sleep disorders

● Concentration and memory problems

● Tourette Syndrome

Medical cannabis in Israel:

● The State of Israel is currently focusing its attention on research and development on the cannabis plant for medical purposes.

● Research into the cannabis plant began in Israel in the 1960s, when Prof. Rafael Meshulam first discovered the main components of the cannabis plant, a discovery that was a world breakthrough in the study of the plant at the time.

● Research into the cannabis plant in Israel has continued ever since, in academic and research institutions. In recent years, many studies have been conducted in the field of medical cannabis in Israel. Israel is considered a world center in the field of cannabis research and treatment.

● The cannabis plant is still not permitted for research in the USA, is still restricted under US federal law, and is only recently increasingly studied in European countries.

● As a result, Israel has an advantage in the field, relative to the rest of the world, and in academic knowledge on the medical potential of the cannabis plant in treating diseases such as cancer, epilepsy, and childhood autism.

● The world’s major drug companies have already begun to express an interest innew Israeli research, as well as the big challenge involved in registering patents and intellectual property for drugs using the cannabis plant, which is a complex plant with hundreds of active ingredients.

● Around 100 cannabis–related startups are currently operating in Israel.

Medical Cannabis Global Market Size:

● In the world, there are over 40 countries that allow legal use of medical cannabis and the medical cannabis industry is also expanding to the wellness and medical foods sectors with cannabis incorporated into a variety of edibles, pills, spray products, transdermal patches, supplements, salves, ointments and lotions.

● Legal medical cannabis products sales grew 45.7% to $14.9 billion in 2019. This worldwide growth estimate reflects the highest annual growth rate to date. As a result of expected growth ArcView Group has updated their 2024 forecast to $42.7 billion in worldwide legal cannabis sales. ⁷

● In addition, we see the emergence of the cannabis-enhanced health edibles and drinks market, that is expected to continuously grow by more than 250% by 2021. ⁸

Facilities and real estate services for the health and medical cannabis industry:

● The healthcare and medical cannabis industry creates attractive opportunities to invest in the industrial real estate sector with a focus on regulated medical-use cannabis facilities.

● Healthcare and medical cannabis companies specifically need infrastructure and assets that are licensed and guarded according to various regulations, involve long-term rentals, and more.

●subsidiary, CTGL – Citrine Global Israel Ltd, has built a model adapted to these companies’ needs, covering innovation centers, laboratories, pharmacies, and clinics. The Cannovation Center is an application of this model.(wholly owned subsidiary 100%) (the “Israeli Subsidiary”).

Cannovation Center –On June 22, 2020, the Company entered into a center for cannabis innovation in Israel.

The “Cannovation Center” - Cannabis Innovation Center - in Israel, referred to in Note 10 above, is being designed to address the needs of the emerging cannabis, CBD and hemp industry. It is intended that the Cannovation Center, when built, will demonstrate a unique model ofshare purchase agreement with Nanomedic Technologies Ltd., an all-in-one platform including factories for producing cannabis, hemp and CBD products, laboratories,Israeli private company and a logistics and distribution center. It is intended that it will support the cannabis eco-system including cannabis growers, cannabis product developers, researchers and other cannabis businesses, which operate in a field that requires interdisciplinary professional expertise, compliance with a wide set of regulatory demands including IMC-GMP production standards, 24/7 surveillance and security, special recycling procedures, and more. It is intended that the Cannovation Center in Israel will provide solutions for companies in Israel and worldwide, leveraging Israel’s leadership in cannabis innovation and promoting the production and distribution of cannabis, hemp and CBD products for local and global markets. Affiliates of the Company are in the process of obtaining a government grant for the Cannovation Center. The Israeli Government provides grants and subsidies specific to the cannabis industryrelated party as further described below (“Nanomedic”) as part of its strategy for boosting the economy through technological innovation. Israel isan A-1 funding round open only to existing Nanomedic shareholders and their affiliates. Nanomedic developed SpinCare™, a leading source of technological innovation, including in the cannabis industry. It is anticipatedsystem that the Company’s Israeli Subsidiary will hold around 60% of the shares in the Cannovation Center. The Cannovation Center venture isintegrates electrospinning technology into a result of years of involvement by affiliates of the Company in the cannabis industry. It is hoped that this will be the first center, to be joined by additional centers around the world.

⁷ https://www.grandviewresearch.com/industry-analysis/medical-foods-market

⁸ https://www.grandviewresearch.com/industry-analysis/medical-foods-market; https://www.grandviewresearch.com/press-release/global-medical-foods-mark

portable, bedside device, offering immediate wound and burn care treatment. The Company at this time intendspaid $450,000 for A-1 preferred shares of Nanomedic and also received warrants to carry out its cannabis-related activity through its Israeli subsidiary only, and not the US parent company, and to be involved, and engage with client companies that are involved,purchase A-1 preferred shares. Such investment represents a holding of approximately 3.3% in cannabis-related activities onlyNanomedic. The round raised approximately $2.2 million in countries where the activity has been authorised under all appliable laws. The Company does not at this time intend to be involved, either directly or indirectly, in cannabis-related activity in the United States, in light of the federal-level restrictions in place at this time.

The Company’s primary shareholders

The Company and its wholly-owned subsidiary CTGL - Citrine Global Israel Ltd leverage the knowledge and experience of the Company’s primary shareholders: members of the WealthStone Group, which specializes in real estate and hedge funds;total. Citrine S A L Investment & Holdings Ltd which is partand certain of its partnerships, all affiliates of the Wealthstone Group’s private equity activityCompany, were already beneficial shareholders of Nanomedic immediately prior to the A-1 funding round. Ilan Ben-Ishay, a director of the Company was already a beneficial shareholder of Nanomedic immediately prior to the A-1 funding round. Ora Meir Soffer, chairperson and CEO of the Company, was already a director of both Nanomedic and its Israeli parent company Nicast Ltd. immediately prior to the A-1 funding round, and she was also already a beneficial shareholder of Nanomedic immediately prior to the A-1 funding round.

On July 21, 2020, the Israeli Subsidiary began to work with certain shareholders of the Company who have been working towards establishing a innovation Center focuses on the medical cannabis industry , cannabidiol (CBD) , hemp, botanical, food supplements and cosmetics products The Company’s board of directors approved that the Israeli Subsidiary to proceed with preparations for investmentsentering into an agreement with certain shareholders of the Company pursuant to which (1) the Israeli Subsidiary would hold approximately 60% of the shares in the high-techCannovation Center, and biotech sectors; and memberscertain shareholders of the Neto Group, which specializesCompany would hold approximately 40% of the shares; and (2) the Israeli Subsidiary would accept limitations on its rights in insurancethe Cannovation Center if and financial planning consultancy. 

The WealthStone Groupas mandated under Israeli regulations on the involvement of foreign entities.

The WealthStone Group, which is oneCannovation Center has submitted an application to the Israeli Ministry of the Economy for a grant and is also preparing to apply for licenses from the Medical Cannabis Unit in the Israeli Ministry of Health.

As part of this process, the Israeli Subsidiary established a new Israeli subsidiary Cannovation Center Israel Ltd, which was incorporated on August 20, 2020 (the “Cannovation Center”) and the Company’s primary shareholders and makes its knowledge and experience availableIsraeli Subsidiary holds 60% of the shares in the Cannovation Center.

On August 4, 2020, the board of directors of the Company approved for the Company and/or the Israeli Subsidiary (references in this paragraph to the Company specializesinclude the Israeli Subsidiary) to proceed with preparations for investing in alternative investments and operates in various fields with extensive financial knowledge and experience. The WealthStone Group has real estate funds, hedge funds and technology investments funds and manages more than half a billion US dollars in investments in Israel.

The Wealthstone Group introduces private investors to a world of investments which until now was reserved toiBOT: Israel Botanicals, an exclusive group, to allow investors to benefit from diversified alternative investments, with strong collateral and attractive returns.

The Wealthstone GroupIsraeli botanical nutraceutical company. iBOT has a variety of products withmanufacturing facility for a wide range of investment periods, riskbotanical formulations, and security levels, so that each investorpart of its strategy is matchedto combine this with hemp and CBD. The board gave its approval, subject to agreement of definitive terms and receipt of all necessary corporate and other approvals, for a proposed transaction in which (1) the most suitable investment.Company would have an option to make one or more investments during a period of 12 months in an aggregate amount of up to $1 million (one million US dollars); (2) the investments may be through loans, direct equity purchases, or other means, and would be based on milestones; and (3) iBOT would grant the Company a 25% discount in its next fundraising. In addition, the board approved for the Company to proceed with preparations for entering a services agreement with iBOT pursuant to which the Company would provide consulting and other services to iBOT. iBOT is controlled by an affiliate of the Company.

On October 8, 2020, the board of directors of the Company approved a reverse stock split of the Company’s authorized, issued and outstanding shares of common stock, par value $0.0001 per share, at a ratio between 1-for-40 to 1-for-100, subject to the approval of the Company’s stockholders (the “Reverse Stock Split”). The final ratio of the Reverse Stock Split will be determined by the Board at a later date. Since such stock split was not approved yet as of the approval date of these financial statements, it is not reflected in any shares information disclosed within these financial statements.

The worldCompany has recently submitted its formal application to list its common stock on the Nasdaq Capital Market (“Nasdaq”). Any listing of alternative investmentsthe Company’s common stock on Nasdaq is multi-faceted, withsubject to review by Nasdaq and is also dependent on the Company meeting all of the necessary Nasdaq listing requirements, including, but not limited to, shareholder’s equity requirements, a wide rangesufficient price per share and a sufficient number of investment opportunitiesround lot holders. There is no guarantee that tendthe Company will be successful in obtaining the necessary approvals to be quite confusing for those who are unfamiliar with the field.list its common stock on Nasdaq.

The management teamOn November 8, 2020, the board of directors of the company approved an amendment to its certificate of incorporation to remove from its authorized capital stock of the Company the fifty million (50,000,000) shares of undesignated preferred stock, par value $0.0001 per share, subject to the approval of the Company’s stockholders. No shares of preferred stock are currently outstanding, and such removal and cancellation would remove the funds’ GP partners specialize in each fund’s area, covering real estate, technologies, hedge funds and financing, and they are supported by top professional consultants inauthority of the respective fields, among them, appraisers, engineering companies, legal advisers, and other experts in each sector.board of directors or any authorized committee thereof to provide for the issuance of shares of preferred stock without further approval of the Company’s stockholders.

Wealthstone Real Estate Ltd:

Wealthstone Real Estate Ltd, which is partResults of Operations during the Wealthstone Group, deals with financingthree and lending for projects in the real estate sector, urban renewal, removal-and-construction, and projects requiring equity and senior debt financing. It is one of the largest companies in Israel for financing renewal projects through limited partnerships in which it servesnine months ended September 30, 2020 as a general partner. It is ranked by DUN’S 100 among the leading 100 companies in Israel’s real estate sector. DUN’S 100 is a professional, objective, and reliable guide based on fixed, defined, and measurable criteria according to various market sectors.

Citrine S A L Investment & Holdings Ltd

Citrine S A L Investment & Holdings Ltd, which is one of the Company’s primary shareholders and makes its knowledge and experience availablecompared to the Company, is part of Wealthstone’s private equity activity for investments in the high-techthree and biotech sectors.

Citrine S A L Investment & Holdings Ltd’s related technology funds, in which its wholly owned subsidiaries serve as general partners, invest in high potential Israeli startup companies that own transformational technologies, leading a unique, independent investment strategy with a professional team and a global network of first-class partners and advisors.

Citrine S A L Investment & Holdings Ltd operates through limited partnerships, in which its wholly owned subsidiaries Citrine S A L High Tech Ltd and Citrine S A L Biotech Ltd serve as general partners, offering a wide array of investment opportunities to private investors, for a range of investment periods.

The funds operate in various fields of technology investment and include:

● Partnerships for investing in high-tech companies.

● Partnerships for investing in biotech companies.

● Partnerships for investing in companies designed for an IPO.

● Along with bringing the financial investment, Citrine S A L Investment & Holdings Ltd provides assistance in building strategies, finding business partners, giving support in financial processes, mergers and acquisitions.

Citrine S AL Investment & Holdings Ltd’s related funds have already invested in several promising Israeli companies including Nicast, NanoMedic, WellBe, Biocep, Improdia, Intelicanna, IBOT, Cannbit, Novomic, Dario, BSP Medical, and ICB Israel-China Fund and more.

The Citrine S A L Investment & Holdings Ltd - ICB Israel-China Fund collaboration targets strategic international and Chinese partners interested in investment in and commercial cooperation with technology companies. Such investment and commercial collaboration includes investment in medical and biomedical companies in order to bring them to China as part of joint ventures.

Additionally, Citrine S A L Investment & Holdings Ltd offers models and investments in partnerships that are designed for institutional investors, foreign investors and designated investment groups.

Neto Financial Planning Insurance Agency Ltd

Neto Financial Planning Insurance Agency Ltd, which is part of the Neto Group, one of the Company’s primary shareholders, and makes its knowledge and experience available to the Company, was founded over 27 years ago and is one of the largest companies in the Israeli private and business financial planning and insurance industry.

Neto Financial Planning Insurance Agency Ltd has thousands of loyal customers, which it has been accompanying for many years, providing financial advisory services in respect of products with a market worth of over $3 billion.

Neto Financial Planning Insurance Agency Ltd is Israel’s largest financial planning private company. DUN’S 100 has ranked Neto Financial Planning Insurance Agency Ltd among the leading 100 companies in Israel’s financial planning sector each year since 2018. Neto Financial Planning Insurance Agency Ltd is the only Israeli broker included in the DUN’S 100 rankings. Neto Financial Planning Insurance Agency Ltd provides holistic (comprehensive) financial planning for thousands of clients across Israel, through a network which includes financial planners who are licensed pension advisors and an administrative and professional support team.

Neto Financial Planning Insurance Agency Ltd’s significant scale and experience enable its clients to benefit from a wide variety of investment opportunities, and services and benefits covering income tax planning and reduction, retirees, wills, medical committees, loans, mortgages, review and analysis of their insurance files, basic insurance, lower costs and access to current and comprehensive knowledge and technologies, for the management of their entire financial lives.

The Neto Group offers financial planning products encompassing the full range of financial needs of every household in Israel, including Neto - Financial Planning, Neto - Financial Protection, Neto - Savings and Investment Portfolios for Retirement Planning and Neto - Alternative Investments.

Neto - Alternative Investments: the Neto Group offers its clients a variety of alternative investments that are not directly sensitive to capital markets swings in Israel and globally. The operations in this area are conducted through the Wealthstone Group (which is owned 50% by Neto), which serves as the Neto Group’s alternative investments arm.

Results of Operationsnine months ended September 30, 2019

Revenues

WeDuring the three months ended September 30, 2020, we did not generate any revenues. During the nine months ended September 30, 2020, we generated $11 thousand in revenues, in the six months ended June 30, 2020 compared to $85$36 thousand and $121 thousand in revenues in the sixthree and nine months ended JuneSeptember 30, 2019. The decrease is mainly attributable to a decreasereduction in the demand forsales of Novomic products, and ourthat failure to obtain FDAthe United States Food and Drug Administration approval for our Novomic products or enter into additional engagements with distributers,distributors, and also as a result of our selling 90% of our shares in Novomic and focusing on our new strategy and business activity, and therefore ceasing to consolidate the financial statements of Novomic.

Gross Profit

During the three months ended September 30, 2020, we did not have any gross profit or loss. During the nine months ended September 30, 2020, we incurred a gross loss of $2 thousand, compared to gross losses of $2 thousand and $30 thousand in the three and nine months ended September 30, 2019. The decrease in the gross losses is mainly as a result of our selling 90% of our shares in Novomic and focusing on our new strategy and business activity, and therefore ceasing to consolidate the financial statements of Novomic.

Research and Development Expenses

During the three months ended September 30, 2020, we did not have any research and development expenses. During the nine months ended September 30, 2020, our research and development expenses were $18 thousand as compared to $34 thousand and $115 thousand during the three and nine months ended September 30, 2019. The decrease is mainly attributable to a reduction in expenses related to the Novomic products as a result of the conclusion of our Board that the Company would not be able to successfully commercialize the Novomic products and also to us selling 90% of our shares in Novomic and focusing on our new business activity.

Gross Profit

We incurred a gross loss duringactivity, and therefore ceasing to consolidate the six months ended June 30, 2020,financial statements of $2 thousand, compared to $33 thousand in the six months ended June 30, 2019.

Research and Development Expenses

Our research and development expenses during the six months ended June 30, 2020 were $18 thousand as compared to $80 thousand, during the six months ended June 30, 2019. The decrease is mainly attributable to decrease in expenses related to the Novomic products as a result of the conclusion of our board of directors that the Company would not be able to successfully commercialize the Novomic products.Novomic.

Marketing, General and Administrative Expenses

Our marketing, general, and administrative expenses during the sixthree and nine months ended JuneSeptember 30, 2020, were $1,757$1,058 thousand as compareand $2,815 thousand compared to $811$366 thousand and $1,177 thousand during the sixthree and nine months ended JuneSeptember 30, 20192019. The increase in our marketing, general and administrative expenses is mainly attributable to the increase in our share basedshare-based compensation expenses, somewhatwhich was partially offset by a decrease in marketing expenses and professional services as a result of the conclusion of our board of directorsBoard that the Company would not be able to successfully commercialize the Novomic products.products and therefore ceasing to consolidate the financial statements of Novomic.

Net Loss

During the sixthree and nine months ended JuneSeptember 30, 2020, we incurred a net loss of $1,786$1,229 thousand and $3,015 thousand. During the sixthree and nine months ended JuneSeptember 30, 2019, we incurred a net loss of $937$405 thousand and $1,342 thousand. The increase in net loss is mainly attributable to the share based compensation expenses as described above.

Liquidity and Capital Resources

Our balance sheet as of JuneSeptember 30, 2020, reflects total assets of $4,476$3,974 thousand, consisting mainly of cash and cash equivalents in the amount of approximately $580$295 thousand, investment in trading securities of approximately $464 thousand, prepaid share based payment, and other current assets of approximately $3,445$2,613 thousand, short-term loan measured at a fair value of approximately $152 thousand and investments valued under the measurement alternative of approximately $450 thousand. As of December 31, 2019, our balance sheet reflects total assets of approximately $257 thousand consisting mainly of cash and cash equivalents in the amount of approximately $18 thousand, inventory in the amount of approximately $35 thousand, other receivablescurrent assets of approximately $19 thousand, and property and equipment net, of approximately $156 thousand.

As of JuneSeptember 30, 2020, we had total current liabilities of approximately $630$748 thousand, consisting mainly of accounts payable and accrued expenses of approximately $175$263 thousand, commitment to issue shares of approximately $105 thousand, the fair value of shares exchange agreement of approximately $66$60 thousand and fair value of the convertible component in convertible loan of approximately $285$320 thousand. As of December 31, 2019, we had total current liabilities of approximately $360 thousand consisting mainly of accounts payable and accrued expenses of approximately $224 thousand and a note payable of approximately $123 thousand.

As of JuneSeptember 30, 2020, excluding prepaid share based payment of $3,445$2,613 thousand to a service provider, we had a negative working capital of approximately $50$302 thousand, compared to negative working capital of approximately $278 thousand at December 31, 2019. Our total liabilities as of JuneSeptember 30, 2020 were approximately $1,211$1,425 thousand, compared to approximately $368 thousand at December 31, 2019.

During the sixnine months ended JuneSeptember 30, 2020, we used approximately $473$613 thousand of cash in our operating activities. This resulted mainly from an overall net loss of approximately $1,786$3,015 thousand, net of an increase in stock-based compensation of approximately $1,340$2,201 thousand, fair value adjustment of liability in connection with stock exchange agreement of approximately $66 thousand.$60 thousand, and expenses in respect of convertible loans.

During the sixnine months ended JuneSeptember 30, 2019, we used approximately $690$1,035 thousand of cash in our operating activities. This resulted mainly from an overall net loss of approximately $937$1,342 thousand, a management fee waiver of approximately $145,$199 thousand, a decrease in accounts payable and accrued expenses of approximately $75$82 thousand, and an increase in other current assets of approximately $132$169 thousand.

During the sixnine months ended JuneSeptember 30, 2020, we used approximately $464$608 thousand of cash in our investing activities. This resulted mainly from a subsidiary no longer consolidated of approximately $14 thousand and an investment accounted under the measurement alternative of $450 thousand and loans granted of $145 thousand, as compared to approximately $4$3 thousand in the same period in the prior year.

During the sixnine months ended JuneSeptember 30, 2020, we provided approximately $1,501 thousand of cash by our financing activities. This resulted mainly from the issued convertible notes and warrants of approximately $1,170 thousand and a commitment to issue shares to related parties of approximately $105 thousand and anloans from related parties of approximately $154 thousand and issuance of common stock of approximately $72 thousand, and loans from related parties of approximately $154 thousand, as compared to approximately $457$698 thousand in the same period in the prior year.