UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

MARK ONE

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

for the Quarterly Period ended September 30,March 31, 20222023; or

 

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

for the transition period from ________ to ________

 

Commission file number 000-55680

A picture containing shape

Description automatically generated

 

CITRINE GLOBAL, CORP

(Exact name of registrant as specified in its charter)

 

Delaware 68-0080601
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

 

2 Jabotinsky St.,Atrium Tower5 Golden Beach, Ramat GanCeasarea Israel 52505013088900
(Address of principal executive offices) Zip Code

 

+ ((972)972) 9 855 1422

(Registrant’s telephone number, including area code)

 

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

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
N/A N/A N/A

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

 

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

 

Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
  Emerging growth company

 

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

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

 

As of November 14, 2022,May 12, 2023, there were outstanding 943,703,873956,479,039 shares of the registrant’s common stock, par value $0.0001 per share, were outstanding.share.

 

 
 

 

CITRINE GLOBAL, CORP

Form 10-Q

September 30, 2022March 31, 2023

 

 Page
  
PART I — FINANCIAL INFORMATION
  
Item 1 – Unaudited Condensed Consolidated Financial Statements44
  
Condensed Consolidated Balance Sheets – September 30, 2022March 31, 2023 (unaudited) and December 31, 202120225
  
Condensed Consolidated Statements of Operations for the three and nine months ended September 30,March 31, 2023 and 2022 and 2021 (unaudited)66
  
Condensed Consolidated Statement of Changes in Stockholders’ Equity (deficit) for the three and nine months ended September 30,March 31, 2023 and 2022 and 2021 (unaudited)77
  
Condensed Consolidated Statements of Cash Flows for the ninethree months ended September 30,March 31, 2023 and 2022 and 2021 (unaudited)9
  
Notes to Unaudited Condensed Consolidated Financial Statements11
  
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations2522
  
Item 3 – Quantitative and Qualitative Disclosures About Market Risk3634 
  
Item 4 – Controls and Procedures3634
  
PART II — OTHER INFORMATION 
  
Item 1 – Legal Proceedings3734
  
Item 1A – Risk Factors3734
  
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds3734
  
Item 3 – Defaults upon Senior Securities3734
  
Item 4 – Mine Safety Disclosures3734
  
Item 5 – Other Information3734
  
Item 6 – Exhibits3538
  
Exhibit Index3835
  
SIGNATURES3936

2
 

  

CITRINE GLOBAL, CORP.

 

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

AS OF SEPTEMBER 30, 2022MARCH 31, 2023

 

3
 

 

CITRINE GLOBAL, CORP.

 

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

AS OF SEPTEMBER 30, 2022MARCH 31, 2023

U.S. DOLLARS IN THOUSANDS

 

TABLE OF CONTENTS

 

 Page
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS: 
Condensed consolidated balance sheets as of September 30, 2022March 31, 2023 (unaudited), and December 31, 2021202253
Condensed consolidated statements of operations and comprehensive loss for nine and three months ended September 30,March 31, 2023 and 2022 and 2021 (unaudited)64
Condensed consolidated statements of stockholders’ deficit for the ninethree months period ended September 30, 2022March 31, 2023 and 2021 (unaudited)2022(unaudited)7 - 85
Condensed consolidated statements of cash flows for the ninethree months ended September 30,March 31, 2023 and 2022 and 2021 (unaudited)9 - 106
Notes to unaudited condensed consolidated financial statements117 - 2419

4
 

CITRINE GLOBAL, CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands, except share and per share data)

 

 September 30, December 31,  March 31, December 31, 
 2022 2021  2023  2022 
 (Unaudited) (Unaudited)    
A s s e t s  
Assets        
Current Assets                
Cash and cash equivalents  179   270   62   77 
Restricted cash  8   10 
Short-term loan granted to others  17   15 
Prepaid expenses  59   30   185   88 
Other current assets  21   24   19   20 
Total current assets  284   349 
Total Current assets  266   185 
                
Non-current assets                
Investments valued under the measurement alternative  450   450   903   894 
Property and equipment, net  229   256   224   230 
Total non-current assets  679   706   1,127   1,124 
T o t a l assets  963   1,055 
Total assets  1,393   1,309 
                
Liabilities and Stockholders’ Deficit                
Current liabilities                
Short term loan  80   - 
Short term loans  -   82 
Credit facility  51   - 
Accounts payable and accrued expenses  213   226   254   247 
Accrued compensation  1,325   838   1,616   1,476 
Total current liabilities  1,618   1,064   1,921   1,805 
        
Non-current liability        
                
Convertible component in convertible notes  138   -   119   161 
  1,1             
Convertible notes  1,704   1,431   2,002   1,814 
                
T o t a l liabilities  3,460   2,495 
Total liabilities  4,042   3,780 
                
Stockholders’ Deficit                
Common stock, par value $0.0001 per share, 1,500,000,000 shares authorized at September 30, 2022 and December 31, 2021; 943,703,873 and 942,568,006 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively  94   94 
Common stock, par value $0.0001 per share, 1,500,000,000 shares authorized at March 31, 2023 and December 31, 2022; 956,479,039 and 943,703,873 shares issued and outstanding at March 31, 2023 and December 31, 2022  95   94 
Additional paid-in capital  22,934   22,073   24,351   23,248 
Stock to be issued  30   44   34   474 
Accumulated deficit  (25,668)  (23,757)  (27,254)  (26,402)
Accumulated other comprehensive income  113   106   125   115 
T o t a l stockholders’ deficit  (2,497)  (1,440)
T o t a l liabilities and stockholders’ deficit  963   1,055 
Total stockholders’ deficit  (2,649)  (2,471)
Total liabilities and stockholders’ deficit  1,393   1,309 

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

 

5
 

 

CITRINE GLOBAL, CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(U.S. dollars in thousands, except share and per share data)

 

  2022  2021  2022  2021 
  Nine months ended  Three months ended 
  September 30  September 30 
  2022  2021  2022  2021 
  (Unaudited)  (Unaudited) 
             
Research and development expenses  (83)  (123)  (27)  (57)
Marketing, general and administrative expenses  (1,234)  (3,281)  (565)  (1,168)
Operating loss  (1,317)  (3,404)  (592)  (1,225)
Financing expenses, net:                
Expenses related to convertible loan terms  (575)  (1,034)  (582)  (237)
Other financing expenses, net  (19)  (70)  (2)  (87)
Financing expenses, net  (594)  (1,104)  (584)  (324)
                 
Net loss attributable to common stockholders  (1,911)  (4,508)  (1,176)  (1,549)
                 
Loss per common stock (basic and diluted)  

-*

   

-*

   

-*

   

-*

 
                 
Basic weighted average number of shares of common stock outstanding  942,713,630   942,568,006   943,000,129   942,568,006 
                 
Comprehensive loss:                
Net loss  (1,911)  (4,508)  (1,176)  (1,549)
Other comprehensive income attributable to foreign currency translation  8   -   6   - 
Comprehensive loss  (1,903)  (4,508)  (1,170)  (1,549)

*Represents an amount less than $0.01 per common stock.
       
  Three months ended 
  March 31 
  2023  2022 
  (Unaudited) 
       
Research and development expenses  (28)  (25)
Marketing, general and administrative expenses  (489)  (315)
Operating loss  (517)  (340)
Financing expenses, net:        
Expenses related to convertible loan terms  (330)  (379)
Other financing expenses, net  (5)  (10)
Financing expenses, net  (335)  (389)
         
Net loss attributable to common stockholders  (852)  (729)
         
Loss per common stock (basic)  (0.00)  (0.00)
         
Basic weighted average number of shares of common stock outstanding  952,728,740   942,568,006 
       
Comprehensive loss:      
Net loss  (852)  (729)
Other comprehensive income attributable to foreign currency translation  10   6 
Comprehensive loss  (842)  (723)

 

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

 

6
 

 

CITRINE GLOBAL, CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

(U.S. dollars in thousands, except share and per share data)

 

 Stock Amount             Stock Amount            
 Common stock Additional paid-in capital Stock to be issued  

 

Accumulated deficit

  Accumulated
other comprehensive income
 Total stockholders’ deficit  Common stock Additional paid-in capital Stock to be issued Accumulated
deficit
  Accumulated other comprehensive income  

Total

stockholders’

deficit

 
 Stock Amount             Stock Amount            
BALANCE AT DECEMBER 31, 2021  942,568,006   94   22,073   44   (23,757)  106   (1,440)
Extinguishment of convertible note  -   -   (162)  -   -   -   (162)
BALANCE AT DECEMBER 31, 2022  943,703,873   94   23,248   474   (26,402)  115   (2,471)
CHANGES DURING THE PERIOD OF THREE MONTHS ENDED MARCH 31, 2023:                            
Issuance of shares under share purchase agreement (note 4)  9,259,250   1   443   (444)  -   -   - 
Issuance of shares for credit facility  3,232,016   *-   123   -   -   -   123 
Share based compensation to service providers  283,900   *-   *-   4   -   -   4 
Warrants issued in connection with convertible notes  -   -   100   -   -   -   100   -   -   268   -   -   -   268 
Share based compensation  -   -   32   -   -   -   32   -   -   269   -   -   -   269 
Other comprehensive income  -   -   -   -   -   6   6   -   -               10   10 
Net loss for the period  -   -   -   -   (729)  -   (729)  -   -   -   -   (852)  -   (852)
BALANCE AT MARCH 31, 2022 (unaudited)  942,568,006   94   22,043   44   (24,486)  112   (2,193)
Share based compensation  -   -   35   -   -   -   35 
Other comprehensive income  -   -   -   -   -   (5)  (5)
Net loss for the period  -   -   -   -   (6)  -   (6)
BALANCE AT JUNE 30, 2022 (unaudited)  942,568,006   94   22,078   44   (24,492)  107   (2,169)
                            
Issuance of shares  535,867   -*   14   (14)  -   -   - 
Issuance of shares to services providers  600,000   -*   -*   -   -   -   - 
Share based compensation  -   -   335   -   -   -   335 
Issuance of warrants  -   -   98   -   -   -   98 
Warrants issued in connection with convertible notes  -   -   55   -   -   -   55 
Modification of warrants in connection with convertible loan restructuring  -   -   354   -   -   -   354 
Other comprehensive income  -   -   -   -   -   6   6 
Net loss for the period  -   -   -   -   (1,176)  -   (1,176)
BALANCE AT SEPTEMBER 30, 2022 (unaudited)  943,703,873   94   22,934   30   (25,668)  113   (2,497)
BALANCE AT MARCH 31, 2023 (unaudited)  956,479,039   95   24,351   34   (27,254)  125   (2,649)

  Common stock  Additional paid-in capital  Stock to be issued  

Accumulated

deficit

  Accumulated other comprehensive income  

Total

stockholders’

deficit

 
  Stock  Amount                
BALANCE AT DECEMBER 31, 2021  942,568,006   94   22,073   44   (23,757)  106   (1,440)
CHANGES DURING THE PERIOD OF THREE MONTHS ENDED MARCH 31, 2022:                            
Extinguishment of convertible note  -   -   (162)  -   -   -   (162)
Warrants issued in connection with convertible notes  -   -   100   -   -   -   100 
Share based compensation          32               32 
Other comprehensive income                      6   6 
Net loss for the period  -   -   -   -   (729)  -   (729)
BALANCE AT MARCH 31, 2022 (unaudited)  942,568,006   94   22,043   44   (24,486)  112   (2,193)

 

*Represents anrepresents amount less than $1,000.under $1 thousand

 

7

CITRINE GLOBAL, CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

(U.S. dollars in thousands, except share data)

  Common stock  Additional paid-in capital  Stock to be issued  

 

Accumulated deficit

  Accumulated
other comprehensive income
  Total stockholders’ deficit 
  Stock  Amount                
BALANCE AT DECEMBER 31, 2020  942,568,006   94   20,414   30   (19,241)  106   1,403 
Net loss for the period  -   -   -   -   (2,100)  -   (2,100)
BALANCE AT MARCH 31, 2021 (unaudited)  942,568,006   94   20,414   30   (21,341)  106   (697)
Modification of warrants in connection with convertible loan restructuring  -   -   361   -   -   -   361 
Warrants issued in connection with convertible notes  -   -   132   -   -   -   132 
Net loss for the period  -   -   -   -   (859)  -   (859)
BALANCE AT JUNE 30, 2021 (unaudited)  942,568,006   94   20,907   30   (22,200)  106   (1,063)
Beginning balance  942,568,006   94   20,907   30   (22,200)  106   (1,063)
Classification of embedded conversion feature from liability to equity  -   -   670   -   -   -   670 
Commitment for issuance of fixed number of ordinary shares  -   -   -   14   -   -   14 
Net loss for the period  -   -   -   -   (1,549)  -   (1,549)
BALANCE AT SEPTEMBER 30, 2021 (unaudited)  942,568,006   94   21,577   44   (23,749)  106   (1,928)
Ending balance  942,568,006   94   21,577   44   (23,749)  106   (1,928)

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

 

87
 

 

CITRINE GLOBAL, CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)

         
  Nine months ended 
  September 30, 
  2022  2021 
  (Unaudited) 
CASH FLOWS FROM OPERATING ACTIVITIES        
Net loss  (1,911)  (4,508)
Adjustments to reconcile net loss to net cash used in operating activities:        
Depreciation and amortization  2   1 
Finance expenses, net  5   - 
Financial expenses with respect to convertible notes and loans  575  1,034 
Share based payment to a service provider  -   872 
Share based payment  402   - 
Fair value adjustment of liability in connection with stock exchange
agreement
  -   (57)
Changes in fair value of marketable securities  -   37 
Loss from sale of marketable securities  -   96 
Changes in operating assets and liabilities:        
Prepaid share based payment to a service provider  -   1,736 
Prepaid and other current assets  (26)  (71)
Accounts payable and accrued expenses  511   438 
Net cash used in operating activities  (442)  (422)
         
CASH FLOWS FROM INVESTING ACTIVITIES        
Purchase of property and equipment  (4)  - 
Repayments of short-term loan granted to others  -   389 
Proceeds from sale of trading securities  -   164 
Net cash provided by (used in) investing activities  (4)  553 
         
CASH FLOWS FROM FINANCING ACTIVITIES        
Proceeds from short term loan  80   - 
Proceeds from issuance of convertible notes  280   350 
Net cash provided by financing activities  360   350 
         
Effect of exchange rates on cash and cash equivalents  (7)  (3)
         
Net increase (decrease) in cash and cash equivalents  (93)  478 
         
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD  280   206 
         
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD  187   684 

9

thousands, except share and per share data)

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Supplemental disclosure of cash flow information:
Cash received during the year:
Interest-14
Non-cash transactions:
Fair value of convertible component in convertible loan(48)-
Warrants issued in connection with convertible notes(155)-
Extinguishment of convertible notes(162)-
Classification of embedded conversion feature from liability to equity-670
  2023  2022 
  Three months ended 
  March 31, 
  2023  2022 
  (Unaudited) 
CASH FLOWS FROM OPERATING ACTIVITIES        
Net loss  (852)  (729)
Adjustments to reconcile net loss to net cash used in operating activities:        
Depreciation and amortization  1   1 
Finance expenses, net  2   3 
Financial expenses with respect to convertible notes and loans  330   378 
Share based payment  273   32 
Fair value adjustment of option to purchase MyPlant shares  (9)  - 
Changes in operating assets and liabilities:        
Increase in inventory  -   (18)
Prepaid expenses and other current assets  27   4 
Accounts payable and accrued expenses  163   168 
Net cash used in operating activities  (65)  (161)
         
CASH FLOWS FROM INVESTING ACTIVITIES        
Purchase of property and equipment  -   (4)
         
Net cash used in investing activities  -   (4)
         
CASH FLOWS FROM FINANCING ACTIVITIES        
Proceeds from issuance of convertible notes  -   180 
Proceeds under credit facility  51   - 
Net cash provided by financing activities  51   180 
         
Effect of exchange rates on cash and cash equivalents  (1)  7 
         
Net increase (decrease) in cash and cash equivalents  (15)  22 
         
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD  77   280 
         
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD  62   302 
       
Supplemental disclosure of cash flow information:      
Non-cash transactions:      
Fair value of convertible component in convertible loan  -   (48)
Warrants issued in connection with convertible notes  (268)  (100)
Issuance of shares for credit facility  123   - 
Extinguishment of convertible notes and loans  (83)  (162)

 

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

 

108
 

 

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

 

NOTE 1 - GENERAL

 

Citrine Global, Corp. (“Citrine Global” or the “Company”) was incorporated under the laws of the State of Delaware on May 26, 2010. The Company’s common stock is traded in the United States on the OTCQB market under the ticker symbol “CTGL.”

 

On June 3, 2020 the Company established a wholly owned new Israeli subsidiary: CTGL – Citrine Global Israel Ltd, (the “Israeli Subsidiary”).

 

On July 21, 2020, the Israeli Subsidiary began to work with certain Company shareholders, Beezz Home Technologies Ltd. (“Beezzhome”), in which Ora Elharar Soffer, the Company’s chairperson and CEO holds shares, and Golden Holdings Neto Ltd., in which Ilan Ben-Ishai, a former director of the Company, holds shares, have been working towards establishing an Operational Innovation Center focuses on the medical cannabis industry, CBD, hemp, botanical, food supplementsplant based wellness and cosmetics products.pharma products and solutions. The Company’s Board of Directors approved the Israeli Subsidiary to proceed with preparations for entering into an agreement to incorporate a new company, named Cannovation Center Israel Ltd. (“Cannovation”), with Beezz Home Technologies Ltd. and Golden Holdings Neto Ltd., and to accept limitations on the Israeli Subsidiary’s rights in the Cannovation Center if and as mandated under Israeli regulations on the involvement of foreign entities. On August 20, 2020, the Israeli Subsidiary, Beezz Home Technologies Ltd., and Golden Holdings Neto Ltd. incorporated Cannovation. Israeli Subsidiary holds 60% of Cannovation’s shares, while each of Beezz Home Technologies Ltd. and Golden Holdings Neto Ltd. holds 20% of its shares.

 

On August 4, 2020, the Board of the Company approved for the Company and its Israeli Subsidiary to proceed with preparations for investing in iBOT Israel Botanicals Ltd., (an affiliate) an Israeli nutritional supplements’ company developing and manufacturing botanical formulas and nutritional supplements for custom & contract manufacturing for leading botanical companies (“iBOT”). The principal shareholders and control persons of iBOT are the Company’s Chief Executive Officer, President and Chairperson. iBOT has a manufacturing facility for a wide range of botanical formulations. iBOT’s manufacturing facility is approved by the Israeli Ministry of Health and is GMP-certified, ISO9001-certifiedISO 9001-certified and HACCP certified by IQC. The principal shareholders and control persons of iBOT are the Company’s Chief Executive Officer and a Company director. On August 4, 2020, the Board of Directors approved for the Company and Citrine Global Israel to proceed with preparations for investing in iBOT. On August 9, 2021, through the 60% owned subsidiary Cannovation Center Israel, the Company entered into an agreement with iBOT pursuant to which iBOT agreed to manufacture a line of nutritional supplements for Cannovation Center Israel, including packaging and storage. On September 29, 2021, the Company agreed to advance to iBOT, up to $50 thousands with a 12-month maturity date and the Company transferred, as a first tranche, $15 thousands on October 8, 2021. The loan bears interest at an effective annual interest rate of 12% as and is convertible, at the option of Citrine Global, into equity shares of iBOT at conversion rate equal to the lower of (i) 25% discount to the most recent round of capital raised by iBOT during the term of the loan and (ii) the rate specified in the framework agreement. In addition, the agreement provided that the Israeli subsidiary is entitled to convert the outstanding loan, in whole or in part, to satisfy payments of amounts owed to iBOT under the services agreements between the parties

 

In November 2021, iBOT granted to Citrine Global Group, a pre-emption right to any equity or equity linked securities that iBOT proposes to issue to an unrelated third party with aggregate gross proceeds to the CompanyiBot exceeding $1 million or which will result in a change in control in iBOT following such issuance, then iBOT is to give to the Citrine Global Group written notice of such proposed issuance and the relevant terms thereof and the Citrine Global Group shall have ten (10) days thereafter to determine if it elects to purchase a minimum of 51% of the proposed issuance on the price and other terms specified in the notice sent by iBOT (the “Pre-Emption Right”).. If the Citrine Global Group elects to exercise the Pre-Emption Right, such purchase is to take place at no more than 90 days following the expiration of the 10 day notice period to the Citrine Global Group. Any iBOT securities of the Pre-Emption Right that Citrine Global Group elects to not purchase are to be sold by not later than 90 days following the end of the Citrine Global Group’s notice period and if such shares are not sold to such third party within the 90 day period, the Pre-Emption right shall apply to any subsequent proposed issuance. The preemption right does not apply to certain specified exceptions. See Note 6B.

 

On August 20, 2020,In November 2022 the Israeli Subsidiary, Beezz Home Technologies Ltd.,Company and Golden Holdings Neto Ltd. incorporated Cannovation. Israeli Subsidiary holds iBOT agreed to extend to March 31, 2023 the pre-emption right previously granted to the Company with respect to any equity or equity linked securities that iBOT proposes to issue to an unrelated third party with aggregate gross proceeds to iBOT exceeding $601 million or which will result 51% of Cannovation’s shares, while each of Beezz Home Technologies Ltd.in a change in control in iBOT following such issuance. In March 2023, the Company and Golden Holdings Neto Ltd. holds 20% of its shares. See note 4C for additional information.iBOT agreed to further extend to December 31, 2023 such right.

119
 

 

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

 

Stock split

 

On June 10, 2022, certain of the Company’s stockholders representing more than 50%50% of the Company’s outstanding share capital (the “Majority Consenting Stockholders”) approved an amendment to the Company’s Certificate of Incorporation (the “Reverse Stock Split Certificate of Amendment”) in order to effect a reverse stock split of the Company’s common stock pursuant to a range of between 50-to-1 and 700-to-1 (the “Reverse Stock Split”). Pursuant to the Reverse Stock Split, each fifty or seven hundred shares of common stock (or any whole number within such range), as shall be determined by the Board at a later time, will be automatically converted, without any further action by the stockholders, into one share of common stock. No fractional shares of common stock will be issued as the result of the Reverse Stock Split. Instead, each stockholder of the Company will be entitled to receive one share of common stock in lieu of the fractional share that would have resulted from the Reverse Stock Split. The Reverse Stock Split Certificate of Amendment will be effective upon receipt of approval from the Financial Industry Regulatory Authority (“FINRA”) and the filing with the Secretary of the State of Delaware, both of which were not completed as of the date of the approval of the financial statements.

 

Financial support from shareholders

 

The Company has not yet to generate revenues and is dependent on raising funds from its current shareholders or from other sources. On April 13, 2021, Citrine S A L, on behalf of itself and its affiliates and related parties, has furnished the Company with an irrevocable letter of obligation to financially support the Company until June 30, 2022. On March 17, 2022, Citrine S A L Investment & Holding Ltd. extended this support through June 30, 2023 and on November 14, 2022 Citrine S A L Investment & Holding Ltd. further extended the support through June 30, 2024.2023. On August 14, 2022, Citrine S A L Investment & Holding Ltd. further extended this support through June 30, 2024.

In addition, on March 6, 2023 Cannovation and S.R. Accord Ltd., an Israeli company (“Lender”), entered into an 18-month credit facility agreement (the “Credit Facility”) pursuant to which Lender has committed to fund Cannovation in an aggregate amount of 3,000,000 NIS (approximately $857,000), as needed. At the time of each draw down, Cannovation and Lender will determine the maturity date of the loan. All amounts drawn under the Credit Facility will bear interest at an monthly rate of 1.7%. Cannovation has the right to pre-pay the entire amount outstanding under the Credit Facility at any time. As security for any loans under the Credit Facility, Cannovation granted the Lender a first priority lien on its rights to the 125,000 sq ft (11,687 sq meters) of industrial land in Yerucham. The lien will become effective only if Cannovation utilizes the Credit Facility. If the market value of the Premises is less than the amount outstanding under the Credit Facility, then Lender will be entitled to additional security including additional shares of Citrine Global common stock, on such terms and conditions as the parties may agree. As additional security for any payments due to Lender, (i) the Israeli Subsidiary, (ii) Beezzhome and (iii) Netto Holdings, an unaffiliated entity under the partial control of Ilan Ben Ishay, a director on the board of Cannovation, as well as each of Ms. Elharar Soffer and Mr. Ben Ishay have, in their personal capacities, provided guarantees for the repayment of any amounts that may be owing to Lender under the Credit Facility. The Company, CTGL – Citrine Global Israel Ltd. and Cannovation have agreed to indemnify Ms. Elharar Soffer and Mr. Ben Ishay for any losses they incur as a result of the personal guarantees.

On March 7, 2023, the Company issued to the Lender and a consultant 3,232,016 shares of the Company’s common stock as a commitment fee in respect of the provision of the Credit Facility (valuated at $123 thousand). As of the date of this report, Cannovation utilized $51,000 of the credit line.

 

The Company has no significant firm commitments that require it to remit cash and can control the level of expenses it incurs. Based on the Company’s current cash balances, and the irrevocable letter of obligation from Citrine S A Laccess to the Credit Facility noted above, management believes the Company believes it haswill have sufficient funds for its plans for the next twelve months from the issuance of these financial statements. As the Company is embarking on its new activity as detailed herein,business plan, it is incurring losses. It cannot determine with reasonable certainty when and if it will have sustainable profits.

 

COVID-19

On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus (SARS-CoV-2) to be a global pandemic (COVID-19), which continues to spread throughout the world. The COVID-19 pandemic is having significant effects on global markets, supply chains, businesses, and communities. Specifically with respect to the Company, COVID-19 may impact various parts of its 2022 plans, operations and financial results, including but not limited to difficulties in obtaining additional financing. The Company considered the impact of COVID-19 on the estimates and assumptions and determined that there were no material adverse impacts on the consolidated financial statements for the period ended September 30, 2022. The Company believes it is taking appropriate actions to mitigate the negative impact, including by focusing its activities initially only within the country of Israel. However, the full impact of COVID-19 is unknown and cannot be reasonably estimated as these events are still developing.

1210
 

 

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

 

Unaudited Interim Financial Statements

 

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiary, prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q. In the opinion of management, the financial statements presented herein have not been audited by an independent registered public accounting firm but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the financial condition, results of operations and cash flows for the ninethree months ended September 30, 2022.March 31, 2023. However, these results are not necessarily indicative of results for any other interim period or for the year ended December 31, 2022.2023.

 

Certain information and footnote disclosures normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission (“SEC”). These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.2022.

 

Use of Estimates

 

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates include fair value estimates of derivative liabilities and assets. Actual results could differ from those estimates.

 

Fair value

Fair value of certain of the Company’s financial instruments including cash, accounts receivable, accounts payable, accrued expenses, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosure,” which defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements.

 

Fair value, as defined by ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company’s credit risk.

11

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF RESENTATION (cont.)

Fair value (cont.)

Valuation techniques are generally classified into three categories: (i) the market approach; (ii) the income approach; and (iii) the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows:

13

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF RESENTATION (cont.)

Fair value (cont.)

 

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.

 

Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and

 

Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values.

 

Fair value measurements are required to be disclosed by the level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), (ii) segregating those gains or losses included in earnings, and (iii) a description of where those gains or losses included in earning are reported in the statement of operations.

 

The Company’s financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy are as follows:

 SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS

 Balance as of September 30, 2022  Level 1  Level 2  Level 3  Total 
 Level 1 Level 2 Level 3 Total  Balance as of March 31, 2023 
 Level 1  Level 2  Level 3  Total 
 US$ in thousands 
         
Assets:                
Option to Purchase MyPlant shares     -      -   300   300 
Total assets  -   -   300   300 
 US$ in thousands                 
Liabilities:                                
Fair value of convertible component in convertible notes  -   -   138   138   -   -   119   119 
Total liabilities  -   -   138   138   -   -   119   119 

 

  Level 1  Level 2  Level 3  Total 
  Balance as of December 31, 2022 
  Level 1  Level 2  Level 3  Total 
  US$ in thousands 
Assets:                
Option to Purchase MyPlant shares  -   -   291   291 
Total assets  -   -   291   291 
                 
Liabilities:                
Fair value of convertible component in convertible notes      -       -   161   161 
Total liabilities  -   -   161   161 

The following table presents the changes in fair value of the level 3 liabilities for the period ended September 30, 2022:

SCHEDULE OF CHANGES IN FAIR VALUE OF LIABILITIES

Changes in Fair value
US$ in thousands
Liabilities:
Outstanding at December 31, 2021-
Initial recognition of convertible component as part of modification in note terms162
Initial recognition of convertible component as part of convertible notes issued48
Changes in fair value187
Outstanding at March 31, 2022397
Changes in fair value(315)
Outstanding at June 30, 202282
Outstanding Beginning82
Initial recognition of convertible component as part of convertible notes issued55
Changes in fair value1
Outstanding at September 30, 2022138
Outstanding Ending138

1412
 

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF RESENTATION (cont.)

The following table presents the changes in fair value of the level 3 assets and liabilities for the period ended March 31, 2023:

SCHEDULE OF CHANGES IN FAIR VALUE OF LIABILITIES

Changes in Fair value
US$ in thousands
Assets:
Outstanding at December 31, 2022291
Changes in fair value9
Outstanding at March 31, 2023300

Changes in Fair value

US$ in thousands

Liabilities:
Outstanding at December 31, 2022161
Initial recognition of convertible component as part of convertible notes issued8
Changes in fair value(50)
Outstanding at March 31, 2023119

 

Credit line issuance costs

Costs associated with entering into a revolving line of credit or revolving-debt arrangement are costs incurred in exchange for access to capital. These fees are paid regardless of whether the funds are ever drawn down. Such costs are recorded as such on the balance sheet as prepaid expenses. Upon drawing down a portion of the credit line, the applicable portion of the costs related to that draw down is presented as a direct deduction from the carrying value of the debt when drawn and amortized as finance expenses using the effective interest method.

Recent Accounting Pronouncements

On October 1, 2021, the Company early adopted ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06), which simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments. This guidance also eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. The adoption of this new standard did not have a material impact on the consolidated financial statements.

In May 2021, the FASB issued ASU 2021-04—Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, which clarifies and reduces diversity in accounting for modifications or exchanges of freestanding equity-written call options that remain equity classified after modifications or exchanges based on the substance of the transactions. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The adoption of this new standard did not have a material impact on the consolidated financial statements.

Other newNew pronouncements issued but not effective as of September 30, 2022March 31, 2023 are not expected to have a material impact on the Company’s consolidated financial statements.

NOTE 3 – STOCK OPTIONS

In May 2022 the Company appointed Prof. Itamar Grotto, a world-renowned expert in Public Health as Director in Cannovation Center Israel Ltd. and President of Green Vision Center Israel. Upon his appointment, Prof . Itamar Gruto was granted options under the 2018 Stock Incentive Plan (the “2018 Plan”) to purchase 2,356,420 shares of the Company’s common stock at per share exercise price of $0.05. The options vest over a three year period, in three annual instalments beginning on June 1, 2023 and thereafter on each subsequent anniversary, subject to his continued service to the Company.

 

On June 8, 2022,March 5, 2023, the Board also approvedof the issuance of 7,000,000 options to two service providers underCompany determined that in the 2018 Plan. The options are exercisable at a per share price of $0.05. The options are scheduled to vest over a three year period, in twelve (12) equal installments, withevent that the first instalment vestingCompany’s stock is listed on the third month anniversaryNasdaq Stock Market, then one half of the dateawarded but unvested option grants made in each of grantAugust 2021 and each further instalment on each subsequent third month anniversary, subjectin August 2022, including to officers, directors, will immediately vest at such individual’s continued service with the Company. 1,166,667 options shall be accelerated upon uplisting to Nasdaq.

On  August 9, 2022, the Company’s board of directors determined to increase the number of shares reserved for issuance under the 2018 Plan by 90 million shares to a total of 180,000,000 shares of common stock thereunder and on August 12, 2022 the Company shareholders approved the same.

On August 9, 2022,time. In addition, the Board also determined to grant toprovide that following the directors and officers set forth below options under the 2018 Plan. The options are exercisable attermination of services by an officer, director or a per share price of $0.02 and through the seventh anniversary of the grant date, except in the case of Ora Elharar Soffer, the Company’s chief executive officer, the per share exercise price is 0.022 and the exerciseselected service provider for any reason other than cause, such person shall have a one year period is five years from the date of grant. The options are scheduledtermination to vest over a three year period, in twelve (12) equal installments, withexercise any option that was vested at the first instalment vesting on the third month anniversarytime of the datetermination of grant and each further instalment on each subsequent third month anniversary, subject to such individual’s continued service with the Company. In the event of a change in control, the vesting schedule is accelerated and all unvested options vest.

SCHEDULE OF ACCELERATED AND UNVESTED OPTIONS

Director/Officer

Number of Options

Ora Elharar Soffer (Chairperson, CEO)47,128,400
Ilanit Halperin (Director, CFO)18,851,360
Ilan Ben Ishay (Director)18,851,360
Doron Birger (Director)2,356,420
David Kretzmer (Director)2,356,420

The terms relating to the options grants are included in stock option agreements under the 2018 Plan, . Amongst other things, the stock option agreements for selected service providers of Citrine Global, including our directors and officers, provide that the exercise price of the options that were awarded to date, shall remain unaffected by the implementation of a reverse stock split that the Company may implement; to avoid any doubt, such reverse stock split shall apply to the number of options shares issuable under such options. All other relevant terms of such shall continue in full force and effect and are such reverse stock split. Any and all tax implications rest solely with the optionee and not the Company.services.

 

The following table presents the Company’s stock option activity for employees and directors of the Company for the year ended September 30, 2022:March 31, 2023:

SCHEDULE OF STOCK OPTION ACTIVITY

  Number of Options  Weighted Average Exercise Price ($) 
Outstanding at December 31, 2022  122,529,342   0.026 
Granted  -   - 
Exercised  -   - 
Forfeited or expired  -   - 
Outstanding at March 31, 2023  122,529,342   0.026 
Number of options exercisable at March 31, 2023  40,011,289   0.039 

 

  Number of Options  Weighted Average Exercise Price ($) 
Outstanding at December 31, 2021  23,628,962   0.05 
Granted  98,900,380   0.021 
Exercised  -   - 
Forfeited or expired  -   - 
Outstanding at September 30, 2022  122,529,342   0.026 
Number of options exercisable at September 30, 2022  21,855,875   0.05 
13

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 3 – STOCK OPTIONS (continue)

The stock options outstanding as of March 31, 2023, have been separated into exercise prices, as follows:

SCHEDULE OF STOCK OPTIONS OUTSTANDING

Exercise price Stock options outstanding  Weighted average remaining contractual life – years  Stock options vested 
$ As of December 31, 2022 
0.0011  46,762   3.75   46,762 
0.02  42,415,560   2.36   7,069,260 
0.022  47,128,400   2.36   7,854,734 
0.05  32,938,620   3.76   25,040,533 
   122,529,342   3.25   40,011,289 

Compensation expense recorded by the Company in respect of its stock-based compensation awards for the period ended March 31, 2023 and 2022 was $269 thousands and $27 thousands, respectively, and are included in General and Administrative expenses in the Statements of Operations.

NOTE 4 - INVESTMENT VALUED UNDER THE MEASUREMENT ALTERNATIVE

A.On December 30, 2022, the Company, MyPlant Bio Ltd., a company incorporated under the laws of the State of Israel (“MyPlant”), Cannasoul Analytics Ltd., a company incorporated under the laws of Israel (“Cannasoul”), and PurPlant Inc., a company duly incorporated under the laws of Canada (“PurPlant”) (Cannasoul and PurPlant are collectively referred to as the “Shareholders”), and Professor Dedi Meiri, an Israeli individual (“Prof Meiri”) entered into the Share Purchase and Option Agreement (the “Share Purchase and Option Agreement”) for the purchase by the Company of up to 55% of MyPlant’s issued and outstanding share capital on a fully diluted basis

The Company purchased from the Shareholders an aggregate of 44,328 ordinary shares of MyPlant (the “MyPlant Shares”) representing, on a fully diluted basis, 10% of the outstanding MyPlant Shares, in consideration for the payment of $444,444 by the issuance by the Company to the selling Shareholders of an aggregate of 9,259,250 shares of the Company’s common stock.

Under the terms of the Share Purchase and Option Agreement, the Company purchased from the MyPlant shareholders an aggregate of 44,328 ordinary shares of MyPlant (the “MyPlant Shares”) representing, on a fully diluted basis, 10% of the outstanding MyPlant Shares, in consideration of $444,444 payable by the issuance by the Company to the MyPlant shareholders of an aggregate of 9,259,250 shares of common stock. In addition, under the Share Purchase and Option Agreement, the Company granted an option by the MyPlant shareholders to purchase an additional 35% of MyPlant Shares, on a fully diluted basis (the “Shareholders Option”), in consideration of $1,555,556 payable by the issuance of up to 32,407,417 shares of our common stock to the MyPlant shareholders, and a separate option by MyPlant to purchase an additional 10% of the MyPlant Shares, on a fully diluted basis (the “MyPlant Option”), in consideration of $444,444, which is payable, in the Company’s sole discretion, in cash or in the issuance to MyPlant of up to 9,259,250 shares of our common stock.

Said options are exercisable through September 30, 2023 (the “Option Expiry Date”). If both the shareholders Option and the Company Options are exercised, the Company will hold 55% of MyPlant Shares, on a fully diluted basis. Under the Share Purchase and Option Agreement, the Company is authorized to continue its due diligence through the Option Expiry Date. The number of shares is subject to adjustment in respect of any stock split or other recapitalization of the Company.

14

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 4 - INVESTMENT VALUED UNDER THE MEASUREMENT ALTERNATIVE (continue)

The transactions under the Share Purchase and Option Agreement are based on a MyPlant company valuation of approximately $4.45 million. The Company is authorized at any time on or before the Option Expiry Date to obtain an independent third-party valuation of MyPlant. If it is determined by such third party valuation that the MyPlant valuation is less than $4.45 million then the consideration payable in respect of the exercise price of the options will be accordingly adjusted, provided however that in any case MyPlant’s valuation in the transaction shall not be below US$1,000,000.

The options to purchase MyPlant shares were also accounted using the measurement alternative. Since the options’ value are subject to the changes in Citrine shares’ value, there are indicators to a change in the options’ value at each reporting date, and therefore the following valuation methos was implemented.

Fair Value Proportional Allocation

The Company estimated the fair value of Shareholders Option using the Monte Carlo option pricing model using the following weighted average assumptions:

SCHEDULE OF FAIR VALUE OF CONVERTIBLE FEATURE USING VALUATION ASSUMPTIONS

  December 30, 2022  March 31, 2023 
Dividend yield  0%  0%
Risk-free interest rate  4.71%  4.94%
Expected term (years)  0.78   0.50 
Company’s volatility  114.80%  93.09%
MyPlant share price (U.S. dollars)  10.04   10.04 
MyPlant volatility  55.29%  67.55%

The fair value of the Shareholders Option as of December 8, 2022 and March 31, 2023 was estimated at $291 thousands and $300 thousands, respectively.

Based on the above, the fair value proportion allocation as of December 30, 2022 was as follows:

SCHEDULE OF FAIR VALUE PROPORTION ALLOCATION

  December 30, 2022 
Shareholders option $    291 
MyPlant’s shares  153 
  $444 

Under the Share Purchase and Option Agreement, MyPlant granted to the Company the exclusive right to utilize MyPlant’s activities as specified in the agreement, including without limitation, the screening platforms using cell line models for certain diseases and conditions to detect effective plant materials and/or other substances for the treatment of these conditions and a and a right of first opportunity to commercialize intellectual property developed by MyPlant that is in the Company’s (or its subsidiaries’) field of business, provided that, if by December 31, 2023 the Company does not exercise either of the Shareholders Option or the MyPlant Option and/or enter into a service agreement with MyPlant, then the exclusive rights shall terminate but the right of first opportunity to commercialize intellectual property developed by MyPlant shall continue thereafter until June 31, 2024, unless such rights have been extended beyond such date under the terms to be agreed in the service agreement entered into by the Company and Citrine Global. In addition, under the Share Purchase and Option Agreement, Cannasoul, MyPlant’s majority Shareholder, agreed to not compete with MyPlant’s activities.

The Company was granted observer rights on the MyPlant board of Directors (the “MyPlant Board”). Following the exercise by Citrine Global of the Shareholders Option, the MyPlant Board shall be comprised of four (4) directors of which MyPlant will be authorized to designate two of such directors.

 

15
 

 

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The stock options outstanding as of September 30, 2022, have been separated into exercise prices, as follows:

SCHEDULE OF STOCK OPTIONS OUTSTANDING

Exercise price  Stock options outstanding  

Weighted average remaining contractual

life – years

  Stock options vested 
   As of September 30, 2022 
 0.0011   46,762       46,762 
 0.02   42,415,560   2.86   - 
 0.022   47,128,400   2.86   - 
 0.05   23,582,200   0.42   21,225,780 
 0.05   9,356,420   4.67   583,333 
     122,529,342   2.53   21,855,875 

Compensation expense recorded by the Company in respect of its stock-based compensation awards for the nine and three months ended September 30, 2022 was $402 thousands and $335 thousands, respectively and are included in General and Administrative expenses in the Statements of Operations.

In determining the fair value of the options granted, the Company used the Black-Scholes option valuation method, with the following assumptions:

SCHEDULE OF STOCK OPTIONS VALUATION METHOD

Dividend yield (%)0%
Risk-free interest rate (%)0.07% - 3.20%
Expected term (years)5-7
Volatility164.84% - 174.46%
Share price (U.S. dollars)0.015 - 0.020
Exercise price (U.S. dollars)0.020.05

NOTE 45EVENTS DURING THE PERIODCONVERTIBLE NOTES

 

A.On January 5, 2022,30, 2023 the Company and each of Citrine High Tech 7 LP (“LP 7”), Citrine 8 LP (“LP 8 “) and Citrine 9 LP one of(“LP 9”; together with LP 7 and LP 8, the Buyer“Lending LP”), the lending entities (hereinafter “Citrine 9”) agreedunder and parties to honor a Draw Down Notice (as defined in the Convertible Note Agreement) for, and has advanced toPurchase Agreement entered into by the Company $180 thousandsand several related parties in April 2020, as subsequently amended (the “CL Agreement”), have entered into an agreement (the “Agreement”) pursuant to which they have agreed to extend the maturity date on the same terms and conditions as are specifiedall outstanding convertible loans in the Convertible Note Agreement. principal amount of $1,800,000 under the CL Agreement to May 31, 2024.

In addition, under the Agreement the Company and the Lending LPs have also agreed that if the Company’s common stock is listed on the Nasdaq Stock Market, then the Company, in its sole discretion, shall determine to convert, in whole or in part, the outstanding amount of the above mentioned notes to shares of the Company’s common stock at a conversion price equal to the price paid by the public investors for the common stock in the offering accompanying the listing.

The Company concluded that the above mentioned change in terms constitutes a trouble debt restructuring, due to its financial condition and the relief that the abovementioned changes provided.

Therefore, the Company concluded that the change in terms should be accounted for as a modification. A new effective interest rate was established based on the carrying value of the debt and the revised cash flows.

On September 30, 2022, the Company received a loan from Citrine S A L Hi Tech 7 LP, an Israeli limited partnership and an affiliated entity, in the principal amount of $80,000. The loan bear interest at 12% per annum and was originally scheduled to mature on December 15, 2022, but the maturity date of the loan is the earlier of Julywas extended to May 31, 20232024 or at such time as the Company shall have consummated an investment of at least $5 million in Company securities. The annual interest on the loan continues to be nine percent (9%). The principal and interest payment on the Note shallloan are to be made in New Israeli Shekels (NIS) at the conversionexchange rate which was in effect on the date on which the loan was advanced.

 

B.On January 30, 2023 Citrine S A L Hi Tech 7 LP agreed to change the terms of this loan, which amounted to $83,000 (including accrued interest) such that such terms shall be adjusted on a pro-rata basis, to those terms applicable to the Company’s convertible notes then outstanding under the Convertible Note Agreement (as detailed in note 5 A above).

As provided for under the terms of the Convertible Note Agreement, Citrine 97 will be issued 6,666,667 Series A warrants and 6,666,667 Series B warrants for shares of common stock, where the Series A warrants are exercisable beginning July 5, 2022 through July 5, 2024andthe Series B warrants are exercisable beginning July 5, 2022 through July 5, 2025, in each caseAugust 9, 2027 at an exercise price of $0.05per share.

See note 4F below for detailed regarding change in terms of the Convertible Note Agreement, Series A warrants and Series B warrants.

 

The Company allocatedconcluded that the proceeds received tochange in term does not constitute a trouble debt restructuring. Thereafter, the freestanding components –Company applied the convertible loan, A Warrantsguidance in ASC 470-50, Modifications and B Warrants, based on their relative fair values, since all three components will not be subsequently measuredExtinguishments. The accounting treatment is determined by whether terms of the new debt and original debt are substantially different.

Since the original and new debt instruments are substantially different, the original debt was derecognized and the new debt was recorded at fair value, (see below)with the difference recognized as an extinguishment loss.

The extinguishment resulted in a loss of $266 thousands, included in the statements of operations as “Expenses related to convertible loan terms”.

The components of the new loan were valuated as follows:

Conversion feature

 

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

 

The fair value of the convertible component was estimated by third party appraiser as weighted average of the two possible scenarios of the total convertible notes amount conversion (each, 50% probability):

The scenario in which the convertible loan would be converted prior to its maturity (scenario 1) was estimated by the appraiser using the Black-Scholes option pricing model, to compute the fair value of the derivative and to market the fair value of the derivative at each balance sheet date. The following are the data and assumptions used as of issuance dates and as of the balance sheet date:

16

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

SCHEDULE OF FAIR VALUE OF CONVERTIBLE FEATURE USING VALUATION ASSUMPTIONS

         
  January 5, 2022  September 30, 2022 
Dividend yield (%)  0%  0%
Risk-free interest rate (%)  0.65%  4.06%
Expected term (years)  1.57   1.08 
Volatility  154.86%  123.94%
Share price (U.S. dollars)  0.025   0.021 
Exercise price (U.S. dollars)  0.05   0.05 
Fair value of the conversion feature (U.S. dollars in thousands)  56   21 

The scenario in which the Company would raise at least $5 million prior to conversion of the convertible loan (scenario 2) was estimated by the appraiser using the Black-Scholes option pricing model, to compute the fair value of the derivative and to market the fair value of the derivative at each balance sheet date. The following are the data and assumptions used as of issuance dates and as of the balance sheet date:

  January 5, 2022  September 30, 2022 
Dividend yield (%)  0%  0%
Risk-free interest rate (%)  0.40%  3.92%
Expected term (years)  0.99   0.25 
Volatility  158%  123.30%
Share price (U.S. dollars)  0.025   0.021 
Exercise price (U.S. dollars)  0.05   0.05 
Fair value of the conversion feature U.S. dollars in thousands)  40   2 

The fair value of the convertible component was estimated by the third-party appraiser after giving effect to the weighted average of the two possible scenarios as of issuance dates was $48 thousands and as of September 30, 2022 was $12 thousands.

Warrants

The fair value of the warrants as of the drawdowns dates was estimated at $255 thousands using the Black-Scholes option-pricing model and is presented within the consolidated statements of changes in shareholders equity (deficit).

The following are the data and assumptions used:

SCHEDULE OF FAIR VALUE DATA AND ASSUMPTIONS OF WARRANTS

Warrants A
Dividend yield0%
Risk-free interest rate0.96%
Expected term (years)2.5
Volatility159.70%
Share price (U.S. dollars)0.025
Exercise price (U.S. dollars)0.05
Fair value of the warrants (U.S. dollars in thousands)119

Warrants B
Dividend yield0%
Risk-free interest rate1.18%
Expected term (years)3.5
Volatility159.70%
Share price (U.S. dollars)0.025
Exercise price (U.S. dollars)0.05
Fair value of the warrants (U.S. dollars in thousands)136

17
 

 

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Fair Value Proportional Allocation

The fair value of the note was estimated at $154 thousands. The note is accounted for according to the effective interest method.

Based on the above, the fair value proportion allocation as of JanuaryNOTE 5 2022 was as follows:

SCHEDULE OF FAIR VALUE OF DEBT

  

January 5, 2022

(US dollars in thousands)

 
Conversion Component $48 
Warrants  100 
Convertible Notes  32 
Total $180 

B.Additionally, on January 5, 2022, the Company and the related entities who are the signatory lenders (hereinafter the “Buyers”) under the Convertible Loan Agreement dated as of April 1, 2020 (the “CL Agreement”) with the Company entered into the Fourth Amendment to the CL Agreement pursuant to which the following was agreed to:

(i)The principal and accrued interest on all outstanding loans in the aggregate principal amount of $1,800,000 are to be repaid in New Israeli Shekels (NIS) at the conversion rate in effect on the date on which the loan was advanced;
(ii)The conversion price on all outstanding notes under the CL Agreement was adjusted to a conversion price of $0.05 per share
(iii)The exercise price on all outstanding warrants issued in connection with advances made under the CL Agreement was adjusted to an exercise price of $0.05 per share.

The Company concluded that the change in terms does not give rise to a trouble debt restructuring, as no concession was given to the Company.

Therefore, the Company went on to assess the whether the terms of the modified note are substantially different. The Company concluded that the change in terms should be accounted for as a debt extinguishment.

Following the abovementioned amendment on January 5, 2022, the conversion component is qualifying for the scope exception under ASC 815-10-15-74(a). In accordance with ASC 815-15-35-4, since the embedded conversion option in the convertible debt meets the bifurcation criteria, the fair value of the conversion component calculated as of January 5, 2022, in the amount of $162 thousands, was reclassified from shareholders equity to short-term liability at that date.

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 non-current liabilities in the Company’s balance sheet. The conversion component is then remeasured at fair value at each reporting period with the resulting gains or losses shown in the statements of operations.– CONVERTIBLE NOTES

 

The fair value of the convertible component was estimated by third party appraiser as weighted average of the two possible scenarios of the total convertible notes amount conversion (each, 50% probability):

18

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The(20% probability for scenario in which the convertible loan would be converted prior to its maturity (scenario 1) was estimated by the appraiser using the Black-Scholes option pricing model, to compute the fair value of the derivative1 and to market the fair value of the derivative at each balance sheet date. The following are the data and assumptions used as of issuance dates and as of the balance sheet date:

SCHEDULE OF FAIR VALUE OF CONVERTIBLE FEATURE USING VALUATION ASSUMPTIONS

  June 15, 2020 convertible loans  April 1, 2021 convertible loans 
  September 30, 2022 
  June 15, 2020 convertible loans  April 1, 2021 convertible loans 
Dividend yield  0%  0%
Risk-free interest rate  4.06%  4.06%
Expected term (years)  1.08   1.08 
Volatility  123.94%  123.94%
Share price (U.S. dollars)  0.021   0.021 
Exercise price (U.S. dollars)  0.05   0.05 
Fair value of the conversion feature (U.S. dollars in thousands)  173   40 

The80% probability for scenario in which the Company would raise at least $5 million prior to conversion of the convertible loan (scenario 2) was estimated by the appraiser using the Black-Scholes option pricing model, to compute the fair value of the derivative and to market the fair value of the derivative at each balance sheet date. The following are the data and assumptions used as of issuance dates and as of the balance sheet date:

  June 15, 2020 convertible loans  April 1, 2021 convertible loans 
  September 30, 2022 
  June 15, 2020 convertible loans  April 1, 2021 convertible loans 
Dividend yield  0%  0%
Risk-free interest rate  3.92%  3.92%
Expected term (years)  0.25   0.25 
Volatility  123.3%  123.3%
Debt instrument measurement input  123.3%  123.3%
Share price (U.S. dollars)  0.021   0.021 
Exercise price (U.S. dollars)  0.05   0.05 
Fair value of the conversion feature (U.S. dollars in thousands)  21   

5

 

The fair value of the convertible component was estimated by the third-party appraiser after giving effect to the weighted average of the two possible scenarios as of September 30, 2022 was $97 thousands and $23 thousands.

C.On February 8, 2022, Cannovation Ltd received from the Israel Land Authority (“ILA”) a counter-signed development agreement to purchase rights for long term lease to 11,687 square meters of Land for purposes of building the Green Vision Center Israel, which is intended to include factories, laboratories, logistics and a distribution center for the medical cannabis, and botanicals industries.
D.On February 15, 2022, the Company signed an investor relations service agreement with a consultant pursuant to which the Company agreed to pay the consultant a monthly retainer of $5,000 and in addition, to issue the consultant 1,800,000 restricted shares of common stock, to be issued in three tranches. In the event that the agreement is terminated prior to the issuance date, the remaining share obligation shall be void. On July 28, 2022, by mutual agreement the Company and the counterparty consultant terminated the agreement and the Company agreed to issue to the counterparty consultant 600,000 restricted shares.

19

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

E.On July 15, 2022, Citrine 9 LP, (hereinafter “Citrine 9”), one of the related entities and a signatory lender (to the Convertible Note Purchase Agreement entered into by the Company and several related parties (hereinafter the “Buyers”) in April 2020, as subsequently amended (the “CL Agreement”) agreed to honor a Draw Down Notice for, and has advanced to the Company, $100,000 on the same terms and conditions as are specified in the CL Agreement. The annual interest on the loan continues to be nine percent (9%). The principal and interest payment on the Note are to be made in New Israeli Shekels (NIS) at the conversion rate which was in effect on the date on which the loan was advanced. In connection with the loan, Citrine 9 is entitled to 8,333,333 Series A warrants and 8,333,333 Series B warrants for shares of common stock, where the Series A warrants are exercisable beginning January 15, 2023 through July 15, 2024 and the Series B warrants are exercisable beginning January 15, 2023 through July 15, 2025, in each case at an exercise price of $0.05 per share. On August 9, 2022, the Company’s board of directors agreed to extend the maturity date on the loans to October 31, 2023, subject to approval of Citrine 9 to such extension, and to extend the exercise period of the warrants through August 9, 2027. 

The Company allocated the proceeds received to the freestanding components – the convertible loan, A Warrants and B Warrants, based on their relative fair values, since all three components will not be subsequently measured at fair value (see below).

Conversion feature

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

The fair value of the convertible component was estimated by third party appraiser as weighted average of the two possible scenarios of the total convertible notes amount conversion (each, 50% probability):

 

The scenario in which the convertible loan would be converted prior to its maturity (scenario 1) was estimated by the appraiser using the Black-Scholes option pricing model, to compute the fair value of the derivative and to market the fair value of the derivative at each balance sheet date. The following are the data and assumptions used as of issuance dates and as of the balance sheet date:

SCHEDULE OF FAIR VALUE OF CONVERTIBLE FEATURE USING VALUATION ASSUMPTIONS

  July 15, 2022  September 30, 2022 
Dividend yield  0%  0%
Risk-free interest rate  3.12%  4.06%
Expected term (years)  1   1.08 
Volatility  146.4%  123.9%
Share price (U.S. dollars)  0.012   0.021 
Exercise price (U.S. dollars)  0.05   0.05 
Fair value of the conversion feature (U.S. dollars in thousands)  6   13 
January 30, 2023
Dividend yield (%)0%
Risk-free interest rate (%)4.56%
Expected term (years)1.33
Volatility123.5%
Share price (U.S. dollars)0.044
Exercise price (U.S. dollars)0.05

 

The scenario in which the Company would raise at least $5million prior to conversion of the convertible loan (scenario 2) was estimated by the appraiser at no fair value since it was estimated that along with such raise the convertible loans would be converted at market price.

The fair value of the convertible component was estimated by the third-party appraiser after giving effect to the weighted average of the two possible scenarios as of issuance dates was $8 thousands.

Warrants

The fair value of the warrants as of January 30, 2023 was estimated at $268 thousands using the Black-Scholes option-pricing model and is presented within the consolidated statements of changes in shareholders equity (deficit).

The following are the data and assumptions used:

SCHEDULE OF FAIR VALUE DATA AND ASSUMPTIONS OF WARRANTS

Warrants A
Dividend yield (%)0%
Risk-free interest rate (%)3.75%
Expected term (years)4.36
Volatility160.5%
Share price (U.S. dollars)0.044
Exercise price (U.S. dollars)0.05
Fair value of the conversion feature (U.S. dollars in thousands)134

Warrants B
Dividend yield (%)0%
Risk-free interest rate (%)3.75%
Expected term (years)4.36
Volatility160.5%
Share price (U.S. dollars)0.044
Exercise price (U.S. dollars)0.05
Fair value of the conversion feature (U.S. dollars in thousands)134

17

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 5 – CONVERTIBLE NOTES

C.As of March 31, 2023, the fair value of the convertible component was estimated by third party appraiser as weighted average of the two possible scenarios of the total convertible notes amount conversion (20% probability for scenario 1 and 80% probability for scenario 2):

The scenario in which the convertible loans would be converted prior to its maturity (scenario 1) was estimated by the appraiser using the Black-Scholes option pricing model, to compute the fair value of the derivative and to market the fair value of the derivative at each balance sheet date. The following are the data and assumptions used as of issuance dates and as of the balance sheet date:

SCHEDULE OF FAIR VALUE OF CONVERTIBLE FEATURE USING VALUATION ASSUMPTIONS

20March 31, 2023
Dividend yield0%
Risk-free interest rate4.54%
Expected term (years)1.17
Volatility108.62%
Share price (U.S. dollars)0.035
Exercise price (U.S. dollars)0.05
Fair value of the conversion feature (U.S. dollars in thousands)610
Weighted fair value based on scenario probability (U.S. dollars in thousands) 119 

 

CITRINE GLOBAL, CORP.The scenario in which the Company would raise at least $5 million prior to conversion of the convertible loan (scenario 2) was estimated by the appraiser at no fair value since it was estimated that along with such raise the convertible loans would be converted at market price.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

  July 15, 2022  September 30, 2022 
Dividend yield  0%  0%
Risk-free interest rate  2.86%  

3.92

%
Expected term (years)  0.46   0.25 
Volatility  125.9%  123.3%
Share price (U.S. dollars)  0.012   0.021 
Exercise price (U.S. dollars)  0.05   0.05 
Fair value of the conversion feature (U.S. dollars in thousands)  1   1 

The fair value of the convertible component was estimated by the third-party appraiser after giving effect to the weighted average of the two possible scenarios as of issuance datesMarch 31, 2023 was $4 thousands and as of September 30, 2022 was $7119 thousands.

 

Warrants

The fair value of the warrants as of the drawdowns dates was estimated at $115 thousands using the Black-Scholes option-pricing model and is presented within the consolidated statements of changes in shareholders equity (deficit).

The following are the data and assumptions used:

SCHEDULE OF FAIR VALUE DATA AND ASSUMPTIONS OF WARRANTS

Warrants A
Dividend yield0%
Risk-free interest rate3.13%
Expected term (years)2
Volatility153.1%
Share price (U.S. dollars)0.012
Exercise price (U.S. dollars)0.05
Fair value of the warrants (U.S. dollars in thousands)50

Warrants B
Dividend yield0%
Risk-free interest rate3.14%
Expected term (years)3
Volatility148.6%
Share price (U.S. dollars)0.012
Exercise price (U.S. dollars)0.05
Fair value of the warrants (U.S. dollars in thousands)64

Fair Value Proportional Allocation

The fair value of the note was estimated at $93 thousands. The note is accounted for according to the effective interest method.

Based on the above, the fair value proportion allocation as of July 15, 2022 was as follows:

SCHEDULE OF FAIR VALUE OF DEBT

  

July 15, 2022

(US dollars in thousands)

 
Conversion Component $4 
Warrants  55 
Convertible Notes  41 
Total $100 

2118
 

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 6 – OTHER EVENTS DURING THE PERIOD

F.A.On August 9, 2022,March 6, 2023 Cannovation and S.R. Accord Ltd., an Israeli company (“Lender”), entered into an 18-month credit facility agreement (the “Credit Facility”) pursuant to which Lender has committed to fund Cannovation in an aggregate amount of 3,000,000 NIS (approximately $857,000), as needed. At the time of each draw down, Cannovation and Lender will determine the maturity date of the loan. All amounts drawn under the Credit Facility will bear interest a an monthly rate of 1.7%. Cannovation has the right to pre-pay the entire amount outstanding under the Credit Facility at any time. As security for any loans under the Credit Facility, Cannovation granted the Lender a first priority lien on its rights to the 125,000 sq ft (11,687 sq meters) of industrial land in Yerucham (the “Premises”). The lien will become effective only if Cannovation utilizes the Credit Facility. If the market value of the Premises is less than the amount outstanding under the Credit Facility, then Lender will be entitled to additional security including additional shares of Citrine Global common stock, on such terms and conditions as the parties may agree. As additional security for any payments due to Lender, (i) the Israeli Subsidiary, (ii) Beezzhome and (iii) Netto Holdings, an unaffiliated entity under the partial control of Ilan Ben Ishay, a director on the board of directorsCannovation, as well as each of Ms. Elharar Soffer and Mr. Ben Ishay have, in their personal capacities, provided guarantees for the repayment of any amounts that may be owing to Lender under the Credit Facility. The Company, CTGL Citrine Global Israel Ltd. and Cannovation have agreed to indemnify Ms. Elharar Soffer and Mr. Ben Ishay for any losses they incur as a result of the Company agreed to the following:guarantee

1.The maturity date on all of the outstanding convertible loans under the CL Agreement was extended to October 31, 2023 (from July 31, 2023), subject to agreement of the lending entities under the CL Agreement to such extension of the maturity date; and
2.The exercise period on all of the outstanding Series A and Series B warrants issued to date in connection with the convertible loans under the CL Agreement was extended to August 9, 2027.

 

The Company concluded thatDuring the change in terms does not give rise to a trouble debt restructuring, as no concession was given toperiod of three month ended March 31, 2023, Cannovation utilized $51,000 out of the Company.credit line.

 

Therefore,On March 7, 2023, the Company went onissued to assess whether the termsLender 2,154,677 shares of the modified note are substantially different.Company’s common stock a commitment fee in respect of the provision of the Credit Facility. The Company concluded thatdetermined the change in termsvalue of the loans should be accounted forshares issued at $82,000 based on the share price at the agreement date of which $5,000 were recorded as a debt extinguishment.finance expenses and the remaining were recorded as pre-paid issuance expenses.

 

FollowingOn March 18, 2023, the abovementioned amendment on August 9, 2022,Company issued to a consultant 1,077,339 shares of the changesCompany’s common stock in respect of the fairprovision of the Credit Facility. The Company determined the value of the conversion component andshares issued at $41,000 based on the warrants inshare price at the amountagreement date of which $513,000 thousands and $354 thousands, respectively were recorded as interestfinance expenses and the remaining were recorded as pre-paid issuance expenses.

19

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 7 – RELATED PARTIES

A.Transactions and balances with related parties

SCHEDULE OF TRANSACTION AND BALANCE WITH RELATED PARTIES

  2022  2022 
  

Three months ended

March 31

 
  2023  2022 
       
Research and development expenses:        
Directors compensation and fees to officers  28   25 
         
General and administrative expenses:        
Directors compensation and fees to officers (*)  394   176 
(*) Share based compensation  269   27 
General and administrative expenses  269   27 
         
Financing expenses, net:        
Interest on convertible notes  330   379 

B.Balances with related parties:

  

As of

March 31,

  

As of

December 31,

 
  2023  2022 
       
Current Liabilities:        
Short term loan  -   82 
Accounts payable  158   120 
Accrued compensation  1,489   1,384 
   1,647   1,586 
Non-current Liabilities:        
Convertible notes  2,002   1,814 

2220
 

 

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

 

G.On August 9, 2022, the Board agreed to issue to the related entities who advanced an aggregate of $1,170 thousands in convertible loans under the CL Agreement on or before June 15, 2020 warrants for a total 5,589,172 shares of common stock, exercisable through August 9, 2027 at a per share exercise price of $0.05, in replacement of the Series A warrants for an identical number of shares issued in June 2020 in connection with such loans, which had expired.

The fair value of the warrants as of the drawdowns dates was estimated at $98 thousands using the Black-Scholes option-pricing model and is presented within the consolidated statements of changes in shareholders equity (deficit).

The following are the data and assumptions used:

SCHEDULE OF FAIR VALUE DATA AND ASSUMPTIONS OF WARRANTS

Warrants A
Dividend yield (%)0%
Risk-free interest rate (%)2.97%
Expected term (years)5
Volatility152.9%
Share price (U.S. dollars)0.02
Exercise price (U.S. dollars)0.05
Fair value of the warrants (U.S. dollars in thousands)98

H.On September 30, 2022, the Company received a loan from Citrine S A L Hi Tech 7 LP, an Israeli limited partnership and an affiliated entity (the “Lender”), in the principal amount of $80,000. The loans bears interest at 12% per annum and is scheduled to mature on December 15, 2022The principal and interest payment on the loan are to be made in New Israeli Shekels (NIS) at the exchange rate which was in effect on the date on which the loan was advanced. The Lender has the option, upon written notice to the Company and subject to the Company’s consent, to extend the maturity date of the loan (the “Maturity Date extension Notice”). The Lender is to provide the Maturity Date extension Notice by no later than December 5, 2022.
In the event that the Company agrees to such extension, the terms of this loan shall be adjusted on a pro-rata basis, to those terms applicable to the Company’s convertible notes then outstanding under the Convertible Note Agreement, date as of April 1, 2020, as subsequently amended, amongst the Company and the affiliated parties thereto (of which the Lender is a party).

NOTE 57RELATED PARTIES(cont’d)

 

A.C.Transactions and balances with related partiesAdditional information:

SCHEDULE OF TRANSACTIONS AND BALANCES WITH RELATED PARTIES

  2022  2021  2022  2021 
  

Nine months ended

September 30

  

Three months ended

September 30

 
  2022  2021  2022  2021 
  U.S. dollars (in thousands) 
             
Research and development expenses:                
Directors compensation and fees to officers  81   24   26   - 
                 
General and administrative expenses:                
Directors compensation and fees to officers (*)  791   1,225   444   1,042 
(*) Share based compensation  349   872   305   872 
General and administrative expenses  349   872   305   872 
                 
Financing expenses (income), net:                
Related to convertible loan terms  (575)  (1,034)  (582)  (237)

23

CITRINE GLOBAL, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

 

B.Balances with related parties:

  As of September 30,  As of December 31, 
  2022  2021 
  U.S. dollars (in thousands) 
       
Current Assets:        
Short term loan granted to others  17   15 
   17   15 
Current Liabilities:        
Short term loan  80   - 
Convertible notes  -   1,431 
Accounts payable  26   20 
Accrued compensation  1,326   838 
   1,432   2,289 
Non-current Liabilities:        
Convertible notes  1,704   - 

C.1.On August 9, 2022,January 17, 2023, the Board of Citrine Global, appointed Ms. Ora Elharar Soffer to serve as president of the Company. Ms. Elharar Soffer has been continuously serving as the Company’s Chief Executive Officer since May 7, 2020 and as a Company director since February 21, 2020 and as Chairperson of the Board since March 3, 2020.
2.On January 17, 2023, the Board of Citrine Global, appointed Ms. Ilanit Halperin to serve as treasurer and secretary of the Company. Ms. Halperin has been continuously serving as the Company’s Chief Financial Officer since May 7, 2020 and as a Company director since February 21, 2020.
3.On January 18, 2023, Mr. David Kretzmer’s fee in respectIlan Ben Ishay resigned from his position as a director on the Board of services providedthe Company for personal reasons. Mr. Ben Ishay’s resignation did not result from any disagreement with the Company on any matter relating to the CompanyCompany’s operations, policies and practices.
4.On March 16, 2023, the consulting agreement originally entered into as of July 2020 with Ms Elharar Soffer, the Company’s Chairperson, CEO and President, was reducedamended. The amendment provides for the following: (i) the monthly consulting to which Ms. Elharar Soffer is entitled will increase from $7,000 per month$20,000 to $1,500 per month. Mr. Kretzmer’s$25,000 plus VAT upon a listing of the Company’s stock on the Nasdaq Stock Market, retroactive to January 1, 2023, (ii) the terms contained in her original agreement and all other terms and awards previously approved by the Company’s board relating to her, including payment of her monthly fee and reimbursement of social benefits payments made by Mr Elharar Soffer, shall continue in full force and effect so long as Ms. Elharar Soffer serves as either director and /or executive officer, (iii) all previous awards and bonuses previously made to her were affirmed and (i) Ms. Elharar Soffer has agreed to defer compensation due to her until such time as the Company shall have consummated an investment of at least $1.8 million in the Company’s securities, at which time outstanding amounts due her under the agreement would be paid to her. The amendment also provides that the committee of the Board that will be responsible for services renderedsetting the compensation terms of senior management shall prepare and present for approval a compensation program for the Consultant that takes into consideration Ms. Elharar Soffer’s role in founding and leading the Company and that such compensation package shall be competitive with compensation programs for top senior executives/founders generally available in the market and which will include, among other things, appropriate bonuses, severance payments and other amenities generally made available in the market to Cannovation Center Israelsenior executive and that Ms. Elharar Soffer shall receive the most extensive of such compensation terms amongst senior management.
5.On March 16, 2023, the consulting agreement originally entered into as of July 2020 with Ilanit Halperin, the Company’s CFO, was amended. The amendment provides for the following: (i) the monthly consulting to which Ms Ilanit Halperin, is entitled will increase from $7,000 to $10,000 plus VAT upon a listing of the Company’s stock on the Nasdaq Stock Market, retroactive to January 1, 2023, (ii) the terms contained in her original agreement and all other terms and awards previously approved by the Company’s board relating to her, including payment of her monthly fee and reimbursement of social benefits payments made by M.s Halperin, shall continue in full force and effect so long as Ms. Halperin serves as either director and /or executive officer, (iii) all previous awards and bonuses previously made to her were affirmed and (i) Ms. Halperin has agreed to defer compensation due to her until such time as the Company shall have consummated an investment of at least $1.8 million in the rateCompany’s securities, at which time outstanding amounts due her under the agreement would be paid to her. In addition, the Company undertakes that the committee of $2,000 the Board that will be responsible for setting the compensation terms of senior management shall prepare and present for approval a compensation program for Ms. Halperin that shall be competitive with compensation programs for senior executives generally available in the market and which will include, among other things, appropriate bonuses, severance payments and other amenities generally made available in the market to senior executivesper month was unaffected..

 

NOTE 68SUBSEQUENT EVENTS

1.A.On October 19, 2022, Mr. Dror Shaked and Mr. David Freidenberg were appointed to serve as independent directors on the Board of Directors of Citrine Global, Corp. effective upon (and subject to) the Nasdaq listing of the Company.
B.In November 2022 the Company and iBOT agreed to extend to March 31,May 9, 2023, the pre-emption right previously granted to the Company with respect to any equity or equity linked securities that iBOT proposes to issue to an unrelated third party with aggregate gross proceeds to iBOT exceeding $1 million or which will result 51% in a change in control in iBOT following such issuance.
C.On November 14, 2022, the CL Agreement was amendedCompany’s Board determined to provide that until the repaymentearlier of the satisfaction in full of all outstanding principal and accrued interest on the Notes issued thereunder andconvertible loans referred to in Note 5A or the earlier to occurtermination of the exercise in totalityperiod of the Warrantswarrants for an aggregate of 62,178,554 shares previously issued to the Lending LPs referred to in connection with the Notes or their termination by the terms thereof,Note 5A (the “Warrants”), if the Company issues securities in any financing transaction, including debt convertible into equity, in any equity and/or debt offering or other transaction (the “Future Financing”)Company’s common stock were to be listed on the Nasdaq Stock Market and said securities contain any terms that are more favorable than the terms and provisions contained in the outstanding Notes and/or Warrants under the CL Agreement, including without limitation, an effective per share public price whichof the offering accompanying such listing is lowerless than the then effective Conversion Price applicable to the Notes or the Exercise Pricecurrent exercise price of the Warrants, then the CompanyWarrant exercise price shall at the request of a majoritybe adjusted to that of the Buyers, enter into amendmentspublic offering price, provided that if such listing and accompanying offering do not occur by June 30, 2023, then the exercise price of the Warrants shall remain at its then current exercise price or may be adjusted to a lower exercise price as determined by Company’s Board and in agreement with the Notes and/or Warrants, as applicable, to provide for the same more favorable terms and provisions.Lending LPs.

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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, 20212022 as filed with the Securities and Exchange Commission, or the SEC, on April 8, 2022.March 22, 2023. 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

 

We are a plant-based wellness & pharma solutions company. Our business activity is primarily comprisedcompany with a vision of developing wellnessbecoming a leading company in these fields and pharma solutions, focused on science backed plant-based products to improve people’s health and quality of life and complementary solutions for balancing side effects caused by using medicines, treatments, or an unbalanced lifestyle.worldwide.

 

The global health and wellness market is expected to reach USD 7.6 trillion by 2030, growing at a CAGR of 5.5% from 2021 to 20301with growing awareness of health and wellness solutions for improving people’s quality of life2.

We are witnessing a global movement of health and wellbeing becoming a priority for the public, further emphasized by the recent global COVID-19 pandemic. There is increasing recognition that people need to take charge of their own health, improve their quality of life, use natural products, and balance side effects caused by medicines and treatment3.

 

Our headquarters and executives are based in Israel, where we operate via our 100%-owned-subsidiary “CTGL Citrine Global Israel Ltd.” and 60%-owned “Cannovation Center Israel Ltd.”

Our presence in Israel combined with our close contacts with leading universities, researchers, companies, shareholders and governmental support, allows us to access the latest technologies, talent, and innovation to bring innovative solutions to the global market.

We believe the power of plant-based solutions from nature can help improve people’s health and quality of life.

We seek to bring to the market plant-based Our business activity is primarily composed of developing wellness and pharma solutions, focused on science backed plant-based products such as nutritional supplements, healthy beverages and food ,natural cosmetics that aim to improve people’s health and quality of life and to balance selectedcomplementary solutions for balancing side effects associated withcaused by using medicines, treatments, or an unbalanced lifestyle.

 

 

1Research, P., 2022. Health and Wellness Market Size to Hit USD 7,656.7 Bn by 2030. [online] GlobeNewswire News Room.

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2NielsenIQ. 2022. An inside look into the 2021 global consumer health and wellness revolution. [online]

3Sullivan, F., 2022. Increasing Health Consciousness Among Consumers to Shift the Global Prebiotic Ingredients Market. [online] Prnewswire.com.

Prnewswire.com

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Research shows thatWe have built an end-to-end strategy to bring to market on a global scale innovative plant-based wellness and pharma solutions covering the whole spectrum from innovation, research and development, product development, infrastructure for production and manufacturing, distribution, marketing and sales.

We seek to bring to the market wellness and pharma innovative products, such as food supplements, healthy snacks, healthy beverages and natural cosmetics, to help improve people’s health and quality of life and complementary products canthat aim to balance selected side effects associated with medicinal usemedicines, treatments or treatments. For example, probiotics, natural nutritional supplements are recommended as a complementary product to balance side effects associated with the use of antibiotics4.an unbalanced lifestyle.

 

Leveraging technology and research, we are focused on developing a products portfolio based on rigorous scientific research ranging from synergistic botanicals, herbal extract, tinctures, medicinal mushrooms together with plant extracts, vitamins, minerals, botanical formulations from seeds, roots, bark, fruits, and a wide variety of plants that contain substances with health-supportive effects. Such supportive effects include, but aren’tare not limited to, enhancing oral care, anti-inflammatory properties, relaxation, sleep enhancement, energizing, mood and body balancing, and alleviating side effects.effects, and more.

 

We have more than 100 plant-based formulations and product lines under the brands GreenFeels™ and Green Side by Side™ targeting the nutritional supplements market that is expected to reach $625 billion by 20304.

Our headquarters

The product lines categories include:

Personal Protection & Health Supportive Product Line
Balance & Calm Product Line
Digestion, Weight Management Product Line
Men Product Line
Women Product Line
Sports & Energy Product Line
Oral Cavity Care Product Line
Vitamins & Minerals Product Line
Medicinal Mushrooms Product Line

Creating Revenue & Growth Strategy

We started our beta testing and senior executivesinitial launch of Green Side by Side™ in the Israeli market with a local company, Following the initial trial period, we developed an additional brand under the name GreenFeels™ and we plan to expand our distribution efforts and building a worldwide network with local teams, partners, collaborations & acquisitions of distribution companies with various business models that are basedintended to bring our products to the global market .

Initially, we are planning to build an infrastructure for sales and business development with local teams in Israel, where we operate via our 100%-owned-subsidiary “CTGL Citrine Global Israel Ltd.”North America and 60%-owned “Cannovation Center Israel Ltd.”Europe.

 

Our experienced team and partners are leaders in their respective fields with proven track records as top-level businesspeople and executives in technology, high-tech, biotech, investments, entrepreneurship, real estate, finance, and proven experience in bringing companies to global success. We have a professional, experienced group of primary shareholders that include Citrine S A L Investment & Technologies, which are supporting the Company.Revenue model includes:

Sales from proprietary product lines & brands worldwide according to local regulations.
Commercialization and licensing of our IP, products & brands
collaborations & acquisitions of distribution companies and strategic partnership activities.

Our target Market potential

 

Our presence in Israel combinedThe plant-based wellness market is booming, with our close contacts with leading universities, researchers, companies, shareholderhealth-conscious consumers spending more on natural products ranging from nutraceuticals, natural superfoods, natural beverages, naturalcosmetics and governmental support powers us to access the latest technologies, talent, and innovation to bring innovative solutions to the global market.plant-derived drugs.

 

With the4 Research, P., 2022. Nutritional Supplements Market to Hit US$ 624.7 Billion by 2030. [online] GlobeNewswire

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The nutritional supplements market was $314 billion in 2020 and is expected to reach $624.7 billion by 20305.
The superfoods market was $172 billion in 2020 and is expected to reach $287.7 billion by 20276.
The botanical and plant-derived drug market was $26 billion in 2018 and is expected to reach $53 billion by 20267.
The natural cosmetics market was $15 billion in 2021 and is expected to reach $21.5 billion by 20288.

Our mission is to leverage the power of plant-based solutions from nature to help improve people’s health and quality of life , and bring to market, on a global scale, innovative plant-based wellness and pharma solutions, covering the whole spectrum from innovation, research and development, product development, infrastructure for production and manufacturing, distribution, marketing and saleslife.

 

We created multi-strategy solutions to realize our mission, the highlights of which include the following:

Manufacturing & Joint venture and with iBOT Israel Botanicals Ltd.

We have strategic joint venture alliance and manufacturing agreements with iBOT Israel Botanicals Ltd, a botanical R&D and nutritional supplements manufacturing company.
iBOT has GMP-certified manufacturing facility approved by the Israeli Ministry of Health for manufacturing nutritional supplements .
iBOT owns IP and know-how of hundreds of formulas and products including liquid formulations in the form of syrups, tinctures, and oils, and dry formulations in the forms of tablets, powders, capsules, and sachets.
We are developing and manufacturing our nutritional supplements product lines, including the GreenFeels™ & Green Side by Side™, with iBOT.
iBOT, an affiliated company, granted to Citrine Global and its subsidiaries through December 31, 2023 a pre-emption right to equity linked securities that iBOT proposes to issue to an unrelated third party.

Acquisition of MyPlant Bio Ltd.

On December 30, 2022, we purchased a 10% equity interest (on a fully diluted basis) in MyPlant Bio Ltd and Citrine Global has an option to purchase an additional 45% of MyPlant equity.

MyPlant Bio Ltd, specializes in botanical drug development and owns certain know-how and intellectual property rights that include a developed platform and cell-disease models to screen plant extracts to understand their biological effect, and has screening platforms using cell line models for certain diseases and conditions to detect effective plant materials and/or other substances for the treatment of these conditions. MyPlant was founded by Cannasoul Analytics, a leading botanical research and development company and Prof. Dedi Meiri from the Faculty of Biology at the Israeli Institute of Technology (Technion) and a member of the Technion Integrated Cancer Center. Citrine Global’s acquisition of MyPlant is in line with the Citrine Global’s strategy to be a leader in plant-based wellness and pharma solutions.

5 Research, P., 2022. Nutritional Supplements Market to Hit US$ 624.7 Billion by 2030. [online] GlobeNewswire

6 Research, I., 2022. Global Superfoods Market Size is Projected to Reach US$ 287.75 Billion by 2027 | Superfoods Market Store, Delivery Options, Emerging Trends 2022 | Segmentation by Product Type, Applications, Regions, & Key-Players (ADM, Ardent Mills, Bunge). [online] GlobeNewswire Newsroom

7 2018-2026, G. and 2018-2026, G., 2022. Botanical and Plant Derivative Drug Market - Global Forecast 2018-2026. [online]

8 Vantage Market Research, Vegan Cosmetics Market to Hit USD 21.5 Billion by 2028 | GlobeNewswire Newsroom [online]

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We view the acquisition of MyPlant as an opportunity to advance our wellness and planned pharma and botanical drug products with MyPlant’s scientific research as to the effects of specific plant substances and compounds on different wellness and medical conditions. We believe that we can benefit from the collaboration with MyPlant and Professor Dedi Meiri to advance the company’s strategy for developing scientifically backed plant-based products composed of specific active plant substances proven by research to be effective for different medical conditions and possibly offer personally customized products for individual patients tailored for their healing process.

The collaboration with MyPlant is part of our strategy to add value to our product lines and position our company with a competitive edge in the Wellness market and the Nutritional Supplements.

As the worldwide use of botanical nutritional supplements and botanical drugs continues to grow, the need for scientific evaluation of the safety and efficacy of these products is becoming ever greater. We are targeting and positioning our product lines for the nutritional supplements market that is expected to reach $625 billion by 20309.

 

Developing & Bringing Plant-Based Wellness & Pharma Products to Market

 

We are basing our efforts on technologies to create research and innovation, developing plant-based solutions which include products for improving quality of life and complementary solutions for balancing selected side effects caused by using medicines, cannabis, treatments, or an unbalanced lifestyle.

 

We developed dozens of formulations and products lines that includes nutritional supplements under the Green Side by Side™ brand name and the GreenFeels™ brand name in multiple form factors that include herbals, medicinal mushrooms, vitamins, minerals, and a variety of researched plants known for their healing qualities that contain substances with different anti-inflammatory properties and a variety of health-supportive effects that are relaxing, sleep enhancing, energizing, mood and body balancing, enhancing oral care, alleviating side effects, and more,

Our products lines include the following product categories:

Oral Cavity Care Product Line
Medicinal Mushrooms Product Line
Booster Product Line
Personal Protection Product Line
Balance & Calm Product Line

4 N.A.Kerna, 2018, A complementary medicine approach to augmenting antibiotic therapy current practices in the use of probiotics during antibiotic therapy, International Journal of Complementary & Alternative Medicine.

We manufacture our products in Israel at iBOT Israel Botanicals (iBOT), a GMP-certified manufacturing facility approved by the Israeli Ministry of Health. iBOT is a related company and we have strategic agreements with them As part of our preparation to sell our products in the US, iBOT already obtained FDA approval for exporting products to the US.

Go to MarketIP Strategy and Prospective Revenue Sources

Our strategy for generating revenue includes sales of our product lines & brands and building a worldwide network with local teams and subsidiaries, partnerships and collaborations with distributors retail and pharmacy chains, and mergers & acquisitions of distribution companies

We are ready to go to market with a wide range of product lines for the wellness industry in multiple form factors, including nutritional supplements, herbals, medicinal mushrooms, vitamins, minerals, and a variety of researched plants known for their healing qualities that contain substances with different anti-inflammatory properties and a variety of health-supportive effects that are relaxing, sleep enhancing, energizing, mood and body balancing, enhancing oral care, alleviating side effects, and more. We started beta-testing several products in the Israeli market and are planning to establish appropriate distribution and marketing networks worldwide .

We have various business models to sell our products through different distribution channels, which include online digital direct sales, online retailer websites, physical shops and retailers including food, drug, and mass merchandise retail networks. Currently we are focused on building a B2B distribution network worldwide with select local partners who will be handling import, distribution, marketing, and sales while adhering with local regulations.

We target our product lines & brands for the plant-based wellness & pharma market of natural products of nutraceuticals, natural superfoods, , healthy beverages, cosmetics, legal, cannabis chains ,distribution network, and the botanical and plant-derived drugs.R&D Roadmap include:

 

Developing wellness plant-based product portfolio across the range from scientific and research-based plants, such as herbal extracts, medicinal mushrooms, and other natural ingredients.
The nutritional supplements market is expected to reach USD 624.7 billion by 20305.Expanding our current product lines and registering the products for worldwide regulatory approvals.
The superfoods market is expected to reach USD 287.7 billionDeveloping complementary products for balancing selected side effects caused by 20276.medicines, treatments, aging, stress, or an unbalanced lifestyle.
The legal cannabis market is expected to reach USD 70.6 billion by 20287Researching and developing pharma solutions with the mission of developing plant-based medicines and botanical drugs.
The botanicalBuilding our patent portfolio, conducting clinical trials, and plant-derived drug market is expected to reach USD 53 billion by 20268.advancing our products through innovation and technology.
The natural cosmetics market is expectedWe filed provisional patent applications in the field of Balancing Side Effects in the United States Patent and Trademark Office (USPTO): Patent Application No. 63/418,046, and Patent Application No. 63/388,361 for compositions and methods for balancing side effects associated with the use of medicines, treatments, aging and unbalanced or unhealthy lifestyle and balancing side effects related to reach USD 20.8 billion by 20279.symptoms in the oral cavity.

 

IP and Research & Development StrategyAbout Side Effects Caused by Using Medicines, Treatments or an Unbalanced Lifestyle

 

Our IP strategySide effects are unexpected reactions which may result from using medicines, treatments and R&D roadmap include developing plant-based wellnessan unbalanced lifestyle. There are common side effects, such as dryness in the oral cavity (xerostomia), headaches, dizziness, drowsiness, fatigue, nausea, vomiting, lack of concentration, and plant-based pharma solutions, building our patent portfolio, conducting clinical trials, advancing products through regulatory approvals,impaired appetite that are associated with the use of medicines and bringing innovative products to market.

We already submitted several provisional patent applications, as detailed below, and we plan to build a patent portfolio.

treatments5 Research, P., 2022. Nutritional Supplements Market to Hit US$ 624.7 Billion by 2030. [online] GlobeNewswire News Room

6 Industry Research., 2022. Global Superfoods Market Size is Projected To Reach US$ 287.75 Billion by 2027 [online]

7 Grandviewresearch.com. 2022. Legal Marijuana Market Size Worth $70.6 Billion By 2028. [online]

8 2018-2026, G. and 2018-2026, G., 2022. Botanical and Plant Derivative Drug Market - Global Forecast 2018-2026. [online] Inkwood Research

9 Mynewsdesk. 2022. Vegan Cosmetics Market is Growing at 6.9% CAGR, Market Size, Share, Statistics, Cosmetics Industry Trends, Leading Company Profiles, Forecast & Estimations to 2027. [online]

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Our strategy includes developing wellness, OTC product lines and plant-based medicines for the botanical and plant-derived drug market including:

Developing products portfolio based on rigorous scientific research ranging from synergistic botanicals, herbal extract tinctures, medicinal mushrooms together with plant extracts, botanical formulations from seeds, roots, bark, fruits and a wide variety of plants that contain substances with health-supportive effects. Such supportive effects include, but aren’t limited to, enhancing oral care, anti-inflammatory properties, relaxation, sleep enhancement, energizing, mood and body balancing and alleviating side effects.

Developing & researching complementary solutions to address the need to balance selected effects for Caused by Using Medicines, Treatments or an Unbalanced Lifestyle. A broad range of medicines and treatments have common side effects such as dryness in the oral cavity (xerostomia), headaches, dizziness, drowsiness, fatigue, nausea, vomiting, lack of concentration, and impaired appetite that are associated with the use of medicines and treatments1910.

 

The public health impact of harms associated with medicines and treatments is a growing area of investigation, given the expanding pharma industry and widespread availability of drugs and different medical treatments around the world. Current evidence suggests that use of medicines is associated with side effects. Exploring the relationship between drug side-effects and therapeutic indications demonstrates that 69% of drugs have between 10 and 100 different side effects; 22% of drugs have more than 100 side-effects; only 9% of drugs have less than 10 side-effects.

The public health impact of potential harm associated with medicines and treatments is a growing area of investigation, given the expanding pharma industry and widespread availability of drugs and different medical treatments around the world. For example, exploringCurrent evidence suggests that use of medicines is associated with side effects. Exploring the relationship between drug side-effects and therapeutic indications demonstrates that 69% of drugs have between 10 and 100 different side effects1011.

Our research and development program includes:

Developing wellness plant-based product portfolio & brands across the range from scientific and research-based plants, such as herbal extracts, medicinal mushrooms, and other natural ingredients
Developing complementary products portfolio & brands for balancing selected side effects caused by medicines, treatments, cannabis, aging, stress, and an unbalanced lifestyle
Researching and developing pharma solutions with the mission of developing plant-based medicines and botanical drugs
Building patent portfolio
Building clinical trials program & portfolio
Registering products for regulatory approval
Building the infrastructure for production and innovation centers to leverage IP & competitive advantage in developing and manufacturing wellness to pharma plant-based products

Provisional Patent Applications

As part of our IP strategy to build a patent portfolio we have to date submitted several provisional patent applications, as detailed below:

In October 2022 we filed a provisional patent application, “COMPOSITIONS AND METHODS FOR TREATING, AMELIORATING, ALLEVIATING, MITIGATING OR BALANCING SIDE-EFFECTS ASSOCIATED WITH THE USE OF MEDICINES, TREATMENTS, AGING, CANNABIS, AND UNBALANCED OR UNHEALTHY LIFESTYLE”, patent No: 63/418,046 in the U.S. Patent & Trademark Office. The patent application describes common side effects associated with the use of medicines, treatments, aging, cannabis and cannabinoids, and unbalanced or unhealthy life style, such as dryness in the oral cavity (xerostomia), headaches, dizziness, drowsiness, fatigue, nausea, vomiting, lack of concentration, impaired appetite, and more. This is a growing area of concern, given the expanding rate of chronical diseases and legalization and widespread availability of cannabis around the world. The patent application relates to compositions and methods for answering the need for treatment, amelioration, alleviation, mitigation, or balance of side effects, and technologies, and solutions to support people who experience side effects related to their treatment.

 

 

9 Research, P., 2022. Nutritional Supplements Market to Hit US$ 624.7 Billion by 2030. [online] GlobeNewswire

10 U.S. Food and Drug Administration. 2022. Learning about Side Effects

1011 P. Zhang, F. Wang, J. Hu, and R. 2013, Exploring the Relationship Between Drug Side-Effects and Therapeutic Indications, PubMed Central, PMCID: PMC3900166; PMID: 24551427

 

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This provisional patent applicationTreatment of side-effects, or adverse drug reactions, has become a healthcare concern12. The new market of Pharmacovigilance, also known as drug safety – the pharmaceutical science relating to the collection, detection, assessment, monitoring, and prevention of adverse effects with pharmaceutical products – is an extension ofdeveloping and expected to reach $12.48 Billion in 2027. Driving this are increasing public awareness and demand for safer medications and increasing government initiatives to promote drug safety around the provisional patent application filed on October 2021 for “PHARMACEUTICAL COMPOSITIONS AND METHODS FOR THE TREATMENT OF SIDE-EFFECTS ASSOCIATED WITH THE USE OF CANNABIS, CANNABINOIDS AND RELATED PRODUCTS”, patent No: 63/257,673 in the U.S. Patent & Trademark Office that describes certain side effects of cannabis use, the needs, technologies, and solutions to support medical cannabis users who experience side effects related to their cannabis treatment.globe13.

 

In July 2022,We believe that natural plant-based products show great promise in improving quality of life and can be used as complementary products to balance side effects. Antibiotics and probiotics are an excellent use case. Antibiotics are important for treating bacterial infections; however, they can sometimes cause side effects such as diarrhea, liver disease and changes to the gut microbiota. Using probiotics during and after a treatment with antibiotics can help reduce the risk of diarrhea and restore the gut microbiota to a healthy state14.

Addressing a significant market need, we filed a provisional patent application for “COMPOSITIONS AND METHODS FOR TREATING, AMELIORATING, ALLEVIATING, MITIGATING OR BALANCING SIDE-EFFECTS IN THE ORAL CAVITY ASSOCIATED WITH THE USE OF MEDICINES, TREATMENTS, AGING OR UNBALANCED/UNHEALTHY LIFESTYLE”, patent No: 63/388,361included in our strategy the U.S. Patent & Trademark Office. The patent application relatesdevelopment of plant based complementary solutions through wellness as well as clinically developing plant-based pharmaceutical products to compositions and methods for answeringaddress the need for treatment, amelioration, alleviation, mitigation, orto balance of sideselected effects in the Oral Cavity related to medications, treatments (such as chemotherapy), and more. It describes technologies and solutions to support people who experience side effects related to their treatment. Oral cavity side effects are common. The overall estimated prevalence of dry mouth is over one in four people in the general population with higher prevalence rates observed in studies conducted with elderly people11. Research shows that oral cavity-related symptoms are linked to different factors, such asfrom using medicines, treatments, aging, an unbalanced or unhealthy lifestyle,cannabis, and various chronic diseases, psychological reasons, stress, and more12.treatments.

 

Our patent application targets solutionsPlant-based product lines categories:

We have more than 100 formulations & products under the brand names of GreenFeels™ and Green Side by Side™ product lines that include wellness plant-based products and nutritional supplements for side effectsimproving quality of life and is in line with the Company’s strategy to bring to market a broad array of plant-based wellness and pharma complementary solutions targeting to addressproducts for balancing selected side effects caused by using medicines, cannabis, treatments, or an unbalanced lifestyle. An excellent use case of complementary natural products alleviating side effects of medicines is that antibiotics and probiotics. For example, research shows that probiotics, natural food supplements, are recommended as a complementary product to balance side effects associated with the use of antibiotics13.

 

1. The Oral Cavity Care Family Line

We developed product lines

The Oral Cavity Care Product Family Line targets to balance oral cavity dryness side effect. The Oral Cavity Care Family Line includes the SmokLy TM and DryLess TM series of sprays for the oral cavity as nutritional supplements contain plant extract combinations, distilledtargeting to balance the dry mouth side effect (xerostomia) that may result from seeds, roots and fruits with active anti-inflammatory effects, that encourage saliva production and balancing of taste in the oral cavity We are manufacturing the products under GMP certification of approved by the Israeli Ministry of Health.using medicines, cannabis, smoking or treatments.

 

We have launchedBenefits of the products in the Israeli market under the brands name :Oral Cavity Care Product series:

The SmokLyTM line of sprays targeting the market of cannabis users and tobacco smokers.
The DryLessTM line of sprays targeting adult population experiencing constant dry mouth and certain cancer treatment patients that experience constant dry mouth as part of their cancer treatment regimen
The products contain plant extracts distilled from seeds, roots, bark, fruits with active anti-inflammatory substances that encourage saliva production, taste and can promote saliva production and moisture in the oral cavity.
Convenient to use by spraying into the oral cavity
The products come in 7 different flavors: lemon, strawberry, passion fruit, aniseed, mango, maple and mint

2. The Medicinal Mushrooms Family Line:

 

SmokLyTM lineMedicinal Mushrooms Family Line targets to balance important body systems.

The Medicinal Mushrooms Family Line is based on researched medicinal mushrooms that have been used for thousands of spraysyears in traditional medicine and have been proven to be efficient for various medicinal uses. Medicinal Mushrooms were found to have a wide potential in the oral cavity dry mouth side effect targetingtreatment and prevention of diseases, including protection of the market of cannabis usersheart, antioxidant activity, balancing and tobacco smokers.strengthening the immune and digestive systems, lowering cholesterol and balancing blood sugar. Furthermore, it has been shown to protect other important organs such as the liver, with anti-cancer activity.

 

12 P. Zhang, F. Wang, J. Hu, and R. 2013, Exploring the Relationship Between Drug Side-Effects and Therapeutic Indications, PubMed Central, PMCID: PMC3900166; PMID: 24551427

1113 How Common is Dry Mouth? Systematic ReviewPharmacovigilance Market Size to Reach 12.48 billion in 2027 | Industry Trend - Rising Prevalence of Chronic Diseases Worldwide, Increasing Cases of Adverse Drug Reactions and Meta-Regression AnalysisDrug Toxicity and High Consumption of Prevalence Estimates Brazilian Dental Journal (2018) 29(6): 606-618Drugs in Developed Economies, 2022, Bio Space Article [online]

14 Healthline. 2022. What You Should Eat During and After Antibiotics. [online]

12 American Dental Association (ADA) Science & Research Institute, LLC Oral Health Topic: Xerostomia, Department of Scientific Information, Evidence Synthesis & Translation Research. Feb 2021

13 N.A.Kerna, 2018, A complementary medicine approach to augmenting antibiotic therapy current practices in the use of probiotics during antibiotic therapy, International Journal of Complementary & Alternative Medicine

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And DryLessTM sprays for the oral cavity dry mouth side effect that targeting adult population experiencing constant dry mouthThe Medicinal Mushrooms Family Line includes synergistic combinations of research-based medicinal mushrooms and certain cancer treatment patients that experience constant dry mouth as partherbs composed in an herbalist method and made of their cancer treatment regimen.purely natural ingredients.

 

The products contain dry form, concentrated powders and extracts of mushrooms and herbals researched and found to benefit headaches, changes in blood pressure, anxiety, fatigue, and sleep disorders. We plan to develop several linesare harnessing the power of natural wellness, OTC product linesmedicinal mushrooms for restoring nutritional balance and strengthening the botanicalimmune system and plant-derived drug market with the mission of developing plant-based medicines for the plant-derived drug market that is expected to reach $53 billion by 202614.other body systems.

 

About 3. The Booster (Energy & Sports) Family Line

The Booster Family Line targets to provide energy and strength. The Booster Family Line contains unique research-based ingredients and herbal extracts with a high concentration of antioxidants composed in an herbalist method. The Booster Family Line products create a synergistic combination of researched plants and natural ingredients that have been shown to have health supportive anti-inflammatory properties, which strengthen the immune system and contribute to an improved overall feeling. Imbalance in the body, resulting from poor diet and unhealthy lifestyle, chronic diseases, weakness of the immune system, and side effects of medicines and treatments may lead to recurrent infections, chronic coughing, weakness, and gastrointestinal disorders. The Booster Family Line includes herbal syrups that are suitable for morning drinking preventively and target to support daily overload as energy and booster products. The Product Line for Sports & Energy contains research-based herbal formulas including powders and extracts of researched plants that have been demonstrated to have effects of enhancing exercise and athletic performance and include ingredients that improve strength or endurance, increase exercise efficiency, achieve a performance goal more quickly, and increase tolerance for more intense training. These products can be used to prepare the body for exercise, reduce the chance of injury during training, and enhance recovery from exercise. The products come in a variety of forms, including tablets, capsules, liquids, powders, and bars.

4. The Balance & Calm Family Line

Balance & Calm Family Line for mood and body balancing. The Balance & Calm Family Line contains research-based herbal formulas composed in an herbalist method including powders and extracts of researched plants that have been demonstrated to have health supporting effects of calming the digestive system, reducing anxiety and fatigue, and improving sleep quality.

The Balance & Calm Family Line serves as support for the digestive system, balancing and strengthening the body, calming and improving sleep quality. Modern lifestyles that include many tasks and heavy stress, with a non-optimal diet, can lead to fatigue, restlessness, pain, and a particularly sensitive digestive system. All of these can also be side effects of taking various medications and having an unbalanced lifestyle. Continuous stress releases toxic substances in the body, which over time can cause significant health problems. Studies showed that reducing stress improves sleep quality through affecting the nervous system. The Balance & Calm Family Line targets to restore and maintain emotional and body balance and calm the digestive and other systems of the body.

5. The Personal Protection & Health Supportive Family Line:

Personal Protection Family Line targets to support various health chronic and other conditions and prevent contagion with viruses and bacteria. The Personal Protection & Health Supportive Family Line contains research-based balanced combinations of plants, vitamins and minerals composed in an herbalist method, which together form a shell that supports the proper functioning of many body systems, giving an incentive to the immune system and preventing contagion with viruses and bacteria. In the current reality of pandemics, such as COVID-19, and the widespread use of medicines and treatments we believe it is important to balance and nurture different body systems and to strengthen the immune system.

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6. The Digestion & Weight Management Family Line

The Product Line for Digestions & Weight Management contains research-based herbal formulas including powders and extracts of researched plants that have been demonstrated to have effects on the digestive system, metabolism and appetite and include ingredients that improve weight management and include ingredients with thermogenic, lipotropic, satiety, and other metabolic effects demonstrating improved markers of metabolic health, such as glucose, lipids, and blood pressure. These products can be used to support various digestive system health conditions and limited calory diet intake without suffering from nutritional deficiencies, successful weight management, which includes not only weight loss but also weight loss maintenance (i.e., limiting weight regain); control of appetite, and more.

7. The Men Family Line

The Product Line for Men contains research-based herbal formulas including powders and extracts of researched plants that have been demonstrated to have health supporting effects on Men’s Health issues in different areas, such as men’s sexual potency & fertility, prostate gland issues, fitness, weight loss, and more. The Product Line for Men targets to restore and maintain specific health issues common for men and is adapted to men’s physiology, nutritional needs, common health issues, and more.

8. The Women Family Line

The Product Line for Women contains research-based herbal formulas including powders and extracts of researched plants that have been demonstrated to have health supporting effects on Women’s Health issues in different areas, such as candidiasis, fertility issues, vaginal microflora, menstrual cycle normalization, PMS relief, weight loss, and more. The Product Line for Women targets to restore and maintain specific health issues common for women and is adapted to women’s physiology, nutritional needs, common health issues, and more.

9. The Vitamins & Minerals Family Line

Vitamins and minerals are essential organic compounds that are required in order to maintain good health and overcome various infections and retain a good health condition. They are involved in a variety of metabolic processes and many physiological systems and functions in the body.

The Vitamins & Minerals Product Line is based on researched substances that have been proven to be efficient for various medicinal uses. Thy contain research-based balanced combinations of vitamins and minerals composed in an herbalist method, which support the proper functioning of many body systems, and specifically the immune system to prevent contagion with viruses and bacteria, support a healthy digestive system, cognitive functions, and more.

Green Vision Center Production &and Innovation Center for Plant-BasedPlant-based Wellness & Pharma Products

 

The Green Vision Center is part of our strategy to create end-to-end plant-based solutions covering all the infrastructure, facilities, and activities required for developing, manufacturing, and bringing to market innovative plant-based wellness and pharma products.

As demand for plant-based products in industries ranging from wellness, to pharma, to cosmetics, to food continues to increase, Green Vision Center will provide all facilities needed for bringing to market plant-based wellness and pharma products.Israel

 

We acquiredIn February of 2022, we completed the acquisition from the Israel Lands Authority (ILA) of 125,000 sq ft (11,687 sqsquare feet (approximately 11,687 square meters), or approximately three acres of industrial land in Yerucham, a city in southern Israel, to build Green Vision Center Israel with the Israeli government support. (ApproximatelyIsrael. Approximately 90% of the acquisition cost was provided by Israeli government programs that encourage industrial development and includes additional grants and tax incentives.)

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It is currently anticipated that the Green Vision Center Israel will include approximately 65,000 sq. ft. (5,800(~ 5,800 sqm) a first-of-its-kind center thatcenter’s infrastructure and facilities will includes:be focused on the development and production of wellness and pharma plant-based products and planned to include:

 

Manufacturing facilities for botanicals and nutritional supplements
Manufacturing facilities for pharma plant-based products & botanical drugs
Manufacturing facilities for healthy snacks & beverages
Manufacturing facilities for plant-based cosmetics
Manufacturing facilities for medical cannabis and related productsproducts*
R&D laboratories for development, clinical studies, and quality control testing
Distribution and global logistics center
Management and consultant offices
Conference, training & visitor center

 

* Pending changes in the regulatory and market landscape and, pending approval of the board of directors.

Green Vision Center Israel was designed by Avner Sher, one of Israel’s most highly regarded architects. Its design includes a unique roof in the shape of a lotus flower and will be built with solar panels and according to ecological green principles of saving energy.

The center willis planned to be constructed by a professional project construction company.company and sub-contractors that will oversee all aspects of the building including interfacing and obtaining all facilities and products relevant licenses and regulatory approvals, the requisite building permits and other required authorizations.

Our mission is to become a leading worldwide production and innovation center for natural plant-based products and health, wellness, and pharma solutions and to bring together partners, market leaders, companies, technologies, and scientific collaborations from Israel and around the world.

 

14 2018-2026, G. and 2018-2026, G., 2022. Botanical and Plant Derivative Drug Market - Global Forecast 2018-2026. [online] Inkwood Research.Israel as a Source of Innovation

 

Our presence in Israel combined with our close contacts with leading universities, researchers and companies empowers us to access the latest technologies, talent, and innovations and bring them to the global market.

We chose to focus on Israel for the following reasons:

Israel is well positioned as a leader in technology with a critical mass of technology companies, researchers, and scientists15.
Our headquarters, our executives and strategic partners are based in Israel, where we have been operating for years and have a strong network with Israeli companies, universities, labs, entrepreneurs, and businesses.
Israel is considered a pharma powerhouse and a world leader in clinical trials due to its advanced regulatory environment and local experience16.
The Israeli government views and supports technological innovation a major growth engine for the Israeli economy and supports it. The government support includes grants for the purchase of equipment, tax incentives, incentives for employing workers, and other benefits as part of a program of the Israeli government to encourages industrial development and benefits for the city of Yerucham.
We acquired land in the south of Israel, backed by government support, to build the Green Vision Center, a first-of-its-kind production and innovation center for plant-based wellness & pharma products.

15 PwC-Startup Nation Central Report Explores Israel’s Multinational Innovation Ecosystem

16 Portfolio of Israeli companies Life science and Clean-tech sectors October 2020

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Significant Events

(i) On December 30, 2022, we purchased a 10% equity interest (on a fully diluted basis) in MyPlant Bio Ltd. under the terms of a Share Purchase and Option Agreement. The agreement provides Citrine Global with an option to purchase an additional 45% of MyPlant equity (on a fully diluted basis). Under the terms of the Share Purchase and Option Agreement, we purchased from the MyPlant shareholders an aggregate of 44,328 ordinary shares of MyPlant (the “MyPlant Shares”) representing, on a fully diluted basis, 10% of the outstanding MyPlant Shares, in consideration of $444,444 payable by the issuance by Citrine Global to the MyPlant shareholders of an aggregate of 9,259,250 shares of our common stock. In addition, under the Share Purchase and Option Agreement, we were granted an option by the MyPlant shareholders to purchase an additional 35% of MyPlant Shares, on a fully diluted basis (the “Shareholders Option”), in consideration of $1,555,556 payable by the issuance of up to 32,407,417 shares of our common stock to the MyPlant shareholders, and a separate option by MyPlant to purchase an additional 10% of the MyPlant Shares, on a fully diluted basis (the “MyPlant Option”), in consideration of $444,444, which is payable, in our sole discretion, in cash or in the issuance to MyPlant of up to 9,259,250 shares of our common stock. Said options are exercisable through September 30, 2023 (the “Option Expiry Date”). If both the Shareholders Option and the Company Options are exercised, we will hold 55% of MyPlant Shares, on a fully diluted basis. Under the Share Purchase and Option Agreement, are authorized to continue its due diligence through the Option Expiry Date.

The transactions under the Share Purchase and Option Agreement are based on a MyPlant company valuation of approximately $4.45 million. Under the agreement, we are authorized at any time on or before the Option Expiry Date to obtain an independent third-party valuation of MyPlant. If it is determined by such third-party valuation that the MyPlant valuation is less than $4.45 million then the consideration payable in respect of the exercise price of the options will be accordingly adjusted, provided however that in any case the Company’s valuation in the transaction shall not be below US$1,000,000.

(ii) On January 29, 2023, the holders of the convertible loans issued under the Convertible Loan Agreement agreed to extend to May 31, 2024 the maturity date thereof of such loans and further agreed that upon a public offering of our securities, our management is authorized to effect in connection with a listing of the Company’s stock on a U.S. National Securities Exchange, at our sole discretion, a conversion into shares of our common stock of all or part of such outstanding loans at a rate equal to the public offering price of the common stock under any offering accompanying such listing of the stock on the Nasdaq Stock Market.

30
 

 

Quarter(iii) On March 6, 2023 Cannovation, the Company’s majority owned subsidiary and Post-Quarter DevelopmentsS.R. Accord Ltd., an Israeli public company (“Lender”), entered into an 18-month credit facility agreement (the “Credit Facility”) pursuant to which Lender has committed to fund Cannovation in an aggregate amount of 3,000,000 NIS (approximately $857,000) as needed. At the time of each draw down, Cannovation and Lender will determine the repayment of the loan. All amounts drawn under the Credit Facility will bear interest at a monthly rate of 1.7% and. Cannovation has the right to pre-pay the entire amount outstanding under the Credit Facility at any time. As security for any loans under the Credit Facility, Cannovation granted Lender a first priority lien on its rights to the 125,000 sq ft (11,687 sqm) of industrial land in Yerucham, a city in southern Israel which Cannovation acquired in February of 2022(the “Premises”) to build the Green Vision Center Israel with the support of the government of Israel. The lien will become effective only if Cannovation utilizes the Credit Facility. If the market value of the Premises is less than the amount outstanding under the Credit Facility, then Lender will be entitled to additional security including additional shares of Citrine Global common stock, on such terms and conditions as the parties may agree. As additional security for any payments due to Lender, CTGL Citrine Global Israel Ltd., a wholly owned subsidiary of Citrine Global, (ii) Beezzhome Technologies Ltd. an entity wholly owned by Ora Elharar Soffer, the Chief Executive Officer of Citrine Global and (iii) Netto Holdings, an unaffiliated entity under the partial control of Ilan Ben Ishay, a director on the board of Cannovation, as well as each of Ms. Elharar Soffer and Mr. Ben Ishay in their personal capacities, are providing guarantees for the repayment of any amounts that may be owing to Lender under the Credit Facility. The Company, CTGL Citrine Global Israel Ltd. and Cannovation have agreed to indemnify Ms. Elharar Soffer and Mr. Ben Ishay for any losses they incur as a result of the guarantee.

 

(i)

On July 15, 2022, Citrine(iv) On May 9, LP, (hereinafter “Citrine 9”), one of the related entities and a signatory lender (to the Convertible Note Purchase Agreement entered into by the Company and several related parties (hereinafter the “Buyers”) in April 2020, as subsequently amended (the “CL Agreement”) agreed to honor a Draw Down Notice for, and has advanced to the Company, $100,000 on the same terms and conditions as are specified in the CL Agreement. The annual interest on the loan continues to be nine percent (9%). The principal and interest payments on the Note are due on July 31, 2023, and are to be made in New Israeli Shekels (NIS) at the conversion rate which was in effect on the date on which the loan was advanced. Citrine 9 was be issued 8,333,333Series A warrants and 8,333,333Series B warrants for shares of common stock, where the Series A warrants are exercisable beginning January 15, 2023 through July 15, 2024 and the Series B warrants are exercisable beginning January 15, 2023 through July 15, 2025, in each case at an exercise price of $0.05 per share On August 9, 2022, the Company’s board of directors agreed to extend the maturity date on the loans to October 31, 2023, subject to approval of Citrine 9, and to extend the exercise period of the warrants through August 9, 2027.

(ii)

In July 2022, the Company’s subsidiary, Cannovation Center Israel Ltd, has filed a provisional patent application in the United States Patent and Trademark Office (USPTO) for “COMPOSITIONS AND METHODS FOR TREATING, AMELIORATING, ALLEVIATING, MITIGATING OR BALANCING SIDE-EFFECTS IN THE ORAL CAVITY ASSOCIATED WITH THE USE OF MEDICINES, TREATMENTS, AGING OR UNBALANCED/UNHEALTHY LIFESTYLE”, patent Application No. 63/388,361, in the U.S. Patent & Trademark Office. The patent application targets solutions for oral cavity side effects and is in line with the Company’s strategy to bring to market a broad array of plant-based wellness and pharma complementary solutions targeting to address selected side effects caused by using medicines, treatments, or an unbalanced lifestyle.

(iii)(v)

On August 9, 2022 , the board of directors of the Company agreed to the following:

1.

The maturity date on all outstanding convertible loans under the CL Agreement was extended to October 31, 2023 (from July 31, 2023), subject to agreement of the lending entities under the CL Agreement to the extension of such maturity date; and

2.

The exercise period on all of the outstanding Series A and Series B warrants issued to date in connection with the convertible loans was extended to August 9, 2027.

(iv)

On August 9, 2022, the Board agreed to issue to the related entities who advanced an aggregate of $1,170,000 in convertible loans under the CL Agreement on or before June 15, 2020 warrants for a total 5,589,172 shares of common stock, exercisable through August 9, 2027 at a per share exercise price of $0.05, in replacement of the Series A warrants for an identical number of shares issued in June 2020 in connection with such loans

(v)

On August 9, 2022, the Company’s board of directors determined to increase the number of shares reserved for issuance under the 2018 Stock Incentive Plan (the “2018 Plan”) by 90 million shares to a total of 180,000,000 shares of common stock thereunder and on August 12, 2022 the Company shareholders approved the same

(vi)

On August 9, 2022, the Board also determined to grant to the directors and officers set forth below options under the 2018 Plan. The options vest over a three year period, in twelve (12) equal installments, with the first instalment vesting on the third month anniversary of the date of grant and each further instalment on each subsequent third month anniversary, subject to such individual’s continued service with the Company. In the event of a change in control, the vesting schedule is accelerated and all unvested options vest.

Director/OfficerNumber of Options
Ora Elharar Soffer (Chairperson, CEO)47,128,400
Ilanit Halperin (Director, CFO)18,851,360
Ben Ishay (Director)18,851,360
Doron Birger (Director)2,356,420
David Kretzmer2,356,420

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The terms relating to the options grants are included in stock option agreements under the 2018 Plan, . Amongst other things, the stock option agreements for selected service providers of Citrine Global, including our directors and officers, provide that until the earlier of the settlement in full of the convertible loans referred to convertible loan holders referred to above or the termination of the exercise period of the warrants for an aggregate of 62,178,554 shares previously issued to such convertible loan holders (the “Warrants”), if the Company’s common stock were to be listed on the Nasdaq Stock Market and the per share public price of the offering accompanying such listing is less than the then current exercise price of the Warrants, then the Warrant exercise price shall be adjusted to that of the public offering price, provided that if such listing and accompanying offering do not occur by June 30, 2023, then the exercise price of the options that were awarded to date,Warrants shall remain unaffectedat its then current exercise price or may be reduced to a lower exercise price as determined by the implementation of a reverse stock split that the Company may implement; to avoid any doubt, such reverse stock split shall apply to the number of options shares issuable under such options. All other relevant terms of such shall continueCompany’s Board and in full force and effect and are such reverse stock split. Any and all tax implications rest solelyagreement with the optionee and not the Company.  loan holders.

 

(viii)

On August 9, 2027, Mr. David Kretzmer’s fee in respect of services provided to us was reduced from $7,000 per month to $1,500 per month. Mr. Kretzmer’s monthly fee for services rendered to Cannovation Center Israel at the rate of $2,000 per month was unaffected.

(ix)

On September 30, 2022, Citrine Global received a loan from Citrine Hi Tech 7 LP, an Israeli limited partnership and an affiliated entity (the “Lender”), in the principal amount of $80,000. The loans bears interest at 12% per annum and is scheduled to mature on December 15, 2022. The principal and interest payment on the Note are to be made in New Israeli Shekels (NIS) at the exchange rate which was in effect on the date on which the loan was advanced. The Lender has the option, upon written notice to the Company and subject to the Company’s consent, to extend the maturity date of the loan (the “Maturity Date extension Notice”). The Lender is to provide the Maturity Date extension Notice by no later than December 5, 2022.

In the event that the Company agrees to such extension, the terms of this Note shall be adjusted on a pro-rata basis, to those terms applicable to the Company’s convertible notes then outstanding under the Convertible Note Agreement, date as of April 1, 2020, as subsequently amended, amongst the Company and the affiliated parties thereto (of which the Lender is a party).

(x) In October 2022 we filed a provisional patent application, “COMPOSITIONS AND METHODS FOR TREATING, AMELIORATING, ALLEVIATING, MITIGATING OR BALANCING SIDE-EFFECTS ASSOCIATED WITH THE USE OF MEDICINES, TREATMENTS, AGING, CANNABIS, AND UNBALANCED OR UNHEALTHY LIFESTYLE”, patent No: 63/418,046 in the U.S. Patent & Trademark Office. The patent application describes common side effects associated with the use of medicines, treatments, aging, cannabis and cannabinoids, and unbalanced or unhealthy life style, such as dryness in the oral cavity (xerostomia), headaches, dizziness, drowsiness, fatigue, nausea, vomiting, lack of concentration, impaired appetite, and more. This is a growing area of concern, given the expanding rate of chronical diseases and legalization and widespread availability of cannabis around the world. The patent application relates to compositions and methods for answering the need for treatment, amelioration, alleviation, mitigation, or balance of side effects, and technologies, and solutions to support people who experience side effects related to their treatment. This patent application is an extension of the provisional patent application files on October 2021 for “PHARMACEUTICAL COMPOSITIONS AND METHODS FOR THE TREATMENT OF SIDE-EFFECTS ASSOCIATED WITH THE USE OF CANNABIS, CANNABINOIDS AND RELATED PRODUCTS”, patent No: 63/257,673 in the U.S. Patent & Trademark Office. that describes certain side effects of cannabis use, the needs, technologies, and solutions to support medical cannabis users who experience side effects related to their cannabis treatment.

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(xi) On October 19, 2022, Mr. Dror Shaked and Mr. David Freidenberg were appointed to serve as independent directors on the Board of Directors of Citrine Global, Corp. effective upon (and subject to) the Nasdaq listing of the Company:

Dror Shaked, 55, is the Senior Vice President Business Development at Wix.com (NASDAQ: WIX), a position he has held since June 2011, where he leads the Global Corporate Business Development and mergers and acquisitions. Prior to Wix, Mr. Shaked was the Vice President Investments at Decima Ventures. Mr. Shaked holds an MBA from Tel Aviv University and BSc from Tel Aviv University.

David Freidenberg, 45, is the Chief Executive Officer of Go Clear, a company in urban renewal software, a position he has held since July 2022. Mr. Freidenberg was the Chief Executive Officer and a Director of Seedo Corp. from June 2020 through November 4, 2021, and the CEO of Saffron Tech Ltd., a wholly owned subsidiary of Seedo Corp. He has extensive experience in the telecommunications and information technology (IT) industries including Vice President of Sales & Business Development at Trigyn Technologies, an IT services provider with $130 million in annual revenue. Past posts include CEO and Director of POMM Inc.; CEO and Director of Chip Pc; COO of Nidam Communication as well as a director and manager for Hot cable TV, and Bezeq (Israeli National telephone company). David received both his BA in Economics (2003) and MBA in finance and accounting (2007) from Hebrew University.

xii) In November 2022 iBOT agreed to extend to March 31, 2023 the pre-emption right previously granted to the Citrine Global Group with respect to any equity or equity linked securities that iBOT proposes to issue to an unrelated third party with aggregate gross proceeds to iBOT exceeding $1 million or which will result 51% ?/in a change in control in iBOT following such issuance.

(xiii) on November 14, 2022, the CL Agreement was amended to provide that until the repayment in full of all outstanding principal and accrued interest on the Notes issued thereunder and the earlier to occur of the exercise in totality of the Warrants issued in connection with the Notes or their termination by the terms thereof, if the Company issues securities in any financing transaction, including debt convertible into equity, in any equity and/or debt offering or other transaction (the “Future Financing”) and said securities contain any terms that are more favorable than the terms and provisions contained in the outstanding Notes and/or Warrants under the CL Agreement, including without limitation, an effective per share price which is lower than the then effective Conversion Price applicable to the Notes or the Exercise Price of the Warrants, then the Company shall, at the request of a majority of the Buyers, enter into amendments to the Notes and/or Warrants, as applicable, to provide for the same more favorable terms and provisions.

Components of Operating Results

 

The following discussion summarizes the key factors our management believes are necessary for an understanding of our consolidated financial statements.

 

Revenues

 

We have not generated any revenues from product sales as of September 30,December 31, 2022.

 

Research and Development Expenses

 

The process of researching and developing our products is lengthy, unpredictable, and subject to many risks. We expect to continue incurring expenses through 2022for the next several years for research and development as we continue to develop our product line.products and innovative solutions. We are unable, with any certainty, to estimate either the costs or the timelines in which those expenses will be incurred. Our current product development plans focus on the development of our products lines that includes the plant-based solutions including GreenFeels™ and Green Side by Side Products line and GreenFeels products line.lines.

 

Our research and development costs include costs are comprisedcomposed of:

 

● internal recurring costs, such as personnel-related and consultants costs (salaries, employee benefits, equity compensation and other costs), materials and supplies, facilities and maintenance costs attributable to research and development functions; and

 

● fees paid to external parties who provide us with contract services, such as preclinical testing, manufacturing , regulations ,and related testing and clinical trial activities.

 

3331
 

Marketing

 

Marketing expenses consist primarily of salaries, employee benefits, equity compensation, and other personnel-related costs associated with executive and other support staff. Other significant marketing expenses include the costs associated with professional fees to develop our marketing strategy.

 

General and Administrative Expenses

 

General and administrative expenses consist primarily of salaries, employee benefits, equity compensation, and other personnel-related costs associated with executive, administrative and other support staff. Other significant general and administrative expenses include the costs associated with professional fees for accounting, auditing, insurance costs, consulting and legal services, along with facility and maintenance costs attributable to general and administrative functions.

 

Financial Expenses

 

Financial expenses consist primarily impact of exchange rate derived from re-measurement of monetary balance sheet items denominated in non-dollar currencies. Other financial expenses include bank’s fees and interest on long term loans.

 

Results of Operations

Comparison of the Three Months Ended September 30, 2022March 31, 2023 compared to the Three Months Ended September 30, 2021March 31, 2022

 

The following table presents our results of operations for the three months ended September 30,March 31, 2023 and 2022 and 2021

 

 Three Months Ended  Three Months Ended 
 September 30  March 31 
 2022  2021  2023  2022 
      US Dollars 
Revenues  -   -   -   - 
Cost of sales  -   -   -   - 
Operating loss  -   -   -   - 
Research and development expenses  (27,000)  (57,000)  (28,000)  (25,000)
Marketing, general and administrative expenses  (565,000)  (1,168,000)  (489,000)  (315,000)
Operating loss  (592,000)  (1,225,000)  (517,000)  (340,000)
Income (expenses) related to convertible loan terms  (582,000)  (237,000)  (330,000)  (379,000)
Other financing expenses, net  (2,000)  (87,000)  (5,000)  (10,000)
Net loss  (1,176,000)  (1,549,000)  (852,000)  (729,000)

 

Revenues. Revenues forWe had no revenues in the three months ended September 30, 2022March 31, 2023 and 2021 were $nil.2022.

 

Research and Development. Research and development expenses for the three months ended September 30, 2022March 31, 2023 were $27,000$28,000 compared to $57,000$25,000 for the three months ended September 30, 2021.March 31, 2022. The increase is primarily attributable to professional expenses incurred in the operation of the business.

 

Marketing, general and Administrative Expenses. Marketing, general and administrative expenses consist primarily of professional services, share-based compensation expenses and other non-personnel related expenses such as legal expenses. Marketing, general and administrative expenses decreased from $1,168,000 for the three months ended September 30, 2021March 31, 2023 were $489,000 compared to $565,000$315,000 for the three months ended September 30,March 31, 2022. The decreaseincrease in our marketing, general and administrative expenses is mainlyprimarily attributable to the decreaseincrease in our non-cash share-based compensation expenses for such professional services.expenses.

 

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Financing Expenses, Net. Financing income, net for the three months ended September 30, 2022March 31, 2023 were $584,000$335,000 compared to financing expenses, net $324,000$389,000 for the three months ended September 30, 2021.March 31, 2022. The reason for the increasedecrease in financial expense is primarily attributable to finance expenses net was duerelated to $345,000 of non-cash expenses recorded in connection withour convertible loan terms offset by decrease in other financing income.loans.

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Net Loss. Net loss for the three months ended September 30, 2022March 31, 2023 was $1,176,000$852,000 and is attributable to the reasons discussed above.

 

Comparison of the Nine Months Ended September 30, 2022 compared to the Nine Months Ended September 30, 2021

The following table presents our results of operations for the nine months ended September 30, 2022 and 2021

  Nine Months Ended 
  September 30 
  2022  2021 
       
Revenues  -   - 
Cost of sales  -   - 
Operating loss  -   - 
Research and development expenses  (83,000)  (123,000)
Marketing, general and administrative expenses  (1,234,000)  (3,281,000)
Operating loss  (1,317,000)  (3,404,000)
Income (expenses) related to convertible loan terms  (575,000)  (1,034,000)
Other financing expenses, net  (19,000)  (70,000)
Net loss  (1,911,000)  (4,508,000)

Revenues. Revenues for the nine months ended September 30, 2022 and 2021 were $nil.

Research and Development. Research and development expenses for the nine months ended September 30, 2022 were $83,000 compared to $123,000 for the nine months ended September 30, 2021.

Marketing, general and Administrative Expenses. Marketing, general and administrative expenses consist primarily of professional services, share-based compensation expenses and other non-personnel related expenses such as legal expenses. Marketing, general and administrative expenses decreased from $3,281,000 for the nine months ended September 30, 2021 to $1,234,000 for the nine months ended September 30, 2022. The decrease in our marketing, general and administrative expenses is mainly attributable to the decrease in our non-cash share-based compensation expenses offset by increase in professional services related expenses.

Financing Expenses, Net. Financing expenses, net for the nine months ended September 30, 2022 were $594,000 compared to $1,104,000 for the nine months ended September 30, 2021. The reason for the decrease in financial expenses, net was due to $459,000 of expenses related to convertible loan terms for the nine months ended September 30, 2021.

Net Loss. Net loss for the nine months ended September 30, 2022 was $1,911,000 and is attributable to the reasons discussed above.

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Financial Condition, Liquidity and Capital Resources

Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. At September 30, 2022,March 31, 2023, we had current assets of $284,000$266,000 compared to total current assets of $349,000$185,000 as of December 31, 2021. At September 30, 2022, we had current liabilities of $1,618,000 as compared to $1,064,000 as of December 31, 2021. At September 30, 2022, we had total liabilities of $3,460,000 as compared to $2,495,000 as of December 31, 2021.2022. The increase is mainly attributed to the increase in the balance of accrued expenses and the balance of convertible component in convertible notes.other prepaid expenses.

 

At September 30, 2022,March 31, 2023, we had a cash balance of $179,000$62,000 compared to the cash balance of $270,000$77,000 as of December 31, 2021.2022.

 

At September 30, 2022,March 31, 2023, we had a working capital deficiency of $1,334,000$1,655,000 as compared with a working capital deficiency of $715,000$1,620,000 at December 31, 2021.2022.

The following table provides a summary of operating, investing, and financing cash flows for the three months ended March 31, 2023 and 2022, respectively (in US Dollars):

  Three Months Ended 
  March 31, 2023  March 31, 2022 
Net cash used in operating activities  (65,000)  (161,000)
Net cash provided by investment activities  -   (4,000)
Net cash provided by Financing Activities  51,000   180,000 

On March 6, 2023 our majority owned subsidiary, Cannovation and S.R. Accord Ltd., an Israeli company (“Lender”), entered into an 18-month credit facility agreement (the “Credit Facility”) pursuant to which Lender has committed to fund Cannovation in an aggregate amount of 3,000,000 NIS (approximately $857,000) as needed. At the time of each draw down, Cannovation and Lender will determine the repayment of the loan. All amounts drawn under the Credit Facility will bear interest at a monthly rate of 1.7% and will be due by no later than September 2024. Cannovation has the right to pre-pay the entire amount outstanding under the Credit Facility at any time. As security for any loans under the Credit Facility, Cannovation granted Lender a first priority lien on its rights to the 125,000 sq ft (11,687 sqm) of industrial land in Yerucham, a city in southern Israel which Cannovation acquired in February of 2022 (the “Premises”) to build the Green Vision Center Israel with the support of the government of Israel. The lien will become effective only if Cannovation utilizes the Credit Facility. If the market value of the Premises is less than the amount outstanding under the Credit Facility, then Lender will be entitled to additional security on such terms and conditions as the parties may agree.

 

On July 15, 2022, Citrine 9 LP (hereinafter “Citrine 9”), oneJanuary 29, 2023, the holders of the related entities who are the signatory lenders (hereinafter the “Buyers”) toconvertible loans issued under the Convertible Note PurchaseLoan Agreement entered into by the Company and such Buyers in April 2020, as subsequently amended (the “CL Agreement”) agreed to honor a Draw Down Notice for, and has advanced to the Company, $100,000 on the same terms and conditions as are specified in the CL Agreement. The annual interest on the loan continues to be nine percent (9%). The principal and interest payment on the Note shall be made in New Israeli Shekels (NIS) at the conversion rate which was in effect on the date on which the loan was advanced. As provided for under the terms of the Convertible Note Agreement, Citrine 9 is entitled to 8,333,333 Series A warrants and 8,333,333 Series B warrants for shares of common stock, where each of the series are exercisable beginning January 15, 2023 through October 31, 2025, in each case at an exercise price of $0.05 per share. On August 9, 2022, the Company’s board of directors agreed to extend the exercise period of the warrants through August 9, 2027.

On September 30, 2022, Citrine Global received a loan from Citrine Hi Tech 7 LP, an Israeli limited partnership and an affiliated entity (the “Lender”), in the principal amount of $80,000. The loans bears interest at 12% per annum and is scheduled to mature on December 15, 2022. The principal and interest payment on the Note are to be made in New Israeli Shekels (NIS) at the exchange rate which was in effect on the date on which the loan was advanced. The Lender has the option, upon written notice to the Company and subject to the Company’s consent, to extendMay 31, 2024 the maturity date thereof of such loans and further agreed that upon a public offering of our securities, our management is authorized to effect in connection with a listing of the loan (the “Maturity Date extension Notice”). The Lender isCompany’s stock on a U.S. National Securities Exchange, at our sole discretion, a conversion into shares of our common stock of all or part of such outstanding loans at a rate equal to provide the Maturity Date extension Notice by no later than December 5, 2022.public offering price of the common stock under any such offering

 

Based on the Company’s current cash balances and the access to the Credit Facility described above, the Company believes that it has sufficient funds for its plans for the next twelve months from the issuance of these financial statements. As the Company is embarking on its activities as detailed herein, it is incurring losses. It cannot determine with reasonable certainty when and if it will have sustainable profits.

 

Off-Balance Sheet Arrangements

 

The Company has no off-balance sheet arrangements.

 

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ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not Applicable.

 

ITEM 4.CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s principal executive officer and the Company’s principal financial officer to allow for timely decisions regarding required disclosure. In designing and evaluating the Company’s disclosure controls and procedures, the Company’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. The Company’s management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

 

Based on the Company’s evaluation of the effectiveness of its disclosure controls and procedures as of September 30, 2022,March 31, 2023, the Company’s principal executive officer and the Company’s principal financial officer concluded that the Company’s disclosure controls and procedures are effective.

 

Changes in Internal Control over Financial Reporting

 

During the three months ended September 30, 2022,March 31, 2023, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting.

 

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PART II—OTHER INFORMATION

 

ITEM 1.LEGAL PROCEEDINGS

 

Currently the Company is not involved in any legal proceedings. However, from time to time we may become involved in various legal proceedings that arise in the ordinary course of business, including actions related to our intellectual property. Although the outcomes of these legal proceedings cannot be predicted with certainty, we are currently not aware of any such legal proceedings that arise in the ordinary course of business, including actions related to our intellectual property. Although the outcomes of these legal proceedings cannot be predicted with certainty, we are currently not aware of any such legal proceedings or claims that we believe, either individually or in the aggregate, will have a material adverse effect on our business, financial condition, or results of operations.

 

ITEM 1A.RISK FACTORS

 

An investment in the Company’s Common Stock involves a number of very significant risks. You should carefully consider the risk factors included in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2021,2022, as filed with the SEC on April 8, 2022,March 22, 2023, in addition to other information contained in our reports and in this quarterly report in evaluating the Company and its business before purchasing shares of our Common Stock. There have been no material changes to our risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2021.2022.

 

ITEM 2.UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS

 

None.

 

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4.MINE SAFETY DISCLOSURES

 

None.

 

ITEM 5.OTHER INFORMATION

 

On November 13, 2022, the board of directors ratified the Stock Option Agreements for the previously disclosed stock options grants that were awarded in each of August 2021 and in August 2022 to service providers, including our officers and directors. With respect to selected optionee service providers to Citrine Global, including our directors and officers, the relevant stock option agreements provide that the exercise price of the options that were awarded to date , which include our officers and directors, shall remain unaffected by the implementation of a reverse stock split that the Company may implement; to avoid any doubt, such reverse stock split shall apply to the number of options shares issuable under such options and all other relevant terms of such options (other than the exercise price) shall continue in full force and effect following the implementation of such reverse stock split. Any and all tax implication of this decision shall rest solely with the optionee.None

 

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ITEM 6.EXHIBITS

 

Exhibit Index:

 

31.1* Certification of Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
   
31.2 Certification of Chief Financial Officer (Principal Financial and Accounting Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
   
32.1* Certification of Chief Executive Officer (Principal Executive Officer), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
   
32.2 Certification of Chief Financial Officer (Principal Financial and Accounting Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
   
101.INS Inline XBRL Instance Document
  
101.SCH Inline XBRL Taxonomy Extension Schema
   
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase
   
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase
   
101.LAB Inline XBRL Taxonomy Extension Label Linkbase
   
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase
   
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

* Filed herewith

 

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SIGNATURES

 

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

 

CITRINE GLOBAL, CORP

(Registrant)

 

By:/s/ Ora Elharar Soffer By:/s/ Ilanit Halperin
 Ora Elharar Soffer  Ilanit Halperin
 Chief Executive Officer  Chief Financial Officer
 (Principal Executive Officer)  (Principal Financial and Accounting Officer)

 

Date:November 15, 2022May 12, 2023 Date:November 15, 2022May 12, 2023

 

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