CITRINE GLOBAL CORP. 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
Overview
We are a plant-based wellness & pharma solutions company. Our business activity is primarily comprised of developing wellness and pharma solutions, focused on science backed plant-based products to improve quality of life and complementary solutions for balancing side effects caused by using medicines, cannabis, treatments, or an unbalanced lifestyle.
The global health and wellness market is expected to reach
We believe the power of plant-based solutions from nature can help improve people's health and quality of life. We have built an end-to-end strategy to bring to market innovative plant-based wellness and pharma solutions covering the whole spectrum from innovation, research and development, product development, infrastructure for production and manufacturing, distribution, and marketing and sales on a global scale. Leveraging technology and research, we are focused on developing 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't limited to, enhancing oral care, anti-inflammatory properties, relaxation, sleep enhancement, energizing, mood and body balancing, and alleviating side effects.
Our headquarters and top executives are based in
1 Research, P., 2022. Health and Wellness Market Size to Hit
2 NielsenIQ. 2022. An inside look into the 2021 global consumer health and wellness revolution. [online]
3 Sullivan, F., 2022. Increasing Health Consciousness Among Consumers to Shift the Global Prebiotic Ingredients Market. [online] Prnewswire.com.
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Our presence in
Our mission is to become a leading company for plant-based wellness & pharma solutions to improve people's quality of life.
Our recent achievements and upcoming milestones include:
Developing & Bringing Plant-Based Wellness & Pharma Products to Market
We are 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. In
The Green Side by Side™ product line includes 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, as well as enhancing oral care, alleviating side effects, and many botanical formulations that we target for balancing selected side effects and improving quality of life.
Green Side by Side products are manufactured in
We have commercially started marketing the products with a local Israeli partner
that is targeting medical cannabis distribution channels and we plan to expand
our activity in the Israeli market as well as distribute worldwide with local
partners and according to local regulations. Green Side by Side is positioned to
capture market share in the nutritional supplements market that is expected to
reach
IP and Research & Development Strategy
Our IP strategy and R&D roadmap include building our patent portfolio, conducting clinical studies, advancing products through regulatory approvals. Leveraging technology and research, we continue to innovate, developing solutions that combine botanical formulations, herbal extracts, tinctures, sprays and other natural delivery methods with a variety of researched plants known for their healing qualities.
We target to bring to the wellness and pharma market innovative products to improve quality of life and complementary solutions for balancing selected side effects caused by medicines, treatments, cannabis, aging, stress, or an unbalanced lifestyle.
Our mission includes developing plant-based medicines for the plant-derived drug
market that is expected to reach
4 Research, P., 2022. Nutritional Supplements Market to Hit
5 2018-2026, G. and 2018-2026, G., 2022. Botanical and Plant Derivative Drug
Market - Global Forecast 2018-2026. [online]
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Side Effects Caused by Medicines, Cannabis and Treatments, or an Unbalanced Lifestyle
A broad range of medicines, including use of cannabis, 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. We are researching and developing complementary solutions to address the need to balance selected effects through wellness solutions, as well as clinically developed plant-based pharmaceutical solutions6.
Addressing a significant market need, we filed a provisional patent application
with the
Research shows that nearly 70% of cannabis users experience constant dry mouth and 20% percent of the elderly suffer from xerostomia as a side effect of their medications7. As part of our Green Side by Side product line, we developed the SmokLy TM series of sprays for the oral cavity which contain plant extracts distilled from seeds, roots, bark, fruits with active anti-inflammatory substances that encourage saliva production and taste in the oral cavity and can balance the dry mouth side effect (xerostomia) from using medicines and cannabis. We are working diligently on developing a broad array of plant-based wellness and pharma complementary solutions to address selected side effects caused by medicines, cannabis, treatments or an unbalanced lifestyle.
Green Vision Center Production &
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.
In February of 2022, we completed the acquisition of 125,000 sq ft (11,687 sq
meters) of industrial land in Yerucham, a city in southern
Designed by
As demand for plant-based products in industries ranging from wellness, to pharma, to cosmetics, to food continues to increase, our Green Vision Center will provide highly sought-after facilities for the development and production of botanical and plant-based products.
Green Vision Center is a first-of-its-kind center that combines:
? Manufacturing facilities for botanicals and nutritional supplements,
plant-based pharmaceuticals, medical cannabis and related products,
plant-based cosmetics, foods, and beverages
? R&D laboratories for development, clinical studies, and quality control
testing
? Management and consultant offices
? Distribution and global logistics center
?
6 WebMD. 2022. Medication Side Effects: Types of Side Effects and FDA Regulations. [online]
7 Harpreet, S., Joseph, K., Wafaa, S. and Seunghee, C., 2019. Impact of Cannabis
on the
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Our presence in
A core part of our strategy includes building a worldwide network with local
teams, partners, subsidiaries, Green Vision Centers, strategic partnerships,
collaborations, and mergers & acquisitions of technology and distribution
companies. Initially, we are planning to build infrastructure for business
development and sales with local teams in
Developments During the Quarter
(i) On
Additionally, on
(i) The repayment of principal and accrued interest on all outstanding loans
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;
(ii) The conversion price on all outstanding notes under the C:L Agreement has
been 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 has been adjusted to an exercise
price of $0.05 per share.
(ii) We previously disclosed that the
Under the Development Agreement,
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Our subsidiary
On
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
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 substantial expenses through 2022 as we continue to develop our product line. 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 Green Side by Side Products.
Our research and development costs include costs are comprised of:
? internal recurring costs, such as personnel-related 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 and related testing and clinical trial activities.
24 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.
Comparison of the Three Months Ended
The following table presents our results of operations for the three months endedMarch 31, 2022 and 2021 Three Months Ended March 31 2022 2021 Revenues - - Cost of sales - - Operating loss - - Research and development expenses (25,000 ) -
Marketing, general and administrative expenses (315,000 ) (1,975,000 ) Operating loss
(340,000 ) (1,975,000 )
Income (expenses) related to convertible loan terms (379,000 ) (122,000 )
Other financing expenses, net (10,000 ) (3,000 )
Net loss (729,000 ) (2,100,000 )
Revenues. Revenues for the three months ended
Research and Development. Research and development expenses for the three months
ended
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
Financing Expenses, Net. Financing expenses, net for the three months ended
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Net Loss. Net loss for the three months ended
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
At
At
On
As provided for under the terms of the Convertible Note Agreement, Citrine 9
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
Additionally, on
(i) The repayment of the principal and accrued interest on all outstanding
loans shall be made in New Israeli Shekels (NIS) at the exchange rate
which was in effect on the date on which the loan was advanced;
(ii) The conversion price on all outstanding notes under the Convertible Note
Agreement has been 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 Convertible Note Agreement has been adjusted to an
exercise price of $0.05 per share.
Based on the Company's current cash balances, 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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