The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") covers information pertaining to the Company for the year ended December 31, 2021 and should be read in conjunction with the audited financial statements and related notes of the Company as of and for the year ended December 31, 2021. Except as otherwise noted, the financial information contained in this MD&A and in the financial statements has been prepared in accordance with accounting principles generally accepted in the United States of America. All amounts are expressed in U.S. dollars unless otherwise noted. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors.

OVERVIEW

As a result of the notice of termination of the License Agreement on January 10, 2019, the Company no longer has business operations. The Company believes that it will continue to experience losses and increased negative working capital and negative cash flows in the near future and will not be able to return to positive cash flow without either obtaining additional financing in the near term or completing a business transaction. The Company has experienced difficulties accessing the equity and debt markets and raising capital and there can be no assurance that the Company will be able to raise such additional capital on favorable terms, or at all, or be able to complete a business transaction. If additional funds are raised through the issuance of equity securities or completing a business transaction, the Company's existing stockholders will experience significant dilution. In order to conserve the Company's cash and manage its liquidity, the Company has implemented cost-cutting initiatives including the reduction of employee headcount and overhead costs.

The Company's Board of Directors is exploring strategic alternatives, which may include future acquisitions, a merger with another company or the sale of the public shell company.

TAXES

We have not recorded any income tax benefit for any period from inception to December 31, 2021. We did record an income tax benefit of $53 for the year ended December 31, 2020.

CRITICAL ACCOUNTING POLICIES

There are no critical accounting policies for the years ended December 31, 2021 and 2020.

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2021 COMPARED TO THE PERIOD ENDED DECEMBER 31, 2020 (dollars in thousands)

REVENUES. The Company did not have revenue-producing operations for the fiscal year ended December 31, 2021, or the fiscal year ended December 31, 2020.

COST OF REVENUES. The Company had no cost of revenues for the fiscal year ended December 31, 2021, or the fiscal year ended December 31, 2020, due to the fact that the Company has no business operations.

PROFIT FROM SALE OF OPERATIONS, NET. We did not incur a profit from the sale of operations in the fiscal year ended December 31, 2021, or the fiscal year ended December 31, 2020.

RESEARCH AND DEVELOPMENT EXPENSES. We did not incur any research and development expenses for the fiscal year ended December 31, 2021, or for the fiscal year ended December 31, 2020, due to the termination of the License Agreement resulting in the Company no longer having business operations.


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SELLING AND MARKETING EXPENSES. Selling and marketing expenses were $0 for the fiscal year ended December 31, 2021, and $0 for the fiscal year ended December 31, 2020, due to the Company being "shell" company and having no substantive operations.

GENERAL AND ADMINISTRATIVE EXPENSES. Our general and administrative expenses consisted primarily of compensation costs for administrative, finance and general management personnel, insurance, legal, accounting and administrative costs.

General and administrative expenses for the fiscal year ended December 31, 2021, decreased by 7% to $154 from $167 for the fiscal year ended December 31, 2020. The decrease is attributable mainly to the decrease in insurance expense.

FINANCIAL EXPENSE, NET. We recognized financial expense of $13 for the fiscal year ended December 31, 2021, compared to financial expense, net of $7 for the fiscal year ended December 31, 2020. The reason for the increase in financial expense was attributable mainly to the increase in interest expense of outstanding loans.

OTHER EXPENSES. Other expenses consist primarily of capital losses in respect of the sale of fixed assets. We incurred no capital losses in the fiscal year ended December 31, 2021, or the fiscal year ended December 31, 2020.

NET LOSS. We incurred a net loss of $167 in the fiscal year ended December 31, 2021, compared to a net loss of $121 for the fiscal year ended December 31, 2020. These net losses were primarily related to our operational and financial expenses. The reason for the increase in our net loss was is attributable mainly to the decrease in administrative expenses and an increase in financial expenses. The loss for the fiscal year ended December 31, 2021 is mainly due to the fact that the Company has no business operations.


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LIQUIDITY AND CAPITAL RESOURCES (dollars in thousands)

As of December 31, 2021, and as of December 31, 2020, we had an accumulated deficit of $2,485 and $2,318, respectively, and a negative working capital (current assets less current liabilities) of $496 in 2021 as compared to a negative working capital of $345 in 2020. Losses will probably continue in the foreseeable future.

We do not have any material capital commitments for capital expenditures as of December 31, 2021, or December 31, 2020.

We have sustained significant operating losses in recent periods, which have resulted in a significant reduction in our cash reserves. Due to the termination of the License Agreement, the Company no longer has any business operations. The Company believes that it will continue to experience losses and negative cash flows in the near future and will not be able to return to positive cash flow without obtaining additional financing in the near term or entering into a business transaction. The Company has experienced difficulties accessing the equity and debt markets and raising capital or entering into a business transaction, and there can be no assurance that the Company will be able to raise such additional capital on favorable terms or at all or entering into a business transaction. If additional funds are raised through the issuance of equity securities or entering into a business transaction, the Company's existing stockholders will experience significant further dilution. In order to conserve the Company's cash and manage its liquidity, the Company has implemented cost-cutting initiatives including the reduction of employee headcount and overhead costs.

On May 15, 2019, the Company issued two unsecured promissory notes in the aggregate principal amount of $100,000. In that regard, one Note, with a principal aggregate balance of $50,000, was issued to KNRY Ltd., an entity related to Nadav Kidron, the natural person with voting and dispositive power over the securities held by Tonak Ltd., the Company's largest shareholder. $20,000 of the funds relating to KNRY Ltd.'s Note were received by the Company on March 22, 2019. The balance of the funds relating to KNRY Ltd.'s Note was received by the Company on April 4, 2019. In addition, one Note, with an aggregate principal balance of $50,000, was issued to Cutter Mill Capital LLC, an existing shareholder of the Company. Each Note accrues interest at a rate of 6% per annum until the Note is repaid in full. All payments of principal, interest and other amounts under each Note are payable by June 30, 2021. The proceeds of the Notes were used by the Company for general working capital purposes.

In addition, on November 4, 2021, the Company issued two Subsequent Notes in the aggregate principal amount of $60,000, with original issuance dates of August 15, 2021 and September 19, 2021. In that regard, one Subsequent Note, with a principal aggregate balance of $30,000, was issued to KNRY Ltd., an entity related to Nadav Kidron, the natural person with voting and dispositive power over the securities held by Tonak Ltd., the Company's largest shareholder and one Subsequent Note, with an aggregate principal balance of $30,000, was issued to Harmony (H.A.) Investments Ltd. Each Subsequent Note accrues interest at a rate of 10% per annum until the Subsequent Note is repaid in full. All payments of principal, interest and other amounts under each Subsequent Note are payable by December 19, 2021. The proceeds of the Notes were used by the Company for general working capital purposes.

The Company is currently in default on the Notes and the Subsequent Notes and intends to negotiate an extension for their repayment, however there is no guarantee that we will be successful in doing so.

As of December 31, 2021 and December 31, 2020, we had accumulated liabilities of $503 and $356, respectively.

As of December 31, 2021 and December 31, 2020, we had cash and cash equivalents of $1 and $1 respectively, and negative cash flow from operating activities of $73 and $1, respectively, for the years and periods then ended. The negative cash flow from operating activities in the year ended December 31, 2021 is attributable mainly to a net loss of $167, share-based compensation expenses of $16, a decrease in accounts receivable and prepaid expenses of $4, an increase in accrued expenses of $61, an increase in related party expenses of $7, an increase in related party loans of $49 and an increase in short term loans in the amount of $30.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

None.

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