Liquidity and Capital Resources

The Company's balance sheet as of December 31, 2019, reflects total assets of approximately $257 thousand consisting mainly of cash and cash equivalents in the amount of approximately $18 thousand, inventory in the amount of approximately $35 thousand, other receivables in the amount of approximately $19 thousand and property and equipment net, in the amount of approximately $156 thousand. As of December 31, 2018, the balance sheet reflects total assets of approximately $1,158 thousand consisting mainly of cash and cash equivalents in the amount of approximately $475 thousand, inventory in the amount of approximately $249 thousand, other receivables in the amount of approximately $177 thousand and property and equipment net, in the amount of approximately $161 thousand. The decrease is related mainly to the decrease in the inventory balance by approximately $214 thousand and the decrease in the cash and cash equivalents balance by approximately $457 thousand.

As of December 31, 2019, the Company had total current liabilities of approximately $360 thousand consisting of accounts payable and accrued expenses in the amount of approximately $224 thousand, and notes payable in the amount of approximately $123 thousand. As of December 31, 2018, the Company had total current liabilities of approximately $385 thousand consisting of approximately $231 thousand in accounts payable and accrued expenses and notes payable in the amount of approximately $80 thousand.

As of December 31, 2019, the Company had negative working capital in the amount of approximately $278 thousand, compared to positive working capital in the amount of approximately $573 thousand at December 31, 2018.

The Company's total liabilities as of December 31, 2019 and 2018 were approximately $368 thousand and $417 thousand respectively.

During the twelve months ended December 31, 2019, the Company used approximately $1,226 thousand in its operating activities. This resulted in an overall net loss of approximately $1,874 thousand.

During the twelve months ended December 31, 2018, the Company used approximately $2,386 thousand in its operating activities. This resulted in an overall net loss of approximately $2,157 thousand.

During the year ended December 31, 2019, the Company's investing activities required approximately $11 thousand due to the purchase of property, plant and equipment, approximately $30 thousand for a severance pay fund and approximately $8 thousand in long-term deposit. This compared to approximately $98 thousand due to the purchase of property and approximately $15 thousand for a severance fund during the year ended December 31, 2018.

During the twelve months ended December 31, 2019, the Company's financing activities provided it with approximately $757 thousand through the issuance of common stock, as compared to approximately $2,372 thousand in the prior year provided through the issuance of common stock.





  21







Results of Operations

Year ended December 31, 2019 as compared to the year ended December 31, 2018

During the twelve months ended December 31, 2019, the Company generated $149 thousand in revenues, compared to $251 thousand in 2018.

The Company's research and development expenses decreased to $115 thousand comprised of ongoing research and development expenses during the twelve months ended December 31, 2019, compared to approximately $289 thousand during the prior year.

The Company's marketing, general and administrative expenses during the year ended December 31, 2019, were $1,536 thousand compared to $2,004 thousand during the prior year. The decrease was mainly due to decrease in payroll and consulting.

During the twelve months ended December 31, 2019, the Company incurred financial expenses of $38 thousand, as compared to financial expenses of $30 thousand during the prior year. The increase in financial expenses was mainly due to exchange rates.

As a result of the above, the Company incurred a net loss of approximately $1,874 thousand during the twelve months ended December 31, 2019 as compared to a net loss of approximately $2,157 thousand in 2018.

Year ended December 31, 2018 as compared to the year ended December 31, 2017

During the twelve months ended December 31, 2018, the Company generated $251 thousand in revenues, compared to no revenues in 2017. Revenues were recorded for the first time from the sales of its product, Novokid®.

The Company's research and development expenses increased to $289 thousand comprised of ongoing research and development expenses during the twelve months ended December 31, 2018, compared to approximately $282 thousand during the prior year, an increase of approximately $6 thousand or 2%.

The Company's marketing, general and administrative expenses during the year ended December 31, 2018, were $2,003 thousand compared to $2,463 thousand during the prior year. The decrease was mainly due to decrease in payroll and consulting.

During the twelve months ended December 31, 2018, the Company incurred financial expenses of $30 thousand, as compared to financial income of $19 thousand during the prior year. The increase in financial expenses was mainly due to exchange rates.

As a result of the above, the Company incurred a net loss of approximately $2,157 thousand during the twelve months ended December 31, 2018 as compared to a net loss of approximately $2,858 thousand in 2017.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Tabular disclosure of contractual obligations

Not applicable.

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