ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
This
Quarterly Report contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond
our control, which may include statements about our:
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business
strategy; |
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financial
strategy; |
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intellectual
property; |
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production; |
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future
operating results; and |
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plans,
objectives, expectations and intentions contained in this report that are not historical. |
All
statements, other than statements of historical fact included in this report, regarding our strategy, intellectual property, future operations,
financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking
statements. When used in this report, the words “could,” “believe,” “anticipate,” “intend,”
“estimate,” “expect,” “project” and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain such identifying words. All forward-looking statements speak only as
of the date of this report. You should not place undue reliance on these forward-looking statements. Although we believe that our plans,
intentions and expectations reflected in or suggested by the forward-looking statements we make in this report are reasonable, we can
give no assurance that these plans, intentions or expectations will be achieved. These statements may be found under “Management’s
Discussion and Analysis of Financial Condition and Results of Operations,” as well as in this report generally. Actual events or
results may differ materially from those discussed in forward-looking statements as a result of various factors. In light of these risks
and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur.
Organizational
History
Creations,
Inc. was incorporated in May 2019. On July 1, 2019, Creations, Inc, acquired a 100% interest in Ocean-Yetsira Ltd (. former- Yetsira
Holdings Ltd), through a share swap agreement. Ocean Yetsira is an Israeli Corporation incorporated in December 2017 which in turn owns
100% of Yetsira Investment House (“Yetsira”), which was incorporated in November 2016.
On
August 19, 2020, the Company purchased 7.5% of the outstanding and issued shares of Ocean Partners Y.O.D.M Ltd., an Israeli corporation
(“Ocean”) for total cash consideration of approximately $87,000. On September 7, 2020, the Company entered into a share exchange
agreement by and among Yetsira, Ocean, and certain shareholders of Ocean, pursuant to which the Company acquired the remaining 92.5%
of the capital stock of Ocean in exchange for an aggregate of 1,254,498 shares of common stock of the Company, $0.001 par value, and
1,254,498 warrants to purchase shares of common stock of the Company (the “Warrants”) issued to the certain Ocean shareholders
by the Company. The Warrants are convertible into shares of our common stock over a period of three-years at an exercise price of $1.00
per share. The Company completed the acquisition on September 28, 2020.
Following
the acquisition of Ocean, all the investment management business of the group is managed through Ocean.
On
August 31, 2020, the Company’s registration statement on Form S-1 was declared effective by the U.S. Securities and Exchange Commission.
As at the date of filing this report, the Company’s shares have not begun to be quoted on the OTCQB.
On
April 17, 2022, the board of directors approved a resolution as to matters of ongoing conduct such as signatory rights, voting etc. In
addition, compensation of officers was updated. Also, non-committal guidelines for future transactions regarding sale of main activity
to related parties and sale of holdings by those parties were discussed, these guidelines are pursuant to completion of legal structuring,
compliance issues and more.
On
February 9, 2023, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) by and among Aharon
Barkai & Co. Ltd. (the “Purchasers”) through its controllers Yaniv Aharon and Dan Barkai, and an agreement for the purchase
of Shares and Capital Notes (the “Purchase Agreement”), whereby the Company sold all of the capital stock and capital notes
of Ocean Yetsira Ltd. (“Ocean”) in exchange for the payment of an aggregate of ILS 2,061,930 (approximately $586,000) and
the return of 1,254,498 shares of common stock of the Company and 1,254,498 warrants to purchase common stock owned by the Purchasers.
The transactions contemplated in the Purchase Agreement and the Share Exchange Agreement are collectively referred to as the “Transaction”).
Mr. Aharon is a director of the Company. The Capital Notes in the amount of ILS 2,165,800 (approximately $615,000) which are owed to
the Company by Ocean will be repaid by the Purchasers at closing as well. The closing of the transaction was subject to the approval
of the Court of Family Affairs to allow the Executor of the Estate of Guy Nissenson to sign upon behalf of the Estate and to approval
of the Company’s stockholders. On March 20, 2023, such approval was obtained.
According
to agreements between the parties to the share exchange agreements, as of February 7, 2023, the Company shall not have any financial
or economic benefit with respect to the contentious operation of Ocean Yetsira and its subsidiaries.
Recently
Issued Accounting Pronouncements
Management
reviewed currently issued pronouncements during the three-month ended March 31, 2023, and does not believe that any recently issued,
but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial
statements.
Results
of Operations for the Three months ended March 31, 2023, compared to Three months Ended March 31, 2022. (In Thousands)
Following
the agreement described above, As of February 7, 2023, the Company do not have any financial or economic benefit with respect to the
contentious operation of Ocean Yetsira and its subsidiaries. As a result, the company ceased the consolidation of the sold companies’
assets, liabilities, and results. For practical matters, the consolidation ceased as of January 1, 2023. The company recognized a receivable
balance in the amount of $1,169 and treasury stock balance in the amount of $321 deducted from the shareholders’ equity.
General
and Administrative Expenses
For
the three-month ended March 31, 2023, our general and administrative expenses were $34 compared to $5 for the three-month ended March
31, 2022, those increase in expenses was attributed to company’s headquarters, CPA, attorney, bookkeeping and management.
Net
Income (Loss)
Net
income (loss) for the three-month ended on March 31, 2023, and 2022, amount to income of $78 and loss $16 respectively, the income
is attributed to $112 Capital gain from realization of subsidiary.
After taking into account foreign currency translation adjustments, which
resulted in other comprehensive loss of $0 and loss of $30 for the three-month ended March 31, 2023, and 2022, respectively. The Company
realized a net income after other comprehensive expenses of $78 for the three months ended March 31, 2023 and a net loss of $46 for the
three months ended March 31, 2022.
Liquidity
and capital resources
As
of March 31, 2023, the Company had cash and restricted cash, from continued operations in the amount of $82 compared to cash and restricted
cash in the amount of $114 as of December 31, 2022.
Stockholders’
equity as of March 31, 2023, was $1,117, as compared to stockholders’ equity of $1,360 as of December 31, 2022.
The
Company’s accumulated deficit was $1,700 and $1,778 on March 31, 2023, and December 31, 2022, respectively.
Off-
Balance Sheet Arrangements
The
Company currently does not have any off-balance sheet arrangements.