RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020





Results of Operations

Summary of Results of Operations





                                              Year ended
                                              December 31
                                          2021            2020

Revenues                              $    140,177     $   98,159

Operating Expenses Research and development expenses (497,121 ) (489,210 ) General and administrative expenses (682,859 ) (523,663 ) Share base compensation expenses (3,485,830 )

            -
Operating loss                          (4,525,633 )     (914,714 )
Financing income (expenses), net           (71,180 )       41,921
Net loss                                (4,596,813 )     (872,793 )




Revenues

Revenues for the years ended December 31, 2020 and 2021 were $98,159 and 140,177, respectively.

Research and Development Expenses. Research and development expenses consist of salaries and related expenses, consulting fees, service providers' costs and overhead expenses. Research and development expenses increased from $489,210 for the year ended December 31, 2020 to $497,121 in 2021. The increase resulted primarily from increased in salaries and related expenses and other development costs associated with our development activities, partially offset by decrease in consulting and professional fees.

General and Administrative Expenses. General and administrative expenses consist primarily of salaries and related expenses and other non-personnel related expenses such as legal expenses. General and administrative expenses increased from $523,663 for the year ended December 31, 2020 to $682,859 in 2021. The increase primarily attributed to the increase in professional services and other non-personnel related expenses, partially offset by decrease in salaries and related expenses.

Financing Expenses, Net. Financing expenses, net increased from financing income of $41,921of financing for the year ended December 31, 2020 to financing expenses, net of $71,180 for the year ended December 31, 2021. The increase is mainly a result of currency exchange differences between the Dollar and the New Israeli Shekel.

Net Loss. Net loss for the year ended December 31, 2021 was $4,596,813 and is primarily attributable to increase in share based compensation expenses to our employees and services providers.

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 December 31, 2021 and 2020, we had current assets of $1,312,175 and $407,213 , respectively, and total assets of $1,588,375 and $458,150 respectively. The increase in total assets is mainly due to the increase in prepaid expenses resulted from issuance of Company's shares to service providers and as part of our CrossMobile transaction as detailed above as well as increase in rights of use asset arising from operating lease . We had current liabilities of $764,203 as compared to $523,158 as of December 31, 2021 and 2020, respectively and total liabilities of $3,107,629 as compared to $2,440,712 as of December 31, 2021 and 2020 , respectively. The increase is mainly attributed to the increase in the balance of employees and related institutions, accrued expenses and increase in loans received from a related party as well as increase in right of use liability arising from operating lease.

At December 31, 2021, we had a cash balance of $46,022 compared to the cash balance of $359,949 as of December 31, 2020. We have no cash equivalents.

At December 31, 2021, we had a working capital of $547,972 as compared with a working capital deficiency of $115,945 at December 31, 2020.





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We need to raise additional operating capital in order to realize our business plan, including the expansion into the MVNO business. Management believes that funds on hand, as well as the subscription proceeds that we are to receive through our fiscal year 2022 on a periodic basis under the committed subscription agreements with certain of our investors, will enable us to fund our operations and capital expenditure requirements through March 2023. Our requirements for additional capital during this period will depend on many factors.

We may seek to raise any necessary additional capital through a combination of private or public equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. To the extent that we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights, future revenue streams, or product candidates or to grant licenses on terms that may not be favorable to us. If we raise additional capital through private or public equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders' rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.





Going Concern

The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern. We have a stockholders' deficit of $1,519,254 and a working capital of $547,972 at December 31, 2021 as well as negative operating cash flows. These conditions raise substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Critical Accounting Policies

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheets and consolidated statements of operations. Actual results may differ significantly from those estimates. The most significant estimates and assumptions used in the financial statements relate to going concern and stock based compensation assumptions.

Off-Balance Sheet Arrangements We have not entered into any off-balance sheet arrangements during 2021 and do not anticipate entering into any off-balance sheet arrangements during the next 12 months.

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