Full Press Release Details
AS OF DECEMBER 31, 2025
| Page | |
| Independent auditor's report | 2 |
| Balance sheets | 3 |
| Statements of operations | 4 |
| Statements of Convertible Preferred Shares and Shareholders' Deficit | 5 |
| Statements of cash flows | 6 |
| Notes to the financial statements | 7-20 |
AUDITOR'S REPORT TO THE SHAREHOLDERS OF COLOSPAN LTD
have audited the financial statements of Colospan Ltd. (the "Company"), which comprise the balance sheets as of December
31, 2025 and 2024, and the related statements of operations, statements of Convertible Preferred Shares and Shareholders' Deficit,
and cash flows for the years then ended, and the related notes to the financial statements (collectively referred to as the "financial
our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as
of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in accordance with accounting
principles generally accepted in the United States of America.
conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities
under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section
of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the
relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion.
Doubt About the Company's Ability to Continue as a Going Concern
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note
1B to the financial statements, the Company has suffered recurring losses from operations, has a shareholders' deficit,
and has stated that substantial doubt exists about the Company's ability to continue as a going concern. Management's evaluation
of the events and conditions and management's plans regarding these matters are also described in Note 1B. The financial statements
do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this
of Management for the Financial Statements
is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally
accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate,
that raise substantial doubt about the Company's ability to continue as a going concern for one year after the date that the financial
statements are issued.
Responsibilities for the Audit of the Financial Statements
objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level
of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always
detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate,
they would influence the judgment made by a reasonable user based on the financial statements.
performing an audit in accordance with GAAS, we:
| Exercise professional judgment and maintain professional skepticism throughout the audit. | |
| Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. | |
| Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed. | |
| Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. | |
| Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time. |
are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit,
significant audit findings, and certain internal control-related matters that we identified during the audit.
Brightman Almagor Zohar & Co.
Firm in the Deloitte Global Network
| As of December 31, | ||||||||||||
| 2025 | 2024 | |||||||||||
| Note | USD in thousands | |||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | 3 | 910 | 567 | |||||||||
| Restricted deposit | 11 | 30 | 27 | |||||||||
| Other accounts receivable | 4 | 48 | 20 | |||||||||
| Total current assets | 988 | 614 | ||||||||||
| Non-current assets | ||||||||||||
| Operating lease right-of-use assets | 5 | 188 | 154 | |||||||||
| Long term prepaid expenses | 18 | 18 | ||||||||||
| Property and equipment, net | 6 | 56 | 70 | |||||||||
| Total non-current assets | 262 | 242 | ||||||||||
| Total assets | 1,250 | 856 | ||||||||||
| LIABILITIES, CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' DEFICIT | ||||||||||||
| Current liabilities | ||||||||||||
| Trade accounts payable | 13 | 21 | ||||||||||
| Other accounts payable | 7 | 583 | 459 | |||||||||
| Convertible Safe Notes | 8 | 3,727 | 3,845 | |||||||||
| Total current liabilities | 4,323 | 4,325 | ||||||||||
| Operating lease liabilities, net of current portion | 5 | 80 | 26 | |||||||||
| COMMITMENTS AND CONTINGENCIES | 11 | |||||||||||
| Convertible preferred shares: | ||||||||||||
| Preferred shares, 0.01 NIS par value -Authorized: 494,547 shares as of December 31, 2025 and 2024; Issued and outstanding: 298,840 as of December 31, 2025 and 2024; Aggregate liquidation preference of $2 5,403 thousand and $23,546 thousand as of December 31, 2025 and 2024 respectively; | 9 | 12,400 | 12,400 | |||||||||
| Shareholders' deficit | ||||||||||||
| Ordinary shares, of NIS 0.01 par value each; Authorized: 9,700,453 shares as of December 31, 2025 and 2024. Issued and outstanding: 53,220 shares as of December 31, 2025 and 2024. | 10 | 1 | 1 | |||||||||
| Additional paid-in capital | 966 | 940 | ||||||||||
| Accumulated deficit | (16,520 | ) | (16,836 | ) | ||||||||
| Total shareholders' deficit | (15,553 | ) | (15,895 | ) | ||||||||
| Total liabilities, convertible preferred shares and shareholders' deficit | 1,250 | 856 |
accompanying notes are an integral part of the financial statements.
| Year ended December 31 | ||||||||||||
| 2025 | 2024 | |||||||||||
| Note | USD in thousands | |||||||||||
| Research and development expenses, net | 1,059 | 1,536 | ||||||||||
| Sales and Marketing expenses | 161 | 151 | ||||||||||
| General and administrative expenses | 602 | 514 | ||||||||||
| Operating loss | 1,822 | 2,201 | ||||||||||
| Financial income, net | (40 | ) | (107 | ) | ||||||||
| Gain of change in fair value of Convertible safe notes | 8 | (2,098 | ) | (2,472 | ) | |||||||
| Gain before income taxes | (316 | ) | (378 | ) | ||||||||
| Income taxes | 13 | - | - | |||||||||
| Net Income | (316 | ) | (378 | ) |
accompanying notes are an integral part of the financial statements
OF CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' DEFICIT
Dollars in thousands except shares data
| Convertible Preferred Shares | Ordinary shares | Additional paid in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | capital | deficit | Total | ||||||||||||||||||||||
| January 1, 2024 | 298,840 | 12,400 | 53,220 | 1 | 925 | (17,214 | ) | (16,288 | ) | |||||||||||||||||||
| Stock-based compensation | - | - | - | - | 15 | - | 15 | |||||||||||||||||||||
| Net income for the year | 378 | 378 | ||||||||||||||||||||||||||
| December 31, 2024 | 298,840 | 12,400 | 53,220 | 1 | 940 | (16,836 | ) | (15,895 | ) | |||||||||||||||||||
| Stock-based compensation | - | - | - | - | 26 | - | 26 | |||||||||||||||||||||
| Net income for the year | - | - | - | - | - | 316 | 316 | |||||||||||||||||||||
| December 31, 2025 | 298,840 | 12,400 | 53,220 | 1 | 966 | (16,520 | ) | (15,553 | ) |
accompanying notes are an integral part of the financial statements
| Year ended December 31 | ||||||||
| 2025 | 2024 | |||||||
| USD in thousands | ||||||||
| Cash flows - operating activities | ||||||||
| Income for the year | 316 | 378 | ||||||
| Adjustments required to reconcile net income to net cash used in operating activities: | ||||||||
| Depreciation | 21 | 19 | ||||||
| Share based compensation | 26 | 15 | ||||||
| Finance expenses (income) | 8 | (29 | ) | |||||
| Gain of change in fair value of Convertible safe notes | (2,098 | ) | (2,472 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Decrease (increase) in other accounts receivable and long-term prepaid expenses | (28 | ) | 33 | |||||
| Decrease in trade accounts payable | (8 | ) | (16 | ) | ||||
| Increase in other accounts payable | 136 | 23 | ||||||
| Net cash used in operating activities | (1,627 | ) | (2,049 | ) | ||||
| Cash flows - investing activities | ||||||||
| Short term deposit | - | 1,500 | ||||||
| Investment in Restricted deposit | (3 | ) | (1 | ) | ||||
| Acquisition of property and equipment | (7 | ) | (1 | ) | ||||
| Net cash flows provided by (used in) investing activities | (10 | ) | 1,498 | |||||
| Cash flows - financing activities: | ||||||||
| Proceeds from Convertible Safe notes | 1,980 | - | ||||||
| Increase (Decrease) in cash and cash equivalents | 343 | (551 | ) | |||||
| Cash and cash equivalents at beginning of the year | 567 | 1,118 | ||||||
| Cash and cash equivalents at the end of the year | 910 | 567 | ||||||
| Non-cash operating activities: | ||||||||
| Right-of-use assets obtained in exchange for new operating lease liabilities, net | 152 | - |
accompanying notes are an integral part of the financial statements
TO THE FINANCIAL STATEMENTS
LTD (the "Company") was incorporated and began operations on November 28, 2010. The Company engages in development of medical
devices that protect digestive system connections.
its inception, the Company has devoted substantially all its efforts to research and development. The Company is still not yet generated
revenues from operations. The Company has incurred operating losses since its inception and expects to continue to incur operating losses
for the near-term. As of December 31, 2025, the Company had an accumulated deficit of approximately $16,520 and had a shareholders'
deficit. The extent of the Company's future operating losses and the timing of becoming profitable are uncertain. As of December
31, 2025 the cash balance is $910.
Company's primary sources of cash have been proceeds from equity financings and other funding transactions. While the Company has
been successful in raising financing recently and in the past, there can be no assurance that it will be able to do so in the future
on a timely basis on terms acceptable to the Company, or at all.
Company has not yet commercialized any of its product candidates. Even if the Company commercializes one or more of its product candidates,
it may not become profitable in the near-term. The Company's ability to achieve profitability depends on several factors, including
its ability to obtain regulatory approval for its product candidates, successfully complete any post-approval regulatory obligations,
and successfully commercialize its product candidates alone or in partnership.
conditions raise substantial doubts about the Company's ability to continue as a going concern.
plans include additional equity financing or other funding transactions. However, there is no assurance such funding will be available
to the Company or that it will be obtained on terms favorable to the Company or will provide the Company with sufficient funds to meet
financial statements do not include any adjustments relating to the recoverability and classification of assets, carrying amounts, or
the amount and classification of liabilities that may be required should the Company be unable to continue as a going concern.
TO THE FINANCIAL STATEMENTS
2 - SIGNIFICANT ACCOUNTING POLICIES
financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles ("U.S. GAAP").
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses
during the reporting period. The Company's management believes that the estimates, judgment, and assumptions used are reasonable
based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements. Actual results
could differ from those estimates.
functional currency of the Company is the U.S dollar (the "dollar"), because the dollar is the currency of the primary economic
environment in which the Company operates. Transactions and balances denominated in dollars are presented in their original amounts.
Non-dollar denominated transactions and balances have been re-measured to dollars in accordance with the provisions of ASC 830-10, "Foreign
Currency Translation." All transaction gains and losses from re-measurement of monetary balance sheet items denominated in non-dollar
currencies are reflected in the statement of operations as financial income or expenses, as appropriate.
equivalents are short-term, highly liquid investments that are readily convertible into cash with maturities of three months or less
as of the date acquired.
that is held for a specific purpose and is not available for immediate or general business use due to external restrictions is classified
in the Company's balance sheets as restricted deposit.
instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. Cash
and cash equivalents are deposited in major banks in Israel and the United States.
believes that the banks that hold the Company's cash and cash equivalent are financially sound and, accordingly, minimal credit
risk exists with respect to these cash and cash equivalents.
long-lived assets of the Company are reviewed for impairment in accordance with ASC No. 360, "Property, Plant and Equipment"
("ASC No. 360"), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted
cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured
by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the years ended December 31, 2025
and 2024, no impairment losses have been identified.
TO THE FINANCIAL STATEMENTS