Full Press Release Details
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| Page | ||
| Report of Independent Registered Public Accounting Firm | F-2 | |
| Consolidated Balance Sheets as of December 31, 2023 and 2022 | F-3 | |
| Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2023, 2022 and 2021 | F-4 | |
| Consolidated Statements of Changes in Shareholders' Equity for the Years Ended December 31, 2023, 2022 and 2021 | F-5 | |
| Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022 and 2021 | F-6 | |
| Notes to the Consolidated Financial Statements | F-7 - F-27 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
To the Shareholders and Board of Directors of
NeuroSense Therapeutics Ltd.
Opinion on the Consolidated Financial Statements
We have audited the accompanying
consolidated balance sheets of NeuroSense Therapeutics Ltd. and its subsidiaries (the "Company") as of December 31, 2023 and
2022, the related consolidated statements of operations and comprehensive loss, changes in shareholders' equity, and cash flows
for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the "consolidated
financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in
the three-year period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.
The accompanying consolidated
financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1B to the consolidated
financial statements, the Company's recurring losses and its expectation to incur significant additional losses raise substantial
doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note
1B. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Company's annual consolidated financial statements for 2023 were previously prepared in conformity with International Financial
Reporting Standards as issued by the IASB. As described in Note 1E to the consolidated financial statements, the Company elected to change
the basis of accounting used in preparing its financial statements for it to be in conformity with U.S. generally accepted accounting
principles. Consequently, the Company's 2023 financial statements including prior years financial statements for 2022 and 2021,
referred to above, are now being presented in accordance with U.S. generally accepted accounting principles.
These consolidated financial
statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in
accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not
required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we
are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing
procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures
in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits
provide a reasonable basis for our opinion.
| /s/ Somekh Chaikin | |
| Somekh Chaikin | |
| Member Firm of KPMG International |
We have served as the Company's auditor since 2020.
NeuroSense Therapeutics Ltd.
Consolidated Balance Sheets
(U.S. dollars in thousands, except share and per share data)
| As of December 31, | ||||||||||
| Note | 2023 | 2022 | ||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalent | 3 | $ | 2,640 | $ | 3,543 | |||||
| Short term deposits | 2F | - | 3,547 | |||||||
| Other receivables | 4 | 236 | 255 | |||||||
| Restricted deposits | 40 | 36 | ||||||||
| Total current assets | 2,916 | 7,381 | ||||||||
| Non-current assets: | ||||||||||
| Property and equipment, net | 5 | 85 | 77 | |||||||
| Operating right of use assets | 6 | 162 | 236 | |||||||
| Restricted deposit | 22 | 23 | ||||||||
| Total non-current assets | 269 | 336 | ||||||||
| Total assets | $ | 3,185 | $ | 7,717 | ||||||
| Liabilities and shareholders' equity | ||||||||||
| Current liabilities: | ||||||||||
| Trade payables | $ | 1,459 | $ | 498 | ||||||
| Other payables | 7 | 2,000 | 1,228 | |||||||
| Total current liabilities | 3,459 | 1,726 | ||||||||
| Non-current liabilities: | ||||||||||
| Operating long-term lease liability | 6 | 73 | 147 | |||||||
| Liability in respect of warrants | 8 | 1,412 | - | |||||||
| 1,485 | 147 | |||||||||
| Total liabilities | 4,944 | 1,873 | ||||||||
| Shareholders' equity: | 9,10 | |||||||||
| Authorized: 60,000,000 shares at December 31, 2023 and 2022; Issued and outstanding: 15,379,042 and 11,781,963 shares at December 31, 2023 and 2022, respectively | - | - | ||||||||
| Share premium and capital reserve | 24,362 | 21,858 | ||||||||
| Accumulated deficit | ( 26,121 | ) | ( 16,014 | ) | ||||||
| Total shareholders' equity (deficit) | ( 1,759 | ) | 5,844 | |||||||
| Total liabilities and shareholders' equity | $ | 3,185 | $ | 7,717 |
The accompanying notes are an integral part of
these consolidated financial statements.
NeuroSense Therapeutics Ltd.
Consolidated Statements of Operations and Comprehensive Loss
(U.S. dollars in thousands, except share and per share data)
| For the year ended December 31 | ||||||||||||||
| Note | 2023 | 2022 | 2021 | |||||||||||
| Research and development expenses | 11 | $ | ( 7,274 | ) | $ | ( 5,587 | ) | $ | ( 1,394 | ) | ||||
| General and administrative expenses | 12 | ( 4,775 | ) | ( 4,967 | ) | ( 1,591 | ) | |||||||
| Operating loss | ( 12,049 | ) | ( 10,554 | ) | ( 2,985 | ) | ||||||||
| Financing income (expenses), net | 13 | 1,942 | 62 | ( 235 | ) | |||||||||
| Net loss and comprehensive loss | $ | ( 10,107 | ) | $ | ( 10,492 | ) | $ | ( 3,220 | ) | |||||
| Basic and diluted net loss per share | $ | ( 0.74 | ) | $ | ( 0.91 | ) | $ | ( 0.52 | ) | |||||
| Weighted average number of ordinary shares used in computing basic net loss per share | 13,640,168 | 11,504,521 | 6,243,411 |
The accompanying notes are an integral part of
these consolidated financial statements.
NeuroSense Therapeutics Ltd.
Consolidated Statements of Changes in Shareholders' Equity
(U.S. dollars in thousands, except share and per share data)
| Ordinary Shares | Share Premium and Capital | Accumulated | Total Shareholders' Equity | |||||||||||||||||
| Number | Amount | Reserve | Deficit | (Deficit) | ||||||||||||||||
| Balance as of January 1, 2021 | 5,582,922 | $ | - | $ | 2,961 | $ | ( 2,302 | ) | $ | 659 | ||||||||||
| Issuance of shares in respect of SAFE instruments | 276,672 | - | 1,000 | - | 1,000 | |||||||||||||||
| Exercise of warrants and options | 3,083,940 | - | 1,311 | - | 1,311 | |||||||||||||||
| Issuance of shares and tradable warrants, net | 2,000,000 | - | 8,969 | - | 8,969 | |||||||||||||||
| Share based compensation | - | - | 2,115 | - | 2,115 | |||||||||||||||
| Net loss and comprehensive loss | - | - | - | ( 3,220 | ) | ( 3,220 | ) | |||||||||||||
| Balance as of December 31, 2021 | 10,943,534 | $ | - | $ | 16,356 | $ | ( 5,522 | ) | $ | 10,834 | ||||||||||
| Repurchase of options | - | - | ( 96 | ) | - | ( 96 | ) | |||||||||||||
| Exercise of warrants and vested RSUs | 838,429 | - | 3,870 | - | 3,870 | |||||||||||||||
| Share based compensation | - | - | 1,728 | - | 1,728 | |||||||||||||||
| Net loss and comprehensive loss | - | - | - | ( 10,492 | ) | ( 10,492 | ) | |||||||||||||
| Balance as of December 31, 2022 | 11,781,963 | $ | - | $ | 21,858 | $ | ( 16,014 | ) | $ | 5,844 | ||||||||||
| Issuance of shares and pre-funded warrants, net | 1,333,600 | - | 806 | - | 806 | |||||||||||||||
| Exercise of pre-funded warrants, options and vested RSUs | 2,263,479 | - | - | - | - | |||||||||||||||
| Share based compensation | - | - | 1,698 | - | 1,698 | |||||||||||||||
| Net loss and comprehensive loss | - | - | - | ( 10,107 | ) | ( 10,107 | ) | |||||||||||||
| Balance as of December 31, 2023 | 15,379,042 | $ | - | $ | 24,362 | $ | ( 26,121 | ) | $ | ( 1,759 | ) |
The accompanying notes are an integral part of
these consolidated financial statements.
NeuroSense Therapeutics Ltd.
Consolidated Statements of Cash Flows
(U.S. dollars in thousands, except share and per share data)
| For the year ended December 31 | ||||||||||||
| 2023 | 2022 | 2021 | ||||||||||
| Cash flows from operating activities | ||||||||||||
| Net loss for the year | $ | ( 10,107 | ) | $ | ( 10,492 | ) | $ | ( 3,220 | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
| Depreciation | 21 | 12 | 3 | |||||||||
| Share based compensation | 1,537 | 1,728 | 1,217 | |||||||||
| Revaluation of liability in respect to warrants | ( 2,191 | ) | - | - | ||||||||
| Revaluation of SAFE instruments | - | - | 200 | |||||||||
| Loss from disposal of property and equipment | - | - | 8 | |||||||||
| Financing expenses (income), net | 473 | 41 | ( 20 | ) | ||||||||
| Changes in assets and liabilities: | ||||||||||||
| Decrease in operating right of use asset | 74 | 70 | - | |||||||||
| Decrease in operating lease liability | ( 69 | ) | ( 95 | ) | - | |||||||
| Decrease (increase) in other current assets | 19 | 55 | ( 204 | ) | ||||||||
| Increase (decrease) in trade payables | 961 | 459 | ( 16 | ) | ||||||||
| Increase (decrease) in other payables | 928 | 606 | 493 | |||||||||
| Net cash used in operating activities | ( 8,354 | ) | ( 7,616 | ) | ( 1,539 | ) | ||||||
| Cash flows from investing activities | ||||||||||||
| Purchase of property and equipment | ( 29 | ) | ( 70 | ) | ( 17 | ) | ||||||
| Redemption of (investment in) short-term deposits | 3,500 | ( 3,500 | ) | - | ||||||||
| Investment in restricted deposit, net | ( 3 | ) | ( 20 | ) | - | |||||||
| Net cash provided by (used in) investing activities | 3,468 | ( 3,590 | ) | ( 17 | ) | |||||||
| Cash flows from financing activities | ||||||||||||
| Issuance of SAFE instruments | - | - | 800 | |||||||||
| Payment in respect of cancellation of options | - | ( 96 | ) | - | ||||||||
| Exercise of warrants and options | 5 | 3,870 | 1,238 | |||||||||
| Issuance of shares, warrants and pre-funded warrants, net | 3,970 | - | 9,864 | |||||||||
| Net cash provided by financing activities | 3,975 | 3,774 | 11,902 | |||||||||
| Effects of exchange rate changes on cash and cash equivalents | 8 | ( 88 | ) | 18 | ||||||||
| Increase (decrease) in cash and cash equivalents | ( 903 | ) | ( 7,520 | ) | 10,364 | |||||||
| Cash and cash equivalents as at the beginning of the year | 3,543 | 11,063 | 699 | |||||||||
| Cash and cash equivalents as of the end of the year | $ | 2,640 | $ | 3,543 | $ | 11,063 | ||||||
| Non-cash investing and financing activities: | ||||||||||||
| Recognition of right of use assets | $ | - | $ | 306 | $ | - | ||||||
| Conversion of SAFE instruments | $ | - | $ | - | $ | 1,000 | ||||||
| Supplemental disclosure of cash flow information: | ||||||||||||
| Interest received | $ | 179 | $ | 49 | $ | - |
The accompanying notes are an integral part of
these consolidated financial statements.
NeuroSense Therapeutics Ltd.
Notes to the Consolidated Financial Statements
In addition to PrimeC, the Company
has initiated research and development efforts in Alzheimer's disease and Parkinson's disease, with a similar strategy of
The Company's ordinary shares
and warrants began trading on the Nasdaq Capital Market on December 9, 2021 under the ticker symbols "NRSN" and
"NRSNW," respectively.
Based on current expected level of
operating expenditures, the Company's cash resources as at December 31, 2023 and the cash received after the reporting period (see
also Note 16) shall not be sufficient to fund the Company's operations for a period of at least 12 months from the approval of these
consolidated financial statements, assuming that the Company will continue its development plan in accordance with the original pipeline
and without delaying or slowing down the progress of its plans. The Company will require additional cash to fund the execution of its
mid and long-term development program. The Company anticipates raising additional funds through public or private sales of debt or equity
securities, collaborative arrangements, or some combination thereof. Whilst management is progressing with its plans to secure external
financing, these still require approval by third parties, and accordingly, there is no assurance that any such arrangement will be entered
into or that financing will be available when needed in order to allow it to continue its operations, or if available, on terms favorable
or acceptable to it.
In the event financing is not obtained,
the Company may pursue cost cutting measures or may be required to delay, reduce the scope of, or eliminate any of its development programs
or clinical trials, these events could have a material adverse effect on its business. These factors raise significant doubt about
the Company ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to recoverability
and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company
be unable to continue as a going concern.
NeuroSense Therapeutics Ltd.
Notes to the Consolidated Financial Statements
Note 1 - General (cont.)
All of the Company's clinical
and pre-clinical research and development is currently being conducted outside of Israel, other than its 12-month
open label-extension ("OLE") study of the PARADIGM trial, partially conducted in Tel Aviv, and a Phase
2 trial for Alzheimer's disease that we conduct in Haifa, Israel. The OLE has not been affected by the war, although
the quality of the study may be adversely affected if as a result of the war patients are unable to visit the study center or the study
coordinator is not able to conduct home visits and monitor the patients. In addition, in the event of a significant escalation of
hostilities in northern Israel, there may be a delay in the planned Alzheimer trial. The Company may also elect to set
up a site in Israel for a Phase 3 pivotal ALS trial of PrimeC, but this would be in addition to numerous other sites in Europe and the