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NeuroSense Therapeutics Ltd.
Interim Unaudited balance sheets
U.S. dollars in thousands
| June 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalent | 1,208 | 2,640 | ||||||
| Other receivables | 376 | 236 | ||||||
| Restricted deposit | 35 | 40 | ||||||
| Total current assets | 1,619 | 2,916 | ||||||
| Non-current assets: | ||||||||
| Property, plant and equipment, net | 77 | 85 | ||||||
| Operating right of use assets | 123 | 162 | ||||||
| Restricted deposit | 22 | 22 | ||||||
| Total non-current assets | 222 | 269 | ||||||
| Total assets | 1,841 | 3,185 | ||||||
| Liabilities and Equity | ||||||||
| Current liabilities: | ||||||||
| Trade payables | 1,483 | 1,459 | ||||||
| Other payables | 2,025 | 2,000 | ||||||
| Total current liabilities | 3,508 | 3,459 | ||||||
| Non Current liabilities: | ||||||||
| Operating long term lease liability | 36 | 73 | ||||||
| Liability in respect of warrants | - | 1,412 | ||||||
| 36 | 1,485 | |||||||
| Total liabilities | 3,544 | 4,944 | ||||||
| Shareholders' equity: | ||||||||
| Authorized: 60,000,000 shares at June 30, 2024 and December 31, 2023; Issued and outstanding: 18,055,006 and 15,379,042 shares at June 30, 2024 and December 31, 2023, respectively | - | - | ||||||
| Share premium and capital reserve | 30,679 | 24,362 | ||||||
| Accumulated deficit | ( 32,382 | ) | ( 26,121 | ) | ||||
| Total Shareholders' equity (deficit) | ( 1,703 | ) | ( 1,759 | ) | ||||
| Total liabilities and shareholders' equity (deficit) | 1,841 | 3,185 |
Date of approval of the interim financial statements: September
The accompanying notes are an integral part of the condensed
interim financial statements.
NeuroSense Therapeutics Ltd.
Interim Unaudited Statements of Comprehensive Loss
U.S. dollars in thousands except share and per share data
| Six months | Six months | |||||||||||
| ended | ended | |||||||||||
| June 30, | June 30, | |||||||||||
| Note | 2024 | 2023 | ||||||||||
| Research and development expenses | ( 3,451 | ) | ( 3,810 | ) | ||||||||
| General and administrative expenses | ( 2,573 | ) | ( 2,551 | ) | ||||||||
| Operating loss | ( 6,024 | ) | ( 6,361 | ) | ||||||||
| Financing expenses, net | ( 237 | ) | ( 209 | ) | ||||||||
| Net loss and comprehensive loss | ( 6,261 | ) | ( 6,570 | ) | ||||||||
| Basic and diluted net loss per share | ( 0.37 | ) | ( 0.55 | ) | ||||||||
| Weighted average number of shares outstanding used in computing basic and diluted net loss per share | 16,773,806 | 11,868,798 |
The accompanying notes are an integral part of
the condensed interim financial statements.
NeuroSense Therapeutics Ltd.
Interim Unaudited Statements of Changes in Equity
U.S. dollars in thousands (except for share
| Ordinary shares | Share premium and capital reserve | Accumulated deficit | Total equity | |||||||||||||||||
| Number | Amount | |||||||||||||||||||
| Balance as of January 1, 2024 | 15,379,042 | $ | - | $ | 24,362 | $ | ( 26,121 | ) | $ | ( 1,759 | ) | |||||||||
| Issuance of shares and pre-funded warrants, net | 1,732,000 | - | 4,209 | - | 4,209 | |||||||||||||||
| Exercise of pre-funded warrants, options and vested RSUs | 873,000 | - | - | - | - | |||||||||||||||
| Reclassification of warrants into equity (Note 3) | - | - | 1,695 | - | 1,695 | |||||||||||||||
| Share-based compensation | 70,964 | - | 413 | - | 413 | ) | ||||||||||||||
| Net loss and comprehensive loss | - | - | - | ( 6,261 | ) | ( 6,261 | ) | |||||||||||||
| Balance as of June 30, 2024 | 18,055,006 | $ | - | $ | 30,679 | $ | ( 32,382 | ) | $ | ( 1,703 | ) |
| Ordinary shares | Share premium and capital reserve | Accumulated deficit | Total equity | |||||||||||||||||
| Number | Amount | |||||||||||||||||||
| Balance as of January 1, 2023 | 11,781,963 | - | $ | 21,858 | $ | ( 16,014 | ) | $ | 5,844 | |||||||||||
| Issuance of shares and pre-funded warrants, net | 1,333,600 | - | 806 | - | 806 | |||||||||||||||
| Exercise of options and vested RSUs | 507,479 | - | - | - | - | |||||||||||||||
| Share-based compensation | - | - | 1,188 | - | 1,188 | ) | ||||||||||||||
| Net loss and comprehensive loss | - | - | - | ( 6,570 | ) | ( 6,570 | ) | |||||||||||||
| Balance as of June 30, 2023 | 13,623,042 | $ | - | $ | 23,852 | $ | ( 22,584 | ) | $ | 1,268 |
NeuroSense Therapeutics Ltd.
Interim Unaudited Statements of Cash Flows
U.S. dollars in thousands
| Six months | Six months | |||||||
| ended | ended | |||||||
| June 30, | June 30, | |||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss for the period | ( 6,261 | ) | ( 6,570 | ) | ||||
| Adjustments: | ||||||||
| Depreciation and Amortization | 11 | 9 | ||||||
| Share-based compensation | 306 | 1,025 | ||||||
| Revaluation of liability in respect to warrants | 283 | ( 109 | ) | |||||
| Finance expenses (income), net | - | 487 | ||||||
| Changes in assets and liabilities: | ||||||||
| Decrease in operating right of use asset | 39 | 36 | ||||||
| Decrease in operating lease liability | ( 37 | ) | ( 40 | ) | ||||
| Decrease (increase) in other receivables | ( 140 | ) | ( 179 | ) | ||||
| Increase in trade payables | 24 | 592 | ||||||
| Increase (decrease) in other payables | 25 | 846 | ||||||
| Net cash used in operating activities | ( 5,750 | ) | ( 3,903 | ) | ||||
| Cash flows from investing activities | ||||||||
| Redemption of short term deposit | - | 3,500 | ||||||
| Investment in restricted deposit | 4 | ( 2 | ) | |||||
| Purchase of property, plant and equipment | ( 3 | ) | ( 25 | ) | ||||
| Net cash provided by investing activities | 1 | 3,473 | ||||||
| Cash flows from financing activities | ||||||||
| Exercise of warrants and options | - | 5 | ||||||
| Issuance of shares, warrants and pre-funded warrants, net | 4,317 | 3,970 | ||||||
| Net cash provided by financing activities | 4,317 | 3,975 | ||||||
| Effects of exchange rate changes on cash and cash equivalents | - | 1 | ||||||
| Net increase (decrease) in cash and cash equivalents | ( 1,432 | ) | 3,546 | |||||
| Cash and cash equivalents at beginning of the period | 2,640 | 3,543 | ||||||
| Cash and cash equivalents at end of the period | 1,208 | 7,089 | ||||||
| Non-cash activity | ||||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Interest received | 2 | 98 |
The accompanying notes are an integral part of
the condensed interim financial statements.
NeuroSense Therapeutics Ltd.
the Condensed Interim Unaudited 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 June 30, 2024 shall not be sufficient to fund the Company's operations
for a period of 12 months from the approval of these consolidated interim 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.
These consolidated financial statements
have been prepared in accordance with US generally accepted accounting principles (GAAP) assuming the Company will continue as a going
concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
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 interim financial
statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that
may be necessary if the Company were unable to continue as a going concern.
NeuroSense Therapeutics Ltd.
the Condensed Interim Unaudited 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
U.S., and as a result it does not expect the timeline or quality of this trial to be adversely affected by the war.
The Israel Defence Force (the "IDF"),
the national military of Israel, is a conscripted military service, subject to certain exceptions. Since October 7, 2023, the IDF has
called up several hundred thousand of its reserve forces to serve. Fourteen out of the Company's current 16 employees are resident
in Israel. One of its non-management employees in Israel who do not perform critical functions have been called, and additional employees
may be called, for service in the current or future wars or other armed conflicts with Hamas, Hezbollah or other terrorist groups, and
such persons may be absent for an extended period of time. As a result, its operations in Israel may be disrupted by such absences, which
disruption may materially and adversely affect its business, prospects, financial condition and results of operations.
Although until approval of these financial
statements, the impact of the war on the Company was negligible, it is currently not possible to predict the duration or severity of the
ongoing conflict or its effects on the Company's business, operations and financial conditions. The ongoing conflict is rapidly
evolving and developing, and could disrupt its business and operations, and hamper its ability to raise additional funds or sell its securities,
Note 2 - Significant accounting policies
These unaudited Condensed interim financial
statements have been prepared as of June 30, 2024 and for the six months period then ended. Accordingly, In the opinion of the Company,
the accompanying unaudited condensed financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary
for a fair statement of its financial position as of June 30, 2024, and its results of operations for the six months ended June 30, 2024,
and 2023, and cash flows for the same periods. The condensed balance sheet at December 31, 2023, was derived from audited annual financial
statements but does not contain all of the footnote disclosures from the annual financial statements. The significant accounting policies
that have been applied in the preparation of the unaudited consolidated Condensed financial statements are identical to those that were
applied in preparation of the Company's most recent annual financial statements for the year ended December 31, 2023. These unaudited
Condensed financial statements should be read in conjunction with the audited financial statements and the accompanying notes of the Company
for the year ended December 31, 2023 that are included in the Company's Annual Report on Form 20-F, filed with the Securities and
Exchange Commission on April 4, 2024 and the Form 6-K filed on June 17, 2024 with financial statements as of December 31, 2023 in US GAAP.
(the "Annual Report on Form 20-F"). The results of operations presented are not necessarily indicative of the results to be
expected for the year ending December 31, 2024.
NeuroSense Therapeutics Ltd.
the Condensed Interim Unaudited Financial Statements
Note 2 - Significant accounting policies
As an emerging growth company, the
Jumpstart Our Business Startup Act ("JOBS Act") allows the Company to delay adoption of new or revised accounting pronouncements
applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this
extended transition period under the JOBS Act. The adoption dates discussed below reflect this election.
Note 3 - Liability in respect of warrants
As noted in Note 9Ah to Company's
annual financial statements for the year ended December 31, 2023, on June 22, 2023, the Company entered into a registered direct offering
under which, inter alia, the Company issued to an institutional investor 3,000,000 warrants, each representing the right to acquire one
ordinary share at an exercise price of $1.50 and expiring on the fifth anniversary of the original issuance date. Due to the warrants'
terms, the warrants were accounted as a financial liability measured at fair-value through profit and losses until their expiration or
On June 26, 2024, the Company and the
institutional investor entered into an amendment to the warrant which included revisions to the fundamental transactions provision and