Full Press Release Details
CONDENSED FINANCIAL STATEMENTS
U.S. DOLLARS IN THOUSANDS
| Page | |
| Condensed Balance Sheets | F-2 |
| Condensed Statements of Comprehensive Loss | F-3 |
| Condensed Statement of Changes in Shareholders' Equity | F-4 - F-5 |
| Condensed Statements of Cash Flows | F-6 |
| Notes to Condensed Financial Statements | F-7 - F-17 |
- - - - - - - - - - - - - - -
CONDENSED BALANCE SHEETS (UNAUDITED)
U.S. dollars in thousands (except share and per share data)
| As of June 30, | As of December 31, | |||||||||
| Note | 2025 | 2024 | ||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 15,828 | $ | 2,554 | ||||||
| Other current assets | 204 | 99 | ||||||||
| Total current assets | 16,032 | 2,653 | ||||||||
| Property and equipment, net | 10 | 10 | ||||||||
| Intangible asset, net | 3 | 2,697 | 2,884 | |||||||
| Total assets | $ | 18,739 | $ | 5,547 | ||||||
| Liabilities and shareholders' equity | ||||||||||
| Current liabilities: | ||||||||||
| Employees and payroll-related liabilities | $ | 45 | $ | 45 | ||||||
| Other payables and accrued expenses | 249 | 216 | ||||||||
| Warrants liability | 5 | 70 | - | |||||||
| Total current liabilities | 364 | 261 | ||||||||
| Shareholders' equity: | 4 | |||||||||
| Ordinary shares, no par value per share; Authorized: 2,000,000,000 and 79,582 shares as of June 30, 2025, and December 31, 2024, respectively; Issued and outstanding: 5,880,763 and 16,778 shares as of June 30, 2025, and December 31, 2024, respectively; (*) | - | - | ||||||||
| Additional paid-in capital | 23,618 | 10,352 | ||||||||
| Accumulated deficit | ( 5,243 | ) | ( 5,066 | ) | ||||||
| Total shareholders' equity | 18,375 | 5,286 | ||||||||
| Total liabilities and shareholders' equity | $ | 18,739 | $ | 5,547 |
The accompanying notes are an integral part of the condensed
financial statements.
CONDENSED STATEMENTS OF NET INCOME
U.S. dollars in thousands (except share and per share data)
| Six months ended June 30, | ||||||||||
| Note | 2025 | 2024 | ||||||||
| Operating expenses: | ||||||||||
| Research and development expenses | $ | ( 776 | ) | $ | ( 137 | ) | ||||
| General and administrative expenses | ( 1,709 | ) | ( 210 | ) | ||||||
| Operating loss | ( 2,485 | ) | ( 347 | ) | ||||||
| Financial income (expense), net | 7 | 2,308 | ( 241 | ) | ||||||
| Net loss | $ | ( 177 | ) | $ | ( 588 | ) | ||||
| Basic and diluted net loss per share (*) | 6 | $ | ( 0.12 | ) | $ | ( 59.90 | ) | |||
| Weighted average number of shares of ordinary share used in computing basic and diluted net loss per share (*) | 1,443,182 | 10,417 |
The accompanying notes are an integral part of the condensed financial
CONDENSED STATEMENT OF CHANGES
IN SHAREHOLDERS' EQUITY (UNAUDITED)
U.S. dollars in thousands (except share data)
| Ordinary shares | Additional paid-in | Accumulated | Total shareholders' | |||||||||||||||||
| Number (*) | Amount | capital | deficit | deficit | ||||||||||||||||
| Balance as of December 31, 2024 | 16,778 | - | 10,352 | ( 5,066 | ) | 5,286 | ||||||||||||||
| Share based payment | - | - | 398 | - | 398 | |||||||||||||||
| Issuance of shares, warrants and pre-funded warrants, net (see Note 4) | 141,667 | - | 1,768 | - | 1,768 | |||||||||||||||
| Exercise of warrants (see Note 4) | 5,722,318 | 11,100 | - | 11,100 | ||||||||||||||||
| Net loss | - | - | - | ( 177 | ) | ( 177 | ) | |||||||||||||
| Balance as of June 30, 2025 | 5,880,763 | - | 23,618 | ( 5,243 | ) | 18,375 |
The accompanying notes are an integral part of the condensed financial
CONDENSED STATEMENT OF CHANGES
IN PERMANENT AND TEMPORERY SHAREHOLDERS' EQUITY (DEFICIT) (UNAUDITED)
U.S. dollars in thousands (except share data)
| Preferred shares | Ordinary shares | Additional paid-in | Receivables on account | Accumulated | Total shareholders' | |||||||||||||||||||||||||||
| Number (*) | Amount | Number (*) | Amount | capital | of shares | deficit | deficit | |||||||||||||||||||||||||
| Balance as of December 31, 2023 | 419 | 248 | 10,202 | - | 3,526 | ( 196 | ) | ( 3,521 | ) | ( 191 | ) | |||||||||||||||||||||
| Share based payment | - | - | - | - | 35 | - | - | 35 | ||||||||||||||||||||||||
| Conversion of convertible loan | - | - | 794 | 225 | - | - | 225 | |||||||||||||||||||||||||
| Issuance of shares | - | - | - | - | - | 177 | - | 177 | ||||||||||||||||||||||||
| Classification of warrant liability to equity | - | - | - | - | 316 | -- | 316 | |||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | ( 588 | ) | ( 588 | ) | ||||||||||||||||||||||
| Balance as of June 30, 2024 | 419 | 248 | 10,996 | - | 4,102 | ( 19 | ) | ( 4,109 | ) | ( 26 | ) |
The accompanying notes are an integral part of the condensed financial
CONDENSED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( 177 | ) | $ | ( 588 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 189 | 1 | ||||||
| Share based payment | 398 | 35 | ||||||
| Fair value revaluation of investment in shares | - | 8 | ||||||
| Fair value revaluation of warrant liability | ( 5,218 | ) | 211 | |||||
| Fair value revaluation in convertible notes | - | 25 | ||||||
| Finance expenses | 3,059 | - | ||||||
| Change in: | ||||||||
| Other current assets | ( 105 | ) | ( 7 | ) | ||||
| Deferred offering costs | - | ( 39 | ) | |||||
| Employees and payroll-related liabilities | - | ( 16 | ) | |||||
| Othrer payables and accrued expenses | 33 | 33 | ||||||
| Net cash used in operating activities | ( 1,821 | ) | ( 337 | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of property and equipment | ( 2 | ) | - | |||||
| Net cash used in investing activities | ( 2 | ) | - | |||||
| Cash flows from financing activities | ||||||||
| Proceeds from sale of investment in shares | - | 28 | ||||||
| Proceeds from issuance of convertible notes | - | 151 | ||||||
| Proceeds from issuance of ordinary shares, warrants and pre-funded warrants | 15,097 | 177 | ||||||
| Net cash provided by financing activities | 15,097 | 356 | ||||||
| Change in cash and cash equivalents | 13,274 | 19 | ||||||
| Cash and cash equivalents at the beginning of the year | 2,554 | 4 | ||||||
| Cash and cash equivalents at the end of the year | $ | 15,828 | $ | 23 | ||||
| Non-cash financing activities: | ||||||||
| Exercise of warrants into ordinary shares | $ | 11,100 | $ | - | ||||
| IPO warrants exchange | $ | 1,635 | $ | - | ||||
| Conversion of convertible notes into ordinary shares | $ | - | $ | 225 | ||||
| Classification of warrant liability into Additional paid-in capital | $ | - | $ | 316 |
The accompanying notes are an integral part of the
condensed unaudited financial statements.
NOTES TO CONDENSED FINANCIAL STATEMENTS
is in the research and development (R&D) stage and, as such, has not generated any revenues from its current operations. The Company's
activities are primarily funded through the proceeds from its initial public offering on the Nasdaq, proceeds from convertible loans and
private placements of its securities. As of June 30, 2025, the Company reported an accumulated deficit of $5,243.
its operations and advance its development programs, the Company intends to continue securing investments from investors. If sufficient
investment cannot be obtained, the Company may need to implement cost-cutting measures, scale back its R&D activities, or delay certain
development programs. Despite these potential challenges, management believes that the Company's existing financial resources will
be sufficient to sustain its planned operations for at least the next twelve months.
NOTES TO CONDENSED FINANCIAL STATEMENTS
These unaudited condensed financial statements
have been prepared as of June 30, 2025 and for the six months period then ended. Accordingly, certain information and footnote disclosures
normally included in annual financial statements prepared in accordance with U.S. GAAP have been omitted. These unaudited condensed consolidated
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, 2024 that are included in the Company's Annual Report on Form 20-F, filed with the Securities and Exchange
Commission on March 11, 2025 (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, 2025.
In November 2024, the FASB issued ASU
2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation
of Income Statement Expenses, which expands disclosures about specific expense categories presented on the face of the income statement.
In January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation
Disclosures (Subtopic 220-40), which clarifies the effective date of ASU 2024-03. The ASU will be effective for us beginning with our
annual reporting for fiscal year 2028 and interim periods thereafter. The Company is evaluating the impact of the adoption of this update
on the Company's condensed financial statements and related disclosures.
NOTES TO CONDENSED FINANCIAL STATEMENTS
In March 2025, the FASB issued ASU
2025-02-Liabilities (405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122. The amendments in this
Update are effective immediately and on a fully retrospective basis to annual periods beginning after December 15, 2024. The Company adopted
the ASU in 2025. The adoption did not have a material impact on the Company's condensed financial statements and related
In May 2025, the FASB issued ASU 2025-04,
Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration
Payable to a Customer, which is intended to reduce diversity in practice and improve the decision usefulness and operability of the guidance
for share-based consideration payable to a customer in conjunction with selling goods or services. The standard is effective for the
Company for fiscal years beginning after December 15, 2026. Early adoption is permitted. The adoption of this standard is not expected
to have a material impact on the Company's condensed financial statements and related disclosures.
On August 13, 2024, the Company entered
into an agreement with SciSparc Ltd. (the "SciSparc") (NASDAQ "SPRC") for the purchase of an exclusive, worldwide,
royalty-bearing license with respect to intellectual property rights associated with SciSparc's SCI-160 platform (the "Licensed
Patent Rights"), in order to research, develop and commercialize the Licensed Patent Rights in connection with the diagnosis, prevention,
and treatment of pain in humans.
Pursuant to the terms of the August
13, 2024 agreement, SciSparc is entitled to up to $3.32 million based on the achievement of certain milestones, including (i) $50,000
upon a successful preclinical safety test, (ii) $100,000 upon first patient enrolled in phase I clinical trial, (iii) $120,000 upon first
patient enrolled in Phase 2a clinical trial, (iv) $150,000 upon first patient enrolled in Phase 2b clinical trial, (v) $500,000 upon first
patient enrolled in Phase 3 clinical trials, (vi) $800,000 upon approval by the FDA, (vii) $800,000 upon approval by an EU regulatory
body, and (viii) $800,000 upon regulatory approval in any additional jurisdiction.
Additionally, SciSparc is eligible
to receive royalties, on a country-by-country and product-by-product basis, at a rate of 5%, on aggregate net sales of a product that
is based on the Licensed Patent Rights for a period of fifteen years from the date of the first sale of a Licensed Product, on a country-by-country
basis, or through the date of expiration of valid claims of any licensed patents with respect to a Licensed Product in such country, if
Furthermore, the Company has the right
to sell sublicenses for the Licensed Patent Rights, at any point in time, to any sublicensee that is not involved in legal proceedings
against SciSparc and that has equity of at least $5.0 million as per its most recent audited financial statements. In the event of such
sublicensing, the Company is required to pay SciSparc 25% of any proceeds generated from such sublicenses (including proceeds from the
sale of the sublicense). The other material terms of the sublicense agreement, including with respect to payments to SciSparc by the sublicensee
upon the achievement of the aforementioned pre-clinical, clinical trial and regulatory milestones, are required to be consistent with
the August 13, 2024 agreement.
NOTES TO CONDENSED FINANCIAL STATEMENTS
In consideration for purchase of the
license, the Company issued to SciSparc 1,280 ordinary shares and additionally committed to issue to SciSparc additional securities in
the occurrence of certain events, including the listing of the Company's shares on a public exchange pursuant to an initial public
offering, for a period of two years, such that the value of the aggregate amount of shares and other securities, as applicable, to be
issued to SciSparc will be equal to $3,000 thousand based on the price at which such securities are to be offered at such initial public
offering. As such, as part of the Company's IPO, the Company issued 1,460 pre-funded warrants and 8,219 warrants.
The Company estimated the fair value
of its commitment to SciSparc to issue securities as consideration for the patent at $3,000 thousand, as this amount represents the contractual
fixed monetary value of the variable number of securities to be issued to SciSparc pursuant to a qualifying IPO event.
The Company estimates the useful life
of the license is 10 years.
In accordance with ASC 350, Intangibles-Goodwill
and Other, during the second quarter of 2025, as a result of a reductions in Company's market share price, the Company reassessed the
fair value of its intangible asset, which had an aggregate carrying value of $2,884 thousand as of December 31, 2024 and performed
an impairment test over its intangible asset. As a result of this test, the Company recognized an impairment loss of $37 thousand.