6-K
NeuroSense Therapeutics Ltd. (NRSN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16
Under the Securities Exchange Act of 1934
For the Month of September 2024
Commission File Number: 001-41084
NeuroSense Therapeutics Ltd.
(Translation of registrant’s name into English)
11 HaMenofim Street, Building BHerzliya 4672562 Israel+972-9-7996183(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Attached are the Company’s condensed interim unaudited financial statements and a summary of its operating and financial review and prospects, each as of June 30, 2024, furnished herewith as Exhibits 99.1 and 99.2, respectively.
This Report on Form 6-K (including Exhibits 99.1 and Exhibit 99.2) is hereby incorporated by reference into the registrant’s Registration Statements on Form S-8 (File No. 333-262480) and Form F-3 (File No. 333-269306 and 333-260338), to be a part thereof from the date on which this report is submitted, to the extent not superseded by documents or reports subsequently filed or furnished.
1
Exhibit Index
| Exhibit No. | Description |
|---|---|
| 99.1 | Condensed Interim Unaudited<br> Financial Statements as of June 30, 2024 |
| 99.2 | Operating<br> and Financial Review and Prospects as of June 30, 2024 |
| 101.INS | Inline XBRL Instance Document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 104 | Cover Page Interactive Data File formatted as Inline XBRL and contained in Exhibit 101 |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| NeuroSense Therapeutics Ltd. | ||
|---|---|---|
| Date: September 30, 2024 | By: | /s/ Alon Ben-Noon |
| Alon Ben-Noon | ||
| Chief Executive Officer |
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Exhibit 99.1
NeuroSense Therapeutics Ltd.
CondensedInterim 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 30, 2024
The accompanying notes are an integral part of the condensed interim financial statements.
NeuroSense Therapeutics Ltd.
CondensedInterim 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.
2
NeuroSense Therapeutics Ltd.
CondensedInterim Unaudited Statements of Changes in Equity
U.S. dollars in thousands (except for shareand per share data)
| 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 |
3
NeuroSense Therapeutics Ltd.
CondensedInterim 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.
4
NeuroSense Therapeutics Ltd.
Notes tothe Condensed Interim Unaudited Financial Statements
Note 1 - General
| A. | NeuroSense Therapeutics Ltd. (“NeuroSense” or the “Company”) was incorporated in Israel on February 13, 2017. NeuroSense is a clinical-stage pharmaceutical company focused on discovering and developing treatments for patients suffering from debilitating neurodegenerative diseases. The Company’s lead product candidate, PrimeC, is a novel oral formulation of a fixed dose combination composed of a specific ratio and doses of two FDA-approved drugs. |
|---|
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 combined products.
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.
| B. | The Company currently has no products approved for sale, and the Company’s operations have been funded primarily by its shareholders. To date, the Company has generated no sales or revenues, has incurred losses and expects to incur significant additional losses due to the continuing focus on the research, development, clinical activities of its product candidates, preclinical programs, business development, organizational structure and to advance the programs within the Company’s pipeline. Consequently, its operations are subject to all the risks inherent in the establishment of a pre-revenue business enterprise as well as those risks associated with a company engaged in the research and development of pharmaceutical compounds. |
|---|
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.
5
NeuroSense Therapeutics Ltd.
Notes tothe Condensed Interim Unaudited Financial Statements
Note 1 - General (Cont.)
| C. | In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets, launched extensive rocket attacks and kidnapped many Israeli civilians and soldiers. Following the attack, Israel declared war against Hamas. In parallel, border clashes between Israel and the Hezbollah terrorist group on Israel’s northern border with Lebanon intensified and may escalate into a greater regional conflict. |
|---|
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, among others.
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.
6
NeuroSense Therapeutics Ltd.
Notes tothe Condensed Interim Unaudited Financial Statements
Note 2 - Significant accounting policies(Cont.)
| Recently issued accounting pronouncements, not yet adopted |
|---|
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.
| 1. | In December 2023, the FASB issued ASU 2023-09 “Improvements to Income Tax Disclosures” which improves the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain amendments to improve income tax disclosures effectiveness. The guidance is effective for the Company’s annual periods beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating the potential effect that the updated standard will have on the consolidated financial statement disclosures. |
|---|---|
| 2. | In November 2023, the FASB issued ASU 2023-07 “Segment Reporting: Improvements to Reportable Segment Disclosures” which expands public entities’ segment disclosures primarily by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. Public entities with a single reportable segment are required to provide the new disclosures and all the disclosures required under ASC 280. The guidance is effective for the Company’s annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements and related disclosures. |
| --- | --- |
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 exercise.
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 the extension of the termination date from June 26, 2028 to October 12, 2029. The Company concluded that the new warrant terms meet equity classification and thus the warrants should be accounted as equity. As a result, on June 26, 2024 the Company reclassified the warrant liability into equity according its fair value for the same date in the amount of $1.695 million.
7
NeuroSense Therapeutics Ltd.
Notes tothe Condensed Interim Unaudited Financial Statements
Note 3 - Liability in respect of warrants (Cont.)
The fair value of the warrants was determined by the management using the assistance of external appraiser and by using Black-Scholes option pricing model and the following inputs:
| Financial liabilities: | |
| Expected volatility (%) | 92.52 |
| Share price (in ) | 0.85 |
| Risk-free interest rate (%) | 4.40 |
| Expected life (years) | 5.30 |
| Dividend yield (%) | - |
All values are in US Dollars.
The following table summarizes the movement in warrant liability during the six month period ended June 30, 2024:
| 2024 | |||
|---|---|---|---|
| U.S. dollars<br> in thousands | |||
| Balance as at January 1, 2024 | $ | 1,412 | |
| Revaluation of liability in respect to warrants | 283 | ||
| Reclassification of warrants into equity | (1,695 | ) | |
| Balance as at June 30, 2024 | $ | - |
Note 4 - Shareholders’ Equity
On April 10, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an institutional investor (the “Purchaser”), pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the Purchaser (i) an aggregate of 1,732,000 ordinary shares, no par value; (ii) an aggregate of 1,248,000 pre-funded warrants, each representing the right to acquire one ordinary share at an exercise price of $0.0001 (either physically or on a net-cash basis at the Purchaser’s discretion), exercisable at any time upon their issuance until exercised in full and (iii) an aggregate of 2,980,000 Warrants, each representing the right to acquire one ordinary share at an exercise price of $1.50 (either physically or on a net-cash basis at the Purchaser’s discretion) and will expire on the fifth anniversary of the original issuance date. The gross proceeds were approximately $4.47 million. As part of the agreement, the Company also issued 70,964 ordinary shares as issuance expenses to the placement agent. Total issuance expenses in cash amounted to $0.16 million.
On June 26, 2024, the Company and the Purchaser reached an agreement to amend the terms of the warrants to extend the termination date from April 15, 2029 to October 12, 2029.
During the six month period ended June 30, 2024, the Company issued 873,000 ordinary shares following exercise of pre-funded warrants and vested RSU’s.
8
NeuroSense Therapeutics Ltd.
Notes tothe Condensed Interim Unaudited Financial Statements
Note 5 - Share Based Payment
In May 2024, the Company’s board of directors, approved the grant of 24,000 RSUs to a consultant of the Company. 12,000 RSUs vested on grant date, and the remaining 12,000 RSUs will vest monthly (2,000 RSUs each month), over six months and until November 1, 2024. The fair value of RSUs is estimated by multiplying the number of RSUs granted by the share price at grant date.
In May 2024, the Company’s board of directors, approved the grant of 24,000 RSUs to a consultant of the Company. 4,000 RSUs vested on grant date, and the remaining 20,000 RSUs will vest monthly (4,000 RSUs each month), over six months and until October 1, 2024. The fair value of RSUs is estimated by multiplying the number of RSUs granted by share price at grant date.
On June 27, 2024, the Company’s annual general meeting of shareholders approved the following proposed resolutions:
| 1. | A grant of 160,000 RSUs to the non-management directors of the Company. Such RSUs would vest on the one<br>year anniversary of the date of the meeting. |
|---|---|
| 2. | To approve an amendment to the Company’s Articles of Association to increase the authorized share<br>capital of the Company. |
| --- | --- |
Note 6 - Related Parties
In May 2024 the Company’s board of directors updated the bonus plan to the Company’s officers for the year 2023, and determined that such bonuses will become effective and paid only after a capital raise, that will allow the initiation of the phase 3 clinical study, of at least $18 million. The aggregate amount of the potential bonus payable to the officers after such capital raise will be approximately $0.8 million.
In May 2024, the Company’s board of directors approved a bonus plan for 2024 for certain Company’s officers. The bonus plan defined specified millstones (in fields of clinic trail progress, regulatory affairs, business developments and capital raising).
On June 27, 2024, the Company’s annual general meeting of shareholders approved the following proposed resolutions, among others:
| 1. | An acceleration of the vesting of the 18,000 unvested options of Ms. Caren Deardorf, and extending the<br>term of the unexercised options, such that they will expire 10 years from the date of grant |
|---|---|
| 2. | To approve a 2024 bonus plan for Mr. Alon Ben-Noon, Chief Executive Officer of the Company, based on the<br>achievement of certain Company milestones. |
| --- | --- |
| 3. | To approve the renewal of Mr. Alon Ben-Noon’s employment agreement with the Company and in addition,<br>an update to his salary in the event that the Company raises an aggregate of US25,000,000. |
| --- | --- |
See also Note 5.
9
NeuroSense Therapeutics Ltd.
Notes tothe Condensed Interim Unaudited Financial Statements
Note 7 - Subsequent Events
| a. | On August 6, 2024, the Company entered into a securities purchase agreement with certain investors, which<br>include members of the Company’s senior management and existing investors. The Company agreed to sell an aggregate of 800,000 ordinary<br>shares and warrants to purchase an aggregate of 800,000 ordinary shares (the “Warrants”), at a combined purchase price of<br>$0.75 per share and accompanying Warrant. |
|---|
Each Warrant was immediately exercisable upon issuance and has a 5-year term from the issuance date. The exercise price of each Warrant is $0.75 per share, subject to adjustment as set forth therein. The Warrants may be exercised on a cashless basis if at the time of exercise thereof there is no effective registration statement registering the ordinary shares underlying the Warrants.
| b. | On August 16, 2024, the Company entered into a Capital on Demand Sales Agreement (the “Sales Agreement”)<br>with JonesTrading Institutional Services LLC, as sales agent (the “Sales Agent”), pursuant to which the Company may offer<br>and sell, from time to time, to or through the Sales Agent, ordinary shares, having an aggregate offering price of up to gross sale proceeds<br>of up to $2,524,437. |
|---|---|
| c. | On August 25, 2024, the Company received a written notice from The Nasdaq Stock Market (“Nasdaq”)<br>with respect to the Company’s stockholders’ equity falling below the required minimum of $2,500,000, stating that the Nasdaq<br>Hearings Panel has granted the Company’s request for an exception to continue its listing on the Nasdaq Capital Market until October<br>31, 2024. |
| --- | --- |
10
Exhibit 99.2
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
You should read the following selected financial data and discussion of our operating and financial condition and prospects in conjunction with the financial statements and the notes thereto included elsewhere in this 6-K. Our financial statements are prepared in in conformity with United States of America, or U.S. GAAP. Unless otherwise indicated or the context otherwise requires, all references herein to the terms “NeuroSense,” “NeuroSense Therapeutics,” the “Company,” “we,” “us” and “our” refer to NeuroSense Therapeutics Ltd. The term “NIS” refers to New Israeli Shekels, the lawful currency of the State of Israel, and the terms “dollar” or “$” refer to U.S. dollars, the lawful currency of the United States. Unless derived from our financial statements or otherwise indicated, U.S. dollar translations of NIS amounts presented in this exhibit are translated using the rate of NIS 3.759 to $1.00, based on the representative exchange rate reported by the Bank of Israel on June 30, 2024.
Forward Looking Statements
This exhibit contains forward-looking statements concerning among other things, our ongoing and planned product development and clinical trials; the timing of, and our ability to make, regulatory filings and obtain and maintain regulatory approvals for our product candidates; our ability to enter into and maintain strategic collaborations, our intellectual property position; our results of operations, cash needs; financial condition, liquidity, prospects, growth and strategies; the industry in which we operate; and the trends that may affect the industry or us. Many of the forward-looking statements contained in this exhibit can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “should,” “target,” “would” and other similar expressions that are predictions of or indicate future events and future trends, although not all forward-looking statements contain these identifying words.
Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to substantial risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors, including, but not limited to, those identified under the section titled “Risk Factors” in our Annual Report on Form 20-F, filed with the SEC on April 4, 2024, or the Annual Report, and our other filings with the SEC from time to time. These risks and uncertainties include factors relating to:
| ● | the going concern reference in our financial statements and<br>our need for substantial additional financing to achieve our goals; |
|---|---|
| ● | our limited operating history and history of incurring significant<br>losses and negative cash flows since our inception, which we anticipate will continue for the foreseeable future; |
| --- | --- |
| ● | our dependence on the success of our lead product candidate,<br>PrimeC, including our obtaining of regulatory approval to market PrimeC in the United States; |
| --- | --- |
| ● | our limited experience in conducting clinical trials and<br>reliance on clinical research organizations and others to conduct them; |
| --- | --- |
| ● | our ability to advance our preclinical product candidates<br>into clinical development and through regulatory approval; |
| --- | --- |
| ● | the results of our clinical trials, which may fail to adequately<br>demonstrate the safety and efficacy of our product candidates; |
| --- | --- |
| ● | our ability to achieve the broad degree of physician adoption<br>and use and market acceptance necessary for commercial success; |
| --- | --- |
| ● | our reliance on third parties in marketing, producing or<br>distributing products and research materials for certain raw materials, compounds and components necessary to produce PrimeC for clinical<br>trials and to support commercial scale production of PrimeC, if approved; |
| --- | --- |
| ● | our receipt of regulatory clarity and approvals for our therapeutic<br>candidates and the timing of such regulatory clarity and approvals and of other regulatory filings and approvals; |
| --- | --- |
| ● | estimates of our expenses, revenues, capital requirements<br>and our needs for additional financing; |
| --- | --- |
| ● | our efforts to obtain, protect or enforce our patents and<br>other intellectual property rights related to our product candidates and technologies; |
| --- | --- |
| ● | our ability to maintain the listing of our ordinary shares<br>on Nasdaq; |
| --- | --- |
| ● | the impact of the public health, political and security situation<br>in Israel, the U.S. and other countries in which we may obtain approvals for our products or our business; and |
| --- | --- |
| ● | the impacts on our ongoing and planned trials and manufacturing<br>as a result of the war in Israel. |
| --- | --- |
The preceding list is not intended to be an exhaustive list of all of our risks and uncertainties. As a result of these factors, we cannot assure you that the forward-looking statements in this exhibit will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of the 6-K that accompanies this exhibit, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information.
The forward-looking statements and opinions contained in this exhibit are based upon information available to us as of the date of the 6-K that accompanies this exhibit and, while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. The forward-looking statements contained in this exhibit speak only as of the date of the 6-K that accompanies this exhibit, and unless otherwise required by law, we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.
You should read this exhibit, and the documents that we reference herein, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
Overview
We are a clinical-stage biotechnology company focused on discovering and developing treatments for people living with neurodegenerative diseases, including ALS AD and PD. We believe these diseases represent some of the most significant unmet medical needs of our time, with limited effective therapeutic options available. The burden of these diseases on both patients and society is substantial. For example, the average annual cost of ALS alone is $180,000 per patient, and its estimated annual burden on the U.S. healthcare system is greater than $1 billion. Due to the complexity of neurodegenerative diseases, our strategy is utilizing a combined therapeutic approach to target multiple disease-related pathways.
Our lead therapeutic candidate, PrimeC, is a novel extended-release oral formulation, fixed-dose combination of two FDA-approved drugs, ciprofloxacin and celecoxib. PrimeC is designed to treat ALS by modulating microRNA synthesis, iron accumulation, and neuroinflammation, all of which are hallmarks of ALS pathology. The U.S. Food and Drug Administration, or the FDA and the European Medicines Agency, or the EMA have granted PrimeC orphan drug designation for the treatment of ALS. In addition, the EMA has granted PrimeC the Small and Medium-Sized Enterprise, or SME, status, which offers significant potential benefits leading up to and following drug regulatory approval. We believe PrimeC’s multifunctional mechanism of action has the potential to significantly prolong lifespan and improve ALS patients’ quality of life, thereby reducing the burden of this debilitating disease on both patients and healthcare systems.
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PrimeC is currently being evaluated in PARADIGM, a Phase IIb randomized, multi-center, multinational, prospective, double-blind, placebo-controlled study, to evaluate safety, tolerability, and efficacy of PrimeC in 68 people living with ALS. Participants were being administered PrimeC or placebo at a 2:1 ratio, respectively, for the six-month double-blind part. Study participants were allowed to continue standard of care treatment of approved products. The primary endpoints of the study are an evaluation of ALS-biomarkers as well as safety and tolerability assessment. Secondary and exploratory endpoints are the evaluation of clinical efficacy (ALS Functional Rating Scale — Revised, or ALSFRS-R, and slow vital capacity), survival, and improvement in quality of life. All subjects who completed the six-month double-blind, placebo-controlled dosing period had the opportunity to be transferred to the PrimeC active arm for a 12-month open label extension. The study completed enrollment in May 2023, enrolling 69 participants, in which 68 are living with ALS and one participant who was misdiagnosed for ALS and was excluded from the evaluations. Four ALS clinical centers participated in the study in 3 territories: Israel, Italy, and Canada. In December 2023, we reported that we met the primary safety and tolerability endpoints and achieved secondary clinical efficacy endpoints in the top-line results of our 6-month double-blind phase of PARADIGM. In May 2024, we announced new positive data analysis from PARADIGM clinical trial demonstrating statistically significant slowing of disease progression in high-risk ALS patients. In July 2024, we announced results from the 12-month analysis of the PARADIGM clinical trial which showed a significant improvement in the rate of decline of ALS Functional Rating Scale-Revised (ALSFRS-R) scores and survival rates for subjects who received PrimeC from the start of the trial compared to those who started on placebo. In August 2024, we announced positive 12-month biomarker data from the PARADIGM clinical trial, which showed a significant decrease in ferritin levels and a corresponding increase in transferrin levels, both indicating alleviation of the pathology.
Following the FDA’s recommendation for additional non-clinical data to support long term use of Ciprofloxacin (as PrimeC is intended for long-term administration in treating ALS) a long-term tox study was initiated in November 2023. In September 2024, we successfully completed the in-life phase of the study. We plan to have a meeting with the FDA and EMA in the fourth quarter of 2024 and to subsequently commence a pivotal clinical trial for PrimeC in ALS treatment in the first half of 2025. Additionally, in November 2023, we concluded a successful Type D meeting with the FDA regarding CMC development plans for the expected Phase 3 pivotal study and subsequent marketing approval in the U.S. The FDA endorsed our proposed CMC development plan.
PrimeC was previously evaluated in a Phase IIa clinical trial, or NST002, in 15 people living with ALS, conducted at the Tel Aviv Sourasky Medical Center, Israel. The primary endpoint of the NST002 trial, which was safety and tolerability, was met. In this trial, the safety profile observed was consistent with known safety profiles of ciprofloxacin and celecoxib. Side effects were mild and transient in nature. There were no new or unexpected safety signals detected during the trial.
Additionally, we observed positive clinical signals in comparison to virtual controls, and a serum biomarker analysis showed significant changes following treatment, indicating biological activity of the drug in comparison to untreated matched ALS patients. All 12 patients who completed the NST002 trial elected to continue into an extension study with PrimeC, that was conducted as an Investigator Initiated Study. To date, we are still supporting the drug supply for a few of the participants in this study, which is over than 40 months since NST002 was initiated.
We completed three additional studies in 2022 as part of our drug development program to further support our future regulatory submissions. In April 2022, we initiated a pharmacokinetic, or PK, study, or NCT05232461, of PrimeC. The PK open-label, randomized, single-dose, three-treatment, three-period crossover study evaluated the effect of food on the bioavailability of PrimeC as compared to the bioavailability of co-administered ciprofloxacin tablets and celecoxib capsules in adult subjects in the U.S. under an FDA cleared IND protocol.
In August 2022, we completed enrollment and dosing of all subjects in a multi-dose PK study, or NCT05436678. On September 28, 2022, we released the results of the NCT05436678 study. Based on results, we believe the PK profile of PrimeC supports the formulation’s extended-release properties, as the concentrations of the active components have been synchronized, aiming to potentially maximize the synergism between the two compounds. In June 2022, we reported the successful completion of the “in-life” phase of its 90-day GLP toxicology study. In this study, the components of PrimeC, celecoxib and ciprofloxacin, were administered to rodents at doses 4x the maximal clinical dose. All animals appeared normal, with no significant findings observed. We intend to present the data from these studies to the FDA as part of PrimeC’s drug development plan.
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We believe we have a strong patent estate, including patents on method of use, combination, and formulation. We have secured U.S. Patent 10,980,780 relating to methods for treatment of ALS using ciprofloxacin and celecoxib, the components of PrimeC, which expires in 2038. Equivalent patents also have been issued in the European Patent Office, Canada, Australia, Israel and Japan. The patent estate also includes US Patent 12,097,185, which relates to Prime C formulations. This patent will expire in December 2042. Equivalent applications are pending in many jurisdictions worldwide. We also expect to take advantage of orphan drug exclusivity for PrimeC, if approved, for seven years in the United States and ten years in the European Union. In addition, U.S. patent application 16/623,467, which relates to methods of treatment of neurodegenerative disease using combinations of ciprofloxacin and celecoxib, is currently pending. This patent application, once granted, is expected to expire on June 20, 2038.
Our organization is built around a management team with extensive experience in the pharmaceutical industry, with a particular focus on ALS research and clinical trials. We believe that our leadership team is well-positioned to lead us through clinical development, regulatory approval and commercialization of our product candidates. Furthermore, we maintain steadfast and extensive communication and collaboration with patient advocacy groups and associations, underscoring the importance of patient perspectives in advancing therapeutic strategies.
In addition to PrimeC, we extended our pipeline and conducted research and development efforts for AD and PD, with a similar strategy of combined products. The following chart represents our current product development pipeline:
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We have incurred operating losses in each year since our inception. We incurred net losses of $6.26 million and $6.57 million for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $32.38 million. We expect to incur significant expenses and operating losses for the foreseeable future as we advance our product candidates from formulation development through preclinical development and clinical trials, seek regulatory approval and pursue commercialization of any approved product candidate. In addition, we expect that our expenses will increase substantially in connection with our ongoing activities as we:
| ● | continue the clinical development of PrimeC; |
|---|---|
| ● | continue the preclinical development of our other product<br>candidates; |
| --- | --- |
| ● | file an NDA seeking regulatory approval for any product candidates; |
| --- | --- |
| ● | establish a sales, marketing and distribution infrastructure<br>and scale up external manufacturing capabilities to commercialize any products for which we obtain manufacturing approval; |
| --- | --- |
| ● | maintain, expand and protect our intellectual property portfolio; |
| --- | --- |
| ● | add equipment and physical infrastructure to support our<br>research and development; |
| --- | --- |
| ● | hire additional clinical development, quality control and<br>manufacturing personnel; |
| --- | --- |
| ● | incur additional expenses associated with operating as a<br>U.S. public company, including significant legal, accounting, investor relations and other expenses that we did not incur as a private<br>company; and |
| --- | --- |
| ● | add operational, financial and management information systems<br>and personnel, including personnel to support our product development and planned future commercialization. |
| --- | --- |
Operating Results
Revenue
We have not recognized any revenue to date and we do not expect to generate revenue from the sale of products in the near future.
Operating Expenses
Our current operating expenses consist primarily of research and development as well as general and administrative expenses.
Research and Development Expenses
Research and development expenses consist primarily of:
| ● | salaries for research and development staff and related expenses,<br>including employee benefits and share-based compensation expenses; |
|---|---|
| ● | expenses for production of our product candidates by contract<br>manufacturers; |
| --- | --- |
| ● | expenses paid to contract research organizations and other<br>third parties in connection with the performance of preclinical studies, clinical trials and related expenses; |
| --- | --- |
| ● | expenses incurred under agreements with other third parties,<br>including subcontractors, suppliers and consultants that conduct formulation development, regulatory activities and preclinical studies; |
| --- | --- |
| ● | expenses incurred to acquire, develop and manufacture preclinical<br>study and clinical trial materials. |
| --- | --- |
Expenses on research activities is recognized in profit or loss when incurred. Development expenditures, including patent registration costs, are capitalized only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and we intend to and have sufficient resources to complete development and to use or sell the asset. As of June 30, 2024, no development expenditures have met the recognition criteria and thus we have expensed all of our development expenditures as incurred.
We are currently focused on advancing our product candidates, and our future research and development expenses will depend on their clinical success. Research and development expenses will continue to be significant and will increase over at least the next several years as we continue to develop our product candidates and conduct preclinical studies and clinical trials of our product candidates.
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We do not believe that it is possible at this time to accurately project total expenses required for us to reach commercialization of our product candidates. Due to the inherently unpredictable nature of preclinical and clinical development, we are unable to estimate with certainty the costs we will incur and the timelines that will be required in the continued development and approval of our product candidates. Clinical and preclinical development timelines, the probability of success and development costs can differ materially from expectations. See “Risk Factors—RisksRelated to Our Business and Strategy” in our Annual Report. In addition, we cannot forecast which product candidates may be subject to future collaborations, if and when such arrangements will be entered into, if at all, and to what degree such arrangements would affect our development plans and capital requirements.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel costs, including share-based compensation, related to directors, executive, finance, and human resource functions, insurance costs, facility costs and external professional service costs, including legal, accounting, marketing and audit services and other consulting fees.
We anticipate that our general and administrative expenses will increase in the future as we increase our administrative headcount and infrastructure to support our continued research and development programs and the potential approval and commercialization of our product candidates. We also anticipate that we will incur increased expenses related to audit, legal, regulatory and tax-related services associated with maintaining compliance with Nasdaq and SEC requirements, director and officer insurance premiums, director compensation, and other costs associated with being a public company.
In addition, if any of our product candidates receives regulatory approval and if we determine to invest in building a commercial infrastructure to support the marketing of our products, we expect to incur greater expenses.
Financing income (Expenses), net
Our net financing expenses (income), net consist primarily of fair value revaluation of warrants, issuance costs, interest income on deposits, interest expenses on lease liability and differences in the exchange rate between NIS and the U.S. Dollar.
Income Taxes
We have yet to generate taxable income in Israel, as we have historically incurred operating losses resulting in carry forward tax losses totaling approximately $20 million as of June 30, 2024. We anticipate that we will continue to generate tax losses for the foreseeable future and that we will be able to carry forward these tax losses indefinitely to future taxable years. Accordingly, we do not expect to pay taxes in Israel until we have taxable income after the full utilization of our carry forward tax losses.
Results of Operations
Our results of operations for the six months ended June 30, 2024 and 2023 were as follows:
| For the Six Months Ended<br> June 30, | ||||||
|---|---|---|---|---|---|---|
| (U.S. dollars in thousands except share and per share data) | 2024 | 2023 | ||||
| Statement of Operations: | ||||||
| Research and Development Expenses | (3,451 | ) | (3,810 | ) | ||
| General and Administrative Expenses | (2,573 | ) | (2,551 | ) | ||
| Operating Loss | (6,024 | ) | (6,361 | ) | ||
| Financing expense, net | (237 | ) | (209 | ) | ||
| Net Loss and Comprehensive Loss | (6,261 | ) | (6,570 | ) | ||
| Basic and Diluted Net Loss per Share | (0.37 | ) | (0.48 | ) | ||
| Weighted average number of shares outstanding used in computing basic and diluted net loss per share | 16,773,806 | 11,868,798 |
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Research and Development Expenses
The following table describes the breakdown of our research and development expenses for the indicated periods:
| For the Six Months Ended<br> June 30, | ||||
|---|---|---|---|---|
| (U.S. dollars in thousands except share and per share data) | 2024 | 2023 | ||
| Subcontractors and consultants | $ | 2,289 | 2,385 | |
| Share-based compensation | 154 | 1,008 | ||
| Salaries and social benefits | 1,008 | 417 | ||
| Total research and development expenses | $ | 3,451 | 3,810 |
Our research and development expenses for the six months ended June 30, 2024 and 2023 were $3,451 thousand and $3,810 thousand, respectively. The decrease of $359 thousand, or 9.4%, was mainly attributed to a decrease in our share-based compensation expenses partly offset by an increase in our salaries related to the clinical study.
General and Administrative Expenses
The following table describes the breakdown of our general and administrative expenses for the indicated periods:
| For the Six Months Ended<br> June 30, | ||||
|---|---|---|---|---|
| 2024 | 2023 | |||
| U.S. dollars in thousands | ||||
| Professional services | $ | 1,437 | 529 | |
| Share-based compensation | 152 | 705 | ||
| Salaries and social benefits | 441 | 700 | ||
| Insurance | 157 | 266 | ||
| Traveling abroad | 83 | 98 | ||
| Others | 303 | 253 | ||
| $ | 2,573 | 2,551 |
Our general and administrative expenses for the six months ended June 30, 2024 and 2024 were $2,573 thousand and $2,551 thousand, respectively. The increase of $22 thousand, or 0.86%, was mainly attributed to higher professional services expenses which were partly offset by lower share-based compensation, salary and related expenses and insurance expenses.
Financing Expenses, net
Our financing expenses, net for the six months ended June 30, 2024 and 2023, were $237 thousand and $209 thousand, respectively. The increase of $28 thousand, or 13.3%, was mainly attributed to the fair value revaluation of liability in respect of warrants.
Liquidity and Capital Resources
Overview
Since our inception, we have incurred losses and negative cash flows from our operations. For the six months ended June 30, 2024, we incurred a net loss of $6.26 million while net cash of $5.75 million was used in our operating activities. As of June 30, 2024, we had a negative working capital of $1.89 million, and an accumulated deficit of $32.38 million. As of June 30, 2024, our cash totaled approximately $1.20 million.
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Our financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business, and our financial status creates a doubt whether we will continue as a going concern. Our future operations are dependent upon the identification and successful completion of equity or debt financing and the achievement of profitable operations at an indeterminate time in the future. There can be no assurances that we will be successful in completing an equity or debt financing or in achieving or maintaining profitability. The financial statements do not give effect to any adjustments relating to the carrying values and classification of assets and liabilities that would be necessary should we be unable to continue as a going concern.
Through June 30, 2024, we have financed our operations primarily through our initial public offering, public and private offerings of our equity securities, proceeds from the exercise of warrants and options, and crowd funding of equity securities. Total gross invested capital as of June 30, 2024 was approximately $29.3 million, which included ordinary shares, SAFE agreements, options and warrants to purchase ordinary shares.
In August 2024, we entered into a Capital on Demand™ Sales Agreement with JonesTrading Institutional Services LLC, or Jones, pursuant to which we may offer and sell, at our option, up to $2,524,437 of our ordinary shares through an equity program under which Jones agreed to act as sales agent. To date, we have sold 319,903 ordinary shares for aggregate gross proceeds of $276 thousand under the equity program.
Furthermore, in August 2024, we received additional gross proceeds of $0.6 million from a private placement offering.
Prior to that in June 2024, we received additional gross proceeds of approximately $4.5 million before deducting placement agent fee and related offering expenses million from a registered direct offering and concurrent private placement. Total issuance expenses in connection with the offering were $0.16 million.
Cash flows
The following table summarizes our statement of cash flows for the six months ended June 30, 2024 and 2023:
| For the Six Months Ended<br> June 30, | ||||||
|---|---|---|---|---|---|---|
| (U.S. dollars in thousands except share and per share data) | 2024 | 2023 | ||||
| Net cash used in operating activities and exchange rates | $ | (5,750 | ) | (3,902 | ) | |
| Net cash used in investing activities | 1 | 3,473 | ||||
| Net cash provided by financing activities | 4,317 | 3,975 | ||||
| (Decrease) increase in cash and cash equivalents | $ | (1,432 | ) | 3,546 |
Net cash used in operating activities
Net cash used in operating activities was $5,750 thousand and $3,902 thousand for the six months ended June 30, 2024 and 2023, respectively. The increase of $1,848 thousand was mainly attributable to higher payments for our working capital following the financing in April 2024.
Net cash used in investing activities
Net cash used in investing activities was $1 thousand and $3,473 thousand for the six months ended June 30, 2024 and 2023, respectively. The decrease of $3,472 thousand was mainly attributed to the change in short term deposits during the six months ended June 30, 2024.
Net cash provided by financing activities
Net cash provided by financing activities was $4,317 thousand and $3,975 thousand for the six months ended June 30, 2024 and 2023, respectively. The increase of $342 thousand was mainly attributed to an increase in issuance of shares, warrants and prefunded warrants, net.
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Funding Requirements
Since our inception, almost all of our resources have been dedicated to the preclinical and clinical development of our lead product candidate, PrimeC. As of June 30, 2024, we had cash of $1.20 million. We believe that our existing cash will be sufficient to fund our operations into the fourth quarter of the year.
Our present and future funding requirements will depend on many factors, including, among other things:
| ● | the progress, timing and completion of clinical trials for<br>PrimeC; |
|---|---|
| ● | preclinical studies and clinical trials for our other product<br>candidates; |
| --- | --- |
| ● | the costs related to obtaining regulatory approval for PrimeC<br>and any of our other product candidates, and any delays we may encounter as a result of regulatory requirements or adverse clinical trial<br>results with respect to any of these product candidates; |
| --- | --- |
| ● | selling, marketing and patent-related activities undertaken<br>in connection with the commercialization of PrimeC and any of our other product candidates, and costs involved in the development of<br>an effective sales and marketing organization; |
| --- | --- |
| ● | the costs involved in filing and prosecuting patent applications<br>and obtaining, maintaining and enforcing patents or defending against claims or infringements raised by third parties, and license royalties<br>or other amounts we may be required to pay to obtain rights to third party intellectual property rights; |
| --- | --- |
| ● | potential new product candidates we identify and attempt<br>to develop; and |
| --- | --- |
| ● | revenues we may derive either directly or in the form of<br>royalty payments from future sales of PrimeC and any other product candidates. |
| --- | --- |
For more information as to the risks associated with our future funding needs, see “Risk Factors — We will require substantial additional financing to achieve our goals, and a failure to obtain this capital when needed and on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development, commercialization efforts or other operations” in our Annual Report.
Contractual Obligations and Commitments
As of June 30, 2024, we did not have any material contractual obligation and commitments, except for lease agreements with respect to offices. In December 2021, we entered into an office space lease agreement in Herzilya, Israel (which commenced on January 1, 2022). Monthly rent payments including utilities amount to approximately $7 thousand and indexed to CPI. The lease period was for 24 months with an option to extend the lease period for additional two periods of 24 months each. We exercised the first period option, and we expect to exercise the second option for an additional lease period.
Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
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