Business Context and Reporting Period
Company: NewcelX Ltd. (formerly NLS Pharmaceutics Ltd.)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: NewcelX is a clinical-stage biopharmaceutical company focused on developing "off-the-shelf" allogeneic cell therapies. Its lead programs include NCEL-101 (stem cell-derived islets for Type 1 Diabetes) and AstroRx (astrocytes for ALS).
Key Transaction: On October 30, 2025, the Company consummated a reverse acquisition merger with Kadimastem Ltd. For accounting purposes, Kadimastem is the accounting acquirer. The Company also effected a 1-for-10 reverse share split.
Key Financial Metrics
| Metric | 2025 (USD Thousands) | 2024 (USD Thousands) |
|---|---|---|
| Revenue | $0 | $0 |
| Net Loss | $(8,300) | $(7,197) |
| Operating Loss | $(2,562) | $(2,066) |
| Net Financing Expenses | $(5,738) | $(5,131) |
| Cash and Cash Equivalents (Dec 31, 2025) | $2,201 | $650 |
| Total Equity (Dec 31, 2025) | $7,250 | $(7,996) |
| Accumulated Deficit (Dec 31, 2025) | $(84,891) | $(76,591) |
Note: The 2025 Net Loss includes significant non-cash charges related to the fair value remeasurement of derivative liabilities prior to conversion and stock-based compensation.
Material Changes vs. Prior Period
- Merger Impact: The consolidation of NLS Pharmaceutics operations following the October 2025 merger contributed to increased General and Administrative expenses ($1.35M in 2025 vs. $0.81M in 2024), primarily due to public company compliance costs.
- Financing Expenses: Net financing expenses increased by $607K to $5.74M. This was driven by non-cash fair value remeasurements of convertible loan derivatives prior to their full conversion into equity in late 2025.
- Balance Sheet: Total equity turned positive ($7.25M) from a deficit in 2024, driven by the reverse acquisition accounting treatment, cash acquired in the merger, and equity issuances.
- Debt: All convertible loans and related derivative liabilities outstanding in 2024 were fully converted or exercised into equity during 2025, resulting in zero balance for these instruments as of year-end.
Guidance, Outlook, and Risks
- Going Concern: Management has raised substantial doubt about the Company's ability to continue as a going concern. Current cash ($2.2M) is insufficient to fund projected operations for the next 12 months without additional financing.
- Liquidity Strategy: The Company is actively exploring equity or debt financing, strategic partnerships, and asset divestment. A $25M committed equity facility exists, and a $1.35M private placement closed in April 2026 (subsequent event).
- Product Development:
- NCEL-101: Advancing toward Phase 1 for Type 1 Diabetes; entered a strategic collaboration with Eledon Pharmaceuticals for immune modulation.
- AstroRx: FDA approved a Phase 2a multisite study for ALS.
- Key Risks:
- Regulatory: Uncertainty in clinical trial outcomes and regulatory approvals (FDA/EMA).
- Geopolitical: Operations in Israel are exposed to regional security instability and potential disruptions.
- Internal Controls: The Company identified a material weakness in internal control over financial reporting related to insufficient accounting personnel and segregation of duties.
Investor Verification Checklist
- Cash Runway: Verify the utilization status of the $25M equity line of credit and the sufficiency of the April 2026 private placement proceeds to fund operations through 2026.
- Merger Integration: Assess the realization of synergies and the impact of the reverse acquisition on future capital structure and dilution.
- Internal Controls: Monitor the remediation plan for the identified material weakness in financial reporting controls.
- Clinical Milestones: Track the initiation and results of the Phase 2a ALS trial and the Phase 1 preparation for the diabetes program.
- Related Party Transactions: Review the terms of the Aexon Labs license agreement and the conversion of loans from controlling shareholders (Prof. Michel Revel) to ensure fair value and arm's length terms.