The Company 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.

To support 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.

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 longer.

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.

Ordinary shares confer upon their holders the right to participate and vote in general shareholder meetings of the Company and the right to receive dividends, if any, declared by the Company.

Shares Issuances:

The Private Placement closed on April 1, 2025, following the satisfaction of customary closing conditions. The aggregate gross proceeds to the Company from the Private Placement were $17,000 thousand (approximately $15,097 thousand, net of issuance costs).

Each Ordinary Unit consists of (i) one of the Company’s ordinary shares and (ii) one series A warrant to purchase one ordinary share (the “Series A Warrant”). Each Pre-Funded Unit consists of (i) one pre-funded warrant to purchase one ordinary share (the “Pre-Funded Warrant”) and (ii) one Series A Warrant. As such, the Company issued 8,984 ordinary shares, 132,683 prefunded warrants and 141,667 Series A Warrants.

The initial exercise price of each Series A Warrant is $300 per share or pursuant to an alternative cashless exercise option pursuant to which the warrant holder would receive an aggregate number of shares equal to the aggregate number Ordinary Shares that would be issuable upon a cash exercise of the Series A Warrant and multiplied by 3.0. The Series A Warrants have a term of 30 months and became exercisable following shareholder approval of a (i) consent to an increase in the number of authorized ordinary shares under the Company’s Amended and Restated Articles of Association from 20,000,000 ordinary shares, with no par value, to 2,000,000,000 Ordinary Shares, with no par value and (b) consent to the Company effecting a reverse share split of our issued and outstanding ordinary shares (but not the authorized ordinary shares) in the range of a ratio of up to 1:250, in one or more increments within the eighteen month period following such shareholder approval. Such shareholder approval at the Company’s annual general meeting of shareholders that was held on April 17, 2025. The number of securities issuable under the Series A Warrant is subject to certain adjustments and certain anti-dilution protection as described in more detail in the Series A Warrant.

On March 31, 2025, the Company also entered into an exchange agreement (the “Exchange Agreement”) with certain holders (the “Holders”) of warrants to purchase ordinary shares previously issued by the Company in October 2024 (“IPO warrants”). Under the Exchange Agreement, the Holders agreed to exchange with the Company 15,705 existing warrants for 15,705 new warrants to purchase ordinary shares, substantially in the form of the Series A Warrants (the “Exchange Warrants”).

As part of the Private Placement (see Note 4a), the Company issued 141,667 Series A Warrants and 15,705 Exchange Warrants.

The Series A Warrants and Exchange Warrants terms did not meet the US GAAP criteria for equity classification as the number of ordinary shares to be issued upon exercise of the warrants and the exercise price of such warrants are subject to certain adjustments and certain anti-dilution protection that depend on the then-current share price, subject to a floor price. Accordingly, The Series A Warrants and Exchange Warrants were initially recognized as a liability at fair value. The Series A Warrants and Exchange Warrants were subsequently measured at fair value at each reporting date with changes in fair value recognized as financial income (loss) in the statements of comprehensive loss.

At initial recognition, the Company recorded an amount of $16,388 thousand as warrant liability.

The fair value of the liability in respect to the warrants at their issuance date was determined by using the Binomical model according to a third-party appraiser valuation.

All outstanding share options and warrants (except for prefunded warrants) for the period ended June 30, 2025 and 2024 have been excluded from the calculation of the diluted net loss per share, because all such securities are anti-dilutive for all periods presented.