Indicate by check mark whether the registrant files
or will file annual reports under cover of Form 20-F or Form 40-F:
This Report of Foreign Private Issuer on Form
6-K consists of the Registrant’s (i) Interim Consolidated Financial Statements as of June 30, 2026, which is attached hereto as
Exhibit 99.1 and (ii) Management’s Discussion and Analysis of Financial Condition and Results of Operations for the six months ended
June 30, 2026, which is attached hereto as Exhibit 99.2.
This Form 6-K is hereby incorporated by reference
into the registrant’s registration statements on F-3 (File Nos. File Nos. 333-282788, 333-268690, 333-269220, 333-295770 and 333-284811)
of the Company, filed with the Securities and Exchange Commission, 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to the extent not superseded by documents or reports subsequently filed or furnished.
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.
Exhibit 99.2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should
be read in conjunction with our unaudited interim condensed financial statements and related notes as of and for the six months ended
June 30, 2026, included as Exhibit 99.1 to this Report on Form 6-K, or this Report. This discussion and other parts of the interim report
contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results and the timing
of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors,
including but not limited to those set forth under Item 3.D. “Risk Factors” in our Annual Report on Form 20-F for the year
ended December 31, 2025, or the 2025 Annual Report, on file with the SEC.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain information included
in this Report may be deemed to be “forward-looking statements.” Forward-looking statements are often characterized by the
use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,”
“continue,” “believe,” “predict,” “should,” “intend,” “project”
or other similar words, but are not the only way these statements are identified.
These forward-looking statements
may include, but are not limited to, statements relating to our objectives, plans and strategies, statements that contain projections
of results of operations or of financial condition, expected capital needs and expenses, statements relating to the research, development,
completion and use of our product candidates, and all statements (other than statements of historical facts) that address activities,
events or developments that we intend, expect, project, believe or anticipate will or may occur in the future.
Forward-looking statements
are not guarantees of future performance and are subject to risks and uncertainties. We have based these forward-looking statements on
assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions,
expected future developments and other factors they believe to be appropriate.
Important factors that could
cause actual results, developments and business decisions to differ materially from those anticipated in these forward-looking statements
include, among other things:
| |
● |
the regulatory pathways that we may elect to utilize in seeking European Medicines Agency, or EMA, the U.S. Food and Drug Administration, or FDA, and other regulatory approvals; |
| |
● |
our ability to drive revenue growth, enhance research and development capabilities, and improve financial performance is subject to uncertainties; |
| |
● |
that our financial position raises substantial doubt about our ability to continue as a going concern; |
| |
● |
our ability to maintain listing and effectively comply with the listing requirements of the Nasdaq; |
| |
● |
changes in technology and market requirements; |
| |
● |
potential delays or obstacles in launching or completing clinical trials, including our expectations regarding the timing of commencing further clinical trials, the process entailed in conducting each such trial, including dosages, and the order of such trials with each of our product candidates or whether such trials will be conducted at all; |
| |
● |
competitive companies, technologies and our industry; |
| |
● |
the development and commercialization, if any, of any other product candidates that we may seek to develop; |
| |
● |
products that may not be approved by regulatory agencies; |
| |
● |
technologies that may not be validated or accepted by the scientific community; |
| |
● |
the inability to retain or attract key employees; |
| |
● |
unforeseen scientific difficulties with products in development; |
| |
● |
the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and our ability to operate our business without infringing the intellectual property rights of others; |
| |
● |
higher-than-expected product costs; |
| |
● |
results in the laboratory that do not translate to clinical success; |
| |
● |
insufficient patent protection; possible adverse safety outcomes; |
| |
● |
our ability to establish and maintain strategic partnerships and other corporate collaborations; |
| |
● |
risks related to changes in healthcare laws, rules and regulations in the United States or elsewhere; |
| |
● |
delays in developing or introducing new technologies, products, or applications; |
| |
● |
competitive pressures that could reduce market share or pricing; |
| |
● |
the overall global political and economic environment in the countries in which we operate; |
| |
● |
security, political and economic instability in the Middle East that could harm our business, including due to the current security situation in Israel; and |
| |
● |
those factors referred to in “Item 3.D. Risk Factors,” “Item 4. Information on the Company,” and “Item 5. Operating and Financial Review and Prospects” in the 2025 Annual Report, as well as in the 2025 Annual Report generally. |
These statements are only current predictions and are subject to known
and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance
or achievements to be materially different from those anticipated by the forward-looking statements. We discuss many of these risks in
this Report in greater detail under Item 3.D. “Risk Factors” in the 2025 Annual Report and elsewhere in the 2025 Annual Report.
You should not rely upon forward-looking statements as predictions of future events. Readers are urged to carefully review and consider
the various disclosures made throughout this Report which are designed to advise interested parties of the risks and factors that may
affect our business, financial condition, results of operations and prospects.
You should not put undue reliance
on any forward-looking statements. Any forward-looking statements in this Report are made as of the date hereof, and we undertake no obligation
to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except
as required by law.
INTRODUCTION
We are a clinical-stage pharmaceutical
company focused on developing and manufacturing “off-the-shelf”, allogeneic, proprietary cell products based on our technology
platform for the expansion and differentiation of hESCs into functional cells.
In this Report, “we,”
“us,” “our,” the “Company” and “NewcelX” refer to NewcelX Ltd., a Swiss corporation, and
its wholly owned subsidiary, NLS Pharmaceutics Inc., a Delaware corporation.
On October 30, 2025, NewcelX (then known as NLS Pharmaceutics Ltd.),
a Swiss corporation, consummated the previously announced transactions pursuant to that certain Agreement and Plan of Merger, dated as
of November 4, 2024 (as amended, the “Merger Agreement”), by and among NewcelX, NLS Pharmaceutics (Israel) Ltd., an
Israeli company and a wholly owned subsidiary of NewcelX (“Merger Sub”), and Kadimastem Ltd., an Israeli company
(“Kadimastem”). The transactions contemplated by the Merger Agreement are hereinafter referred to as the “Merger.”
In connection with the consummation of the Merger (the “Closing”), NewcelX changed its name from “NLS Pharmaceutics
Ltd.” to “NewcelX Ltd.”
Pursuant to the Merger Agreement, among other things, (i) Kadimastem
merged with and into Merger Sub, with Merger Sub as the surviving company, and (ii) at the effective time of the Merger (the “Effective
Time”), each issued and outstanding ordinary share of Kadimastem, no par value (“Kadimastem Ordinary Share”),
was exchanged for and automatically converted into the right to receive from NewcelX that certain number of fully paid and nonassessable
common shares, 0.05 Swiss Franc (CHF) par value per share, of NewcelX (“common share”) as calculated in accordance
with the terms of the Merger Agreement. Pursuant to the Merger Agreement, the holders of Kadimastem ordinary shares outstanding immediately
prior to the Merger received 0.706 NewCelX common shares in exchange for each Kadimastem ordinary share in the Merger. The exchange ratio
also reflects the 1-for-10 reverse share split effected by NewCelX in connection with the Merger. In connection with the consummation
of the Merger, NewcelX changed its name from “NLS Pharmaceutics Ltd.” to “NewcelX Ltd.” Kadimastem was established
as an Israeli company on October 6, 2008. Kadimastem began trading on the TASE in June 2013 and on October 30, 2025 Kadimastem voluntarily
delisted from the Tel Aviv Stock Exchange in connection with the Merger.
PRESENTATION OF FINANCIAL INFORMATION
Our financial statements were
prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). We present
our consolidated financial statements in U.S. dollars.
Our fiscal year ends on December
31 of each year. Our most recent fiscal year ended on December 31, 2025.
Unless otherwise expressly
stated or the context otherwise requires, references in this Report to “dollars,” “USD” or “$” mean
U.S. dollars, references to “NIS” mean to New Israeli Shekels, and references to “CHF” mean the Swiss Franc. Unless
otherwise noted, for the purposes of the presentation of financial data, all conversions from NIS to U.S. dollars and from U.S. dollars
to NIS were made at the rate of NIS 2.978 to $1.00, based on the representative exchange rate reported by the Bank of Israel on June 30,
2026 and all conversions from CHF to U.S. dollars and from U.S. dollars to CHF were made at the rate CHF 1.00 to $1.236, based on the
exchange rate provided by the Swiss Federal Tax Administration on June 30, 2026.
In connection with the Merger,
on October 30, 2025, we effected a 1-for-10 reverse share split of our common shares, preferred shares and preferred participation certificates,
and after giving effect to such reverse share split, changed the par value of our common shares to CHF 0.05 per share. All historical
quantities of common shares and per share data herein are presented on a post-split basis to give effect to the aforementioned reverse
share split.
Overview
NewcelX is an innovative clinical stage biopharmaceutical company,
with a unique platform for cell therapy that enables the production of off-the-shelf cell-based products for the treatment of unmet medical
needs. NewcelX is focused on developing transformative stem-cell-derived therapies for Type 1 Diabetes. Built on a validated human pluripotent
stem cell (hPSC) platform, the Company’s lead program, NCEL-101, is designed to restore functional insulin production through scalable,
off-the-shelf cell replacement. NewcelX is advancing a comprehensive therapeutic approach for Type 1 Diabetes integrating cell therapy,
immune protection, and translational science to address critical unmet medical needs.
NewcelX operates in the field of development of cell therapy and regenerative
medicine. Regenerative medicine is an innovative medical research field that focuses on regeneration of tissue or organs harmed due to
disease, injury or due to birth defects in patients, using one of the following two ways: (1) creating new cells, organ parts or tissues
under laboratory conditions, or using donor cells, organs or parts of organs transplanted into the patient’s body in order to replace
the cells or tissues damaged by disease; (2) finding and developing drugs that will help induce a process of spontaneous regeneration
of the damaged tissue/organ by encouraging the adult stem cells that are regularly present in the tissue, divide, differentiate and take
their place in the affected area.
NewcelX is developing revolutionary regenerative therapies based on
stem cells-derived therapeutic cells, in addition to the traditional curative therapies. The stem cells-derived therapeutics technology
has been developed as a platform enabling the manufacturing of islet-like endocrine cells and glia restricted progenitors thus having
potential applications for diabetes, and for neurodegenerative diseases such as ALS. The therapies are scalable and industrialized,
to be commercialized as a stable “off the shelf” product and reduce the cost of treatments. For this, NewcelX uses pluripotent
cells (e.g. embryonic stem cells - hESCs) that have a unique ability to multiply infinitely without losing their “naivety”
and to be able to become any cell type. The cell therapy products are manufactured under Good Manufacturing Practices, or GMP, guidelines
(similar to traditional therapeutics) in order to reach optimal clinical results. NewcelX developed a novel process to differentiate the
cells in the lab to their mature phenotype, before their implantation into the patient, thus enabling the cells to confer their function
immediately post treatment. Thus, NewcelX believes that its process will markedly enhance the efficiency of the treatment.
NewcelX’s vision is to:
| |
● |
Develop and commercialize its stem cell-based therapies to treat or cure Type 1 Diabetes (T1D). (Stem cell derived islets); |
| |
● |
Replace, restore and repair the functionality of diseased and malfunctioning cells in various degenerative diseases by transplantation of healthy and functional cells; |
| |
● |
Commercialize its proprietary cell lines optimized for the treatment of ALS, and other neurodegenerative diseases; and |
| |
● |
Utilize the DOXA small molecules platform for clinical development of drug candidates, primarily for narcolepsy, neuroinflammation and DANS (Diabetes-Associated Neurological Disorders). |
NewCelX is primarily focused on the development of NCEL-101, its lead
cell therapy program for the treatment of Type 1 diabetes, while also maintaining a broader portfolio of cell therapy assets and development
programs.
NCEL-101 – Type 1 Diabetes
| |
|
NCEL-101
is NewCelX’s lead development program and primary strategic focus. NCEL-101 is comprised of enriched pancreatic islet cells,
including functional insulin- and glucagon-producing and releasing cells, intended for the treatment of patients with Type 1 diabetes
and potentially insulin-dependent Type 2 diabetes. |
| |
|
|
| |
|
The Company
is currently advancing NCEL-101 through IND-enabling development toward planned clinical development. Other diabetes programs are
also in the Company’s pipeline, including programs being pursued in collaboration with academic and commercial partners. |
| |
|
|
| |
|
The Company
recently appointed Dr. Julien Boisdron, Chief Medical Officer of Roche Switzerland, to its Scientific Advisory Board. Dr. Boisdron
brings more than two decades of global leadership in diabetes care and is expected to support the strategic advancement of the Company’s
NCEL-101 Type 1 Diabetes program. |
AstroRx®
| |
|
AstroRx® is NewCelX’s clinical-stage platform validation asset for the
treatment of ALS. AstroRx® is an off-the-shelf cryopreserved cell therapy comprised of fully differentiated astrocytes, the primary
supportive cells of the central nervous system. The program has undergone clinical development in ALS and has also been evaluated
preclinically in other neurodegenerative indications. |
On July 1, 2026, we successfully completed a Type B Pre-IND meeting
with the FDA regarding our clinical development plan for NCEL-101 in combination with Eledon Pharmaceuticals’ tegoprubart for the
treatment of Type 1 Diabetes. The FDA provided positive feedback and consensus on the regulatory pathway, preclinical data, and proposed
Phase 1/2a clinical trial design, providing a clear roadmap toward the submission of an Investigational New Drug (IND) application.
For more information regarding
our business and operations, see “Item 4B. Business Overview” in the 2025 Annual Report.
Recent Developments
Merger with Kadimastem
On October 30, 2025, NewcelX (then known as NLS Pharmaceutics Ltd.),
a Swiss corporation, consummated the previously announced transactions pursuant to that certain Merger Agreement by and among NewcelX,
Merger Sub and Kadimastem. In connection with the Closing of the Merger, NewcelX changed its name from “NLS Pharmaceutics Ltd.”
to “NewcelX Ltd.”
Pursuant to the Merger Agreement,
the holders of Kadimastem ordinary shares outstanding immediately prior to the Merger received 0.706 NewCelX common shares in exchange
for each Kadimastem ordinary share in the Merger.
Pursuant to the Merger Agreement, among other things, (i) Kadimastem
merged with and into Merger Sub, with Merger Sub as the surviving company, and (ii) at the Effective Time of the Merger, each issued
and outstanding Kadimastem Ordinary Share was exchanged for and automatically converted into the right to receive from NewcelX that certain
number of fully paid and nonassessable common shares, as calculated in accordance with the terms of the Merger Agreement. In connection
with the consummation of the Merger, NewcelX changed its name from “NLS Pharmaceutics Ltd.” to “NewcelX Ltd.”
Kadimastem was established as an Israeli company on October 6, 2008. Kadimastem began trading on the TASE in June 2013 and on October
30, 2025, Kadimastem voluntarily delisted from the Tel Aviv Stock Exchange in connection with the Merger.
Committed Equity Facility
On March 31, 2025, we entered into a common shares purchase agreement
with Alpha Capital Anstalt, or Alpha and the Facility SPA, relating to a committed equity facility. Pursuant to the Facility SPA, we have
the right from time to time at our option to sell to Alpha up to $25.0 million of our common shares, subject to certain conditions and
limitations set forth in the Facility SPA.
Upon the initial satisfaction of the conditions to Alpha’s obligation
to purchase common shares set forth in the Facility SPA, or the Commencement, including that a registration statement registering the
resale by Alpha of the common shares under the Securities Act that may be sold to it by us under the Facility SPA, or the Initial Resale
Registration Statement, is declared effective by the SEC and a final prospectus relating thereto is filed with the SEC, we will have the
right, but not the obligation, from time to time at our sole discretion until the first day of the month next following the 36-month period
from and after Commencement, to direct Alpha to purchase up to a specified maximum amount of common shares as set forth in the Facility
SPA by delivering written notice to Alpha prior to the commencement of trading on any trading day. The purchase price of the common shares
that we elect to sell to Alpha pursuant to the Facility SPA will be 95% of the volume weighted average price of the common share during
the applicable purchase date on which we have timely delivered written notice to Alpha directing it to purchase common share under the
Facility SPA.
In connection with the execution
of the Facility SPA, we issued a pre-funded warrant to purchase $250,000 common share to Alpha as consideration for its irrevocable commitment
to purchase the common shares upon the terms and subject to the satisfaction of the conditions set forth in the Facility SPA.
April 2026 Private Placement
On April 1, 2026, we entered
into definitive securities purchase agreements for a private placement financing in the amount of $1.35 million with certain accredited
investors, or the April 2026 PIPE, pursuant to which we issued and sold 272,726 common shares and 218,181 pre-funded warrants at a purchase
price of $2.75 per share and per pre-funded warrant. Each common share and pre-funded warrant was issued with a common warrant to purchase
up to an aggregate of 687,270 common shares at an exercise price of $3.025 per share. The common warrants shall have a term of five years.
The pre-funded warrants have an exercise price of $0.06 per share and will not expire until exercised in full. Aggregate gross proceeds
from the April 2026 PIPE were $1.35 million. Cash exercise of the warrants in full would result in an additional approximately $2.1 million
in gross proceeds to the Company. The April 2026 PIPE closed on April 27, 2026.
In connection with the April
2026 PIPE, down-round protection provisions contained in certain legacy NLS preferred shares, preferred participation certificates (PPCs)
and warrants were triggered, reducing the applicable conversion and exercise prices to $2.75 per share. These adjustments increased the
number of shares issuable upon conversion of the preferred shares and PPCs from 61,855 to 371,130 shares and increased the number of shares
underlying certain warrants by 655,373 shares, while other affected warrants experienced only a reduction in exercise price. See Note
6 to the Company’s unaudited condensed consolidated interim financial statements.
July 2026 Private Placement
On July 31, 2026, we entered into definitive securities purchase agreements
for a private placement financing in the amount of $1.4 million with certain accredited investors, or the July 2026 PIPE, pursuant to
which we issued and sold 347,134 common shares at a purchase price of $4.033 per share. Each common share was issued with a common warrant
to purchase up to an aggregate of 347,134 common shares at an exercise price of $4.437 per share. The common warrants shall have a term
of five years.
Aggregate gross proceeds from
the July 2026 PIPE were $1.4 million. Cash exercise of the warrants in full would result in an additional approximately $1.5 million in
gross proceeds to the Company.
The July 2026 PIPE closed
on August 10, 2026.
Components of Operating Results
Operating Expenses
Our current operating expenses mainly consist of two components: research
and development expenses and general and administrative expenses.
Research and Development Expenses, net
Our research and development
expenses are expensed as incurred and consist primarily of costs of third-party clinical consultants who conduct clinical and pre-clinical
trials on our behalf and expenses related to lab supplies, materials and facility costs.
Clinical trial costs are a
major component of research and development expenses. We accrue and expense clinical trial activities performed by third parties based
upon actual work completed in accordance with agreements established with clinical research organizations and clinical sites. We determine
the actual costs through monitoring patient enrollment and discussions with internal personnel and external service providers as to the
progress or stage of completion of trials or services and the agreed-upon fee to be paid for such services.
Our research and development
expenses have materially increased and will continue to increase as we advance the clinical development of our lead product candidate,
NCEL-101 for the treatment of type 1 diabetes. In addition, we expect to incur ongoing research and development expenses related to our
other proprietary platforms and pipeline assets, as well as potential new research initiatives, which may include recruiting additional
research and development personnel.
General and Administrative Expenses
General and administrative
expenses include personnel costs, expenses for outside professional services, and all other general and administrative expenses. Personnel
costs consist of salaries, cash bonuses and benefits. Outside professional services consist of legal fees (including intellectual property
and corporate matters), accounting and audit services, IT and other consulting fees.
Finance Expense and Income
Financial expenses primarily consist of exchange rate differences and
interest expenses related to a bank loan.
Taxation
As of June 30, 2026, the Company had significant tax loss carryforwards
resulting from its research and development activities and historical operations.
In Switzerland, we are subject
to corporate Swiss federal, cantonal and communal taxation in the Canton of Zurich, Switzerland. We are entitled under Swiss laws to carry
forward any losses incurred for a period of seven years and can offset our losses carried forward against future taxes. As of June 30,
2026, we had tax loss carryforwards totaling $65.2 million. There is no certainty that we will make sufficient profits to be able to utilize
these tax loss carryforwards in full. As such, we have recorded a 100% valuation on these tax loss carryforwards. The statutory corporate
income tax rate (cantonal and communal) where we are domiciled is currently 10.6%, in addition to statutory federal corporate tax of 8.5%.
Notwithstanding the corporate income tax, the corporate capital is taxed at a rate of 0.1% (cantonal and communal tax only, as there is
no federal tax on capital). Value Added Tax, or VAT, is charged on all qualifying goods and services by VAT-registered businesses. An
amount of 8.1% of the value of the goods or services is added to all sales invoices and is payable to the Swiss tax authorities. Similarly,
VAT paid on purchase invoices is reclaimable from the Swiss tax authorities.
Our Israeli subsidiary is subject to the corporate and taxation laws
of the State of Israel. As of June 30, 2026, our net operating loss carryforwards for Israeli tax purposes registered on behalf of our
Israeli subsidiary amounted to approximately $81 million. Under Israeli law, these net-operating losses may be carried forward indefinitely
and offset within our Israeli subsidiary only, against future taxable income, with no expiration date. There is no certainty that we will
make sufficient profits to be able to utilize these tax loss carryforwards in full. As such, we have recorded a 100% valuation on these
tax loss carryforwards.
Factors Affecting Our Performance and Related
Trends
We believe that the key factors
affecting our performance and financial performance include:
NewcelX’s ability to generate revenue
from a product candidate
NewcelX’s ability to
become profitable depends upon NewcelX’s ability to generate revenue. To date, NewcelX has not generated any revenue from NewcelX’s
development stage product candidates, AstroRx® and/or NCEL-101. In order to generate significant revenue, it will need to obtain additional
regulatory approvals in jurisdictions within which it already has certain regulatory approvals, and also in jurisdictions in which it
currently has no regulatory approvals to market NewcelX’s products.
NewcelX’s ability to
obtain regulatory approval for its drug substances and product candidates, which is necessary before they can be commercialized.
NewcelX’s ability to
procure regulatory approvals for its product candidates is critical to its success. NewcelX has invested almost all of its efforts and
financial resources in research and development of NewcelX’s drug substances, as defined by the Harmonised Tripartite Guideline
for Good Clinical Practice (ICH-GCP E6), and product candidates and general and administrative costs. NewcelX’s portfolio comprises
a clinical program, AstroRx®, human astrocytes derived from pluripotent stem cells for the treatment of neurodegenerative diseases
such as ALS, as well as a preclinical proof of concept program, NCEL-101, human pancreatic islet like clusters for the treatment of insulin
dependent diabetes.
NewcelX’s ability to maintain sufficient cash to fund its projected
operating requirements.
NewcelX’s ability to
maintain sufficient current cash on hand to fund its projected operating requirements is critical to its success. Until NewcelX can generate
significant revenues, if ever, it expects to satisfy its future cash needs through debt or equity financing. NewcelX cannot be certain
that additional funding will be available to it on acceptable terms, if at all. If funds are not available, NewcelX may be required to
delay, reduce the scope of, or eliminate research or development plans for, or commercialization efforts with respect to its products.
Results of Operations
The numbers below have
been derived from our unaudited interim condensed financial statements included elsewhere in this Report. The discussion below should
be read along with these financial statements, and it is qualified in its entirety by reference to them.
Comparison of the Six Months Ended June
30, 2026 and 2025
The table below provides NewcelX’s
results of operations for the periods indicated (according to US GAAP).
| | |
June 30, | |
| | |
2026 | | |
2025 | |
| | |
$ (USD) Thousands | |
| Revenues | |
| — | | |
| — | |
| Cost of revenues | |
| — | | |
| — | |
| Gross profit | |
| — | | |
| — | |
| Research and development expenses, net | |
| (1,168 | ) | |
| (576 | ) |
| Marketing expenses | |
| — | | |
| — | |
| General and administrative expenses | |
| (1,663 | ) | |
| (685 | ) |
| Other Expenses (expenses for merger with NLS) | |
| — | | |
| (101 | ) |
| Operating loss | |
| (2,831 | ) | |
| (1,362 | ) |
| Financing expenses related to the convertible instruments | |
| — | | |
| (9,923 | ) |
| Other financial income (expenses), net | |
| (69 | ) | |
| 30 | |
| Net Financing expenses | |
| (69 | ) | |
| (9,893 | ) |
| Loss before taxes on income | |
| (2,900 | ) | |
| (11,255 | ) |
| Tax benefit | |
| — | | |
| — | |
| Total loss | |
| (2,900 | ) | |
| (11,255 | ) |
Revenues
NewcelX had no revenues from
operations in each of the six-month periods ended June 30, 2026 and June 30, 2025.
Cost of Revenues
NewcelX had no costs of revenues
from operations in each of the six-month periods ended June 30, 2026 and June 30, 2025.
Research and Development Expenses, net
Research and development expenses were $1,168 thousand for the six-months
ended June 30, 2026, representing an increase of $592 thousand compared to $576 thousand for the six-months ended June 30, 2025. The increase
was primarily attributable to the expansion of the Company’s research and development activities following the merger with NLS,
as well as the advancement of NCEL-101, the Company’s lead development program and primary R&D focus, for the treatment of Type
1 diabetes (T1D).
Marketing Expenses
NewcelX had no sales and marketing
expenses in each of the six-month periods ended June 30, 2026 and June 30, 2025.
General and Administrative Expenses
General and administrative
expenses for the six months ended June 30, 2026 were $1,663 thousand, representing an increase of $978 thousand compared to $685 thousand
for the six months ended June 30, 2025. The increase was primarily attributable to the inclusion of NLS’s general and administrative
expenses following the completion of the merger, including increased costs associated with operating as a Nasdaq-listed public company,
primarily legal, accounting and other professional fees, as well as increased business development expenses.
Other Expenses (Expenses for merger with
NLS)
We incurred no merger-related
expenses for the six months ended June 30, 2026, compared to $101 thousand for the six months ended June 30, 2025. This decrease was due
to the completion of the merger with NLS on October 30, 2025.
Operating Loss
Operating loss for the six
months ended June 30, 2026, was $2,831 thousand, representing an increase of $1,469 thousand compared to $1,362 thousand for the six
months ended June 30, 2025. The increase in operating loss was primarily driven by the inclusion of NLS operations following the Merger,
which included public company compliance costs for the first time (mainly legal and accounting-related expenses), continued clinical
development of our lead NCEL-101 program for T1D , as well as increased of business development expenses.
net financing expenses
Finance expenses, net, were $69 thousand for the six months ended June 30, 2026, representing a decrease of $9,824
thousand compared to $9,893 thousand for the six months ended June 30, 2025. The decrease was primarily attributable to non-cash finance
expenses recognized in the corresponding period in 2025 in connection with the fair value remeasurement of conversion features associated
with convertible loans that were outstanding prior to the Merger. These convertible loans were subsequently fully converted in connection
with the Merger and are no longer outstanding. Finance expenses for the six months ended June 30, 2026 primarily consisted of foreign
exchange differences and interest expense related to outstanding borrowings.
Total Loss
The net loss for the six months ended June 30, 2026 was $2,900 thousand, representing a decrease of $8,355 thousand
compared to a net loss of $11,255 thousand for the six months ended June 30, 2025. The decrease in net loss was primarily attributable
to non-cash finance expenses recognized in the corresponding period in 2025 related to the fair value remeasurement of conversion features
associated with convertible loans that were outstanding prior to the Merger. These convertible loans were fully converted as part of the
Merger and are no longer outstanding. The decrease was partially offset by higher operating expenses following the Merger, primarily reflecting
the expansion of the Company’s operations, increased development activities related to NCEL-101, and the additional costs associated
with operating as a Nasdaq-listed public company.
Liquidity and Capital Resources
Overview
Cash and cash equivalents
as of June 30, 2026 were $710 thousand, representing a decrease of $1,491 thousand compared to $2,201 thousand as of June 30, 2025. The
decrease was primarily attributable to cash used in operating activities, including expenditures related to the advancement of NCEL-101,
the Company’s lead development program for the treatment of Type 1 diabetes. Subsequent to June
30, 2026, the Company raised approximately $1.4 million in gross proceeds through a private placement. For additional information, see
“July 2026 Private Placement ” above.
The table below summarizes our cash flows for the six-month
periods ended June 30, 2026 and 2025:
| | |
June 30, | |
| | |
2026 | | |
2025 | |
| | |
$ (USD) Thousands | |
| Net cash used in operating activities | |
$ | (2,872 | ) | |
$ | (602 | ) |
| Net cash provided (used in) investing activities | |
| - | | |
| - | |
| Net cash provided by financing activities | |
$ | 1,366 | | |
$ | 278 | |
| Net increase (decrease) in cash and cash equivalents | |
$ | (1,506 | ) | |
$ | (324 | ) |
Operating Activities
Net cash used in operating
activities for the six months ended June 30, 2026, was $2,872 thousand, representing an increase of $2,270 thousand compared to $602 thousand
for the six months ended June 30, 2025.
The increase in cash used
in operating activities was primarily driven by higher operating cash burn following the first-time consolidation of NLS operations, public
company compliance costs, and continued clinical development of our lead NCEL-101 program for T1D, as well as working capital changes.
Investing Activities
Net cash provided by (used
in) investing activities was $0 for both the six months ended June 30, 2026 and June 30, 2025.
Financing Activities
Net cash provided by financing
activities for the six months ended June 30, 2026, amounted to $1,366 thousand, representing an increase of $1,088 thousand compared to
$278 thousand for the six months ended June 30, 2025. This increase was primarily driven by proceeds from the issuance of share capital
and warrants (net of issuance costs) received during the current period.
Current Outlook
NewcelX is a research and development entity that, since its inception,
has financed its operations primarily through the sale of equity securities, debt financing, convertible loans and royalty-bearing grants.
NewcelX’s primary requirements for liquidity and capital are to finance working capital, capital expenditures and general corporate
purposes. We have incurred losses and generated negative cash flows from operations since inception and to date, we have not generated
revenues, and we do not expect to generate any significant revenue from the sale of our product candidates in the near future.
We have incurred significant operating losses since inception and have
not yet generated revenue from our core operations. During the six months ended June 30, 2026, we incurred a net loss of $2.9 million
and used approximately $2.9 million of cash in operating activities. As of June 30, 2026, we had an accumulated deficit of $90.5 million.
Historically, we have devoted substantially all of our financial resources to research and development activities, including clinical
studies in the field of regenerative medicine, as well as general and administrative functions necessary to support our operations.
As of June 30, 2026, our total shareholders’
equity was approximately $6.0 million, which included cash and cash equivalents of $0.7 million . We also had access to an existing equity
line of credit facility with a maximum commitment amount of up to $25.0 million, subject to the terms and conditions of the facility.
In addition, subsequent to the balance sheet date, in July 2026, we entered into securities purchase agreements providing for gross proceeds
of approximately $1.4 million in a private placement financing.
We expect to continue to incur operating losses
and generate negative cash flows from operations for the foreseeable future as we advance our clinical development programs and pursue
commercialization opportunities. Accordingly, we will require additional capital to fund our operations and execute our business strategy.
We are evaluating a range of strategic and financing alternatives, including additional equity or debt financings, strategic collaborations
and partnerships, and potential licensing, divestiture or other monetization transactions involving certain assets.
Based on our current operating plan, management believes that our existing
cash resources, together with available financing sources, may not be sufficient to fund our operations and capital requirements for at
least the next twelve months. Our ability to continue operating as planned will depend on our ability to obtain additional funding on
acceptable terms and on a timely basis. There can be no assurance that such financing or strategic transactions will be available when
needed, in sufficient amounts, or on terms favorable to us. As a result, substantial doubt exists regarding our ability to continue as
a going concern.
Our future capital requirements will be affected by many factors, including our revenue growth, the timing and
extent of investments to support such growth, the development and regulatory approval of our products, and many other factors as described
under “Item 3.D—Risk Factors” in the 2025 Annual Report.
Off-Balance Sheet Arrangements
We have not engaged in any
off-balance sheet arrangements, such as the use of unconsolidated subsidiaries, structured finance, special purpose entities or variable
interest entities.
Quantitative and Qualitative Disclosure About
Market Risk
We are exposed to market risks
in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse
changes in financial market prices and rates. Our current investment policy is to invest available cash in bank deposits with banks that
have a credit rating of at least A-. Accordingly, a substantial majority of our cash and cash equivalents is held in deposits that bear
interest. Given the current low rates of interest we receive, we will not be adversely affected if such rates are reduced. Our market
risk exposure is primarily a result of foreign currency exchange rates, which is discussed in detail in the following paragraph.
Interest Rate Risk
NewcelX does not anticipate
undertaking any significant long-term borrowings. At present, NewcelX’s investments consist primarily of cash and cash equivalents
and financial assets at fair value.
NewcelX may invest in investment-grade
marketable securities with maturities of up to three years, including commercial paper, money market funds, and government/non-government
debt securities. The primary objective of NewcelX’s investment activities is to preserve principal while maximizing the income that
it receives from its investments without significantly increasing risk and loss. NewcelX’s investments are exposed to market risk
due to fluctuation in interest rates, which may affect its interest income and the fair market value of its investments, if any. NewcelX
manages this exposure by performing ongoing evaluations of its investments. Due to the short-term maturities, if any, of its investments
to date, their carrying value has always approximated their fair value. If NewcelX decides to invest in investments other than cash and
cash equivalents, it will be its policy to hold such investments to maturity in order to limit its exposure to interest rate fluctuations.
Foreign Currency Exchange Risk
We are exposed to market risk
associated with foreign currency exchange rate fluctuations. The functional currency of our Swiss parent company is the U.S. Dollar, while
the functional currency of our Israeli subsidiary is the New Israeli Shekel (NIS). Because our reporting currency is the U.S. Dollar,
the financial statements of our Israeli subsidiary are translated into U.S. Dollars for consolidation purposes. This creates exposure
to currency exchange fluctuations, particularly when the NIS strengthens against the U.S. Dollar. A significant portion of our consolidated
operating expenses, primarily employee salaries and facility leases in Israel, are incurred in NIS. Accordingly, an appreciation of the
NIS against the U.S. Dollar increases the U.S. dollar cost of our Israeli operations, which may adversely affect our results of operations
and increase our net loss.
We do not hedge our foreign
currency exchange risk. In the future, we may enter into formal currency hedging transactions to decrease the risk of financial exposure
from fluctuations in the exchange rates of our principal operating currencies. These measures, however, may not adequately protect us
from the material adverse effects of such fluctuations.
JOBS Act Accounting Election
Under the Jumpstart Our Business
Startups Act of 2012, or the JOBS Act, an emerging growth company, or an EGC, can delay adopting new or revised accounting standards issued
subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have irrevocably elected
to avail ourselves of this exemption from new or revised accounting standards, and, therefore, will not be subject to the same new or
revised accounting standards as public companies that are not EGCs.
Critical Accounting
Estimates
Our management’s discussion
and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance
with generally accepted accounting principles, or U.S. GAAP. The preparation of these financial statements requires us to make judgments
and estimates that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the
date of the financial statements, as well as the expenses incurred during the reporting periods. Our estimates are based on our historical
experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results
may differ from these judgments and estimates under different assumptions or conditions and any such differences may be material. There
have been no material changes to our critical accounting policies and estimates of and for the year ended December 31, 2025, included
in our 2025 Form 20-F.
11
