[S-1] Silexion Therapeutics Corp Files IPO Registration Statement
Filing Impact
Filing Sentiment
Form Type
S-1
Rhea-AI Filing Summary
Silexion Therapeutics Corp filed an S-1 registration for an offering of ordinary shares, pre-funded warrants and ordinary warrants under Nasdaq tickers SLXN and SLXNW. The company is a development-stage RNAi therapeutics firm focused on KRAS-silencing candidates, including first-generation siG12D-LODER (Phase 1/2 data showing a numerical OS advantage in KRAS G12D/V patients) and second-generation SIL204 (preclinical stability, PK and in vivo efficacy data).
Financially, Silexion reported net losses of $16.5 million for 2024 (vs. $5.1 million in 2023) and had $3.5 million in cash as of June 30, 2025. Management states there is substantial doubt about the companys ability to continue as a going concern without additional financing. The S-1 discloses potential dilution from existing warrants, a $3.433 million promissory note convertible into shares, and an equity line (White Lion) that could issue up to $11.9 million of shares.
Silexion Therapeutics Corp ha depositato un modulo S-1 per un collocamento di azioni ordinarie, warrant pre-finanziati e warrant ordinari con i ticker Nasdaq SLXN e SLXNW. La società è una realtà in fase di sviluppo che lavora su terapie RNAi mirate al silenziamento di KRAS, con candidati come la prima generazione siG12D-LODER (dati di Fase 1/2 che mostrano un vantaggio numerico di OS nei pazienti con KRAS G12D/V) e la seconda generazione SIL204 (dati preclinici su stabilità, farmacocinetica ed efficacia in vivo).
Dal punto di vista finanziario, Silexion ha riportato perdite nette per 16,5 milioni di dollari nel 2024 (contro 5,1 milioni nel 2023) e disponeva di 3,5 milioni di dollari in contanti al 30 giugno 2025. La direzione dichiara che esistono seri dubbi sulla capacità dell'azienda di proseguire l'attività senza finanziamenti aggiuntivi. L'S-1 rivela potenziale diluizione da warrant esistenti, una nota di credito da 3,433 milioni di dollari convertibile in azioni e una linea di capitale (White Lion) che potrebbe emettere fino a 11,9 milioni di dollari di azioni.
Silexion Therapeutics Corp presentó un registro S-1 para una oferta de acciones ordinarias, warrants prefinanciados y warrants ordinarios bajo los tickers de Nasdaq SLXN y SLXNW. La compañía está en fase de desarrollo y se centra en terapias RNAi para silenciar KRAS, con candidatos como la primera generación siG12D-LODER (datos de Fase 1/2 que muestran una ventaja numérica de OS en pacientes con KRAS G12D/V) y la segunda generación SIL204 (datos preclínicos de estabilidad, PK y eficacia in vivo).
En cuanto a lo financiero, Silexion reportó pérdidas netas de 16,5 millones de dólares en 2024 (frente a 5,1 millones en 2023) y contaba con 3,5 millones de dólares en efectivo al 30 de junio de 2025. La dirección manifiesta dudas sustanciales sobre la capacidad de la empresa para continuar como negocio en marcha sin financiación adicional. El S-1 revela dilución potencial por warrants existentes, un pagaré por 3,433 millones de dólares convertible en acciones y una línea de capital (White Lion) que podría emitir hasta 11,9 millones de dólares en acciones.
Silexion Therapeutics Corp는 보통주, 선지급 워런트 및 보통 워런트의 공모를 위한 S-1 등록서를 Nasdaq 티커 SLXN 및 SLXNW로 제출했습니다. 이 회사는 KRAS 침묵화 후보물질에 중점을 둔 개발 단계의 RNA 간섭(RNAi) 치료제 회사로, 1세대 siG12D-LODER(임상 1/2상 데이터에서 KRAS G12D/V 환자들의 전체생존(OS)에서 수치적 우위)과 2세대 SIL204(전임상 안정성, 약동학 및 in vivo 효능 데이터)를 보유하고 있습니다.
재무적으로 Silexion은 2024년에 1,650만 달러의 순손실을 보고했으며(2023년 510만 달러), 2025년 6월 30일 기준 현금은 350만 달러였습니다. 경영진은 추가 자금 조달 없이는 기업의 계속 존속 능력에 중대한 의문이 있다고 밝혔습니다. S-1에는 기존 워런트로 인한 잠재적 희석, 주식으로 전환 가능한 343만3,000달러의 약속어음, 최대 1,190만 달러 상당의 주식을 발행할 수 있는 자본 라인(White Lion)이 공개되어 있습니다.
Silexion Therapeutics Corp a déposé un enregistrement S-1 pour une offre d'actions ordinaires, de bons de souscription préfinancés et de bons de souscription ordinaires sous les tickers Nasdaq SLXN et SLXNW. La société est en phase de développement et se concentre sur des thérapies RNAi visant à silencier KRAS, avec des candidats tels que la première génération siG12D-LODER (données de phase 1/2 montrant un avantage numérique en OS chez les patients KRAS G12D/V) et la deuxième génération SIL204 (données précliniques de stabilité, PK et efficacité in vivo).
Sur le plan financier, Silexion a déclaré des pertes nettes de 16,5 millions de dollars pour 2024 (contre 5,1 millions en 2023) et disposait de 3,5 millions de dollars en liquidités au 30 juin 2025. La direction indique qu'il existe un doute substantiel quant à la capacité de la société à poursuivre son activité sans financement supplémentaire. Le S-1 divulgue une dilution potentielle due aux bons existants, une reconnaissance de dette de 3,433 millions de dollars convertible en actions et une ligne de capitaux (White Lion) qui pourrait émettre jusqu'à 11,9 millions de dollars d'actions.
Silexion Therapeutics Corp hat ein S-1-Registrierungsformular für ein Angebot von Stammaktien, vorfinanzierten Warrants und Stammwarrants unter den Nasdaq-Tickern SLXN und SLXNW eingereicht. Das Unternehmen befindet sich in der Entwicklungsphase und konzentriert sich auf RNAi-Therapeutika zur KRAS-Stilllegung, darunter die erste Generation siG12D-LODER (Phase-1/2-Daten zeigen einen numerischen OS-Vorteil bei KRAS G12D/V-Patienten) und die zweite Generation SIL204 (präkklinische Daten zu Stabilität, Pharmakokinetik und Wirksamkeit in vivo).
Finanziell meldete Silexion Nettoversluste von 16,5 Millionen US-Dollar für 2024 (gegenüber 5,1 Millionen im Jahr 2023) und verfügte per 30. Juni 2025 über 3,5 Millionen US-Dollar in bar. Das Management erklärt, es bestehe erhebliche Unsicherheit über die Fähigkeit des Unternehmens, ohne zusätzliche Finanzierung als Fortführungsunternehmen tätig zu bleiben. Das S-1 weist auf mögliche Verwässerung durch bestehende Warrants, eine in Aktien wandelbare Schuldscheinforderung in Höhe von 3,433 Millionen US-Dollar und eine Kapitallinie (White Lion) hin, die bis zu 11,9 Millionen US-Dollar an Aktien ausgeben könnte.
Positive
- Clinical signal: Phase 2 siG12D-LODER data showed a numerical median overall survival increase (13.4 to 22.7 months) in the KRAS G12D/V subgroup, indicating potential efficacy.
- SIL204 preclinical profile: improved stability (>48 hours in human serum), prolonged plasma/tissue levels (>56 days in rats) and in vivo tumor growth inhibition and metastasis reduction.
- Regulatory engagement: BfArM indicated agreement in principle with planned Phase 2/3 trial design, supporting regulatory dialogue for the pivotal study.
Negative
- Going concern: Independent auditors and management note substantial doubt about the company's ability to continue without additional financing.
- Low cash runway: Cash and cash equivalents were $3.5 million as of June 30, 2025, stated to fund operations into the fourth quarter of 2025 absent further financing.
- Material dilution risk: Multiple convertible instruments and outstanding warrants (including up to 438,636 and other warrant pools referenced) plus an $11.9 million ELOC could significantly dilute existing shareholders.
- Clinical and commercialization uncertainty: Trials are early-stage or preclinical for key SIL204 candidate and the filing flags extensive regulatory, manufacturing, reimbursement and competition risks.
Insights
TL;DR The company shows promising preclinical/early clinical signals but faces immediate cash shortfall and clear dilution risk.
Silexions clinical signals from siG12D-LODER indicate a numerical OS improvement in a small KRAS G12D/V cohort, supporting continued development of SIL204. Preclinical SIL204 data show improved stability and systemic activity versus first generation. However, operating losses widened to $16.5 million in 2024 and cash of $3.5 million (6/30/2025) is insufficient for 12 months, per management. The planned offering and multiple convertible instruments create material dilution potential. This profile is typical of early-stage biotech where clinical validation and financing execution are the immediate value drivers.
TL;DR Significant near-term financial and execution risks highlighted: going concern, dilution, regulatory and manufacturing hurdles.
The filing explicitly states substantial doubt about going concern and details multiple financing vehicles that may depress share value, including outstanding warrants (hundreds of thousands of shares), a $3.433 million convertible promissory note, and an $11.9 million equity line. Clinical development, manufacturing scale-up, regulatory approvals and reimbursement uncertainty are described as material risks. These are concrete, material risk factors that could materially impair shareholder value absent successful financings and clinical progress.
Silexion Therapeutics Corp ha depositato un modulo S-1 per un collocamento di azioni ordinarie, warrant pre-finanziati e warrant ordinari con i ticker Nasdaq SLXN e SLXNW. La società è una realtà in fase di sviluppo che lavora su terapie RNAi mirate al silenziamento di KRAS, con candidati come la prima generazione siG12D-LODER (dati di Fase 1/2 che mostrano un vantaggio numerico di OS nei pazienti con KRAS G12D/V) e la seconda generazione SIL204 (dati preclinici su stabilità, farmacocinetica ed efficacia in vivo).
Dal punto di vista finanziario, Silexion ha riportato perdite nette per 16,5 milioni di dollari nel 2024 (contro 5,1 milioni nel 2023) e disponeva di 3,5 milioni di dollari in contanti al 30 giugno 2025. La direzione dichiara che esistono seri dubbi sulla capacità dell'azienda di proseguire l'attività senza finanziamenti aggiuntivi. L'S-1 rivela potenziale diluizione da warrant esistenti, una nota di credito da 3,433 milioni di dollari convertibile in azioni e una linea di capitale (White Lion) che potrebbe emettere fino a 11,9 milioni di dollari di azioni.
Silexion Therapeutics Corp presentó un registro S-1 para una oferta de acciones ordinarias, warrants prefinanciados y warrants ordinarios bajo los tickers de Nasdaq SLXN y SLXNW. La compañía está en fase de desarrollo y se centra en terapias RNAi para silenciar KRAS, con candidatos como la primera generación siG12D-LODER (datos de Fase 1/2 que muestran una ventaja numérica de OS en pacientes con KRAS G12D/V) y la segunda generación SIL204 (datos preclínicos de estabilidad, PK y eficacia in vivo).
En cuanto a lo financiero, Silexion reportó pérdidas netas de 16,5 millones de dólares en 2024 (frente a 5,1 millones en 2023) y contaba con 3,5 millones de dólares en efectivo al 30 de junio de 2025. La dirección manifiesta dudas sustanciales sobre la capacidad de la empresa para continuar como negocio en marcha sin financiación adicional. El S-1 revela dilución potencial por warrants existentes, un pagaré por 3,433 millones de dólares convertible en acciones y una línea de capital (White Lion) que podría emitir hasta 11,9 millones de dólares en acciones.
Silexion Therapeutics Corp는 보통주, 선지급 워런트 및 보통 워런트의 공모를 위한 S-1 등록서를 Nasdaq 티커 SLXN 및 SLXNW로 제출했습니다. 이 회사는 KRAS 침묵화 후보물질에 중점을 둔 개발 단계의 RNA 간섭(RNAi) 치료제 회사로, 1세대 siG12D-LODER(임상 1/2상 데이터에서 KRAS G12D/V 환자들의 전체생존(OS)에서 수치적 우위)과 2세대 SIL204(전임상 안정성, 약동학 및 in vivo 효능 데이터)를 보유하고 있습니다.
재무적으로 Silexion은 2024년에 1,650만 달러의 순손실을 보고했으며(2023년 510만 달러), 2025년 6월 30일 기준 현금은 350만 달러였습니다. 경영진은 추가 자금 조달 없이는 기업의 계속 존속 능력에 중대한 의문이 있다고 밝혔습니다. S-1에는 기존 워런트로 인한 잠재적 희석, 주식으로 전환 가능한 343만3,000달러의 약속어음, 최대 1,190만 달러 상당의 주식을 발행할 수 있는 자본 라인(White Lion)이 공개되어 있습니다.
Silexion Therapeutics Corp a déposé un enregistrement S-1 pour une offre d'actions ordinaires, de bons de souscription préfinancés et de bons de souscription ordinaires sous les tickers Nasdaq SLXN et SLXNW. La société est en phase de développement et se concentre sur des thérapies RNAi visant à silencier KRAS, avec des candidats tels que la première génération siG12D-LODER (données de phase 1/2 montrant un avantage numérique en OS chez les patients KRAS G12D/V) et la deuxième génération SIL204 (données précliniques de stabilité, PK et efficacité in vivo).
Sur le plan financier, Silexion a déclaré des pertes nettes de 16,5 millions de dollars pour 2024 (contre 5,1 millions en 2023) et disposait de 3,5 millions de dollars en liquidités au 30 juin 2025. La direction indique qu'il existe un doute substantiel quant à la capacité de la société à poursuivre son activité sans financement supplémentaire. Le S-1 divulgue une dilution potentielle due aux bons existants, une reconnaissance de dette de 3,433 millions de dollars convertible en actions et une ligne de capitaux (White Lion) qui pourrait émettre jusqu'à 11,9 millions de dollars d'actions.
Silexion Therapeutics Corp hat ein S-1-Registrierungsformular für ein Angebot von Stammaktien, vorfinanzierten Warrants und Stammwarrants unter den Nasdaq-Tickern SLXN und SLXNW eingereicht. Das Unternehmen befindet sich in der Entwicklungsphase und konzentriert sich auf RNAi-Therapeutika zur KRAS-Stilllegung, darunter die erste Generation siG12D-LODER (Phase-1/2-Daten zeigen einen numerischen OS-Vorteil bei KRAS G12D/V-Patienten) und die zweite Generation SIL204 (präkklinische Daten zu Stabilität, Pharmakokinetik und Wirksamkeit in vivo).
Finanziell meldete Silexion Nettoversluste von 16,5 Millionen US-Dollar für 2024 (gegenüber 5,1 Millionen im Jahr 2023) und verfügte per 30. Juni 2025 über 3,5 Millionen US-Dollar in bar. Das Management erklärt, es bestehe erhebliche Unsicherheit über die Fähigkeit des Unternehmens, ohne zusätzliche Finanzierung als Fortführungsunternehmen tätig zu bleiben. Das S-1 weist auf mögliche Verwässerung durch bestehende Warrants, eine in Aktien wandelbare Schuldscheinforderung in Höhe von 3,433 Millionen US-Dollar und eine Kapitallinie (White Lion) hin, die bis zu 11,9 Millionen US-Dollar an Aktien ausgeben könnte.
As
filed with the Securities and Exchange Commission on September 5, 2025.
Registration
No. 333-
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-1
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
(Exact
name of registrant as specified in its charter)
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8731
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N/A
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(State
or other jurisdiction of
incorporation
or organization) |
|
(Primary
Standard Industrial Classification Code Number) |
|
(I.R.S.
Employer
Identification
Number) |
12
Abba Hillel Road
Ramat
Gan, Israel 5250606
+972-3-7564999
(Address,
Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
Puglisi &
Associates
850 Library Avenue, Suite 204
Newark, DE 19711
Telephone: (302) 738-6680
850 Library Avenue, Suite 204
Newark, DE 19711
Telephone: (302) 738-6680
(Name,
Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)
Copies
to:
|
Jonathan
M. Nathan, Adv.
Meitar Law Offices 16 Abba Hillel Road Ramat Gan, Israel 5251608 Tel: +972-3-610-3100 |
Mark S. Selinger, Esq.
Gary Emmanuel, Esq. Greenberg
Traurig, LLP
One Vanderbilt Avenue
New York, New York 10017-5404 Tel: (212) 801-9200 |
Robert
Charron, Esq.
Joseph
Masiello, Esq.
Ellenoff
Grossman & Schole LLP
1345
Avenue of the Americas
New
York, New York 10105
Tel:
(212) 370-1300 |
Approximate
date of commencement of proposed sale to the public:
As
soon as practicable after the effective date of this registration statement becomes effective.
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. ☒
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
Large accelerated
filer |
☐
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Accelerated filer
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☐
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☒
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Smaller reporting
company |
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Emerging growth
company |
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If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
The
Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933, as amended (“Securities Act”), or until the Registration
Statement shall become effective on such date as the SEC, acting pursuant to Section 8(a), may determine.
The information in this preliminary prospectus is not complete
and may be changed. The securities described herein may not be sold until the registration statement filed with the U.S. Securities and
Exchange Commission is declared effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting
an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION, DATED SEPTEMBER 5,
2025
Up to 832,177 Ordinary
Shares
Up to 832,177 Pre-funded
Warrants to Purchase up to 832,177 Ordinary Shares
Up to 832,177 Series
A Ordinary Warrants to Purchase up to 832,177 Ordinary Shares
Up to 832,177 Series
B Ordinary Warrants to Purchase up to 832,177 Ordinary Shares
Up to 58,252 Placement Agent Warrants to Purchase up to 58,252 Ordinary Shares
Up to 2,554,783
Ordinary Shares Issuable Upon Exercise of the Series A Ordinary Warrants, Series B Ordinary Warrants Pre-funded Warrants and Placement
Agent Warrants
We are offering in a best-efforts offering up to 832,177 ordinary shares (the “shares”),
par value $0.0135 per share of Silexion Therapeutics Corp, a Cayman Islands exempted company (“New Silexion”, the “Company”,
“our company”, “we” or “us”), together with up to 832,177 series A ordinary warrants, (the “Series
A ordinary warrants”) to purchase up to 832,177 ordinary shares and 832,177 series B ordinary warrants, (the “Series
B ordinary warrants” and together with the Series A ordinary warrants, the “ordinary warrants”), to purchase up to 832,177 ordinary
shares at an assumed public offering price of $7.21 per share and ordinary warrant pursuant to this prospectus, which was the closing
price of our ordinary shares on the Nasdaq Capital Market on September 2, 2025. The ordinary shares and ordinary warrants will be sold
in a fixed combination, with each ordinary share accompanied by one Series A ordinary warrant to purchase one ordinary share and one Series
B ordinary warrant to purchase one ordinary share.
We are also offering to those purchasers,
if any, whose purchase of our ordinary shares in this offering would otherwise result in such purchaser, together with its affiliates
and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding ordinary
shares immediately following the consummation of this offering, the opportunity, in lieu of purchasing ordinary shares, to purchase pre-funded
warrants to purchase ordinary shares. Each pre-funded warrant will be immediately exercisable for one ordinary share at any time at the
option of the holder until such pre-funded warrant is exercised in full, provided that the holder will be prohibited from exercising pre-funded
warrants for ordinary shares if, as a result of such exercise, the holder, together with its affiliates and certain related parties, would
own more than 4.99% (or, at the election of the purchaser, 9.99%) of the total number of ordinary shares then issued and outstanding. The
assumed purchase price of each pre-funded warrant is $7.2099 (which is equal to the assumed public offering price per share and ordinary
warrants to be sold in this offering minus $0.0001, the exercise price per share of each pre-funded warrant). For each pre-funded warrant
we sell, the number of ordinary shares we are offering will be decreased on a one-for-one basis. The pre-funded warrants will be sold
together with ordinary warrants in a fixed combination, with each pre-funded warrant to purchase one ordinary share accompanied by one
Series A ordinary warrant to purchase one ordinary share and one Series B ordinary warrant to purchase one ordinary share.
Each ordinary warrant will have an exercise price of $
per share (which will be no less than 100% of the assumed public offering price per share to be sold in this offering), will
be exercisable beginning on the effective date of shareholder approval of the issuance of the ordinary shares upon exercise of the ordinary
warrants (“Warrant Shareholder Approval”), provided however, if the Pricing Conditions (as defined below) are met, the ordinary
warrants will be exercisable upon issuance (the “Initial Exercise Date”). The Series A ordinary warrants and the Series B
ordinary warrants will expire on the five (5) year anniversary and 12-month anniversary, respectively, of the Initial Exercise Date.
Because we will issue an ordinary warrant for each ordinary share and for each pre-funded warrant sold in this offering, the number of
ordinary warrants sold in this offering will not change as a result of a change in the mix of ordinary shares and pre-funded warrants
sold. As used herein, “Pricing Conditions” means that the combined offering price per share and accompanying ordinary warrants
is such that the Warrant Shareholder Approval is not required under the rules of the Nasdaq Stock Market (“Nasdaq”) because
either (i) the offering is an at-the-market offering under Nasdaq rules and such price equals or exceeds the sum of (a) the applicable
“Minimum Price” per share under Nasdaq Rule 5635(d) plus (b) $0.125 per whole ordinary share underlying the ordinary warrants
or (ii) the offering is a discounted offering where the pricing and discount (including attributing a value of $0.125 per whole share
underlying the ordinary warrants) meet the pricing requirements under Nasdaq’s rules.
We are also registering the ordinary shares issuable from time to time upon the exercise
of the pre-funded warrants, ordinary warrants and placement agent warrants offered hereby.
Our ordinary shares and warrants are listed
on The Nasdaq Capital Market under the symbols “SLXN” and “SLXNW,” respectively. On September 4, 2025, the last
reported sales price of our ordinary shares was $7.00 per share and the last reported sales price of our warrants was $0.028 per warrant.
There is no established public trading market for the ordinary shares being offered and the pre-funded warrants and we do not expect
a market to develop. Without an active trading market, the liquidity of those warrants will be limited. In addition, we do not intend
to list the pre-funded warrants or the ordinary warrants on The Nasdaq Capital Market, any other national securities exchange or any other
trading system.
The public offering price per share and any pre-funded warrant will be determined at
the time of pricing, and may be at a discount to the then current market price. The recent market price used throughout this prospectus
may not be indicative of the final offering price. The final public offering price will be a fixed price determined through negotiation
between us and investors based upon a number of factors, including our history and our prospects, the state of the biotechnology industry
in which we operate, our recent operating results, including results of our pre-clinical studies and clinical trials, and the general
condition of the securities markets at the time of this offering.
This offering will terminate on October
5, 2025, unless we decide to terminate the offering (which we may do at any time in our discretion) prior to that date. We will have one
closing for all the securities purchased in this offering. The combined public offering price per share (or pre-funded warrant) and accompanying
ordinary warrants will be fixed for the duration of this offering.
We have engaged H.C. Wainwright & Co.,
LLC (“Placement Agent”), to act as our exclusive placement agent in connection with this offering. The Placement Agent has
agreed to use its reasonable best efforts to arrange for the sale of the securities offered by this prospectus. The Placement Agent is
not purchasing or selling any of the securities we are offering and the Placement Agent is not required to arrange the purchase or sale
of any specific number of securities or dollar amount. We have agreed to pay to the Placement Agent the placement agent fees set forth
in the table, which assumes that we sell all of the securities offered by this prospectus. There is no minimum offering requirement as
a condition of closing of this offering. Because there is no minimum offering amount required as a condition to closing this offering,
we may sell fewer than all of the securities offered hereby, which may significantly reduce the amount of proceeds received by us. We
will bear all costs associated with the offering and investors in this offering will not receive a refund in the event that we do not
sell an amount of securities sufficient to pursue our business goals described in this prospectus. In addition, because there is no escrow
account and no minimum offering amount, investors could be in a position where they have invested in our company, but we are unable to
fulfill all of our contemplated objectives due to a lack of interest in this offering. Further, any proceeds from the sale of securities
offered by us will be available for our immediate use, despite uncertainty about whether we would be able to use such funds to effectively
implement our business plan. See “Plan of Distribution”
on page 114 of this prospectus for more information regarding these arrangements.
On November 27, 2024, we effected
a 1-for-9 reverse share split of our authorized ordinary shares, including our issued and outstanding ordinary shares, with a market effectiveness
date of November 29, 2024, and on July 28, 2025, we effected a 1-for-15 reverse share split of our authorized ordinary shares, including
our issued and outstanding ordinary shares, with a market effectiveness date of July 29, 2025. Unless specifically provided otherwise
herein, all share, per share and related option and warrant information presented in this prospectus has been adjusted (in the case of
information as of a date or period prior to either or both such reverse splits, on a retroactive basis) to reflect the reduced number
of shares and the increase in the share price which resulted from the reverse share splits.
We are an “emerging growth company” as defined under U.S. federal securities
laws and, as such, have elected to comply with reduced public company reporting requirements. This prospectus complies with the requirements
that apply to an issuer that is an emerging growth company.
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Per Share and Accompanying Ordinary Warrant |
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Warrant and Accompanying Ordinary Warrant |
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Placement agent fees (1) |
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We have agreed to pay the Placement Agent cash fee equal to 7.0% of the gross proceeds raised in this offering.
We have also agreed to reimburse the Placement Agent for certain of its offering-related expenses, including a management fee of 1.0%
of the gross proceeds raised in this offering, to reimburse the Placement Agent for its non-accountable expenses in the amount of $25,000,
for its legal fees and expenses and other out-of-pocket expenses in an amount up to $100,000, and for its clearing expenses in the amount
of up to $15,950. In addition, we have agreed to issue to the Placement Agent warrants to purchase up to a number of ordinary shares equal
to 7.0% of the aggregate number of our ordinary shares and pre-funded warrants being offered, at an exercise price equal to 125% of the
public offering price of our ordinary shares. See “Plan of Distribution” for additional
information and a description of the compensation payable to the Placement Agent. |
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(2) |
We estimate the total expenses of this offering payable by us,
excluding the placement agent fee, will be approximately 181,116. Because there is no minimum number of securities or amount of proceeds
required as a condition to closing in this offering, the actual public offering amount, Placement Agent fees, and proceeds to us, if any,
are not presently determinable and may be substantially less than the total maximum offering amount set forth above. |
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(3) |
Does not include proceeds from the cash exercise of the pre-funded warrants or ordinary warrants, if any.
Assumes no pre-funded warrants are issued. |
Investing in our securities involves a high degree of risk. You should
review carefully the risks and uncertainties described in the section titled “Risk Factors” beginning on page 6 of this prospectus,
and under similar headings in any amendments or supplements to this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or passed upon the accuracy or adequacy of this prospectus. Any representation
to the contrary is a criminal offense.
We expect to deliver the securities to the purchasers in the offering
on or about , 2025, subject to satisfaction of certain conditions.
H.C. Wainwright & Co.
Prospectus dated , 2025
PRELIMINARY NOTES REGARDING THIS PROSPECTUS
Unless the context indicates otherwise,
references in this prospectus to “New Silexion”, “we”,
“us,” “our,” “the
Company”, “our company” and similar terms refer to Silexion Therapeutics
Corp (formerly known as Biomotion Sciences), a Cayman Islands exempted company, and its consolidated subsidiaries. References to “Silexion”
refer to Silexion Therapeutics Ltd., an Israeli company and wholly-owned subsidiary of the Company, and references to “Moringa”
refer to Moringa Acquisition Corp, a Cayman Islands exempted company and wholly-owned subsidiary of the Company. References to the “Business
Combination” refer collectively to the transactions completed on August 15, 2024 pursuant to that certain Amended and Restated
Business Combination Agreement, dated as of April 3, 2024 (as amended, the “Business Combination
Agreement”), by and among New Silexion, August M.S. Ltd., an Israeli company and a wholly-owned subsidiary of New
Silexion (“Merger Sub 1”), Moringa Acquisition Merger Sub Corp, a Cayman Islands exempted
company and a wholly-owned subsidiary of New Silexion (“Merger Sub 2”), Moringa
and Silexion. Pursuant to the Business Combination Agreement, among other things, (i) Merger Sub 2 merged with and into Moringa, with
Moringa continuing as the surviving company and a wholly-owned subsidiary of New Silexion (the “SPAC
Merger”) and (ii) Merger Sub 1 merged with and into Silexion, with Silexion continuing as the surviving company and a wholly-owned
subsidiary of New Silexion (the “Acquisition Merger”). In connection with the consummation
of the Business Combination (the “Closing”), New Silexion changed its name from “Biomotion
Sciences” to “Silexion Therapeutics Corp”, and the ordinary shares and warrants of New Silexion commenced trading on
Nasdaq under the symbols “SLXN” and “SLXNW”, respectively, on August 16, 2024.
We and the Placement Agent have not authorized anyone to provide any information or
to make any representations other than those contained in or incorporated by reference in this prospectus or in any free writing prospectuses
prepared by or on behalf of us or to which we have referred you. We take no responsibility for and can provide no assurance as to the
reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but
only under circumstances and in jurisdictions where it is lawful to do so. The information contained in or incorporated by reference in
this prospectus is accurate only as of its date regardless of the time of delivery of this prospectus or of any sale of ordinary shares.
To the extent there is a conflict between the information contained in this prospectus,
on the one hand, and the information contained in any document incorporated by reference filed with the U.S. Securities and Exchange Commission
(the “SEC”) before the date of this prospectus, on the other hand, you should rely on the information in this prospectus.
If any statement in a document incorporated by reference is inconsistent with a statement in another document incorporated by reference
having a later date, the statement in the document having the later date modifies or supersedes the earlier statement.
Neither we nor the Placement Agent have done anything that would permit this offering
or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United
States. Persons who come into possession of this prospectus and any free writing prospectus in jurisdictions outside the United States
are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus and
any free writing prospectus applicable to that jurisdiction. We will not make an offer to sell these ordinary shares in any jurisdiction
where the offer or sale is not permitted.
This prospectus contains market data and industry statistics and forecasts that are
based on independent industry publications and other publicly available information. Although we believe that these sources are reliable,
we do not guarantee the accuracy or completeness of this information and we have not independently verified this information. Although
we are not aware of any misstatements regarding the market and industry data presented or incorporated by reference in this prospectus,
these estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed under the
heading “Risk Factors” and any related free writing prospectus. These and other factors could cause our future performance
to differ materially from our assumptions and estimates. See “Special Note Regarding Forward-Looking Statements.” Accordingly,
investors should not place undue reliance on this information.
This prospectus contains summaries of certain provisions contained in some of the documents
described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their
entirety by the actual documents. Copies of some of the documents referred to herein have been filed, will be filed or will be incorporated
by reference as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents
as described below under “Where You Can Find More Information”.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
The statements contained in this prospectus that are not purely historical are forward-looking
statements. Certain statements in this prospectus may constitute “forward-looking statements” for purposes of the federal
securities laws. These forward-looking statements include, but are not limited to, statements regarding the Company’s and the Company’s
management team’s expectations, hopes, beliefs, intentions or strategies regarding the future, including statements regarding our
future results of operations or financial condition, business strategy and plans, and objectives of management for future operations.
In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including
any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,”
“possible,” “potential,” “predict,” “project,” “should,” “will,”
“would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that
a statement is not forward-looking. Forward-looking statements in this prospectus may include, for example, statements about:
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the ability to maintain the listing of our ordinary shares and our warrants on Nasdaq; |
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our future performance, including our projected timeline for regulatory approvals of its product candidates;
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our market opportunity; |
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our strategy, future operations, financial position, projected costs, prospects and plans; |
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expectations regarding the time during which we will be an emerging growth company under the JOBS Act;
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our ability to retain or recruit officers, key employees and directors; |
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the impact of the regulatory environment and complexities with compliance related to such environment;
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expectations regarding future partnerships or other relationships with third parties; and |
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our future capital requirements and sources and uses of cash, including the our ability to obtain additional
capital in the future. |
The forward-looking statements contained in this prospectus and in any document incorporated
by reference are based on current expectations, forecasts and beliefs concerning future developments and their potential effects on us.
There can be no assurance that future developments affecting we will be those that we have anticipated. These forward-looking statements
involve a number of risks, uncertainties, some of which are beyond our control, or other assumptions that may cause actual results or
performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties
include, but are not limited to, the following factors:
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we are a development-stage company and have a limited operating history on which to assess its business;
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we have never generated any revenue from product sales and may never be profitable; |
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we will need to raise substantial additional funding, which may not be available on acceptable terms, or
at all, and which will cause dilution to its shareholders; |
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the approach we are taking to discover and develop novel RNAi therapeutics is unproven for oncology and
may never lead to marketable products; |
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we do not have experience producing our product candidates at commercial levels, currently have no marketing
and sales organization, have an uncertain market receptiveness to our product candidates, and are uncertain as to whether there will be
insurance coverage and reimbursement for its potential products; |
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we may be unable to attract, develop and/or retain its key personnel or additional employees required for
our development and future success; |
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we may issue additional ordinary shares or other equity
securities without your approval, including: (a) up to $11.9 million of ordinary shares that remain issuable under the Ordinary Share
Purchase Agreement, dated August 13, 2024 and effective as of August 15, 2024, by and between the Company and White Lion Capital, LLC
(“White Lion”) (the “White Lion Purchase Agreement” or “ELOC Agreement”), which established an equity
line of credit for the Company; (b) ordinary shares underlying 44,000 outstanding warrants; and (c) ordinary shares underlying the convertible
promissory note that the Company has issued to Moringa’s sponsor, Moringa Sponsor, LP, a Cayman Islands exempted limited partnership
(the “Sponsor” or “Moringa Sponsor”), in a principal amount of $3,433,000 (the “A&R Sponsor Promissory
Note”), in amendment and restatement of all promissory notes previously issued by Moringa to the Sponsor for funds borrowed between
Moringa’s initial public offering and the completion of the Business Combination, each of which would dilute your ownership interest
and may depress the market price of our ordinary shares; and (d) 394,636 additional ordinary shares underlying outstanding warrants that
we have issued in private placement or public offering financing transactions since the Closing of the Business Combination; and
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our ability to maintain the listing of our ordinary shares
and warrants on the Nasdaq; |
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those additional factors described or incorporated by reference under the heading “Risk
Factors” below. |
Should one or more of these risks or uncertainties materialize, or should any of our
assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. It
is not possible to predict or identify all such risks. Accordingly, forward-looking statements in this prospectus and in any document
incorporated herein by reference should not be relied upon as representing our views as of any subsequent date, and we undertake no obligation
to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may
be required under applicable securities laws.
These forward-looking statements are based on information available as of the date of
this prospectus, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly,
forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any
obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result
of new information, future events or otherwise, except as may be required under applicable securities laws.
You should read this prospectus and the documents that we reference in this prospectus
and have filed as exhibits to the registration statement of which this prospectus is a part, 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.
In addition, statements that “we believe” and similar statements reflect
our beliefs and opinions on the relevant subject. Those statements are based upon information available to us as of the date of this prospectus
and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and
such statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available
relevant information. Those statements are inherently uncertain, and investors are cautioned not to unduly rely upon those statements.
TABLE OF CONTENTS
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Page |
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Prospectus Summary |
1 |
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Risk Factors |
6 |
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Use of Proceeds |
36 |
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Capitalization |
37 |
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Dilution |
38 |
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Market Information for Securities and Dividend Policy |
40 |
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Management’s Discussion and Analysis of Financial Condition
and Results of Operations |
40 |
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Business |
56 |
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Management |
82 |
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Executive Compensation |
87 |
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Certain Relationships and Related Party Transactions |
97 |
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Beneficial Ownership of Securities |
98 |
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Description of Share Capital |
100 |
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Description of Securities Offered |
106 |
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Material U.S. Federal Income Tax Consequences |
108 |
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Plan of Distribution |
114 |
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Legal Matters |
116 |
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Experts |
116 |
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Where You Can Find More Information |
116 |
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Index to Financial Statements |
F-1 |
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this
prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in
our securities, you should carefully read this entire prospectus, including our consolidated financial statements and the related notes
thereto and the information set forth in the sections titled “Risk Factors” and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations.”
Our Business
We conduct operations primarily through our principal
subsidiary— Silexion— which is a clinical-stage, oncology-focused biotechnology company engaged in the discovery and development
of proprietary treatments for cancers driven by Kirsten rat sarcoma viral oncogene homolog (“KRAS”).
The KRAS gene, when mutated, plays a central role in many cancer types, such as pancreatic, colorectal and lung, and is therefore considered
to be an oncogene. This oncogene instructs cells to make the corresponding KRAS protein which has a controlling function in cell
growth signaling in the cancer cells. Various pharmaceutical companies are developing inhibitors of this protein, which attempt
to inhibit its activity after it is already functioning in an oncogenic manner. At Silexion, we have taken a different approach,
moving upstream to the source of the cancer; silencing the KRAS oncogene so the oncogenic protein is not made. We believe this approach
has various important clinical advantages. Our technology works by inducing the tumor cells to destroy the messenger (mRNA) between
the oncogene and the tumor cell’s protein manufacturing apparatus. For this we use small segments biologically complementary
to the oncogenic mRNA, made out of the natural genetic building block of mRNA, and modify them to become significantly more stable and
with capability to more readily enter the tumor cells, yet while maintaining their important ability to carry out the treatment. These
small pieces of genetic material are called small interfering RNA(siRNA) as they are relatively small compared to the mRNA molecule and
they interfere with the mRNA function. Our lead product candidate, SIL204, is a second generation siRNA. The siRNA prevents or severely
limits the tumor cells’ manufacturing of the protein. Without the mutated KRAS protein, the mechanism of generating the tumor
is prevented. In pancreatic cancer, ~92% of patients have this mutated oncogene. To further optimize treatment, we introduce a novel
delivery approach which we refer to as an Integrated Treatment Regimen. To get across the very strong barrier surrounding pancreatic
tumor cells, which limits the effectiveness of current treatments, we administer SIL204 directly into the tumor, where it can be most
effective. For affected tumor cells which may have already left the primary tumor, we also administer SIL204 systemically
via the subcutaneous route. In order to be used as a first-line treatment, we administer the Integrated Treatment Regimen alongside
standard of care (SoC) chemotherapy. The approach of using an siRNA directed against mutated KRAS together with SoC chemotherapy
evidenced a benefit for overall survival over SoC chemotherapy alone in a Phase 2 clinical trial, where the siRNA used was our prototype
or first-generation product. We are further expecting improved overall survival results with our second generation product SIL204.
We plan to conduct a Phase 2/3
prospective, randomized, controlled, multinational, open-label trial in LAPC subjects that harbor the KRAS G12D/V mutations to evaluate
the efficacy, safety and tolerability of SIL204 administered intratumorally in combination with standard of care (SoC) chemotherapy versus
SoC chemotherapy only. In support of our planned Phase 2/3 trial, we held a meeting with the Federal Institute for Drugs and Medical Devices
in Germany (BfArM) to discuss the planned design of the Phase 2/3 trial at which BfArM agreed, in principle, to the design. In preparation
for the study, we have been conducting toxicology studies of SIL204 in 2025, to be followed by the regulatory submission in the fourth
quarter of 2025 to the Israeli ministry of health and in the first quarter of 2026 to BfArM. We plan to initiate the Phase 2/3 trial and
trial initiation in the first half of 2026. At this time, we are focused on the further development of the core siRNA technology, SIL204,
and its clinical development.
1
Corporate Information
We were originally known as Biomotion Sciences, a Cayman Islands exempted company. On
April 3, 2024, we entered into an amended and restated business combination agreement (the “Business Combination Agreement”),
dated April 3, 2024, by and among our company (whose name was subsequently changed to Silexion Therapeutics Corp) (“New Silexion”),
August M.S. Ltd., an Israeli company and a wholly owned subsidiary of New Silexion (“Merger Sub 1”), Moringa Acquisition Merger
Sub Corp, a Cayman Islands exempted company and a wholly owned subsidiary of Silexion (“Merger Sub 2”), Moringa Acquisition
Corp (“Moringa”) and Silexion Therapeutics Ltd., an Israeli company (“Silexion”). On August 15, 2024 (the “Closing
Date”), the transactions contemplated by the Business Combination Agreement (collectively, the “Business Combination”)
were completed (the “Closing”), following the approval of the Business Combination on August 6, 2024 by the extraordinary
general meeting of Moringa.
Our principal executive offices are located at 12 Abba Hillel Road, Ramat Gan, Israel
5250606, Israel and our phone number is +972-8-6286005. Our corporate website address is www.silexion.com. Information contained on or
accessible through our website is not a part of this prospectus, and the inclusion of our website address in this prospectus is an inactive
textual reference only.
This prospectus contains trademarks, service marks, trade names and copyrights of other
companies, which are the property of their respective owners. Solely for convenience, trademarks and trade names referred to in this prospectus
may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that the applicable licensor
will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use
or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship
of us by, any other companies.
Reverse Share Splits
On November 27, 2024, we effected
a 1-for-9 reverse share split of our authorized ordinary shares, including our issued and outstanding ordinary shares, with a market effectiveness
date of November 29, 2024, and on July 28, 2025, we effected a 1-for-15 reverse share split of our authorized ordinary shares, including
our issued and outstanding ordinary shares, with a market effectiveness date of July 29, 2025. Unless specifically provided otherwise
herein, all share, per share and related option and warrant information presented in this prospectus, has been retroactively adjusted
to reflect the reduced number of shares and the increase in the share price which resulted from the reverse share splits.
Nasdaq Market Value-Related Deficiencies
On November 19, 2024, we received
two letters from the Nasdaq Listing Qualifications Department, each addressing a separate compliance deficiency of the Company under the
Nasdaq Listing Rules. The first letter from the Nasdaq Listing Qualifications Department notified us of our non-compliance with Nasdaq
Listing Rule 5450(b)(2)(A), which requires a company such as ours whose securities are listed on the Nasdaq Global Market under the “Market
Value Standard” to maintain a minimum Market Value of Listed Securities (an “MVLS”) of $50,000,000. The deficiency was
triggered by our MVLS having closed below the minimum level for a period of 30 consecutive business days. Under Nasdaq Listing Rule 5810(c)(3)(C),
we were entitled to a 180-day period, ending on May 19, 2025, to rectify the deficiency by maintaining an MVLS of $50,000,000 or more
for at least 10 consecutive business days.
The second letter informed us of
our deficiency in complying with Nasdaq Listing Rule 5450(b)(2)(C), which requires a minimum Market Value of Publicly Held Shares (an
“MVPHS”) of $15,000,000 for continued listing on the Nasdaq Global Market under the “Market Value Standard”. This
deficiency was caused by our MVPHS having fallen below the minimum threshold for the prior 30 consecutive business days. Under Nasdaq
Listing Rule 5810(c)(3)(D), we had 180 calendar days, or until May 19, 2025, to regain compliance by having our MVPHS close at or above
$15,000,000 for at least 10 consecutive business days.
On May 22, 2025, we received a delisting notice
from the Nasdaq Listing Qualifications Department in respect of the MVLS and MVPHS deficiencies, and on May 28, 2025, we requested a hearing
related to the delisting notice, which was held on June 26, 2025. On July 7, 2025, we received a favorable decision from the Nasdaq hearings
panel, granting our request to remain listed on the Nasdaq subject to certain conditions. As a result of the favorable outcome of the
hearing, the listing of our ordinary shares and warrants was transferred from the Nasdaq Global Market to the Nasdaq Capital Market on
July 8, 2025, where trading continued under the symbols “SLXN” and “SLXNW”, respectively. Under the terms of the
decision reached by the hearings panel, the continued listing of our securities on the Nasdaq Capital Market will be conditioned on our
fulfillment of the terms of the compliance plan that we had presented to the panel at the hearing, which was designed to enable us to
achieve at least $2.5 million of shareholders’ equity for listing on the Nasdaq Capital Market on a continued basis pursuant to
Nasdaq Listing Rule 5550(b)(1). The terms of the compliance plan consist, in primary part, of the following: (i) on or before September
19, 2025, we are required to demonstrate in a report filed under the Exchange Act, our restoration of compliance with, and our expected
long-term compliance with, the shareholders’ equity requirement under Nasdaq Listing Rule 5550(b)(1), as to be demonstrated in a
balance sheet not older than 60 days to be included in such a filing; and (ii) if we fail to maintain compliance with any Nasdaq listing
rule on or before November 18, 2025, we will be required to submit, and the Nasdaq hearings panel will review (as part of its maintenance
of jurisdiction over our listing status until November 18, 2025), a compliance plan for the subject deficiency to determine whether the
panel is willing to grant an exception to us to cure that deficiency.
Implications of Being a Smaller Reporting Company
and Emerging Growth Company
We are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation
S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing
only two years of audited financial statements and reduced disclosure obligations regarding executive compensation. We will remain a smaller
reporting company until the last day of any fiscal year for so long as either (1) the market value of our ordinary shares held by non-affiliates
does not equal or exceed $250 million as of the prior June 30th, or (2) our annual revenues did not equal or exceed $100 million during
such completed fiscal year and the market value of our ordinary shares held by non-affiliates did not equal or exceed $700 million as
of the prior June 30th. To the extent we take advantage of any reduced disclosure obligations, it may make the comparison of our financial
statements with other public companies difficult or impossible.
2
We are an “emerging growth company,” as defined in the Jumpstart Our Business
Startups Act of 2012 (the “JOBS Act”). As an emerging growth company, we are exempt from certain requirements related to executive
compensation, including the requirements to hold a nonbinding advisory vote on executive compensation and to provide information relating
to the ratio of total compensation of our Chief Executive Officer to the median of the annual total compensation of all of our employees,
each as required by the Investor Protection and Securities Reform Act of 2010, which is part of the Dodd-Frank Act.
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required
to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration
statement under the Securities Act of 1933, as amended (the “Securities Act”) declared effective or do not have a class of
securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS
Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging
growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period,
which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an
emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may
make comparison of our financial statements with those of another public company that is neither an emerging growth company nor an emerging
growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences
in accounting standards used.
We will remain an emerging growth company until the earlier of: (1) the last day of
the fiscal year (a) following the fifth anniversary of the date on which our ordinary shares were offered in exchange for ordinary shares
of each of Moringa and Silexion, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed
to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million
as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion
in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” are
to its meaning under the Securities Act, as modified by the JOBS Act.
Summary of Risk Factors
Investing in our securities involves risks. You should carefully consider the risks
described in “Risk Factors” before making a decision to invest in our securities.
If any of these risks is actualized, our business, financial condition and results of operations would likely be materially adversely
affected. In such case, the trading price of our securities would likely decline, and you may lose all or part of your investment. In
particular, you should consider the risk factors described under “Risk Factors” beginning
on page 6. Such risks include, but are not limited to:
Risks Relating to our Financial
Condition and Capital Requirements, including that:
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We have never generated any revenue from product sales and may never be profitable. |
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We will need to raise substantial additional funding,
which may not be available on acceptable terms, or at all, and which will cause dilution to our shareholders. |
Risks Relating to Silexion’s Business and Industry,
including that:
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We are a development-stage company and has a
limited operating history on which to assess our business. |
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The approach we are taking to discover and develop novel RNAi therapeutics is unproven for oncology and
may never lead to marketable products. |
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We are heavily dependent on the success of our product candidates, which are in the early stages of preclinical
or clinical development, and cannot give any assurance that any of our product candidates will receive regulatory approval, which is a
lengthy, time consuming, and inherently unpredictable process. |
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We may find it difficult to enroll patients in our
clinical studies, which could delay or prevent clinical studies of our product candidates. |
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We are subject to a multitude of manufacturing risks,
any of which could substantially increase our costs and limit supply of our product candidates. |
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We rely on third parties to conduct our preclinical
and clinical studies, and to manufacture the raw materials and products that we use to create our product candidates and to supply it
with the medical devices used to administer such products, which entails regulatory and trade secrets-related risks. |
3
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We do not have experience producing our product candidates
at commercial levels, currently have no marketing and sales organization, have an uncertain market receptiveness to our product candidates,
and are uncertain as to whether there will be insurance coverage and reimbursement for our potential products. |
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We face competition from other companies that are working to develop novel drugs and technology platforms
using technology similar or in the same field as ours. |
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If we are unable to obtain and maintain effective
patent rights for our product candidates or any future product candidates, we may not be able to compete effectively in our markets.
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We may be unable to attract, develop and/or retain
our key personnel or additional employees required for our development and future success. |
Risks Relating to the Offering,
including that:
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This offering is being made on a best efforts basis and we may sell fewer than all of the securities offered
hereby and may receive significantly less in net proceeds from this offering, which will provide us only limited working capital.
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Our management team will have immediate and broad discretion over the use of the net proceeds from this
offering and may not use them effectively. |
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You will experience immediate dilution in the book value per share of the ordinary shares purchased in
the offering. |
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Purchasers who purchase our securities in this offering pursuant to a securities purchase agreement may
have rights not available to purchasers that purchase without the benefit of a securities purchase agreement. |
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Ordinary shares representing a substantial percentage of our outstanding shares may be sold in this offering,
which could cause the price of our ordinary shares to decline. |
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There is no public market for the warrants being offered or pre-funded warrants in this offering.
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The pre-funded warrants are speculative in nature. |
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The ordinary warrants may not have any value. |
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Holders of the pre-funded warrants and ordinary warrants offered hereby will have no rights as our ordinary
shareholders with respect to the ordinary shares underlying those warrants until such holders exercise their warrants and acquire our
ordinary shares, except as otherwise provided in the ordinary warrants. |
Risks Relating to Owning Our Ordinary Shares, including
that:
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We may not succeed at restoring and maintaining compliance with Nasdaq continued listing requirements,
which may lead to the delisting of our ordinary shares from the Nasdaq Capital Market. | |
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The price of our ordinary shares and our warrants may be volatile. |
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A substantial number of our ordinary shares may be issued pursuant to the White Lion Purchase Agreement
and/or the conversion terms of the A&R Sponsor Promissory Note, which could cause (i) substantial dilution and (ii) the market price
of the ordinary shares to decline. |
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We have no current plans to pay cash dividends on our ordinary shares for the foreseeable future.
|
The Offering
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Ordinary shares |
Up to 832,177 ordinary shares on a best-efforts basis
based on an assumed public offering price of $7.21 per share and accompanying ordinary warrants (the last reported sale price of our ordinary
shares on the Nasdaq Capital Market on September 2, 2025). | |
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Pre-funded warrants |
We are also offering to those purchasers, if any, whose purchase
of our ordinary shares in this offering would otherwise result in such purchaser, together with its affiliates and certain related parties,
beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding ordinary shares immediately following
the consummation of this offering, the opportunity, in lieu of purchasing ordinary shares, to purchase pre-funded warrants to purchase
ordinary shares. Each pre-funded warrant will be immediately exercisable for one ordinary share at any time at the option of the holder
until such pre-funded warrant is exercised in full, provided that the holder will be prohibited from exercising pre-funded warrants for
ordinary shares if, as a result of such exercise, the holder, together with its affiliates and certain related parties, would own more
than 4.99% (or, at the election of the purchaser, 9.99%) of the total number of ordinary shares then issued and outstanding. The
assumed purchase price of each pre-funded warrant is $7.2099 (which is equal to the assumed public offering price per share and accompanying
ordinary warrants to be sold in this offering minus $0.0001, the exercise price per share of each pre-funded warrant). For each pre-funded
warrant we sell, the number of ordinary shares we are offering will be decreased on a one-for-one basis. This offering also relates to
the ordinary shares issuable upon exercise of any pre-funded warrants sold in this offering. See “Description
of Securities Offered” for more information. |
4
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Warrants |
Each ordinary share and each pre-funded warrant will be sold together with one Series A ordinary warrant
and one Series B ordinary warrant. Each ordinary warrant will have an exercise price of $ per
share (which will be no less than 100% of the assumed public offering price per share to be sold in this offering), will be exercisable
beginning on the effective date of the Warrant Shareholder Approval, provided however, if the Pricing Conditions are met, the ordinary
warrants will be exercisable upon issuance. The Series A ordinary warrants and the Series B ordinary warrants will expire five (5) years
and twelve (12) months, respectively, from the Initial Exercise Date. Because we will issue an ordinary warrant for each ordinary share
and for each pre-funded warrant sold in this offering, the number of ordinary warrants sold in this offering will not change as a result
of a change in the mix of ordinary shares and pre-funded warrants sold. This offering also relates to the ordinary shares issuable
upon exercise of any ordinary warrants sold in this offering. See “Description of Securities Offered”
for more information. | |
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Ordinary shares outstanding prior to this offering |
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731,642 ordinary shares |
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Ordinary shares outstanding after this offering |
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1,563,819 ordinary shares (assuming no sale of any pre-funded
warrants and no exercise of the ordinary warrants). |
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Use of proceeds |
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Assuming the maximum number of ordinary shares are sold in
this offering at an assumed public offering price of $7.21 per share, which represents the closing price of our ordinary shares on Nasdaq
on September 2, 2025, and assuming no issuance of pre-funded warrants and no exercise of the ordinary warrants in connection with
this offering, we estimate the net proceeds of the offering will be approximately 5.2 million, after deducting the placement agent fees
and estimated offering expenses payable by us. However, this is a best efforts offering with no minimum number of securities or amount
of proceeds as a condition to closing, and we may not sell all or any of these securities offered pursuant to this prospectus; as a result,
we may receive significantly less in net proceeds. We currently intend to use the net proceeds from this offering to advance our pre-clinical clinical studies,
and for general corporate purposes. Pending such uses, we intend to invest the net proceeds in bank deposits. We have not determined the
amount of net proceeds to be used specifically for such purposes. As a result, our management will have broad discretion in the application
of the net proceeds of this offering. See “Use of Proceeds” for additional information.
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Risk factors |
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Before investing in our securities, you should carefully read and consider the information set forth in
“Risk Factors” beginning on page 6. |
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Nasdaq ticker symbols |
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Our ordinary shares and warrants are listed on the
Nasdaq Capital Market under the symbols “SLXN” and “SLXNW”, respectively. There is no established public trading
market for the ordinary warrants being offered and the pre-funded warrants and we do not expect a market to develop. Without an active
trading market, the liquidity of those warrants will be limited. In addition, we do not intend to list the pre-funded warrants or the
ordinary warrants on The Nasdaq Capital Market, any other national securities exchange or any other trading system. |
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Best efforts offering |
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We have agreed to offer and sell the securities offered hereby to the purchasers through the Placement
Agent. The Placement Agent is not required to buy or sell any specific number or dollar amount of the securities offered hereby, but it
will use its reasonable best efforts to solicit offers to purchase the securities offered by this prospectus. See “Plan
of Distribution” on page 114 of this prospectus. |
The number of ordinary shares to be outstanding
immediately after this offering as shown above assumes that all of the ordinary shares offered hereby are sold and is based on 731,642
ordinary shares issued and outstanding as of September 4, 2025. This number excludes:
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up to 438,636 ordinary shares underlying an equivalent
number of outstanding warrants at a weighted average exercise price of $168.09 per share; |
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50,860 ordinary shares issuable pursuant to the A&R
Sponsor Promissory Note (based on the conversion of the entire $3,433,000 principal amount of that note into ordinary shares at an assumed
conversion price of $67.50 per share); |
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10,234 ordinary shares issuable
upon exercise of outstanding stock options or settlement of outstanding restricted share units (“RSUs”)
under our equity incentive plans, at a weighted average exercise price (with respect to the options only) of $897.34 per share; and
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86,573 ordinary shares reserved
for future awards under our equity incentive plan. |
Unless otherwise indicated, all information in this prospectus
assumes or gives effect to:
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no exercise of the options described above; |
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no sale of pre-funded warrants in this offering; |
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no exercise of the ordinary warrants and the placement agent
warrants in this offering; and |
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the reverse share splits effected on November
27, 2024 and July 28, 2025. |
5
RISK FACTORS
Investing in our securities involves a high degree of risk. You
should carefully consider the risks and uncertainties described below together with all of the other information contained in this prospectus,
including our financial statements and related notes appearing at the end of this prospectus and in the section titled “Management’s
Discussion and Analysis of Financial Condition and Results of Operations,” before deciding to invest in our securities. If any of
the events or developments described below were to occur, our business, prospects, operating results and financial condition could suffer
materially, the trading price of our ordinary shares could decline, and you could lose all or part of your investment. The risks and uncertainties
described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe
to be immaterial may also adversely affect our business.
Risks Related to Our Financial Condition and Capital Requirements
We are a development-stage company and have a limited operating
history on which to assess our business. We have incurred significant losses since our inception and anticipate that we will continue
to incur significant losses for the foreseeable future.
We are a development stage company
with a limited operating history focused on the discovery and development of treatments based on the emerging therapeutic modality RNA
interference (RNAi), a biological process in which ribonucleic acid (RNA) molecules inhibit gene expression. Our proposed treatment, which
we refer to as SIL204, consists of locally administered small interfering RNAs, or siRNA, to KRAS G12D- or KRAS G12V-mutations (G12D/V),
which is the gene driver that causes development of tumors and human cancer (oncogenic). We have incurred net losses since our inception
in November 2008, including net losses of $16.5 million and $5.1 million for the years ended December 31, 2024 and December 31, 2023,
respectively, and $4.2 million for the six months ended June 30, 2025. As of June 30, 2025, we had an accumulated deficit of $47.5 million.
We have devoted substantially all of our financial resources to design and develop our
product candidates, including conducting preclinical and clinical studies and providing general and administrative support for these operations.
To date, we have financed our operations primarily through the sale of equity securities and through royalty-bearing grants that we received
from Israel’s Innovation Authority, or the IIA. The amount of our future net losses will depend, in part, on the rate of our future
expenditures and our ability to obtain funding through equity or debt financings, strategic collaborations, or grants. Biopharmaceutical
product development is a highly speculative undertaking and involves a substantial degree of risk. We are the early stages of clinical
and preclinical development for our product candidates, we have we have not yet commenced pivotal clinical studies for any product candidate
and it may be several years, if ever, before we complete pivotal clinical studies and have a product candidate approved for commercialization.
Even if we obtain regulatory approval to market a product candidate, our future revenue will depend upon the size of any markets in which
our product candidates may receive approval, and our ability to achieve sufficient market acceptance, pricing, reimbursement from third-party
payors, and adequate market share for our product candidates in those markets.
6
We expect to continue to incur significant expenses and increasing operating losses
for the foreseeable future. We anticipate that our expenses will increase substantially if and as we:
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continue and expand our research and preclinical and clinical development of our product candidates;
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initiate additional preclinical, toxicology, clinical, or other studies for our product candidates;
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continue to improve our quality standards and change or add additional manufacturers or suppliers;
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seek regulatory and marketing approvals for our product candidates that successfully complete clinical
studies; |
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establish a sales, marketing, and distribution infrastructure to commercialize any products for which we
may obtain marketing approval; |
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seek to identify, assess, acquire, license, and/or develop other product candidates; |
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enter into license agreements; |
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seek to maintain, protect, and expand our intellectual property portfolio; |
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seek to attract and retain skilled personnel; |
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create additional infrastructure to support our operations as a public company and our product development
and planned future commercialization efforts; and |
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experience any delays or encounter issues with any of the above, including but not limited to failed studies,
complex results, safety issues, or other regulatory challenges that require longer follow-up of existing studies, additional major studies,
or additional supportive studies in order to pursue marketing approval. |
Further, the net losses we incur may fluctuate significantly from
quarter to quarter and year to year, such that a period-to-period comparison of our results of operations may not be a good indication
of our future performance.
We have never generated any revenue from product sales and may never
be profitable.
We have we have no products approved for commercialization and
has never generated any revenue. Our ability to generate revenue and achieve profitability depends on our ability, alone or with strategic
collaboration partners, to successfully complete the development of, and obtain the regulatory and marketing approvals necessary to commercialize,
one or more of our product candidates. We do not anticipate generating revenue from product sales for the foreseeable future. Our ability
to generate future revenue from product sales depends heavily on our success in many areas, including but not limited to:
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completing research and preclinical and toxicology and clinical development of our product candidates;
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obtaining regulatory and marketing approvals for our product candidates, if and when we complete clinical
studies; |
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developing a sustainable and scalable in-house manufacturing process, meeting all regulatory standards
for approved product candidates, and in some instances, establishing and maintaining supply and manufacturing relationships with third
parties that can conduct the process and provide adequate (in amount and quality) products to support clinical development and the market
demand for product candidates, if approved; |
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launching and commercializing product candidates, if and when we obtain regulatory and marketing approval,
either directly or with a collaborator or distributor; |
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exposing, educating and training physicians to use our products; |
7
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obtaining market acceptance of our product candidates as viable treatment options; |
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addressing any competing technological and market developments; |
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identifying, assessing, acquiring and/or developing new product candidates; |
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negotiating favorable terms in any collaboration, licensing, or other arrangements into which we may enter;
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maintaining, protecting, and expanding our portfolio of intellectual property rights, including patents,
trade secrets, and know-how; and |
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attracting, hiring, and retaining qualified personnel. |
Even if one or more of the product candidates that we develop is
approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved product candidate.
Our expenses could increase beyond expectations if we are required by the FDA, the European Medicines Agency (EMA) or other regulatory
agencies, domestic or foreign, or ethical committees in medical centers, to change our manufacturing processes or assays or to perform
clinical, nonclinical, or other types of studies in addition to those that we currently anticipate. In cases where we are successful in
obtaining regulatory approvals to market one or more of our product candidates, our revenue will be dependent, in part, upon the size
of the markets in the territories for which we gain regulatory approval, the accepted price for the product, the ability to get reimbursement
at any price, and whether we own the commercial rights for that territory. If the number of our addressable disease patients is not as
significant as we estimate, the indication approved by regulatory authorities is narrower than we expect, or the reasonably accepted population
for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales
of such products, even if approved. Additionally, there might be changes in supply or other changes in the approved drugs of which our
products will be administrated in combination, where such changes can affect our revenues. Further, if we are not able to generate revenue
from the sale of any approved products, we may be forced to cease operations.
We will need to raise substantial additional funding before we can
expect to become profitable from product sales. This additional financing may not be available on acceptable terms, or at all. Failure
to obtain this necessary capital when needed may force us to delay, limit, or terminate our product development efforts or other operations.
We are currently advancing our SIL204 platform product through preclinical and clinical
development. Developing our product candidates is expensive, and we expect our research and development expenses to increase substantially
in connection with our ongoing activities, particularly as we advance pour product candidates through clinical studies.
If our product candidates enter and advance through preclinical studies and clinical
trials, we will need substantial additional funds to expand our development, regulatory, manufacturing, marketing and sales capabilities
or contract with other organizations to provide those capabilities for it. We have used substantial funds to develop our product candidates
and delivery technologies and will require significant funds to conduct further research and development and preclinical testing and clinical
trials of our product candidates, to seek regulatory approvals for our product candidates and to manufacture and market products, if any,
which are approved for commercial sale.
As of June 30, 2025, our cash and
cash equivalents were $3.5 million. Based upon our then-expected level of operating expenditures, we have substantial doubt about our
ability to continue as a going concern as of such date. Please see the risk factor below titled “Our independent registered public
accounting firm’s report contains an explanatory paragraph.” Beyond our activities for the next 12 months, we furthermore
expect that we will require substantial additional capital to advance manufacturing capabilities for, to obtain regulatory approval for,
and to commercialize, our product candidates. In addition, our operating plans may change as a result of many factors that may currently
be unknown to it, and we may need to seek additional funds sooner than planned. Our future funding requirements will depend on many factors,
including but not limited to:
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the scope, rate of progress, results and cost of our clinical studies, preclinical testing, toxicology
studies, and other related activities; |
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the cost of manufacturing clinical supplies, and establishing commercial supplies of our product candidates
and any future products; |
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the number and characteristics of product candidates that we pursue; |
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the cost, timing, and outcomes of regulatory approvals; |
8
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the cost and timing of establishing sales, marketing, and distribution capabilities; and |
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the terms and timing of any collaborative, licensing, and other arrangements that we may establish.
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Any additional fundraising efforts may divert our management from our day-to-day activities,
which may adversely affect our abilities to develop and commercialize our product candidates. In addition, we cannot guarantee that future
financing will be available in sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of any financing may adversely
affect the holdings or the rights of our shareholders, and the issuance of additional securities, whether equity or debt, by us, or the
possibility of such issuance, may cause the market price of our ordinary shares to decline due to expected or actual dilution. The incurrence
of indebtedness could result in increased fixed payment obligations, and we may be required to agree to certain restrictive covenants,
such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell, or license intellectual property
rights, and other operating restrictions that could adversely impact our ability to conduct our business. We could also be required to
seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable, and we
may be required to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to it,
any of which may have a material adverse effect on our business, operating results, and prospects. Even if we believe we have sufficient
funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific
strategic considerations.
If we are unable to obtain funding on a timely basis, we may be required to significantly
curtail, delay, or discontinue one or more of our research, development or manufacturing programs or the commercialization of any product
candidates, or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially
affect our business, financial condition, and results of operations.
Our independent registered public accounting firm’s report
contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”
We have limited cash resources and will need to obtain additional funds in order to
satisfy our liquidity needs. Silexion will require significant funds to conduct further research and development and preclinical testing
and clinical trials of our product candidates, to seek regulatory approvals for our product candidates and to manufacture and market products,
if any, which are approved for commercial sale. In light of our significant working capital needs and the absence of any committed source
of financing to meet those needs, there may be substantial doubt raised about our ability to continue as a “going concern.”
Please see the explanatory paragraph under the heading “Substantial Doubt about the Company’s Ability to Continue as a Going
Concern” in our independent auditors’ report on our financial statements that appear in this prospectus. Those financial statements
do not include any adjustments that might result from our inability to continue as a “going concern.”
Risks Related to the Research and Development of Silexion’s Product Candidates
The approach we are taking to discover and develop novel RNAi therapeutics
is unproven for oncology and may never lead to marketable products.
We have concentrated our efforts and therapeutic product research on RNAi technology,
and RNAi drug delivery and our future success depends on the successful development of this technology and products based on it. We have
not received regulatory approval to market therapeutics utilizing RNAi based drugs, including siRNAs, the class of molecule we are trying
to develop into products. The scientific discoveries that form the basis for our efforts to discover and develop new drugs are relatively
new. The scientific evidence to support the feasibility of developing drugs and the delivery of such drugs based on these discoveries
is both preliminary and limited. Skepticism as to the feasibility of developing RNAi therapeutics for oncology has been expressed in scientific
literature. For example, there are potential challenges to achieving safe RNAi therapeutics based on the so-called off-target effects
and activation of the interferon response, and other potential challenges to achieve safe and potent levels of RNAi drugs due to complications
associated with drug delivery. In addition, decisions by other companies with respect to their RNAi development efforts may increase skepticism
in the marketplace regarding the potential for RNAi therapeutics.
Relatively few product candidates based on these discoveries have ever been tested in
animals or humans. siRNAs may not naturally possess the inherent properties typically required of drugs, such as the ability to be stable
in the body long enough to reach the tissues in which their effects are required, or the ability to enter cells within these tissues in
order to exert their effects. We are currently has only limited data, and no conclusive evidence, to suggest that it can introduce these
drug-like properties into siRNAs. We may spend large amounts of money trying to introduce these properties, and may never succeed
in doing so. In addition, these compounds may not demonstrate in patients the chemical and pharmacological properties ascribed to them
in laboratory studies, and they may interact with human biological systems in unforeseen, ineffective or harmful ways. As a result, we
may never succeed in developing a marketable product, we may not become profitable and the value of our ordinary shares may decline.
The FDA has relatively limited experience with RNAi and siRNA based therapeutics. Limited
granted approvals to any person or entity, including us, to market and commercialize therapeutics using RNAi based drugs including siRNA,
which may increase the complexity, uncertainty and length of the regulatory approval process for our product candidates. Further, siRNA
therapies are part of a broader therapeutic category called oligonueciotides, and there are only a few approved drugs based on this therapeutic
category. We may never receive approval to market and commercialize any product candidate.
9
Further, our focus on RNAi technology for developing drugs, as opposed to multiple,
more proven technologies for drug development, increases the risks associated with the ownership of our ordinary shares. If we are not
successful in developing a product candidate using RNAi technology, we may be required to change the scope and direction of our product
development activities. In that case, we may not be able to identify and implement successfully an alternative product development strategy.
We are heavily dependent on the success of our product candidates,
which are in the early stages of preclinical or clinical development. We cannot give any assurance that any of our product candidates
will receive regulatory approval, which is necessary before they can be commercialized.
To date, we have invested a substantial amount of our efforts and financial resources
to: (i) identify and develop our product candidates, including conducting preclinical and clinical studies and providing general
and administrative support for these operations; and (ii) develop and secure our intellectual property portfolio for our product
candidates. Our future success is dependent on our ability to successfully develop, obtain regulatory approval for, and then successfully
commercialize one or more product candidates. We currently generate no revenue from sales of any drugs or technology platforms, and we
may never be able to develop or commercialize a marketable drug.
Each of our product candidates is in the early stages of development and will require
additional clinical development (and in some cases additional preclinical development), management of nonclinical, clinical and manufacturing
activities, regulatory approval, obtaining adequate manufacturing supply, building of a commercial organization, and significant marketing
efforts before we generate any revenue from product sales. We have concluded Phase II study on first-generation Loder and moved
on to SIL204. Silexion hopes to initiate the next clinical trial with SIL204 during the first half of 2026 for locally advanced
pancreatic cancer. We are not permitted to market or promote any of our product candidates before we receive regulatory approval from
the FDA or comparable foreign regulatory authorities, and we may never receive such regulatory approval for any of our product candidates.
We have never submitted marketing applications to the FDA or comparable foreign regulatory
authorities. We cannot be certain that any of our product candidates will be successful in clinical studies or receive regulatory approval.
Further, our product candidates may not receive regulatory approval even if they are successful in clinical studies. If we do not receive
regulatory approvals for our product candidates, we may not be able to continue our operations.
We generally plan to seek regulatory approval to commercialize our product candidates
in the United States, the EU and in additional foreign countries. To obtain regulatory approval in other countries, we must comply with
numerous and varying regulatory requirements of such other countries regarding safety, efficacy, chemistry, manufacturing and controls,
clinical studies, commercial sales, pricing, and distribution of our product candidates. Even if we are successful in obtaining approval
in one jurisdiction, it cannot ensure that we will obtain approval in any other jurisdictions. If we are unable to obtain approval for
our product candidates in multiple jurisdictions, our revenue and results of operations could be negatively affected.
The regulatory approval processes of the FDA and comparable foreign
authorities are lengthy, time consuming, and inherently unpredictable. If we are ultimately unable to obtain regulatory approval for our
product candidates, our business will be substantially harmed.
The time required to develop a drug and obtain approval by the FDA and comparable foreign
authorities is unpredictable, typically takes many years following the commencement of clinical studies, and depends upon numerous factors.
In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the
course of a product candidate’s clinical development and may vary among jurisdictions, which may cause delays in the approval or
the decision not to approve an application. We have not obtained regulatory approval for any product candidate, and it is possible that
none of our existing product candidates or any product candidates we may seek to develop in the future will ever obtain regulatory approval.
Applications for our product candidates could fail to receive regulatory approval for
many reasons, including but not limited to the following:
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the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of
our clinical studies; |
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we may be unable to demonstrate to the FDA or comparable foreign regulatory authorities that a product
candidate’s benefit to risk ratio for our proposed indication is acceptable; |
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the population studied in the clinical program may not be sufficiently broad or representative to assure
safety in the full population for which we seek approval; |
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the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from
preclinical studies or clinical studies; |
10
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the data collected from clinical studies of our product candidates may not be sufficient to support the
submission of a new drug application (NDA) or a biologics license application (BLA) or other submission or to obtain regulatory approval
in the United States or elsewhere; |
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the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes, test
procedures and specifications, or facilities of third-party manufacturers with which we contract for clinical and commercial supplies;
and |
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the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly
change in a manner rendering our clinical data insufficient for approval. |
This lengthy development and approval process, as well as the unpredictability of the
results of clinical studies, may result in our failing to obtain regulatory approval to market any of our product candidates, which would
significantly harm our business, and our consolidated results of operations and prospects.
Clinical drug development involves a lengthy and expensive process
with an uncertain outcome, and results of preclinical activity or earlier studies may not be predictive of future study results.
Before obtaining marketing approval from regulatory authorities for the sale of our
product candidates, we must conduct extensive clinical studies to demonstrate the safety and efficacy of the product candidates in humans.
Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time
during the clinical study process. The results of preclinical studies and early clinical studies of product candidates often are not predictive
of the results of later-stage clinical studies. In general, even product candidates that have shown promising results in preclinical activities
or early-stage clinical studies may still suffer significant setbacks in subsequent registration clinical studies. For example, the safety
or efficacy results generated to date in preclinical and clinical studies for siG12DLoder or preclinical studies with SIL204 do not ensure
that later clinical studies will demonstrate similar results. There is a high failure rate for drugs and biologics proceeding through
clinical studies, and product candidates in later stages of clinical studies may fail to show the desired safety and efficacy traits despite
having progressed through preclinical studies and initial clinical studies. A number of companies in the biopharmaceutical industry have
suffered significant setbacks in advanced clinical studies due to lack of efficacy or adverse safety profiles, notwithstanding promising
results in earlier studies. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses. We
do not know whether any Phase 1, Phase 2, Phase 3 or other clinical studies we may conduct will demonstrate consistent or adequate efficacy
and safety sufficient to obtain regulatory approval to market our drug candidates.
Events that may prevent successful or timely completion of clinical development include
but are not limited to:
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inability to generate sufficient preclinical, toxicology, or other in
vivo or in vitro data to support the initiation of human clinical studies;
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delays in reaching a consensus with regulatory agencies on study design; |
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delays in reaching agreement on acceptable terms with prospective contract research organizations (CROs)
and clinical study sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and
clinical study sites; |
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delays in obtaining required Institutional Review Board (IRB) or Ethics Committee approval at each clinical
study site; |
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imposition of a clinical hold by regulatory agencies, after review of an investigational new drug (IND)
application, or equivalent application, or an inspection of our clinical study operations or study sites; |
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difficulty collaborating with patient groups and investigators; |
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failure by our CROs, other third parties, or us to adhere to clinical study requirements; |
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failure to perform in accordance with the FDA’s good clinical practices requirements or applicable
regulatory guidelines in other countries; |
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occurrence of serious adverse events associated with the product candidate that are viewed to outweigh
our potential benefits; |
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the cost of clinical studies of our drug candidates being greater than we anticipate; |
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clinical studies of our drug candidates producing negative or inconclusive results, which may result in
us deciding, or regulators requiring us, to conduct additional clinical studies or abandon drug development programs; and |
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failures associated with data interpretation, data management and data storage of such studies. |
If we ultimately are unable to successfully complete clinical development of our product
candidates, we would be forced to cease operations. Clinical study delays could also shorten any periods during which our products have
patent protection and may allow our competitors to bring products to market before we do, which could impair our ability to obtain orphan
exclusivity and to successfully commercialize our product candidates.
We may find it difficult to enroll patients in our clinical studies.
Difficulty in enrolling patients could delay or prevent clinical studies of our product candidates.
Identifying and qualifying patients to participate in clinical studies of our product
candidates is critical to our success. The timing of our clinical studies depends in part on the speed at which we can recruit patients
to participate in testing our product candidates, and we may experience delays in our clinical studies if we encounter difficulties in
enrollment.
Some of the conditions for which we plan to evaluate our current product candidates
are relatively rare diseases. For example, according to the National Cancer Institute, approximately 61,000 patients were diagnosed with
pancreatic cancer in the U.S. in 2020. Accordingly, there are limited patient pools from which to draw for clinical studies. In addition
to the relative rarity of these diseases, the eligibility criteria of our clinical studies will further limit the pool of available study
participants as we will require that patients have specific characteristics that we can measure or to assure their disease is either severe
enough or not too advanced to include them in a study. We also may not be able to identify, recruit, and enroll a sufficient number of
patients to complete our clinical studies because of the perceived risks and benefits of the product candidate under study, the availability
and efficacy of competing therapies and clinical studies, the proximity and availability of clinical study sites for prospective patients,
and the patient referral practices of physicians.
In addition, even for the more prevalent diseases which we target, such as prostate
and breast cancer, enrolling patients in our clinical studies may be difficult. There may be several ongoing clinical studies for these
diseases (both RNAi based and otherwise), and we may face competition in enrolling patients. The number of patients in such clinical studies
might be significantly large. In addition, the time period required to achieve indications of safety and efficacy in such studies may
be very long. Some of these competing studies may be conducted by other biopharmaceutical companies with more experience in clinical testing
and with much greater financial, technical and human resources than we have.
If patients are unwilling to participate in our studies for any reason, the timeline
for recruiting patients, conducting studies, and obtaining regulatory approval of our potential products will be delayed.
Our product candidates and the administration of our product candidates
may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial
profile of an approved label, or result in significant negative consequences following marketing approval, if any.
Undesirable side effects including toxicology caused by our product candidates could
cause us or regulatory authorities to interrupt, delay, or halt clinical studies and could result in a more restrictive label or the delay
or denial of regulatory approval by the FDA or other comparable foreign authorities. For example, there are known immune stimulation and
other side effects associated with RNAi. The implantation of SIL204 may entail the use of endoscopic ultrasound (EUS) needles, which may
cause pancreatitis, bleeding or other procedural related safety issues. The Phase 2 clinical study with siG12DLoder indicated that Loder
treatment was well tolerated. Safety events that were observed were primarily related to procedure, mainly reversible abdominal pain.
In addition, the presence of a foreign body such as our SIL204) in human tissue may cause inflammation. Results of our studies could reveal
a high and unacceptable severity and prevalence of these or other side effects. In such an event, such studies could be suspended or terminated,
and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny or withdraw approval of
our product candidates for any or all targeted indications.
The drug-related, drug-product related, and administration related side effects
could affect patient recruitment, the ability of enrolled patients to complete the study, or result in potential product liability claims.
we do not currently have product liability insurance and does not anticipate obtaining product liability insurance until such time as
we have received FDA or other comparable foreign authority approval for a product and there is a product that is being provided to patients
outside of clinical trials.
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Additionally, if one or more of our product candidates receives marketing approval,
and we or others later identify undesirable side effects caused by such products, a number of potentially significant negative consequences
could result, including but not limited to:
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regulatory authorities may withdraw approvals of such product; |
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regulatory authorities may require additional warnings on the label; |
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We may be required to create a Risk Evaluation and Mitigation Strategy (REMS) plan or similar plan in other
jurisdictions, which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication
plan for healthcare providers, and/or other elements to assure safe use; |
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We could be sued and held liable for harm caused to patients; and |
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Our reputation may suffer. |
Any of these events could prevent us from achieving or maintaining market acceptance
of the particular product candidate, if approved, and could significantly harm our business, results of operations, and prospects.
Even if we obtain regulatory approval for a product candidate, our
products will remain subject to regulatory scrutiny.
If our product candidates are approved, they will be subject to ongoing regulatory requirements
for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing studies,
and submission of safety, efficacy, and other post-market information, including both federal and state requirements in the United States
and other jurisdictions, where the product might be marketed. Accordingly, we and others with whom we work must continue to expend time,
money, and effort in all areas of regulatory compliance, including manufacturing, production, and quality control.
Any regulatory approvals that we receive for our product candidates may also be subject
to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements
for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy
of the product candidate. We will also be required to report certain adverse reactions and production problems, if any, to the FDA, and
to comply with requirements concerning advertising and promotion for our products. Promotional communications with respect to prescription
drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s
approved label. As such, we may not promote our products for indications or uses for which they do not have FDA approval. The holder of
an approved NDA or BLA must also submit new or supplemental applications and obtain FDA approval for certain changes to the approved product,
product labeling, or manufacturing process. We could also be asked to conduct post-marketing clinical studies to verify the safety and
efficacy of our products in general or in specific patient subsets. If we obtain original marketing approval via the accelerated approval
pathway, we could be required to conduct a successful post-marketing clinical study to confirm clinical benefit for our products. An unsuccessful
post-marketing study or failure to complete such a study could result in the withdrawal of marketing approval. Furthermore, any new legislation
addressing drug safety issues could result in delays in product development or commercialization or increased costs to assure compliance.
Foreign regulatory authorities impose similar requirements.
If a regulatory agency discovers previously unknown problems with a product, such as
adverse events of unanticipated severity or frequency, or disagrees with the promotion, marketing or labeling of a product, such regulatory
agency may impose restrictions on that product or us, including requiring withdrawal of the product from the market. If we fail to comply
with applicable regulatory requirements, a regulatory agency or enforcement authority may, among other things:
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issue warning letters; |
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impose civil or criminal penalties; |
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suspend or withdraw regulatory approval; |
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suspend any of our ongoing clinical studies; |
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refuse to approve pending applications or supplements to approved applications submitted
by Silexion; or |
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seize or detain products, or require a product recall. |
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Any government investigation of alleged violations of law could require us to expend
significant time and resources in response, and could generate negative publicity. Any failure to comply with ongoing regulatory requirements
may significantly and adversely affect our ability to commercialize and generate revenue from our products. If regulatory sanctions are
applied or if regulatory approval is withdrawn, the value of the Company and our operating results will be adversely affected.
The FDA and other regulatory agencies actively enforce the laws
and regulations prohibiting the promotion of off-label uses.
If any of our product candidates are approved and they are found to have been improperly
promoted for unapproved uses of those products, we may become subject to significant liability. The FDA and other regulatory agencies
or other governmental bodies strictly regulate the promotional claims that may be made about prescription products, such as our product
candidates, if approved. In particular, a product may not be promoted for uses that are not approved by the FDA or such other regulatory
agencies as reflected in the product’s approved labeling. If we receive marketing approval for a product candidate, physicians may
nevertheless prescribe it to their patients in a manner that is inconsistent with the approved label. If we are found to have promoted
such unapproved, or off-label, uses, they may become subject to significant liability. The U.S. federal government has levied large civil
and criminal fines against companies for alleged improper promotion of off-label use and has enjoined several companies from engaging
in off-label promotion. The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified
promotional conduct is changed or curtailed. If we cannot successfully manage the promotion of our product candidates, if approved, we
could become subject to significant liability, which would materially adversely affect our business and financial condition.
We and our collaborators are subject to significant regulation with
respect to manufacturing our product candidates. The facilities we subcontract to for manufacturing may not meet regulatory requirements
and may have limited capacity.
All entities involved in the preparation of therapeutics for clinical studies or commercial
sale are subject to extensive regulation. Components of a finished therapeutic product approved for commercial sale or used in late-stage
clinical studies must be manufactured in accordance with current GMP (cGMP) or, in other countries, GMP. These regulations govern manufacturing
processes and procedures (including record keeping) and the implementation and operation of quality systems to control and assure the
quality of investigational products and products approved for sale. Poor control of production processes can lead to the introduction
of contaminants or to inadvertent changes in the properties or stability of our product candidates that may not be detectable in final
product testing. Us, our collaborators, or any contract manufacturers must supply all necessary documentation in support of an NDA, BLA,
or Marketing Authorization Application (MAA) on a timely basis and must adhere to Good Laboratory Practices (GLP) and cGMP/GMP regulations
enforced by the FDA and other regulatory agencies through their facilities and data and documentation inspection programs. We have never
produced a commercially approved pharmaceutical product and therefore have not obtained the requisite regulatory authority approvals to
do so. Our facilities and quality systems, and those of our collaborators and any third-party contractors, must pass a pre-approval inspection
for compliance with the applicable regulations as a condition of regulatory approval of our product candidates or any of our other potential
products. In addition, the regulatory authorities may, at any time, inspect a manufacturing facility involved with the preparation of
our product candidates or our other potential products or the associated quality systems for compliance with the regulations applicable
to the activities being conducted. If these facilities do not pass a preapproval plant inspection, regulatory approval of the products
may not be granted or may be substantially delayed until any violations are corrected to the satisfaction of the regulatory authority,
if ever.
The regulatory authorities also may, at any time following approval of a product for
sale, audit a manufacturing facility. If any such inspection or audit identifies a failure to comply with applicable regulations or if
a violation of our product specifications or applicable regulations occurs independent of such an inspection or audit, we or the relevant
regulatory authority may require remedial measures that may be costly and/or time consuming for us or a third party to implement, and
that may include the temporary or permanent suspension of a clinical study or commercial sales or the temporary or permanent closure of
a facility. Any such remedial measures imposed upon us, or third parties with whom we contract could materially harm our business.
If we, our collaborators, or any of our third-party manufacturers fail to maintain
regulatory compliance, the FDA or other applicable regulatory authorities can impose regulatory sanctions including, among other things,
refusal to approve a pending application for a new drug product or biologic product, withdrawal of an approval, or suspension of production.
As a result, our business, financial condition, and results of operations may be materially harmed.
These factors could cause us to incur higher costs and could cause the delay or termination
of clinical studies, regulatory submissions, required approvals, or commercialization of our product candidates.
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We are subject to a multitude of manufacturing risks, any of which
could substantially increase our costs and limit supply of our product candidates.
The process of manufacturing our product candidates is complex, highly regulated, and
subject to several risks, including but not limited to:
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the process of manufacturing RNAi-drugs, drug substances, and RNAi-delivery vehicles, such as our product
candidates, is extremely susceptible to product loss due to contamination, equipment failure or improper installation or operation of
equipment, or vendor or operator error. Even minor deviations from normal manufacturing processes for any of our product candidates could
result in reduced production yields, product defects, and other supply disruptions. If microbial, viral, or other contaminations are discovered
in our product candidates or in the manufacturing facilities in which our product candidates are made, such manufacturing facilities may
need to be closed for an extended period of time to investigate and remedy the contamination; and |
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the manufacturing facilities in which our product candidates are made could be adversely affected by equipment
failures, labor shortages, natural disasters, power failures, and numerous other factors. |
Any adverse developments affecting manufacturing operations for our product candidates
may result in shipment delays, inventory shortages, lot failures, withdrawals or recalls, or other interruptions in the supply of our
product candidates. We may also have to take inventory write-offs and incur other charges and expenses for product candidates that
fail to meet specifications, undertake costly remediation efforts, or seek more costly manufacturing alternatives.
Risks Related to Our Reliance on Third Parties
We rely on third parties to conduct its preclinical and clinical
studies and perform other tasks for us. If these third parties do not successfully carry out their contractual duties, meet expected deadlines,
or comply with regulatory requirements, we may not be able to obtain regulatory approval for or commercialize its product candidates,
and our business could be substantially harmed
We have relied upon and plans to continue to rely upon third-party CROs to monitor and
manage data for our ongoing preclinical and clinical programs. We rely on these parties for execution of our preclinical and clinical
studies, and control only certain aspects of their activities. Nevertheless, we are responsible for ensuring that each of our studies
is conducted in accordance with the applicable protocol, legal, regulatory, and scientific standards and our reliance on the CROs does
not relieve us of our regulatory responsibilities. we and our CROs and other vendors are required to comply with cGMP and GLP, which are
regulations and guidelines enforced by the FDA, the Competent Authorities of the Member States of the European Economic Area (EEA) and
comparable foreign regulatory authorities for all of our product candidates in clinical development. Regulatory authorities enforce these
regulations through periodic inspections of study sponsors, principal and other investigators, study sites, and other contractors. If
we or any of our CROs or vendors fail to comply with applicable regulations, the clinical data generated in our clinical studies may be
deemed unreliable and the FDA, EMA, or comparable foreign regulatory authorities may require us to perform additional clinical studies
before approving our marketing applications. We cannot assure you that upon inspection by a given regulatory authority, such regulatory
authority will determine that any of our clinical studies comply with Good Clinical Practices (GCP) regulations. In addition, our clinical
studies must be conducted with product produced under cGMP/GMP regulations. Our failure to comply with these regulations may require us
to repeat clinical studies, which would delay the regulatory approval process.
If any of our relationships with these third-party CROs terminate, we may not be able
to enter into arrangements with alternative CROs or do so on commercially reasonable terms. In addition, our CROs are not our employees,
and, except for remedies available to us under our agreements with such CROs, we cannot control whether or not they devote sufficient
time and resources to our on-going clinical, nonclinical, and preclinical programs. If CROs do not successfully carry out their contractual
duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they
obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements, or for other reasons, our clinical
studies may be extended, delayed, or terminated, and we may not be able to obtain regulatory approval for or successfully commercialize
our product candidates. CROs may also generate higher costs than anticipated. As a result, our results of operations and the commercial
prospects for our product candidates would be harmed, our costs could increase, and our ability to generate revenue could be delayed.
Switching or adding additional CROs involves additional cost and requires management
time and focus. In addition, there is a natural transition period when a new CRO commences work. As a result, delays occur, which can
materially impact our ability to meet our desired clinical development timelines. Though we carefully manage our relationships with our
CROs, there can be no assurance that we will not encounter similar challenges or delays in the future or that these delays or challenges
will not have a material adverse impact on our business, financial condition, and prospects.
We currently rely on third parties to manufacture the raw materials
and products that we use to create our product candidates and to supply us with the medical devices used to administer such product. This
reliance requires us to share our trade secrets with these third parties, which increases the possibility that a competitor will discover
them or that our trade secrets will be misappropriated or disclosed.
Because we rely on third parties to provide us with the materials that we use to develop
and manufacture our product candidates, we may, at times, share trade secrets with such third parties. We seek to protect our proprietary
technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, collaborative research
agreements, consulting agreements, or other similar agreements with our collaborators, advisors, employees, and consultants prior to beginning
research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our
confidential information, such as trade secrets. Despite the contractual provisions employed when working with third parties, the need
to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors,
are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. Given that our
proprietary position is based, in part, on our know- how and trade secrets, a competitor’s discovery of our trade secrets or other
unauthorized use or disclosure would impair our competitive position and may have a material adverse effect on our business.
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Our reliance on third parties to manufacture the raw materials and
products that are used to create our product candidates and to supply us with the medical devices used to administer such product might
cause our business harm if manufacturers fail to provide us with sufficient quantities of these materials and products or fail to do so
at acceptable quality levels or prices.
We do not currently have the infrastructure or capability internally to develop the
raw materials and other products that we use to manufacture our product candidates, and we lack the resources and the capability to manufacture
the medical devices which we use to administer our products. There are a limited number of suppliers for these raw materials, products
and devices, and there may be a need to identify alternate suppliers to prevent a possible disruption to our clinical studies, and, if
approved, ultimately for commercial sale. We cannot assure you that we will be able to identify alternate suppliers if the need arises
at acceptable quality levels or prices.
Risks Related to Commercialization of Our Product Candidates
If the market opportunities for our product candidates are smaller
than we believe they are, our revenue may be adversely affected, and our business may suffer. Because some of the target patient populations
of our product candidates are small, we must be able to successfully identify patients and achieve a significant market share to maintain
profitability and growth.
We focus a substantial part of our research and product development on treatments for
locally advanced pancreatic cancer with certain specific mutations. Given the small number of patients who have this disease with these
mutations, it is critical to our ability to grow and become profitable that we continue to successfully identify effected patients. Our
projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential
to benefit from treatment with our product candidates, are based on our beliefs and estimates. These estimates have been derived from
a variety of sources, including scientific literature, surveys of clinics, patient foundations, or market research, and may prove to be
incorrect. Further, new studies may change the estimated incidence or prevalence of these diseases. The number of patients may turn out
to be lower than expected. The effort to identify patients with diseases we seek to treat is in its early stages, and we cannot accurately
predict the number of patients for whom treatment might be possible. Additionally, the potentially addressable patient population for
each of our product candidates may be limited or may not be amenable to treatment with its product candidates, and new patients may become
increasingly difficult to identify or gain access to, which would adversely affect our results of operations and business.
We do not have experience producing our product candidates at commercial
levels and may not achieve the necessary regulatory approvals or produce product candidates at the quality, quantities, locations, and
timing needed to support commercialization. Additionally, we intend to rely on third-party manufacturers to produce the raw materials
and products that we use to manufacture our product candidates, but we have not entered into binding agreements with any such manufacturers
to support commercialization.
We do not currently have the experience or ability to produce product candidates at
commercial levels. We may run into technical or scientific issues related to manufacturing or development that we may be unable to resolve
in a timely manner or with available funds. We also have not completed all of the characterization and validation activities necessary
for commercialization and regulatory approvals. If we do not conduct all such necessary activities, our commercialization efforts will
be harmed.
Although we intend to rely on third-party manufacturers for the raw materials and products
to support our own manufacturing of our product candidates for commercialization, we have not yet entered into agreements with such manufacturers.
We may be unable to negotiate binding agreements with the manufacturers to support our commercialization activities at commercially reasonable
terms. Additionally, these third party manufacturers may not be able to supply us with the necessary quantities of these raw materials
and products to support our own manufacturing process, or in compliance with cGMP or other pertinent regulatory requirements, and within
our planned timeframe and cost parameters, and the development and sales of our products, if approved, may be materially harmed.
We face intense competition and rapid technological change and the
possibility that our competitors may develop therapies that are similar, more advanced, or more effective than ours, which may adversely
affect our financial condition and our ability to successfully commercialize our product candidates.
The biotechnology and pharmaceutical industries are intensely competitive and subject
to rapid and significant technological change. We are currently aware of various existing therapies in the market and in development that
may in the future compete with our product candidates. For example, there is an increasing number of companies commercializing treatments
and/or developing programs specifically targeting KRAS mutations, including KRAS G12D and KRAS G12V, in a variety of manners and for a
variety of indications, including cancer, including Bristol-Myers Squibb Company (through the recently acquired Mirati Therapeutics, Inc.),
Revolution Medicines, Inc., AstraZeneca (in collaboration with Usynova), Boehringer and Gilead. Smaller and other early-stage companies
may also prove to be significant competitors. Treatments for cancer currently include surgery, radiation therapy, chemotherapy, hormone
therapy, immunotherapy and combined treatment modalities such as chemo-radiotherapy. Other approaches may also emerge for the treatment
of any of the disease areas in which we focus.
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We have competitors both in the United States and internationally, including major multinational
pharmaceutical companies, specialty pharmaceutical companies, and biotechnology companies. Our competitors may succeed in developing,
acquiring, or licensing on an exclusive basis, products that are more effective or less costly than any product candidate that we may
develop, or achieve earlier patent protection, regulatory approval, product commercialization, and market penetration than we do. Additionally,
technologies developed by our competitors may render our potential product candidates uneconomical or obsolete, and we may not be successful
in marketing our product candidates against competitors.
We currently have no marketing and sales organization. If we are
unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates,
we may be unable to generate any revenue.
We as a company have no experience selling and marketing our product candidates, and
currently have no marketing or sales organization. To successfully commercialize any products that may result from our development programs,
we will need to develop these capabilities, either on our own or with others. If our product candidates receive regulatory approval, we
intend to establish a sales and marketing organization with technical expertise and supporting distribution capabilities to commercialize
our product candidates in major markets, which will be expensive, difficult, and time consuming. Any failure or delay in the development
of our internal sales, marketing, and distribution capabilities would adversely impact the commercialization of our products.
Further, given our lack of prior experience in marketing and selling biopharmaceutical
products, our initial estimate of the size of the required sales force may be materially more or less than the size of the sales force
actually required to effectively commercialize our product candidates. As such, we may be required to hire the commercialization of our
product candidates, or we may incur excess costs as a result of hiring more sales representatives than necessary. With respect to certain
geographical markets, we may enter into collaborations with other entities to utilize their local marketing and distribution capabilities,
but we may be unable to enter into such agreements on favorable terms, if at all. If our future collaborators do not commit sufficient
resources to commercialize our future products, if any, and we are unable to develop the necessary marketing capabilities on our own,
we will be unable to generate sufficient product revenue to sustain our business. We may be competing with companies that currently have
extensive and well-funded marketing and sales operations. Without an internal team or the support of a third party to perform marketing
and sales functions, we may be unable to compete successfully against these more established companies.
The market may not be receptive to our product candidates based
on a novel therapeutic modality, and we may not generate any future revenue from the sale or licensing of product candidates.
Even if approval is obtained for a product candidate, we may not generate or sustain
revenue from sales or licensing of the product due to factors such as whether the product can be sold at a competitive cost and otherwise
accepted in the market. The product candidates that we are developing are based on new technologies and therapeutic approaches. Market
participants with significant influence over acceptance of new treatments, such as physicians and third-party payors, may not adopt
a treatment based on RNAi, including siRNA technology, and we may not be able to convince the medical community and third-party payors
to accept and use, or to provide favorable reimbursement for, our product candidates. Market acceptance of Silexion’s product candidates
will depend on, among other factors:
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the timing of our receipt of any marketing and commercialization approvals; |
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the terms of any approvals and the countries in which approvals are obtained; |
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the safety and efficacy of our product candidates; |
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the prevalence and severity of any adverse side effects associated with our product candidates; |
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limitations or warnings contained in any labeling approved by the FDA or other regulatory authorities;
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relative convenience and ease of administration of our product candidates; |
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the willingness of patients to accept any new methods of administration; |
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the success of our physician education programs; |
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the availability of adequate government and third-party payor reimbursement; |
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the pricing of our products, particularly as compared to alternative treatments; and |
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availability of alternative effective treatments for the disease indications our product candidates are
intended to treat and the relative risks, benefits and costs of those treatments. |
With our focus on the emerging therapeutic modality RNAi, these risks may increase to
the extent the space becomes more competitive or less favored in the commercial marketplace. Some of our target diseases, such as pancreatic
cancer, are relatively rare. Because of the small patient population for a rare disease, if pricing is not approved or accepted in the
market at an appropriate level for an approved product, such product may not generate enough revenue to offset costs of development, manufacturing,
marketing and commercialization. Market size is also a variable in disease indications not classified as rare. Our estimates regarding
potential market size for any indication may be materially different from what we discover to exist at the time we commence commercialization,
if any, for a product, which could result in significant changes in our business plan and have a material adverse effect on our business,
financial condition, results of operations and prospects.
Even if a potential product displays a favorable efficacy and safety profile in preclinical
and clinical studies, market acceptance of the product will not be fully known until after it is launched. Our efforts to educate the
medical community and third-party payors on the benefits of the product candidates may require significant resources and may never be
successful. If our product candidates are approved but fail to achieve an adequate level of acceptance by physicians, patients, third-party
payors, and others in the medical community, we will not be able to generate sufficient revenue for us to become or remain profitable.
The insurance coverage and reimbursement status of newly-approved products
is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for new or current products could limit our ability to
market those products and decrease our ability to generate revenue.
Some of our target patient populations are small, and, accordingly, the pricing, coverage,
and reimbursement of our respective product candidates, if approved, must be adequate to support our commercial infrastructure. Our per-patient prices
must be sufficient to recover our development and manufacturing costs and potentially achieve profitability. Accordingly, the availability
and adequacy of coverage and reimbursement by governmental and private payors are essential for most patients to be able to afford expensive
treatments such as our, assuming approval. Sales of our product candidates will depend substantially, both domestically and abroad, on
the extent to which the costs of our product candidates will be paid for by health maintenance, managed care, pharmacy benefit, and similar
healthcare management organizations, or reimbursed by government authorities, private health insurers, and other third-party payors.
If coverage and reimbursement are not available, or are available only to limited levels, Silexion may not be able to successfully commercialize
our product candidates. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish
or maintain pricing sufficient to realize a return on our investment.
There is significant uncertainty related to the insurance coverage and reimbursement
of newly approved products. In the United States, the principal decisions about coverage and reimbursement for new drugs are typically
made by the Centers for Medicare & Medicaid Services, or CMS, an agency within the U.S. Department of Health and Human Services,
as CMS decides whether and to what extent a new drug will be covered and reimbursed under Medicare. Private payors tend to follow the
coverage reimbursement policies established by CMS to a substantial degree. It is difficult to predict what CMS will decide with respect
to reimbursement for products such as ours.
Outside the United States, international operations are generally subject to extensive
governmental price controls and other market regulations, and we believe the increasing emphasis on cost-containment initiatives
in Europe, Canada, and other countries has, and will continue to, put pressure on the pricing and usage of our product candidates. In
many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems. In
general, the prices of medicines under such systems are substantially lower than in the United States. Other countries allow companies
to fix their own prices for medicinal products, but monitor and control company profits. Additional foreign price controls or other changes
in pricing regulation could restrict the amount that we are able to charge for our product candidates. Accordingly, in markets outside
the United States, the reimbursement for our products may be reduced compared with the United States and may be insufficient
to generate commercially reasonable revenue and profits.
Moreover, increasing efforts by governmental and third-party payors in the United States
and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for new
products approved, and, as a result, they may not cover or provide adequate payment for our product candidates. We expect to experience
pricing pressures in connection with the sale of any of our product candidates due to the trend toward managed healthcare, the increasing
influence of health maintenance organizations, and additional legislative changes like the Inflation Reduction Act. The downward pressure
on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense.
As a result, increasingly high barriers are being erected to the entry of new products.
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Healthcare legislative reform measures may have a material adverse
effect on our business and results of operations.
The business and financial condition of pharmaceutical and biotechnology companies are
affected by the efforts of governmental and third-party payors to contain or reduce the costs of health care. The U.S. Congress
has enacted legislation to reform the health care system. While we anticipate that this legislation may, over time, increase the number
of patients who have insurance coverage for pharmaceutical products, it also imposes cost containment measures that may adversely affect
the amount of reimbursement for pharmaceutical products. These measures include increasing the minimum rebates for products covered by
Medicaid programs and extending such rebates to drugs dispensed to Medicaid beneficiaries enrolled in Medicaid managed care organizations
as well as expansion of the 340(B) Public Health Services drug discount program. In addition, such legislation contains a number
of provisions designed to generate the revenues necessary to fund the coverage expansion. In foreign jurisdictions there have been, and
we expect that there will continue to be, a number of legislative and regulatory proposals aimed at changing the health care system. For
example, in some countries other than the United States, pricing of prescription drugs is subject to government control and we expect
to see continued efforts to reduce healthcare costs in international markets.
Some U.S. states are also considering legislation that would control the prices
of drugs, and state Medicaid programs are increasingly requesting manufacturers to pay supplemental rebates and requiring prior authorization
by the state program for use of any drug for which supplemental rebates are not being paid. Managed care organizations continue to seek
price discounts and, in some cases, to impose restrictions on the coverage of particular drugs. Government efforts to reduce Medicaid
expenses may lead to increased use of managed care organizations by Medicaid programs. This may result in managed care organizations influencing
prescription decisions for a larger segment of the population and a corresponding constraint on prices and reimbursement for drugs. It
is likely that federal and state legislatures and health agencies will continue to focus on additional health care reform in the future
although we are unable to predict what additional legislation or regulation, if any, relating to the health care industry or third-party coverage
and reimbursement may be enacted in the future or what effect such legislation or regulation would have on our business. Our ability to
commercialize any product candidates that Silexion may seek to commercialize, is highly dependent on the extent to which coverage and
reimbursement for these product candidates will be available from government payors, such as Medicare and Medicaid, private health insurers,
including managed care organizations, and other third-party payors, and any change in reimbursement levels could materially and adversely
affect our business. Further, the pendency or approval of future proposals or reforms could result in a decrease in our share price or
limit our ability to raise capital or to obtain strategic partnerships or licenses.
Our product candidates may be approved and/or commercialized only
in part, only as neoadjuvant therapy, or as an adjuvant therapy.
Our product candidates may be approved by the FDA or other regulatory agencies only
as a treatment to be provided in association with other treatments, if at all. For example, it may be possible that our SIL204 be
used as adjunct therapy with chemotherapy treatments. Limitation in commercialization of such treatments, including limitations in supply,
call-back, clinical holds, changes in medical trends, changes in cost and/or reimbursement policy, may limit our ability to commercialize
our product candidates, either directly or via third parties.
Risks Related to Competition
The pharmaceutical market is intensely competitive. If we are unable
to compete effectively with existing drugs, new treatment methods and new technologies, we may be unable to commercialize successfully
any drugs that we develop.
The pharmaceutical market is intensely competitive and rapidly changing. Many large
pharmaceutical and biotechnology companies, academic institutions, governmental agencies and other public and private research organizations
are pursuing the development of novel drugs for the same diseases that we are targeting or expect to target. Many of our competitors have:
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much greater financial, technical and human resources than we have at every stage of the discovery, development,
manufacture and commercialization of products; |
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more extensive experience in pre-clinical testing, conducting clinical trials, obtaining regulatory
approvals, and in manufacturing, marketing and selling pharmaceutical products; |
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product candidates that are based on previously tested or accepted technologies; |
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products that have been approved or are in late stages of development; and |
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collaborative arrangements in our target markets with leading companies and research institutions.
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We will face intense competition from drugs that have already been, or may in the future
become, approved and accepted by the medical community for the treatment of the conditions for which we may develop drugs. We also expect
to face competition from new drugs that enter the market. We believe a significant number of drugs are currently under development, and
may become commercially available in the future, for the treatment of conditions for which we may try to develop drugs and therapies.
These drugs may be more effective, safer, less expensive, or marketed and sold more effectively, than any product we develop.
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If we successfully develop our product candidates, and obtains approval for them, we
will face competition based on many different factors, including:
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the safety and effectiveness of our product; |
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the ease with which our product can be administered and the extent to which patients accept relatively
new routes of administration; |
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the timing and scope of regulatory approvals for our product; |
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the availability and cost of manufacturing, marketing and sales capabilities; |
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price; |
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reimbursement coverage; and |
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patent position. |
Our competitors may develop or commercialize products with significant advantages over
any products we develop based on any of the factors listed above or on other factors. Our competitors may therefore be more successful
in commercializing their products than us, which could adversely affect our competitive position and business. Competitive products may
make any products we develop obsolete or noncompetitive before we can recover the expenses of developing and commercializing our product
candidates. Such competitors could also recruit our employees, which could negatively impact our level of expertise and the ability to
execute on our business plan.
We face competition from other companies that are working to develop
novel drugs and technology platforms using technology similar or in the same field as ours. If these companies develop drugs more rapidly
than us, or their technologies, including delivery technologies, are more effective, our ability to successfully commercialize drugs may
be adversely affected.
In addition to the competition we face from competing drugs in general, we also face
competition from other companies working to develop novel drugs using technology that competes more directly with our own. We are aware
of multiple companies that are working in the field of RNAi therapeutics and or KRAS inhibition, including major pharmaceutical companies
such as Bristol Myers Squibb/Mirati; Amgen; AstraZeneca; E.I. Lilly; Pfizer, Novartis International AG, Takeda Pharmaceutical Company
Limited and, and biopharmaceutical/pharmaceutical companies such as Alnylam, Revolutions Medicines; Boehringer Ingelheim; Biomea Fusion
Inc; Tekmira Pharmaceuticals Corporation, Arrowhead Research Corporation, Silence Therapeutics plc, RXi Pharmaceuticals Corporation, Quark
Pharmaceuticals, Inc. and Marina Biotech, Inc.
We also compete with companies working to develop antisense-based drugs. Like RNAi
therapeutics, antisense drugs target mRNAs in order to suppress the activity of specific genes. Ionis Pharmaceuticals, Inc. is currently
marketing an antisense drug and has several antisense product candidates in clinical trials, albeit none in the oncology area at this
time.
In addition to competition with respect to RNAi and with respect to specific products,
we face substantial competition to discover and develop safe and effective means to deliver RNAi based drugs to the relevant cell and
tissue types. Safe and effective means to deliver RNAi based drugs and to the relevant cell and tissue types may be developed by our competitors,
and our ability to successfully commercialize a competitive product would be adversely affected. In addition, substantial resources are
being expended by third parties in the effort to discover and develop a safe and effective means of delivering RNAi based drugs and into
the relevant cell and tissue types, both in academic laboratories and in the corporate sector. Some of our competitors have substantially
greater resources than we do, and if our competitors are able to negotiate exclusive access to those delivery solutions developed by third
parties, we may be unable to successfully commercialize our product candidates. Also, we compete with companies working to develop non
RNAi based treatments for solid tumor cancers. For example, Novartis is working on a SHP2 inhibitor, and Boehringer Ingelheim and Bayer
SOS1 inhibitors; Threshold Pharmaceuticals (Threshold) is working to develop therapies that target tumor hypoxia, a common characteristic
of the tumor microenvironment. Even if we successfully develop our product candidates, and obtain approval for them, other non RNAi treatments
may be preferred, and we may not be successful in commercializing our product candidates
Also, we compete with companies commercializing and/or working to develop drug delivery
systems, including drug delivery systems for local (or regional) release. For example, various companies are working on nanoparticle technologies,
although these products would not give the extended-release delivery of SIL204. In addition other companies such as SurModics, Inc.
is a provider of drug delivery and surface modification technologies to the healthcare industry, including local delivery of drugs from
drug eluting stents. We compete with many companies commercializing and/or working to develop drug delivery systems for specific indications,
for example for local ocular (in the eye) release of drugs, including degradable and non-degradable products.
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Risks Related to Our Intellectual Property
If we are unable to obtain and maintain effective patent rights
for our product candidates or any future product candidates, we may not be able to compete effectively in our markets.
We rely upon a combination of trade secret protection and confidentiality agreements
to protect the intellectual property related to our technologies and product candidates. As further described in detail below, we have
pending PCT application in several international (i.e. non-U.S.) locations relating the SIL204, which upon grant will provide patent protection
in the U.S., E.U. and other international jurisdictions. Our success depends in large part on our ability to obtain and maintain patent
and other intellectual property protection in the United States and in other countries with respect to our proprietary technology and
products.
We have sought to protect our proprietary position by filing patent applications in
the United States and in other countries, with respect to our novel technologies and products, which are important to our business.
This process is expensive and time consuming, and we may not be able to file and prosecute all necessary or desirable patent applications
at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development
output before it is too late to obtain patent protection.
The patent position of biotechnology and pharmaceutical companies generally is highly
uncertain and involves complex legal and factual questions for which legal principles remain unsolved. The patent applications that we
own may fail to result in issued patents with claims that cover our product candidates in the United States or in other foreign countries.
There is no assurance that all potentially relevant prior art relating to our patents and patent applications has been found, which can
invalidate a patent or prevent a patent from issuing from a pending patent application. Even if patents do successfully issue, and even
if such patents cover our product candidates, third parties may challenge their validity, enforceability, or scope, which may result in
such patents being narrowed, found unenforceable or invalidated. Furthermore, even if they are unchallenged, our patents and patent applications
may not adequately protect our intellectual property, provide exclusivity for our product candidates, or prevent others from designing
around our claims. Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse
impact on our business.
We cannot offer any assurances about which, if any, patents will issue, the breadth
of any such patent or whether any issued patents will be found invalid and unenforceable or will be threatened by third parties. Any successful
opposition to these patents or any other patents owned by or licensed to us after patent issuance could deprive us of rights necessary
for the successful commercialization of any product candidates that we may develop. Further, if we encounter delays in regulatory approvals,
the period of time during which we could market a product candidate under patent protection could be reduced.
If we cannot obtain and maintain effective patent rights for our product candidates,
we may not be able to compete effectively, and our business and results of operations would be harmed.
We may not have sufficient patent terms to effectively protect our
products and business.
In the pharmaceutical and biotechnology industries, the majority of an innovative product’s
commercial value is realized during our market exclusivity period. In the United States and in some other countries, when market
exclusivity expires and generic versions are approved and marketed or when biosimilars are introduced (even if only for a competing product),
there are usually very substantial and rapid declines in a product’s revenues.
Patents have a limited lifespan. In the United States, the natural expiration of
a patent is generally 20 years after it is filed. Although various extensions may be available, the life of a patent, and the protection
it affords, is limited.
While patent term extensions under the Hatch-Waxman Act in the United States
and under supplementary protection certificates in Europe may be available to extend the patent exclusivity term, we cannot provide any
assurances that any such patent term extension will be obtained and, if so, for how long. In addition, upon issuance in the United States,
any patent term can be adjusted based on certain delays caused by the applicant(s) or the USPTO. For example, a patent term
can be reduced based on certain delays caused by the patent applicant during patent prosecution. If we do not have sufficient patent terms
or regulatory exclusivity to protect our products, our business and results of operations will be adversely affected. Furthermore, manufacturers
of innovative products as well as generic drug manufacturers may be able to design their products around our patents and compete with
Silexion using the resulting alternative technology. Absent relevant patent protection for a product, once the exclusivity period expires,
generic or alternative versions can be approved and marketed.
Generic and biosimilar product manufacturers as well as other groups seeking financial
gain are also increasingly seeking to challenge patents before they expire, and we could face earlier-than-expected competition for
any products at any time. Patents covering our key products may be subject to validity, enforceability and infringement challenges in
patent litigations and post-grant review patent office proceedings. It may be possible for these parties to successfully challenge
our rights and launch their versions of our drugs prior to the expiration of our intellectual property rights.
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In addition, both the U.S. Congress and the U.S. FDA have taken steps to promote
the development and approval of generic drugs and biosimilar biologics, including by providing generic and biosimilar developers a private
right of action to obtain sufficient quantities of drug samples from the reference product’s manufacturer in order to conduct testing
necessary to obtain approval for generic or biosimilar products.
Further, in December 2023, the Biden Administration released a proposed framework
that for the first time proposed that a drug’s price can be a factor in determining that the drug is not accessible to the public
and therefore that the government could exercise “march-in rights” and license it to a third party to manufacture. A
comment period on the proposal ran through February 6, 2024, and we are not able to predict whether a final rule will be adopted
along the lines proposed and, if adopted, whether the government would seek to exercise march-in rights for any of our products.
Patent law, policy or rule changes could increase the uncertainties
and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patent.
Changes in either the patent laws or interpretation of the patent laws in the United
States and other countries may diminish the value of our patent or narrow the scope of our patent protection. The laws of foreign countries
may not protect our rights to the same extent as the laws of the United States. Publications of discoveries in the scientific literature
often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published
until 18 months after filing, or in some cases not at all. We therefore cannot be certain that we or our licensors were the first to make
the invention claimed in our owned and licensed patent or pending applications, or that it or our licensor were the first to file for
patent protection of such inventions. Assuming the other requirements for patentability are met, in the United States prior to March 15,
2013, the first to make the claimed invention is entitled to the patent, while outside the United States, the first to file a patent application
is entitled to the patent. After March 15, 2013, under the Leahy-Smith America Invents Act, or the Leahy-Smith Act, enacted on September
16, 2011, the United States has moved to a first to file system. The Leahy-Smith Act also includes a number of significant changes that
affect the way patent applications will be prosecuted and may also affect patent litigation. The USPTO recently developed new regulations
and procedures to govern administration of the Leahy-Smith Act, and accordingly, it is not clear what, if any, impact the Leahy-Smith
Act will have on the operation of our business. The Leahy-Smith Act and our implementation could increase the uncertainties and costs
surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a
material adverse effect on our business and financial condition.
In addition, patent reform legislation may pass in the future that could lead to additional
uncertainties and increased costs surrounding the prosecution, enforcement and defense of our patents and pending patent applications.
Recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the
rights of patent owners in certain situations. Furthermore, the U.S. Supreme Court and the U.S. Court of Appeals for the Federal
Circuit have made, and will likely continue to make, changes in how the patent laws of the United States are interpreted. Similarly,
foreign countries have made, and will likely continue to make, changes in how the patent laws in their respective jurisdictions are interpreted.
We cannot predict future changes in the interpretation of patent laws or changes to patent laws that might be enacted into law by United States
and foreign legislative bodies. Those changes may materially affect our patents or patent applications and our ability to obtain additional
patent protection in the future.
The United States federal government retains certain rights in inventions produced
with our financial assistance under the Patent and Trademark Law Amendments Act, or the Bayh-Dole Act. The federal government retains
a “nonexclusive, nontransferable, irrevocable, paid-up license” for our own benefit. The Bayh-Dole Act also provides
federal agencies with “march-in rights.” March-in rights allow the government, in specified circumstances, to require
the contractor or successors in title to the patent to grant a “nonexclusive, partially exclusive, or exclusive license” to
a “responsible applicant or applicants.” If the patent owner refuses to do so, the government may grant the license itself.
If we are unable to maintain effective proprietary rights for our
product candidates or any future product candidates, we may not be able to compete effectively in our markets.
In addition to the protection afforded by any patents that may be granted, we rely on
trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable or that we elect not
to patent, processes for which patents are difficult to enforce and any other elements of our product candidate discovery and development
processes that involve proprietary know-how, information or technology that is not covered by patents. However, trade secrets can be difficult
to protect. we seek to protect our proprietary technology and processes, in part, by entering into confidentiality agreements with our
employees, consultants, scientific advisors, and contractors. We also seek to preserve the integrity and confidentiality of our data and
trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems.
While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached, and we may
not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by
competitors.
Although we expect all of our employees and consultants to assign their inventions to
it, and all of our employees, consultants, advisors, and any third parties who have access to our proprietary know-how, information, or
technology to enter into confidentiality agreements, we cannot provide any assurances that all such agreements have been duly executed
or that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise
gain access to our trade secrets or independently develop substantially equivalent information and techniques. Misappropriation or unauthorized
disclosure of our trade secrets could impair our competitive position and may have a material adverse effect on our business. Additionally,
if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating
the trade secret.
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Intellectual property rights of third parties could adversely affect
our ability to commercialize our product candidates, and we might be required to litigate or obtain licenses from third parties in order
to develop or market our product candidate. Such litigation or licenses could be costly or not available on commercially reasonable terms.
Because the RNAi intellectual property landscape is still evolving, it is difficult
to conclusively assess our freedom to operate without infringing on third party rights. There are numerous companies that have pending
patent applications and issued patents broadly directed to RNAi generally and to RNAi delivery technologies. Our competitive position
may suffer if patents issued to third parties or other third party intellectual property rights cover our products or elements thereof,
or our manufacture or uses relevant to our development plans. In such cases, we may not be in a position to develop or commercialize products
or our product candidate unless we successfully pursue litigation to nullify or invalidate the third party intellectual property right
concerned, or enter into a license agreement with the intellectual property right holder, if available on commercially reasonable terms.
we are also aware of pending patent applications, and there may be others of which we are not aware, that if they result in issued patents,
could be alleged to be infringed by our product candidates. If such an infringement claim should be brought and be successful, we may
be required to pay substantial damages, be forced to abandon our product candidates or seek a license from any patent holders. No assurances
can be given that a license will be available on commercially reasonable terms, if at all. It is also possible that we have failed to
identify relevant third party patents or applications. For example, U.S. applications filed before November 29, 2000 and certain U.S.
applications filed after that date that will not be filed outside the U.S. remain confidential until patents issue. Patent applications
in the U.S. and elsewhere are published approximately 18 months after the earliest filing for which priority is claimed, with such earliest
filing date being commonly referred to as the priority date. Therefore, patent applications covering our product candidates or platform
technology could have been filed by others without our knowledge. Additionally, pending patent applications which have been published
can, subject to certain limitations, be later amended in a manner that could cover our platform technologies, our product candidates or
the use of our product candidates. Third party intellectual property right holders may also actively bring infringement claims against
Us. We cannot guarantee that we will be able to successfully settle or otherwise resolve such infringement claims. If we are unable to
successfully settle future claims on terms acceptable to us, we may be required to engage in or continue costly, unpredictable and time-consuming
litigation and may be prevented from or experience substantial delays in pursuing the development of and/or marketing of our product candidates.
If we fail in any such dispute, in addition to being forced to pay damages, we may be temporarily or permanently prohibited from commercializing
our product candidates that are held to be infringing. We might, if possible, also be forced to redesign our product candidates so that
we no longer infringes the third party intellectual property rights. Any of these events, even if we were ultimately to prevail, could
require us to divert substantial financial and management resources that we would otherwise be able to devote to our business.
Third-party claims of intellectual property infringement may
prevent or delay our development and commercialization efforts.
Our commercial success depends in part on our avoiding infringement of the patents and
proprietary rights of third parties. There have been many lawsuits and other proceedings involving patent and other intellectual property
rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, oppositions, and reexamination
proceedings before the USPTO and corresponding foreign patent offices. Numerous U.S. and foreign issued patents and pending patent
applications, which are owned by third parties, exist in the fields in which we are developing product candidates. As the biotechnology
and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may be subject to claims
of infringement of the patent rights of third parties.
Third parties may assert that we are employing our proprietary technology without authorization.
There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture, or methods for
treatment related to the use or manufacture of our product candidates. Because patent applications can take many years to issue, there
may be currently pending patent applications that may later result in issued patents that our product candidates may infringe. In addition,
third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. If any third-party
patents were held by a court of competent jurisdiction to cover the manufacturing process of any of our product candidates, any molecules
formed during the manufacturing process or any final product itself, the holders of any such patents may be able to block our ability
to commercialize such product candidates unless we obtain a license under the applicable patents, or until such patents expire or are
finally determined to be invalid or unenforceable.
Similarly, if any third-party patents were held by a court of competent jurisdiction
to cover aspects of our formulations, processes for manufacture, or methods of use, the holders of any such patents may be able to block
our ability to develop and commercialize the applicable product candidate unless we obtain a license or until such patent expires or is
finally determined to be invalid or unenforceable. In either case, such a license may not be available on commercially reasonable terms
or at all.
Parties making claims against us may obtain injunctive or other equitable relief, which
could effectively block our ability to further develop and commercialize one or more of our product candidates. Defense of these claims,
regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from
our business. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble
damages and attorneys’ fees for willful infringement, pay royalties, redesign our infringing products or obtain one or more licenses
from third parties, which may be impossible or require substantial time and monetary expenditure.
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We may not be successful in obtaining or maintaining necessary rights
to our product candidates through acquisitions and in-licenses.
Because our programs may require the use of proprietary rights held by third parties,
the growth of our business will likely depend in part on our ability to acquire, in-license, or use these proprietary rights. In addition,
our product candidates may require specific formulations to work effectively and efficiently and the rights to these formulations may
be held by others. We may be unable to acquire or in-license any compositions, methods of use, processes, or other third-party intellectual
property rights from third parties that we identify as necessary for our product candidates. The licensing and acquisition of third-party
intellectual property rights is a competitive area, and a number of more established companies are also pursuing strategies to license
or acquire third-party intellectual property rights that we may consider attractive. These established companies may have a competitive
advantage over us due to their size, cash resources, and greater clinical development and commercialization capabilities.
For example, we sometimes collaborate with U.S. and foreign academic institutions to
accelerate our preclinical research or development under written agreements with these institutions. Typically, these institutions provide
us with an option to negotiate a license to any of the institution’s rights in technology resulting from the collaboration. Regardless
of such option, we may be unable to negotiate a license within the specified timeframe or under terms that are acceptable to us. If we
are unable to do so, the institution may offer the intellectual property rights to other parties, potentially blocking our ability to
pursue our program.
In addition, companies that perceive us to be a competitor may be unwilling to assign
or license rights to us. We also may be unable to license or acquire third-party intellectual property rights on terms that would
allow us to make an appropriate return on our investment. If we are unable to successfully obtain rights to required third-party intellectual
property rights, we may have to abandon development of that program and our business and financial condition could suffer.
We may be involved in lawsuits to protect or enforce our current
patent applications or future patents, which could be expensive, time consuming, and unsuccessful.
Competitors may infringe our current patent applications, future patents or the patents
of our licensors. If we or a future licensing partner were to initiate legal proceedings against a third party to enforce a patent covering
one of our product candidates, the defendant could counterclaim that the patent covering our product candidate is invalid and/or unenforceable.
In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds
for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness,
or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent
withheld relevant information from the USPTO, or made a misleading statement, during prosecution. The outcome following legal assertions
of invalidity and unenforceability is unpredictable.
Interference proceedings provoked by third parties or brought by us or declared by the
USPTO may be necessary to determine the priority of inventions with respect to our patent or patent applications or those of our licensors.
An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to us from the prevailing
party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. Our defense
of litigation or interference proceedings may fail and, even if successful, may result in substantial costs and distract our management
and other employees. In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to
raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third parties,
or enter into development partnerships that would help us bring our product candidates to market.
Furthermore, because of the substantial amount of discovery required in connection with
intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during
this type of litigation. There could also be public announcements of the results of hearings, motions, or other interim proceedings or
developments. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the
price of our ordinary shares.
We may be subject to claims that our employees, consultants, or
independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully
used or disclosed alleged trade secrets of their former employers.
We employ or engage as consultants or subcontractors individuals who were previously
employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although
we try to ensure that our employees, consultants, and independent contractors do not use the proprietary information or know-how of others
in their work for us, we may be subject to claims that we or our employees, consultants, or independent contractors have inadvertently
or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of any of our employees’
former employers or other third parties. Litigation may be necessary to defend against these claims. If we fail in defending any such
claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel, which could adversely
impact our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a
distraction to management and other employees.
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We may be subject to claims challenging the inventorship of our
current patent application or future patents and other intellectual property.
We may be subject to claims that former employees, collaborators or other third parties
have an interest in or right to compensation with respect to our current patent application, future patents or other intellectual property
as an inventor or co-inventor. For example, we may have inventorship disputes arise from conflicting obligations of consultants or others
who are involved in developing our product candidates. Litigation may be necessary to defend against these and other claims challenging
inventorship or claiming the right to compensation. If we fail in defending any such claims, in addition to paying monetary damages, we
may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such
an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation
could result in substantial costs and be a distraction to management and other employees. To the extent that our employees have not effectively
waived the right to compensation with respect to inventions that they helped create, they may be able to assert claims for compensation
with respect to our future revenue. As a result, we may receive less revenue from future products if such claims are successful which
in turn could impact our future profitability.
We may not be able to protect our intellectual property rights throughout
the world.
Filing, prosecuting, and defending patents on product candidates in all countries throughout
the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can
be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property
rights to the same extent as federal and state laws in the United States.
Competitors may use our technologies in jurisdictions where we have not obtained patent
protection to develop their own products and may also export otherwise infringing products to territories where we have patent protection
but where enforcement is not as strong as that in the United States. These products may compete with our products, and our current
patent application, future patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.
Many companies have encountered significant problems in protecting and defending intellectual
property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor
the enforcement of patents, trade secrets, and other intellectual property protection, particularly those relating to biotechnology products,
which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary
rights generally. Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial
costs and divert our efforts and attention from other aspects of our business, could put our current patent applications or future patents
at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties
to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may
not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate
to obtain a significant commercial advantage from the intellectual property that we develop or license.
Risks Related to our Human Resources
The loss of the services of our key personnel would negatively affect
our business.
To successfully develop our drug candidates, we must be able to attract and retain highly
skilled personnel, including consultants and employees. The retention of their services cannot be guaranteed. Our failure to retain or
recruit such professionals might impair our performance and materially affect our technological and product development capabilities and
our product marketing ability. Our future success depends to a large extent on the continued services of our senior management and key
personnel, including in particular, Ilan Hadar, Dr. Mitchell Shirvan, Dr. Racheli Malka and Michal Yaron. Any loss of the services
of members of our senior management or key employees would adversely affect our business. We do not currently maintain key-person insurance
on the lives of any of our key personnel.
We may be unable to attract, develop and retain additional employees
required for our development and future success.
Our success is largely dependent on the performance of our management team and certain
key employees and our continuing ability to attract, develop, motivate and retain highly qualified and skilled employees. Qualified individuals
are in high demand, and we may incur significant costs to attract and retain them. The inability to attract suitably qualified persons
when needed, could prevent us from executing on our business plan and strategy, and we may be unable to find adequate replacements on
a timely basis, or at all.
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Risks Related to Our Operations
Our business and operations, or those of our CROs or third parties,
may suffer in the event of computer system failures, cyberattacks or deficiencies in our cybersecurity, which could materially affect
our results.
We receive, generate and store significant and increasing volumes of sensitive information,
such as health information, insurance information and other potentially personally identifiable information. We face a number of risks
relative to protecting the computer systems we rely on and this critical information, including loss of access risk, inappropriate use
or disclosure, inappropriate modification and the risk of being unable to adequately monitor, audit and modify our controls over our critical
information. This risk extends to the computer systems and information of any collaboration partners, medical institutions, clinical investigators,
CROs, contract laboratories, or other third parties involved in our business.
Despite the implementation of security measures, our information technology systems,
as well as those of CROs or other third parties with which we have relationships, are vulnerable to attack and damage from computer viruses
and malware (e.g., ransomware), unauthorized access, natural and manmade disasters, terrorism, war and telecommunication and electrical
failures, malfeasance by external or internal parties, and human error (e.g., social engineering, phishing). Attacks upon information
technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by
sophisticated and organized groups and individuals with a wide range of motives and expertise. Furthermore, because the technologies used
to obtain unauthorized access to, or to sabotage or disrupt, systems change frequently and often are not recognized until launched against
a target, we may be unable to anticipate these techniques or implement adequate preventative measures. we may also experience security
breaches that may remain undetected for an extended period. We may not be able to anticipate all types of security threats, and even if
identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and
techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence. We may also face
increased cybersecurity risks due to our reliance on internet technology and the number of our and our service providers’ employees
who are (and may continue to be) working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.
The White House, SEC and other regulators have also increased their focus on companies’ cybersecurity vulnerabilities and risks.
Our CROs and certain of our service
providers are from time to time, subject to cyberattacks and security incidents. While we have not to our knowledge experienced any significant
system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our or our critical third
parties’ operations, it could result in delays and/or material disruptions of our research and development programs, our operations
and ultimately, our financial results. For example, the loss of trial data from completed, ongoing or planned trials could result in delays
in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Likewise, we rely on third parties
for the manufacture of our product candidates and to conduct clinical trials, and similar events relating to their computer systems could
also adversely impact our business. Further, due to the current political uncertainty involving the security situation in Israel and the
war between Russia and Ukraine, there is an increased likelihood that the tensions could result in cyberattacks or cybersecurity incidents
that could either directly or indirectly impact our or our critical third parties’ operations. To the extent that any disruption
or security breach were to result in a loss of or damage to data or applications, or inappropriate disclosure of personal, confidential
or proprietary information, we could incur liability due to delays in the development and commercialization of our product candidates
or other business activities and/or due to reputational harm, litigation, regulatory investigations and enforcement, fines and penalties,
or increased costs of compliance and system remediation.
Our existing general liability and cyber liability insurance policies may not cover,
or may cover only a portion of, any potential claims related to security breaches to which we are exposed or may not be adequate to indemnify
us for all or any portion of liabilities that may be imposed. We also cannot be certain that our existing insurance coverage will continue
to be available on acceptable terms or in amounts sufficient to cover the potentially significant losses that may result from a security
incident or breach or that the insurer will not deny coverage of any future claim. If the information technology systems of our CROs or
other service providers become subject to disruptions or security breaches, we may have insufficient remedies against such third parties
and we may have to expend significant resources to mitigate the impact of such an event, and to develop and implement protections to prevent
future events of this nature from occurring.
If product liability lawsuits are brought against us, we may incur
substantial liabilities and may be required to limit commercialization of any approved products.
We face an inherent risk of product liability as a result of the clinical testing of
product candidates and will face an even greater risk if we commercialize any products. For example, we may be sued if any product candidate
we develop causes or is perceived to cause injury or is found to be otherwise unsuitable during clinical testing, manufacturing, marketing
or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of
dangers inherent in the product, negligence, strict liability or a breach of warranties. Claims could also be asserted under state consumer
protection acts. If we cannot successfully defend itself against product liability claims, we may incur substantial liabilities or be
required to limit commercialization of any approved products. Even successful defense would require significant financial and management
resources.
Regardless of the merits or eventual outcome, liability claims may result in:
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decreased demand for any approved product; |
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injury to our reputation; |
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withdrawal of clinical trial participants; |
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initiation of investigations by regulators; |
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costs to defend the related litigation; |
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a diversion of management’s time and our resources; |
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substantial monetary awards to trial participants or patients; |
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product recalls, withdrawals or labeling, marketing or promotional restrictions; |
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exhaustion of any available insurance and our capital resources and potential increase in our insurance
premiums and/or retention amounts; and |
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the inability to commercialize any product candidate. |
Our inability to obtain sufficient product liability insurance at an acceptable cost
to protect against potential product liability claims could prevent or inhibit the commercialization of products we develop, alone or
with collaboration partners.
Insurance coverage is increasingly expensive. We may not be able to maintain insurance
at a reasonable cost or in an amount adequate to satisfy any liability that may arise, if at all. Our insurance policy contains various
exclusions, and we may be subject to a product liability claim for which we have no coverage. We may have to pay any amounts awarded by
a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have,
or be able to obtain, sufficient capital to pay such amounts. Even if our agreements with any current or future collaborator entitle us
to indemnification against losses, such indemnification is limited and may not be available or adequate should any claim arise.
We may not be able to successfully identify and execute strategic
alliances or other relationships with third parties or to successfully manage the impacts of acquisitions, dispositions or relationships
on our operations.
We currently have, and may expand the scope of, and may in the future enter into, strategic
alliances with third parties that it believes will complement or augment our existing business. Our ability to complete further such strategic
alliances is dependent upon, and may be limited by, among other things, the availability of suitable candidates and capital. In addition,
strategic alliances could present unforeseen integration obstacles or costs, may not enhance our business and may involve risks that could
adversely affect us, including the investment of significant amounts of management time that may be diverted from operations in order
to pursue and complete such transactions or maintain such strategic alliances. Future strategic alliances could result in the incurrence
of debt, costs and contingent liabilities, and there can be no assurance that future strategic alliances will achieve, or that our existing
strategic alliances will continue to achieve, the expected benefits to our business or that we will be able to consummate future strategic
alliances on satisfactory terms, or at all.
Although we do not currently plan to engage in other material strategic transactions,
such as acquisitions, we may from time to time consider such transactions. Material strategic transactions involve a number of risks,
including:
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the potential disruption of our ongoing business; |
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the distraction of management away from the ongoing oversight of our existing business activities;
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incurring additional indebtedness; |
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the anticipated benefits and cost savings of those transactions not being realized fully, or at all, or
taking longer to realize than anticipated; |
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an increase in the scope and complexity of our operations; and |
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the loss or reduction of control over certain of our assets. |
A strategic transaction may result in a significant change in the nature of our business,
operations and strategy, and we may encounter unforeseen obstacles or costs in implementing a strategic transaction or integrating any
acquired business into our operations.
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Risks Related to our Operations in Israel
Conditions in the Middle East and in Israel may harm our operations.
Our executive offices and research and development facilities are located in Israel.
Most of our officers and directors are residents of Israel. Since the establishment of the State of Israel in 1948, a number of armed
conflicts have taken place between Israel and its neighboring countries, and between Israel and neighboring terrorist organizations, including
Hamas (an Islamist terrorist and political group in the Gaza Strip) and Hezbollah (an Islamist terrorist and political group in Lebanon).
In particular, on October 7, 2023, Hamas terrorists infiltrated Israel’s
southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive
rocket attacks on the Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas
within the State of Israel. These attacks resulted in thousands of deaths and injuries, and Hamas additionally kidnapped many Israeli
civilians and soldiers. Following the attack, Israel’s security cabinet declared war against Hamas and commenced a military campaign
against Hamas and these terrorist organizations, in parallel to continued rocket and terror attacks against Israel by Hamas. Upon the
start of the war, the Israeli military began to call-up reservists for active duty.
In parallel with the war against
Hamas that began in October 2023, there were continued hostilities along Israel’s northern border, as the Hezbollah terrorist organization
based in Lebanon conducted rocket, drone, and missile attacks against Israel, and there have also been rocket, drone and missile attacks
against Israel by the Houthi movement in Yemen, as well as occasional hostilities between Israel and various rebel militia groups
in Syria and Iraq. The hostilities with Hezbollah escalated at a certain point, prompting Israel to send its ground forces into southern
Lebanon to destroy terrorist positions and infrastructure used by Hezbollah for attacks on northern and central Israel, which had caused
the displacement of residents in northern Israel for a period of time during the war. In November 2024, a ceasefire was brokered
between Israel and Hezbollah.
Iran furthermore entered the conflict
against Israel, shooting ballistic missiles at Israel twice during the current war (on April 13, 2024 and October 1, 2024). In June
2025, in light of continued nuclear threats and intelligence assessments indicating imminent attacks, Israel launched a preemptive strike
directly targeting military and nuclear infrastructure inside Iran, aimed at disrupting Iran’s capacity to coordinate or launch
further hostilities against Israel, as well as to degrade its nuclear program. In response, Iran launched multiple waves of drones and
ballistic missiles at Israeli cities. While most of these attacks were intercepted, several caused civilian casualties and damage to infrastructure.
The Israeli military conducted additional operations against Iranian assets. While a ceasefire was reached between Israel and Iran in
June 2025 after 12 days of hostilities, the situation remains volatile, and it is not clear to what extent Iran retains future nuclear
capabilities that can be used against Israel. There is also a risk that other terrorist organizations, including Palestinian military
organizations in the West Bank as well as other hostile countries could initiate hostilities against Israel. Such clashes could potentially
escalate into a greater regional conflict.
Armed conflicts, terrorist activities or political instability in Israel or in the broader
Middle East have been adversely effecting, and could continue to, in a more severe way, adversely affect business conditions in Israel,
and could harm our results of operations and make it more difficult for us to raise capital. Parties with whom we do business may decline
to travel to Israel during periods of heightened unrest or tension, forcing Silexion to make alternative arrangements when necessary in
order to meet our business partners face to face. In addition, the political and security situation in Israel may result in parties with
whom we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those
agreements pursuant to force majeure provisions in such agreements. Further, in the past, the State of Israel and Israeli companies have
been subjected to economic boycotts. Several countries still restrict business with the State of Israel and with Israeli companies. These
restrictive laws and policies may have an adverse impact on our operating results, financial condition or the expansion of our business.
The interruption or curtailment of trade between Israel and its trading partners could adversely affect our operations and results of
operations.
Our commercial insurance does not cover losses that may occur as a result of events
associated with the security situation in the Middle East. Although the Israeli government currently covers the reinstatement value of
direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained.
Any losses or damages incurred by us could have a material adverse effect on our business.
Finally, political conditions within Israel may also affect our operations. Israel held
five general elections between 2019 and 2022, and prior to October 2023, the Israeli government pursued extensive changes to Israel’s
judicial system, which sparked extensive political debate and unrest. To date, these initiatives have been substantially put on hold.
Actual or perceived political instability in Israel or any negative changes in the political environment, may individually or in the aggregate
adversely affect the Israeli economy and, in turn, our business, financial condition, results of operations and growth prospects.
It may be difficult to enforce a U.S. judgment against us,
our officers or our directors or to assert U.S. securities law claims in Israel.
Service of process upon us and upon our directors and officers, who reside outside the
U.S., may be difficult to obtain within the U.S. In addition, because substantially all of our assets and most of our directors and
officers are located outside the U.S., any judgment obtained in the U.S. against us or any of our directors and officers may not
be collectible within the U.S. There is a doubt as to the enforceability of civil liabilities under the Securities Act or the Exchange Act
pursuant to original actions instituted in Israel. Subject to particular time limitations and provided certain conditions are met, executory
judgments of a U.S. court for monetary damages in civil matters may be enforced by an Israeli court.
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Under applicable U.S. and Israeli law, we may not be able to
enforce covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of
our former employees. In addition, employees may be entitled to seek compensation for their inventions irrespective of their agreements
with us, which in turn could impact our future profitability.
We generally enter into non-competition agreements with our employees and key consultants.
These agreements prohibit our employees and key consultants, if they cease working for us, from competing directly with it or working
for our competitors or clients for a limited period of time. We may be unable to enforce these agreements under the laws of the jurisdictions
in which our employees work and it may be difficult for it to restrict our competitors from benefitting from the expertise our former
employees or consultants developed while working for us. For example, Israeli courts have required employers seeking to enforce non-compete undertakings
of a former employee to demonstrate that the competitive activities of the former employee will harm one of a limited number of material
interests of the employer which have been recognized by the courts, such as the secrecy of a company’s confidential commercial information
or the protection of our intellectual property. If it cannot demonstrate that such interests will be harmed, we may be unable to prevent
our competitors from benefiting from the expertise of our former employees or consultants and our ability to remain competitive may be
diminished.
In addition, Chapter 8 of the Israeli Patents Law, 5727-1967, or the Patents
Law, deals with inventions made in the course of an employee’s service and during his or her term of employment, whether or not
the invention is patentable, or service inventions. Section 134 of the Patents Law sets forth that if there is no agreement which
explicitly determines whether the employee is entitled to compensation for the service inventions and the extent and terms of such compensation,
such determination will be made by the Compensation and Rewards Committee, a statutory committee of the Israeli Patents Office. As a result,
it is unclear if, and to what extent, our research and development employees may be able to claim compensation with respect to our future
revenue. As a result, Silexion may receive less revenue from future products if such claims are successful, which in turn could impact
our future profitability.
Risks Related to Our Status as a Cayman
Islands Company
Economic substance legislation
of the Cayman Islands may adversely impact us or our operations.
The Cayman Islands,
together with several other non-European Union jurisdictions, have introduced legislation aimed at addressing concerns raised by the Organisation
for Economic Co-operation and Development’s (OECD) Base Erosion and Profit Shifting (BEPS) initiative as to offshore structures
engaged in certain activities which attract profits without real economic activity. The International Tax Co-operation (Economic Substance)
Act, (As Revised) (the “Economic Substance Act”) contains economic substance requirements for in-scope Cayman Islands entities
which are engaged in certain “relevant activities”. As we are a Cayman Islands company, our compliance obligations will include
filing an annual notification, which need to state whether we are carrying out any relevant activities and if so, whether we have satisfied
economic substance tests to the extent required under the Economic Substance Act. If the Cayman Islands Tax Information Authority determines
that the Company or any of its Cayman Islands subsidiaries has failed to meet the requirements imposed by the Economic Substance Act the
Company may face significant financial penalties, restriction on the regulation of its business activities and/or may be struck off as
a registered entity in the Cayman Islands.
As it is still a relatively
new regime, it is anticipated that the Economic Substance Act and associated guidance will evolve and may be subject to further clarification
and amendments. We may need to allocate additional resources to keep updated with these developments, and may have to make changes to
our operations in order to comply with all requirements under the Economic Substance Act. Failure to satisfy these requirements may subject
us to penalties under the Economic Substance Act.
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Because
we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to
protect your rights through the U.S. Federal courts may be limited.
We have been advised by Conyers, Dill and
Pearman, LLP, our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against
us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the
United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated
upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed
by those provisions are penal in nature. Our amended and restated articles of association furthermore have an exclusive forum provision
under which federal district courts of the United States will be the exclusive forum for the resolution of any complaint asserting
a cause of action arising under the Securities Act or the Exchange Act. The Cayman Islands court will not enforce criminal fines and tax
judgments and judgments that are contrary to Cayman Islands public policy. However, although there is no statutory enforcement in
the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign
money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a
competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain
conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a
liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the
same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural
justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy).
A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
Risks Relating to this Offering
The best efforts structure of this offering may have an adverse
effect on our business plan.
The Placement Agent has agreed to use its reasonable best efforts to solicit offers
to purchase the securities in this offering. The Placement Agent has no obligation to buy any of the securities from us or to arrange
for the purchase or sale of any specific number or dollar amount of the securities. There is no required minimum number of securities
that must be sold as a condition to completion of this offering. Because there is no minimum offering amount required as a condition to
the closing of this offering, the actual offering amount, placement agent fees and proceeds to us are not presently determinable and may
be substantially less than the maximum amounts set forth above. We may sell fewer than all of the securities offered hereby, which may
significantly reduce the amount of proceeds received by us, and investors in this offering will not receive a refund in the event that
we do not sell an amount of securities sufficient to support our continued operations, including our near-term continued operations. Thus,
we may not raise the amount of capital we believe is required for our operations in the short-term and may need to raise additional funds,
which may not be available or available on terms acceptable to us. The success of this offering will impact our ability to use the proceeds
to execute our business plan. We may have insufficient capital to implement our business plan, potentially resulting in greater operating
losses unless we are able to raise the required capital from alternative sources. There is no assurance that alternative capital, if needed,
would be available on terms acceptable to us, or at all.
This offering is being made on a best efforts basis and we may sell
fewer than all of the securities offered hereby and may receive significantly less in net proceeds from this offering, which will provide
us only limited working capital.
This offering is being made on a best efforts
basis and we may sell fewer than all of the securities offered hereby and may receive significantly less in net proceeds from this offering.
Assuming that we receive net proceeds of approximately $5.2 million from this offering (assuming an offering with gross proceeds of $6.0
million), we believe that the net proceeds from this offering, together with our existing cash and cash equivalents, will meet our capital
needs into second quarter of 2026 under our current business plan. Assuming that we receive net proceeds of approximately $4.3 million
from this offering (assuming an offering with gross proceeds of $5.0 million), we believe that the net proceeds from this offering, together
with our existing cash and cash equivalents, will satisfy our capital needs into second quarter of 2026 under our current business
plan. Assuming that we receive net proceeds of approximately $3.3 million from this offering (assuming an offering with gross proceeds
of $4.0 million), we believe that the net proceeds from this offering, together with our existing cash and cash equivalents, will satisfy
our capital needs into second quarter of 2026 under our current business plan. Without giving effect to the receipt of any proceeds from
this offering or proceeds that we may raise from other financing arrangements that we currently have, or may in the future put, in place,
we currently estimate that our existing cash and cash equivalents are sufficient to fund business operations into first quarter of
2026.
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Our management team will have immediate and
broad discretion over the use of the net proceeds from this offering and may not use them effectively.
We currently intend to use the net proceeds of this offering for
continued development of our pipeline products, as well as the advancement of new programs, business development activities, and general
corporate purposes. See “Use of Proceeds.” However, our management will have broad discretion in the application of the net
proceeds. Our shareholders may not agree with the manner in which our management chooses to allocate the net proceeds from this offering.
The failure by our management to apply these funds effectively could have a material adverse effect on our business, financial condition
and results of operation. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income.
The decisions made by our management may not result in positive returns on your investment and you will not have an opportunity to evaluate
the economic, financial or other information upon which our management bases its decisions.
You will experience immediate dilution in the book value per share
of the ordinary shares purchased in the offering.
Since the public offering price of our ordinary shares in this offering is substantially
higher than the net tangible book value per share of our outstanding ordinary shares outstanding prior to this offering, you will suffer
dilution in the book value of the ordinary shares you purchase in this offering. The exercise of outstanding ordinary shares and warrants,
including warrants sold in this offering, may result in further dilution of your investment. See the section titled “Dilution”
for a more detailed discussion of the dilution you will incur if you purchase shares in this offering.
Purchasers who purchase our securities in this offering pursuant
to a securities purchase agreement may have rights not available to purchasers that purchase without the benefit of a securities purchase
agreement.
In addition to rights and remedies available to all purchasers in this offering under
federal securities and state law, the purchasers that enter into a securities purchase agreement will also be able to bring claims of
breach of contract against us. The ability to pursue a claim for breach of contract provides those investors with the means to enforce
the covenants uniquely available to them under the securities purchase agreement including: (i) timely delivery of shares; (ii) agreement
to not enter into any financings for sixty (60) days from closing; and (iii) indemnification for breach of contract.
Ordinary shares representing a
substantial percentage of our outstanding shares may be sold in this offering, which could cause the price of our ordinary shares to decline.
We may sell in this offering up to 832,177
ordinary shares, or approximately 113.7% of our outstanding ordinary shares, prior to this offering, as of September 4, 2025.
This sale and any future sales of a substantial number of ordinary shares in the public market, or the perception that such sales may
occur, could materially adversely affect the price of our ordinary shares. We cannot predict the effect, if any, that market sales of
those ordinary shares or the availability of those ordinary shares for sale will have on the market price of our ordinary shares.
There is no public market for the warrants being offered or pre-funded
warrants in this offering.
There is no established public trading market for the warrants being offered or the
pre-funded warrants, and we do not expect a market to develop. In addition, we do not intend to apply to list the pre-funded warrants
or ordinary warrants on any national securities exchange or other nationally recognized trading system. Without an active market, the
liquidity of the pre-funded warrants and ordinary warrants will be limited.
The pre-funded warrants are speculative in nature.
The pre-funded warrants offered hereby do not confer any rights of ordinary share ownership
on their holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire ordinary shares
at a fixed price. Specifically, commencing on the date of issuance, holders of the pre-funded warrants may acquire the ordinary shares
issuable upon exercise of such warrants at an exercise price of $0.0001 per share. Moreover, following this offering, the market value
of the pre-funded warrants is uncertain and there can be no assurance that the market value of the pre-funded warrants will equal or exceed
the public offering price for the pre-funded warrants.
The ordinary warrants may not have any value.
Each ordinary warrant has an exercise price per share equal to $
(no less than 100% of the assumed public offering price of ordinary shares in this offering). The Series A ordinary
warrants and the Series B ordinary warrants expire on the fifth anniversary and 12-month anniversary, respectively, of the Initial Exercise
Date. In the event the market price per our ordinary share does not exceed the exercise price of the ordinary warrants during the period
when the warrants are exercisable, the ordinary warrants may not have any value.
If we are required to obtain Warrant Shareholder Approval, until
we are able to receive such approval the ordinary warrants will not be exercisable, and if we are unable to obtain such approval the ordinary
warrants will have no value.
If we are required to obtain Warrant Shareholder Approval, the ordinary warrants will
not be exercisable until, and unless, we obtain the Warrant Shareholder Approval from our shareholders. While we intend to promptly seek
shareholder approval, if required, there is no guarantee that the Warrant Shareholder Approval will ever be obtained. If we are unable
to obtain the Warrant Shareholder Approval, the ordinary warrants will have no value. In addition, we will incur substantial cost, and
management will devote substantial time and attention, in attempting to obtain the Warrant Shareholder Approval.
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Holders of the pre-funded warrants and ordinary warrants offered
hereby will have no rights as ordinary shareholders with respect to the ordinary shares underlying those warrants until such holders exercise
their warrants and acquire our ordinary shares, except as otherwise provided in the ordinary warrants.
Until holders of the pre-funded warrants and ordinary warrants acquire our ordinary
shares upon exercise thereof, such holders will have no rights with respect to the ordinary shares underlying such warrants, except to
the extent that holders of such warrants will have certain rights to participate in distributions or dividends paid on our ordinary shares
as set forth in the warrants. Upon exercise of the pre-funded warrants and ordinary warrants, the holders will be entitled to exercise
the rights of an ordinary shareholder only as to matters for which the record date occurs after the exercise date.
Risks Related to Owning Our Ordinary Shares
If we fail
to maintain compliance with Nasdaq continued listing requirements, our shares may be delisted from the Nasdaq Capital Market.
To continue to be listed on Nasdaq,
we need to satisfy a number of conditions. On November 19, 2024, we received two letters from the Nasdaq Listing Qualifications Department,
each addressing a separate compliance deficiency under the Nasdaq Listing Rules. The first letter from the Nasdaq Listing Qualifications
Department notified us of our non-compliance with Nasdaq Listing Rule 5450(b)(2)(A), which requires a company such as ours whose securities
are listed on the Nasdaq Global Market under the “Market Value Standard” to maintain a minimum Market Value of Listed Securities
(an “MVLS”) of $50,000,000. The deficiency was triggered by our MVLS having closed below the minimum level for a period of
30 consecutive business days. Under Nasdaq Listing Rule 5810(c)(3)(C), we were entitled to a 180-day period, ending on May 19, 2025, to
rectify the deficiency by maintaining an MVLS of $50,000,000 or more for at least 10 consecutive business days. The second letter informed
us of our deficiency in complying with Nasdaq Listing Rule 5450(b)(2)(C), which requires a minimum Market Value of Publicly Held Shares
(an “MVPHS”) of $15,000,000 for continued listing on the Nasdaq Global Market under the “Market Value Standard”.
This deficiency was caused by our MVPHS having fallen below the minimum threshold for the prior 30 consecutive business days. Under Nasdaq
Listing Rule 5810(c)(3)(D), we had 180 calendar days, or until May 19, 2025, to regain compliance by having our MVPHS close at or above
$15,000,000 for at least 10 consecutive business days.
On May 22, 2025, we received a delisting notice from the Nasdaq Listing Qualifications
Department in respect of the MVLS and MVPHS deficiencies, and on May 28, 2025, we requested a hearing related to the delisting notice,
which was held on June 26, 2025. On July 7, 2025, we received a favorable decision from the Nasdaq hearings panel, granting our request
to remain listed on the Nasdaq subject to certain conditions. As a result of the favorable outcome of the hearing, the listing of our
ordinary shares and warrants was transferred from the Nasdaq Global Market to the Nasdaq Capital Market on July 8, 2025, where trading
continued under the symbols “SLXN” and “SLXNW”, respectively. Under the terms of the decision reached by the hearings
panel, the continued listing of our securities on the Nasdaq Capital Market will be conditioned on our fulfillment of the terms of the
compliance plan that we had presented to the panel at the hearing, which was designed to enable us to achieve at least $2.5 million of
shareholders’ equity for listing on the Nasdaq Capital Market on a continued basis pursuant to Nasdaq Listing Rule 5550(b)(1).
The terms of the compliance plan consist, in primary part, of the following: (i) on or before September 19, 2025, we are required to demonstrate
in a report filed under the Exchange Act, our restoration of compliance with, and our expected long-term compliance with, the shareholders’
equity requirement under Nasdaq Listing Rule 5550(b)(1), as to be demonstrated in a balance sheet not older than 60 days to be included
in such a filing; and (ii) if we fail to maintain compliance with any Nasdaq listing rule on or before November 18, 2025, we will be required
to submit, and the Nasdaq hearings panel will review (as part of its maintenance of jurisdiction over our listing status until November
18, 2025), a compliance plan for the subject deficiency to determine whether the panel is willing to grant an exception to us to cure
that deficiency. No assurance can be given that we will successfully restore and maintain compliance with the $2.5 million shareholders’
equity requirement for listing on the Nasdaq Capital Market or that we will not again be in violation of any of Nasdaq’s continued
listing standards in the future. We have historically not been in compliance with the minimum bid price rule and also had compliance deficiencies
with respect to audit committee requirements, MVLS and MVPHS, although each of those other deficiencies has been remedied. Our failure
to meet the relevant listing requirements may result in our securities being delisted from Nasdaq.
If our securities are delisted from Nasdaq, we may seek to list them on other markets
or exchanges, or the ordinary shares may trade on the pink sheets. In the event of such delisting, our shareholders’ ability to
trade, or obtain quotations of the market value of, our securities would be severely limited because of lower trading volumes and transaction
delays. These factors could contribute to lower prices and larger spreads in the bid and ask prices for our securities. In addition, the
substantially decreased trading in our securities and decreased market liquidity of our securities as a result of the loss of market efficiencies
associated with Nasdaq, and the accompanying loss of federal preemption of state securities laws, could materially adversely affect our
ability to obtain financing on acceptable terms, if at all, and may result in the potential loss of confidence by investors, suppliers,
customers and employees, and cause us to have fewer business development opportunities. Additionally, that may cause the market price
of our securities to decline further, and shareholders may lose some or all of their investment. There can be no assurance that our securities,
if delisted from Nasdaq in the future, would be listed on another national or international securities exchange or on a national quotation
service, the Over-The-Counter Markets or the pink sheets.
32
The price of our ordinary shares and our warrants may be volatile,
and the value of our ordinary shares and our warrants may decline.
We cannot predict the prices at which our ordinary shares or warrants will trade.
The price of our ordinary shares and our warrants may not bear any relation to any established criteria of the value of our business and
prospects. In addition, the trading price of our ordinary shares and warrants is likely to be volatile and could be subject to fluctuations
in response to various factors, some of which are beyond our control. These fluctuations could cause you to lose all or part of your investment
in our ordinary shares and our warrants as you might be unable to sell your shares at or above the price you paid. Factors that could
cause fluctuations in the trading price of our ordinary shares and our warrants include the following:
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actual or anticipated fluctuations in our financial condition or results of operations; |
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● |
variance in the projected timeline for regulatory approvals of our product candidates from expectations
of securities analysts; |
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changes in laws or regulations applicable to our business; |
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● |
announcements by us or our competitors of significant business developments; |
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significant data breaches, disruptions to or other incidents involving our company; |
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conditions or developments affecting the biotechnology industry; |
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future sales of New Silexion ordinary shares by us or our shareholders, as well as the anticipation of
lock-up releases; |
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changes in senior management or key personnel; |
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the trading volume of our securities; |
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changes in the anticipated future size and growth rate of our markets; |
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● |
publication of research reports or news stories about us, our competitors or our industry, or positive
or negative recommendations or withdrawal of research coverage by securities analysts; |
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general economic and market conditions; and |
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● |
other events or factors, including those resulting from war, incidents of terrorism, global pandemics or
responses to those events. |
Broad market and industry fluctuations, as well as general economic, political, regulatory
and market conditions, may also negatively impact the market price of our ordinary shares. In the past, companies that have experienced
volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this
type of litigation in the future, which could result in substantial expenses and divert our management’s attention.
A substantial number of our ordinary shares may be issued pursuant
to the White Lion Purchase Agreement, as well as the conversion terms of the A&R Sponsor Promissory Note, which could cause (i) the
price of the ordinary shares to decline, and (ii) substantial dilution to our existing shareholders.
The purchase price per share to be paid by White Lion for shares that we may elect to
issue and sell to it under the White Lion Purchase Agreement will fluctuate based on the market price of our ordinary shares at the time
we elect to sell such shares. Depending on market liquidity at the time, resales of such ordinary shares by White Lion may cause the trading
price of our ordinary shares to decrease, and any such decrease could be substantial.
If and when we elect to issue and sell ordinary shares to White Lion, those issuances
and sales will result in dilution to the interests of existing holders of our ordinary shares, which dilution may be substantial. Additionally,
the sale of a substantial number of ordinary shares to White Lion, or the anticipation of such sales, could make it more difficult for
us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales.
In addition to ordinary shares that may be issued under the White Lion Purchase Agreement,
ordinary shares may also be issued upon conversion of amounts outstanding under the A&R Sponsor Promissory Note, in an amount of $3,433,000,
due February 15, 2027, that we issued to the Moringa Sponsor in connection with the consummation of the Business Combination. The conversion
prices under the A&R Sponsor Promissory Note relates to the market price of our ordinary shares and/or the price at which we raise
capital from equity financings. The issuance of additional shares under the A&R Sponsor Promissory Note will dilute our other equity
holders, which could cause the price of our ordinary shares to decline.
33
The ordinary shares (including ordinary shares underlying warrants)
that are being offered by selling securityholders under registration statements that we currently have in effect represent a substantial
percentage of our outstanding ordinary shares, and the sale of such shares, or the perception that such sales may occur, could cause the
price of our ordinary shares to be more volatile or decrease.
On October 9, 2024, we filed, and on October
16, 2024, the SEC declared effective, a registration statement on Form S-1 (SEC file number 333-282556), under which selling securityholders
named therein may currently sell up to 94,927 of our ordinary shares and up to 1,408 of our warrants (constituting our private warrants).
On February 12, 2025 and August 26, 2025, we filed registration statements on Form S-1 (SEC file numbers 333-284873 and 333-289860) under
which selling securityholders named therein may currently sell into the market up to 28,832 and 314,859 of our ordinary shares underlying
equivalent numbers of warrants that have not yet been exercised (which warrants had been issued pursuant to the January 2025 and August
1, 2025 induced warrant exercise transactions). Depending on market liquidity, resales of ordinary shares and warrants by the selling
securityholders under those registration statements may cause the trading price of our ordinary shares and warrants to decrease,
and any such decrease could be substantial. Additionally, the sale of a substantial number of ordinary shares or warrants by those selling
securityholders, or the perception that such sales may take place, could increase the volatility of the market price of the ordinary shares
and warrants and depress the trading price of the ordinary shares and warrants and thereby make it more difficult for us to raise capital
by selling equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales.
Because we have no current plans to pay cash dividends on our ordinary
shares for the foreseeable future, you may not receive any return on investment unless you sell New Silexion ordinary shares for a price
greater than that which you paid for it.
We will likely retain future earnings, if any, for future operations, expansion and
debt repayment and have no current plans to pay any cash dividends for the foreseeable future. Any decision to declare and pay dividends
as a public company in the future will be made at the discretion of our board of directors and will depend on, among other things, our
results of operations, financial condition, cash requirements, contractual restrictions, funds lawfully available therefor and other factors
that our board of directors may deem relevant. In addition, our ability to pay dividends may be limited by covenants of any existing and
future outstanding indebtedness we or our subsidiaries incur. As a result, you may not receive any return on an investment in our ordinary
shares unless you sell our ordinary shares for a price greater than that which you paid for it.
Following, and as a partial result of, our recent reverse share
split, our ordinary shares may experience extreme price volatility unrelated to our actual or expected operating performance, financial
condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our ordinary shares.
Recently, there have been instances
of extreme share price run-ups followed by rapid price declines and strong share price volatility with a number of relatively new public
companies, especially among companies with relatively smaller public floats. As a relatively small-capitalization company with relatively
small public float, we may experience greater share price volatility, extreme price run-ups, lower trading volume and less liquidity than
large-capitalization companies. The potential for reduced liquidity was heightened in the aftermath of our 1-for-9 and 1-for-15 reverse
share splits effected on November 29, 2024 and July 29, 2025, respectively, which may heighten our exposure to those trading trends. In
particular, following our recent 1-for-15 reverse share split, our ordinary shares may be subject to rapid and substantial price volatility,
low volume of trades, and large spreads in bid and ask prices. Such volatility, including any stock run up, may be unrelated to our actual
or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly
changing value of our ordinary shares.
In addition, if the trading volumes of our ordinary shares are low, persons buying
or selling in relatively small quantities may easily influence prices of our ordinary shares. This low volume of trades could also cause
the price of our ordinary shares to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Holders
of our ordinary shares may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to
low volume trading. If high spreads between the bid and ask prices of our ordinary shares exist at the time of a purchase, the shares
would have to appreciate substantially on a relative percentage basis for an investor to recoup its investment. Broad market fluctuations
and general economic and political conditions (including in Israel, where our operations are centered) may also adversely affect the market
price of our ordinary shares.
As a result of this volatility,
investors may experience losses on their investment in our ordinary shares. A volatile market price of our ordinary shares also could
adversely affect our ability to issue additional ordinary shares or other securities and our ability to obtain additional financing in
the future, which is a key strategic goal for us, thereby frustrating our ability to achieve one of the key purposes of our reverse share
splits.
We qualify as an “emerging growth company” as well as
a “smaller reporting company” within the meaning of the Securities Act, and if we take advantage of certain exemptions from
disclosure requirements available to emerging growth companies or smaller reporting companies, it could make our securities less attractive
to investors and may make it more difficult to compare our performance to the performance of other public companies.
We qualify as an “emerging growth company” as defined in Section 2(a)(19)
of the Securities Act, as modified by the JOBS Act. As such, we will be eligible for and intend to take advantage of certain exemptions
from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue
to be an emerging growth company, including (a) the exemption from the auditor attestation requirements with respect to internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act, (b) the exemptions from say-on-pay, say-on-frequency and say-on-golden
parachute voting requirements and (c) reduced disclosure obligations regarding executive compensation in its periodic reports and proxy
statements. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the market value
of our ordinary shares that are held by non-affiliates is equal to or exceeds $700 million as of the end of that year’s second fiscal
quarter, (ii) the last day of the fiscal year in which we have total annual gross revenue of $1.235 billion or more during such fiscal
year (as indexed for inflation), (iii) the date on which we have issued more than $1 billion in non-convertible debt in the prior three-year
period or (iv) the last day of the fiscal year following the fifth anniversary of the date of the first issuance of our ordinary shares
in the Business Combination. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage
of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long
as the Company is an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards
until those standards would otherwise apply to private companies. We have elected not to opt out of such extended transition period and,
therefore, the Company may not be subject to the same new or revised accounting standards as other public companies that are not emerging
growth companies. Investors may find our ordinary shares less attractive because we rely on these exemptions, which may result in a less
active trading market for our ordinary shares and its price may be more volatile.
34
Additionally, we qualify as a “smaller reporting company” as defined in
Item 10(f)(1) of Regulation S-K promulgated by the SEC. Smaller reporting companies may take advantage of certain
reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. The Company
will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our ordinary
shares held by non-affiliates is equal to or exceeds $250 million as of the end of that year’s second fiscal quarter,
or (ii) our annual revenues is equal to or exceeds $100 million during such completed fiscal year and the market value of our
ordinary shares held by non-affiliates is equal to or exceeds $700 million as of the end of that year’s second fiscal
quarter. To the extent the Company takes advantage of such reduced disclosure obligations, it may also make comparison of our financial
statements with other public companies difficult or impossible.
Risks Related to U.S. Federal Income Taxation
The PFIC status of New Silexion could result in adverse U.S. federal
income tax consequences to U.S. Holders.
In general, a non-U.S. corporation is a PFIC for U.S. federal income tax purposes
for any taxable year in which, after applying certain look-through rules, either (i) 50% or more of the average value of its
assets (generally determined on the basis of a weighted quarterly average) consists of assets that produce, or are held for the production
of, passive income, or (ii) 75% or more of its gross income consists of passive income. Passive income generally includes dividends,
interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the
disposition of passive assets. Cash and cash equivalents generally are passive assets. The value of goodwill will generally be treated
as an active or passive asset based on the nature of the income produced in the activity to which the goodwill is attributable. For purposes
of the PFIC rules, a non-U.S. corporation that owns, directly or indirectly, at least 25% by value of the stock of another corporation
is treated as if it held its proportionate share of the assets of the other corporation and received directly its proportionate share
of the income of the other corporation.
The annual PFIC income and asset tests in respect of New Silexion will be applied based
on the assets and activities of the combined business. Based on the composition of our income and assets, it cannot be determined whether
we will be classified as a PFIC for our current taxable year or in any future taxable year. Further, changes in the composition of our
income or composition of our assets may cause us to be or become a PFIC for the current or subsequent taxable years. Whether we are treated
as a PFIC for U.S. federal income tax purposes is a factual determination that must be made annually at the close of each taxable year
and, thus, is subject to significant uncertainty.
If we are treated as a PFIC for any taxable year, or portion thereof, that is included
in the holding period of a U.S. Holder, such U.S. Holder may be subject to certain adverse U.S. federal income tax consequences and may
be subject to additional reporting requirements. For a further discussion, see “Certain Material
U.S. Federal Income Tax Considerations — PFIC Rules.” U.S. Holders are strongly encouraged to consult their own advisors
regarding the potential application of these rules to the ownership of our ordinary shares, pre-funded warrants and/or our ordinary warrants.
If a U.S. person is treated as owning at least 10% of the shares
of New Silexion, such person may be subject to adverse U.S. federal income tax consequences.
If a U.S. Holder is treated as owning (directly, indirectly or constructively) at least
10% of the value or voting power of our shares, such holder may be treated as a “United States shareholder” with respect to
each of New Silexion and our direct and indirect subsidiaries (the “New Silexion Group”)
that is a “controlled foreign corporation,” (a “CFC”), for U.S. federal income tax purposes. A non-U.S. corporation
is considered a CFC if more than 50% of (1) the total combined voting power of all classes of stock of such corporation entitled to vote,
or (2) the total value of the stock of such corporation is owned, or is considered as owned by applying certain constructive ownership
rules, by United States shareholders on any day during the taxable year of such non-U.S. corporation. If the New Silexion Group includes
one or more non-U.S. subsidiaries, certain of our non-U.S. subsidiaries could be treated as CFCs regardless of whether we are treated
as a CFC.
If we or any of our non-U.S. subsidiaries is a CFC, 10% “United States shareholders”
will be subject to adverse income inclusion and reporting requirements with respect to such CFC. No assurance can be provided that we
will assist holders in determining whether we or any of our non-U.S. subsidiaries is treated as a CFC or whether any holder is treated
as a United States shareholder with respect to any of such CFCs, or furnish to any holder information that may be necessary to comply
with reporting and tax payment obligations with respect to such CFCs.
If a U.S. person is treated as owning at least 10% of the shares
of New Silexion, such person may be subject to adverse U.S. federal income tax consequences.
If a U.S. Holder is treated as owning (directly, indirectly or constructively)
at least 10% of the value or voting power of the shares of Silexion, such holder may be treated as a “United States shareholder”
with respect to each of Silexion and our direct and indirect subsidiaries (the “New Silexion Group”)
that is a “controlled foreign corporation,” (a “CFC”), for U.S. federal income tax purposes. A non-U.S. corporation
is considered a CFC if more than 50% of (1) the total combined voting power of all classes of stock of such corporation entitled
to vote, or (2) the total value of the stock of such corporation is owned, or is considered as owned by applying certain constructive
ownership rules, by United States shareholders on any day during the taxable year of such non-U.S. corporation. If the
New Silexion Group includes one or more non-U.S. subsidiaries, certain of our non-U.S. subsidiaries could be treated as CFCs
regardless of whether we are treated as a CFC.
If Silexion or any of our non-U.S. subsidiaries is a CFC, 10% “United States
shareholders” will be subject to adverse income inclusion and reporting requirements with respect to such CFC. No assurance
can be provided that New Silexion will assist holders in determining whether it or any of our non-U.S. subsidiaries is treated as
a CFC or whether any holder is treated as a United States shareholder with respect to any of such CFCs, or furnish to any holder
information that may be necessary to comply with reporting and tax payment obligations with respect to such CFCs.
35
General Risks
The Company may be subject to securities litigation, which is expensive
and could divert management attention, including securities class action and derivative lawsuits which could result in substantial costs.
Our share price may be volatile and, in the past, companies that have experienced volatility
in the market price of their stock or shares have been subject to securities litigation, including class action litigation. The Company
may be the target of this type of litigation in the future. Litigation of this type could result in substantial costs and diversion of
management’s attention and resources, which could have a material adverse effect on our business, financial condition, and results
of operations. Any adverse determination in litigation could also subject the Company to significant liabilities.
Securities class action lawsuits and derivative lawsuits are often brought against public
companies that have entered into merger or business combination agreements. Even if the lawsuits are without merit, defending against
these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages,
which could have a negative impact on our liquidity and financial condition. We cannot predict whether any such lawsuits will be filed.
USE OF PROCEEDS
Assuming the maximum number of ordinary
shares are sold in this offering at an assumed public offering price of $7.21 per share and accompanying ordinary warrants, which represents
the closing price of our ordinary shares on the Nasdaq Capital Market on September 2, 2025, and assuming no issuance of pre-funded
warrants in connection with this offering, we estimate the net proceeds of the offering will be approximately $5.2 million, after deducting
the Placement Agent’s fees and estimated offering expenses payable by us. However, this is a best efforts offering with no minimum
number of securities or amount of proceeds as a condition to closing, and we may not sell all or any of these securities offered pursuant
to this prospectus; as a result, we may receive significantly less in net proceeds.
Each $0.10 increase (decrease) in the assumed
public offering price of $7.21 per share and accompanying ordinary warrants would increase (decrease) the net proceeds to us from this
offering, after deducting the estimated placement agent fees and estimated offering expenses payable by us, by $0.08 million, assuming
that the number of ordinary shares and accompanying ordinary warrants offered by us, as set forth on the cover page of this prospectus,
remains the same. We may also increase or decrease the number of ordinary shares and ordinary warrants we are offering. An increase (decrease)
of 100,000 in the number of ordinary shares we are offering would increase (decrease) the net proceeds to us from this offering,
after deducting the estimated placement agent fees and estimated offering expenses payable by us, by $0.67 million, assuming the assumed
public offering price stays the same.
We currently intend to use the net proceeds from this offering to advance our pre-clinical
clinical studies, and for general corporate purposes. Accordingly, we retain broad discretion over the use of the net proceeds from the
sale of our ordinary shares and ordinary warrants (or pre-funded warrants and ordinary warrants, if applicable), pursuant to this prospectus.
The precise amount and timing of the application of such proceeds will depend upon our liquidity needs and the availability and cost of
other capital over which we have little or no control.
Pending the use of the net proceeds from this offering as described above, we intend
to invest the net proceeds in a variety of capital preservation investments, short and intermediate term, interest-bearing, investment-grade
instruments, U.S. government securities and highly rated corporate debt securities, although our investment policy may change following
the date of this prospectus supplement. It is possible that, pending their use, we may invest the net proceeds in a way that does not
yield a favorable, or any, return for us.
36
CAPITALIZATION
The following table sets forth
our capitalization as of June 30, 2025 as follows:
|
• |
on an actual basis; |
|
• |
on a pro forma basis after giving effect to the exercise
of 152,106 ordinary warrants for 152,106 underlying ordinary shares at an exercise price of $11.57 per share pursuant to a warrant
inducement transaction that we completed on August 1, 2025 for aggregate gross proceeds of approximately $1.8 million (net proceeds of
approximately $1.5 million after deducting placement agent fees and other offering expenses payable by us) (the pro forma capitalization
set forth in the below table does not give effect, however, to our potential issuance of (a) up to 304,212 ordinary shares underlying
warrants that are exercisable at an exercise price of $11.32 per share, which warrants were issued pursuant to the foregoing warrant inducement
transaction, or (b) up to 10,647 ordinary shares underlying 10,647 new placement agent warrants, exercisable at $ 14.4625 per share,
which new placement agent warrants were issued in that same warrant inducement transaction), as if such events had occurred on June 30,
2025 (collectively, the “Pro Forma Adjustments”); and |
|
• |
on a pro forma as adjusted basis to reflect assumed sale by
us of all ordinary shares and accompanying ordinary warrants offered by means of this prospectus at an assumed public offering price of
$7.21 per share and accompanying ordinary warrants, which is based on the last reported sale price of our ordinary shares on the Nasdaq
Capital Market on September 2, 2025, assuming no sale of pre-funded warrants and after deducting the Placement Agent’s fees
and estimated offering expenses payable by us, and without giving effect to the exercise of the ordinary warrants issued in this offering,
as if such issuance and sale had occurred on June 30, 2025. |
The as adjusted information below is illustrative only and our capitalization following
the completion of this offering is subject to various adjustments. The as adjusted amounts shown below are unaudited and represent management’s
estimate. The information in this table should be read in conjunction with and is qualified by reference to the financial statements and
notes thereto and other financial information contained in this prospectus.
37
|
As of June 30, 2025
(unaudited) |
| |||||||||||
|
(U.S. dollars in thousands) |
|
Actual |
|
|
Pro
Forma |
|
|
Pro Forma As
Adjusted |
| |||
|
Cash and cash equivalents |
|
$ |
3,466 |
|
|
$ |
4,944 |
|
|
$ |
10,143 |
|
|
Related Party Promissory Note |
|
|
(3,190 |
) |
|
|
(3,190 |
) |
|
|
(3,190) |
|
|
Total shareholders’ equity |
|
|
120 |
|
|
|
1,598 |
|
|
|
6,797 |
|
Each $0.10 increase (decrease) in an assumed
public offering price of $7.21 per share and accompanying ordinary warrant would increase (decrease) the amount of cash and cash equivalents
and total shareholders’ equity by $0.08 million, assuming that the number of ordinary shares and accompanying ordinary warrants
offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the Placement Agent’s fees
and estimated offering expenses payable by us. We may also increase or decrease the number of ordinary shares and accompanying ordinary
warrants we are offering. An increase (decrease) of 100,000 in the number of ordinary shares we are offering would increase (decrease)
the amount of cash and cash equivalents and total shareholders’ equity by $0.67 million, after deducting the estimated Placement
Agent’s fees and estimated offering expenses payable by us, assuming the assumed public offering price stays the same. The information
discussed above is illustrative only and will adjust based on the actual public offering price, the actual number of shares that we offer
in this offering, and other terms of this offering determined at pricing.
The above table is based on 579,536
shares outstanding as of June 30, 2025 and excludes as of that date:
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up to 275,883 ordinary shares
underlying an equivalent number of outstanding warrants at an average exercise price of $266.43 per share; |
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● |
50,860 ordinary shares issuable
pursuant to the A&R Sponsor Promissory Note (based on the conversion of the entire $3,433,000 principal amount of that note into ordinary
shares at an assumed conversion price of $67.50 per share); |
|
● |
10,234 ordinary
shares issuable upon exercise of outstanding stock options or settlement of outstanding restricted share units (“RSUs”)
under our equity incentive plans, at a weighted average exercise price (with respect to the options only) of $897.34 per share; and
|
|
● |
1,782 ordinary shares reserved for
future awards under our equity incentive plan. |
DILUTION
If you purchase our ordinary shares and accompanying ordinary warrants in this offering,
you will experience dilution to the extent of the difference between the combined public offering price per share and ordinary warrant
you pay in this offering and the net tangible book value per share of our ordinary shares immediately after this offering.
The net tangible book value of
our ordinary shares on June 30, 2025 was approximately $ 0.1 million, or approximately $0.21 per share. Net tangible book value
per share is equal to the amount of our total tangible assets, less total liabilities, divided by the aggregate number of our ordinary
shares outstanding.
After giving effect on a pro forma
basis to the Pro Forma Adjustments (as described in the “Capitalization” section above), our pro forma net tangible book value
as of June 30, 2025 would have been approximately $1.6 million, or approximately $2.18 per share.
38
After giving further effect to the assumed sale by us of all ordinary shares and accompanying
ordinary warrants offered by means of this prospectus at an assumed public offering price of $7.21 per share and accompanying ordinary
warrants, which is based on the last reported sale price of our ordinary shares on the Nasdaq Capital Market on September 2, 2025,
assuming no sale of pre-funded warrants and after deducting the Placement Agent’s fees and estimated offering expenses payable by
us, and without giving effect to the exercise of the ordinary warrants issued in this offering, our pro forma as adjusted net tangible
book value as of June 30, 2025 would have been approximately $6.8 million, or approximately $4.35 per share and accompanying ordinary
warrants. This represents an immediate increase in net tangible book value of approximately $2.17 per share to existing shareholders and
an immediate dilution of approximately $2.86 per share to new investors in this offering. The following table illustrates this per share
dilution:
|
Assumed public offering price per share and accompanying ordinary warrants |
|
$ |
7.21 |
|
|
Net tangible book value per share as of June 30, 2025 |
|
$ |
0.21 |
|
|
Pro forma net tangible book value per share as of June 30, 2025 after giving effect to the Pro Forma Adjustments
|
|
$ |
2.18 |
|
|
Increase per share attributable to new investors in this offering |
|
$ |
2.17 |
|
|
Pro forma as adjusted net tangible book value per share as of June 30, 2025 after giving effect to this
offering |
|
$ |
4.35 |
|
|
Dilution in net tangible book value per share to new investors in this offering |
|
$ |
2.86 |
|
Each $0.10 increase (decrease) in an assumed
public offering price of $7.21 per share and accompanying ordinary warrants would increase (decrease) our pro forma as adjusted net tangible
book value after this offering by $0.05 per share, and the dilution per share to new investors by $0.05 per share and accompanying ordinary
warrants, assuming that the number of ordinary shares and accompanying ordinary warrants offered by us, as set forth on the cover page
of this prospectus, remains the same and after deducting the Placement Agent’s fees and estimated offering expenses payable by us.
We may also increase or decrease the number of ordinary shares and accompanying ordinary warrants we are offering. An decrease (increase)
of 100,000 in the number of ordinary shares we are offering would increase (decrease) the dilution per shares to new investors by $0.14
($0.16), after deducting the estimated Placement Agent’s fees and estimated offering expenses payable by us, assuming the assumed
public offering price stays the same. The information discussed above is illustrative only and will adjust based on the actual public
offering price, the actual number of shares that we offer in this offering, and other terms of this offering determined at pricing.
The number of our ordinary shares
to be outstanding after this offering as shown above is based on 579,536 shares outstanding as of June 30, 2025 and excludes as of
that date:
|
● |
up
to 275,883 ordinary shares underlying an equivalent number of outstanding warrants at an average
exercise price of $266.43 per share; |
|
● |
50,860 ordinary shares issuable pursuant to the A&R Sponsor
Promissory Note (based on the conversion of the entire $3,433,000 principal amount of that note into ordinary shares at an assumed conversion
price of $67.50 per share); |
|
● |
10,234 ordinary shares issuable upon exercise
of outstanding stock options or settlement of outstanding restricted share units (“RSUs”)
under our equity incentive plans, at a weighted average exercise price (with respect to the options only) of $897.34 per share; and
|
|
● |
1,782 ordinary shares reserved for future awards under our equity incentive plan.
|
To the extent that any of our options or warrants listed above are exercised, new options
are issued under our equity incentive plan and subsequently exercised or we issue additional ordinary shares in the future, there will
be further dilution to new investors participating in this offering.
39
MARKET
INFORMATION FOR SECURITIES AND DIVIDEND POLICY
Market Information
Our ordinary shares and
warrants are currently listed on the Nasdaq Capital Market under the symbols “SLXN” and “SLXNW,” respectively.
On September 2, 2025, there were 27 holders of record of the ordinary shares and three holders of record of our warrants.
Dividend Policy
We have never declared or paid any dividends on ordinary shares. We anticipate that
we will retain all of our future earnings, if any, for use in the operation and expansion of our business and do not anticipate paying
cash dividends in the foreseeable future. Any decision to declare and pay dividends in the future will depend on, among other things,
the consent of our lender(s), our results of operations, cash requirements, financial condition, contractual restrictions, funds lawfully
available therefor and other factors that our board of directors may deem relevant.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Introductory Note
The following discussion and analysis of our financial condition
and results of operations (this “MD&A”) should be read in conjunction with the
financial statements and the related notes included elsewhere in this prospectus. Some of the information contained in this discussion
and analysis or set forth in this prospectus, including information with respect to our plans, objectives, expectations, projections,
and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result
of many factors, including those factors set out in the “Risk Factors” sections of this prospectus, our actual results could
differ materially from the results described in or implied by these forward-looking statements. See also the section entitled “Special
Note Regarding Forward-Looking Statements” in this prospectus.
Unless the context otherwise requires, references to the “Company,”
“we,” “us” and “our” in this MD&A generally refer to Silexion Therapeutics Ltd., an Israeli company
(“Silexion”), or, from and after the Business Combination, Silexion Therapeutics Corp (formerly known as Biomotion Sciences),
a Cayman Islands exempted company (also referred to herein as “New Silexion”).
On August 15, 2024, New Silexion, Silexion and Moringa completed
the Business Combination pursuant to the Business Combination Agreement.
Overview
We are a Cayman Islands exempted
company that was originally formed for the purpose of effectuating the Business Combination and that now serves as a publicly-traded holding
company for each of Silexion (through which our operations are carried out) and Moringa (which has no operations). Our ordinary shares
and warrants are listed on the Nasdaq Capital Market under the trading symbols “SLXN” and “SLXNW”, respectively.
We conduct operations primarily through our principal
subsidiary— Silexion— which is a clinical-stage, oncology-focused biotechnology company engaged in the discovery and development
of proprietary treatments for cancers driven by Kirsten rat sarcoma viral oncogene homolog (“KRAS”).
The KRAS gene, when mutated, plays a central role in many cancer types, such as pancreatic, colorectal and lung, and is therefore considered
to be an oncogene. This oncogene instructs cells to make the corresponding KRAS protein which has a controlling function in cell
growth signaling in the cancer cells. Various pharmaceutical companies are developing inhibitors of this protein, which attempt
to inhibit its activity after it is already functioning in an oncogenic manner. At Silexion, we have taken a different approach,
moving upstream to the source of the cancer; silencing the KRAS oncogene so the oncogenic protein is not made. We believe this approach
has various important clinical advantages. Our technology works by inducing the tumor cells to destroy the messenger (mRNA) between
the oncogene and the tumor cell’s protein manufacturing apparatus. For this we use small segments biologically complementary
to the oncogenic mRNA, made out of the natural genetic building block of mRNA, and modify them to become significantly more stable and
with capability to more readily enter the tumor cells, yet while maintaining their important ability to carry out the treatment. These
small pieces of genetic material are called small interfering RNA(siRNA) as they are relatively small compared to the mRNA molecule and
they interfere with the mRNA function. Our lead product candidate, SIL204, is a second generation siRNA. The siRNA prevents or severely
limits the tumor cells’ manufacturing of the protein. Without the mutated KRAS protein, the mechanism of generating the tumor
is prevented. In pancreatic cancer, ~92% of patients have this mutated oncogene. To further optimize treatment, we introduce a novel
delivery approach which we refer to as an Integrated Treatment Regimen. To get across the very strong barrier surrounding pancreatic
tumor cells, which limits the effectiveness of current treatments, we administer SIL204 directly into the tumor, where it can be most
effective. For affected tumor cells which may have already left the primary tumor, we also administer SIL204 systemically
via the subcutaneous route. In order to be used as a first-line treatment, we administer the Integrated Treatment Regimen alongside
standard of care (SoC) chemotherapy. The approach of using an siRNA directed against mutated KRAS together with SoC chemotherapy
evidenced a benefit for overall survival over SoC chemotherapy alone in a Phase 2 clinical trial, where the siRNA used was our prototype
or first-generation product. We are further expecting improved overall survival results with our second generation product SIL204.
Prior to the Business Combination,
Silexion financed its operations primarily with the net proceeds from private offerings of its ordinary shares and convertible preferred
shares, convertible financing agreements and Simple Agreement for Future Equity (SAFE) financings, and royalty-bearing grants from the
Israeli Innovation Authority (the “IIA”) (which grants totaled $5.8 million through
June 30, 2025).
Upon the Closing of
the Business Combination, we raised $2.0 million via a private investment in public entity (PIPE) financing, whereby Moringa sold to Greenstar,
LP, an affiliate of the Moringa sponsor, 1,482 newly issued Moringa ordinary shares, at a price of $1,350.00
per share, which shares converted into an equivalent number of New Silexion ordinary shares at the Closing, Also in connection with the
Closing, we entered into the ELOC Agreement with White Lion, which provided us with an equity line of credit of up to $15.0 million (the
“ELOC”).We have utilized the ELOC
for financings from time to time since the Closing of the Business Combination, having raised an aggregate of $3.1 million from the ELOC
through June 30, 2025.
40
In addition to ongoing financings
via the ELOC, as a public company, we have raised capital via the public offering of ordinary shares and/or pre-funded warrants, together
with ordinary warrants, having completed our first public offering following the Closing in January 2025, which raised gross proceeds
of approximately $5.0 million. As a follow-up to that public offering, later in January 2025, we completed an induced exercise of ordinary
warrants, which raised gross proceeds of approximately $3.3 million, before deducting placement agent fees and other offering expenses,
and in July 2025, we completed an induced exercise of ordinary warrants, which raised gross proceeds of approximately $1.8 million, before
deducting placement agent fees and other offering expenses.
Since our inception, we have incurred significant operating losses. Our net losses (consisting
of Silexion’s net losses for all periods through the Business Combination, and the combined company's net losses for all periods
after) were $16.5 million and $5.1 million for the years ended December 31, 2024 and December 31, 2023, respectively, and $4.2 million
for the six months ended June 30, 2025. As of June 30, 2025, we had an accumulated deficit of $47.5 million (reflecting Silexion’s
accumulated deficit for all periods through August 15, 2024 and the combined company's accumulated deficit from August 16, 2024 through
June 30, 2025). We have not recognized any revenue to date.
We expect to continue to incur significant expenses and operating losses for the foreseeable
future. The net losses it incurs may fluctuate significantly from quarter to quarter. Our expenses will depend on many factors, including
the timing and extent of spending to further develop SIL204 and initiate pre-clinical and clinical trials, support research and development
efforts, investments in potential additional pipe-line products, and increased overall compensation as we continue to hire additional
personnel. We anticipate that our expenses will increase if and as we:
|
|
● |
apply for Orphan Drug Designation in both the U.S. and EU for its SIL204 product; |
|
|
● |
initiate toxicological studies with respect to SIL204; |
|
● |
initiate a clinical trial powered for statistical significance with respect to SIL204; |
|
|
● |
seek marketing approvals for SIL204 in various territories; |
|
|
● |
maintain, expand and protect our intellectual property portfolio; |
|
|
● |
hire additional operational, clinical, quality control and scientific personnel; |
|
|
● |
add additional product candidates to our pipeline; |
|
|
● |
add operational, financial and management information systems and personnel, including personnel to support
our product development, any future commercialization efforts and our prospective transition to a public company; and |
|
|
● |
invest in research and development and regulatory approval efforts in order to utilize our technology as
a platform focused on the silencing of the KRAS oncogene using RNA-interference therapeutics. |
Reverse Share Splits
On November 27, 2024, we effected
a 1-for-9 reverse share split of our authorized ordinary shares, including our issued and outstanding ordinary shares, with a market effective
date of November 29, 2024, and on July 28, 2025, we effected a 1-for-15 reverse share split of our authorized ordinary shares, including
our issued and outstanding ordinary shares, with a market effectiveness date of July 29, 2025. Unless specifically provided otherwise
herein, all share, per share and related option and warrant information for presented in this prospectus has been adjusted (in the case
of information as of any date or for any period prior to the respective reverse split dates, on a retroactive basis) to reflect the reduced
number of shares and the increase in the share price which resulted from the reverse share splits.
Recent Developments
Our prospective financial condition
and results of operations in the period following the Closing of the Business Combination have been impacted by the transactions described
below under “Liquidity and Capital Resources”, most of which have been entered into
subsequent to, and some of which were entered into at, or around the time of, the Closing.
41
Components of our Results of Operations
Operating Expenses
Research and Development Expenses
Research and development expenses include costs directly attributable to the conduct
of research and development programs, including the cost of payroll and related expenses, payroll taxes and other employee benefits including
share-based compensation related to employees, subcontractors, lab expenses, preclinical and clinical trials cost, material costs and
consulting fees.
We expect to continue to invest in research and development to develop SIL204, including
hiring additional employees and continuing the research and development of that product candidate. As a result, we expect that our research
and development expenses will continue to increase in the future.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel costs, including
share-based compensation related to directors and employees, patent application fees, office space rental costs, and maintenance expenses,
external professional service costs, including legal, accounting, audit, finance, insurance, human resource services, travel expenses
and other consulting fees.
We expect that our general and administrative expenses will increase in the future to
fund our continued research and development activities, primarily due to increased headcount to support anticipated growth in the business
and due to incremental costs associated with operating as a public company, including costs to comply with the rules and regulations applicable
to public companies such as costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC and
stock exchange listing standards, public relations, insurance and professional services.
Financial expenses (income), net
The finance expenses consisted primarily of changes in fair value of financial
liabilities measured at fair value, non-cash loss upon entering into the Business Combination transaction, and exchange rate differences
expenses.
42
Comparison of six-month periods
ended June 30, 2025 and 2024
The following table summarizes our results of operations
for the six-month periods ended June 30, 2025 and 2024:
|
|
Six-month period
ended
June 30,
|
|||||||
|
|
2025
|
2024
|
||||||
|
|
(U.S. dollars, in thousands)
|
|||||||
|
Operating expenses: |
||||||||
|
|
||||||||
|
Research and development |
$ |
1,608 |
$ |
1,727 |
||||
|
General and administrative |
2,326 |
908 |
||||||
|
Total operating expenses |
3,934 |
2,635 |
||||||
|
Operating loss |
3,934 |
2,635 |
||||||
|
Financial expenses, net |
301 |
270 |
||||||
|
Loss before income tax |
4,235 |
2,905 |
||||||
|
Income tax |
3 |
7 |
||||||
|
Net loss |
$ |
4,238 |
$ |
2,912 |
||||
Research and Development Expenses
The following table summarizes our research and
development expenses for the six-month periods ended June 30, 2025 and 2024:
|
|
Six-month period
ended
June 30,
|
|||||||
|
|
2025
|
2024
|
||||||
|
|
(U.S. dollars, in thousands)
|
|||||||
|
Payroll and related expenses |
$ |
854 |
$ |
476 |
||||
|
Share-based compensation expenses |
- |
38 |
||||||
|
Subcontractors and consultants |
598 |
1,128 |
||||||
|
Rent and maintenance |
95 |
49 |
||||||
|
Other |
61 |
36 |
||||||
|
Total research and development expenses |
$ |
1,608 |
$ |
1,727 |
||||
Research and development expenses decreased by
approximately $0.1 million, or 5.9%, to $1.6 million for the six-month period ended June 30, 2025, compared to $1.7 million for the six-month
period ended June 30, 2024. The decrease resulted mainly from the timing and nature of subcontractors’ and consultants’ expenses,
which decreased by $0.5 million. The comparative six-month period from 2024 included development activities related to our Application
Programming Interface, or API, whereas the six-month period in 2025 focused on API manufacturing activities as our development program
progressed to the next phase. This decrease was partly offset by an increase in payroll and payroll-related expenses of $0.4 million due
to additional headcount and increases in salaries following the Closing of the Business Combination in August 2024.
43
General and Administrative Expenses
The following table summarizes our general and
administrative expenses for the six-month periods ended June 30, 2025 and 2024:
|
|
Six-month period
ended
June 30,
|
|||||||
|
|
2025
|
2024
|
||||||
|
|
(U.S. dollars, in thousands)
|
|||||||
|
Payroll and related expenses |
$ |
739 |
$ |
280 |
||||
|
Share-based compensation expenses |
58 |
26 |
||||||
|
Professional service |
1,111 |
448 |
||||||
|
Depreciation |
7 |
15 |
||||||
|
Rent and maintenance |
85 |
72 |
||||||
|
Patent registration |
51 |
25 |
||||||
|
Travel expenses |
91 |
16 |
||||||
|
Other |
184 |
26 |
||||||
|
Total general and administrative expenses |
$ |
2,326 |
$ |
908 |
||||
General and administrative expenses increased by
approximately $1.4 million, or 155.6%, to $2.3 million for the six-month period ended June 30, 2025, compared to $0.9 million for the
six-month period ended June 30, 2024. The increase resulted mainly from an increase of $0.5 million in payroll and payroll-related expenses
due to headcount growth and an increase in salaries following the Closing of the Business Combination in August 2024. Additionally, there
was an increase in professional services costs in an amount of $0.7 million primarily related to legal, accounting, and other expenses
associated with the costs of financing activities as a public company subsequent to the Closing of the Business Combination.
Financial expenses, net
Financial expenses, net remained approximately
the same for the six-month period ended June 30, 2025 compared to the six-month period ended June 30, 2024, due to an increase of $0.1
million in revaluation expenses of financial instruments offset by a decrease in foreign exchange losses in an amount of $0.1 million.
Net loss
Net loss increased by approximately $1.3 million,
or 44.8%, to $4.2 million for the six-month period ended June 30, 2025, compared to $2.9 million for the six-month period ended June 30,
2024. The increase was mainly due to an increase in our general and administrative expenses related to our status as a public company.
Comparison of three-month periods
ended June 30, 2025 and 2024
The following table summarizes our results of operations
for the three-month periods ended June 30, 2025 and 2024:
|
|
Three-month
period ended
June 30,
|
|||||||
|
|
2025
|
2024
|
||||||
|
|
(U.S. dollars, in thousands)
|
|||||||
|
Operating expenses: |
||||||||
|
|
||||||||
|
Research and development |
$ |
1,018 |
$ |
766 |
||||
|
General and administrative |
1,266 |
619 |
||||||
|
Total operating expenses |
2,284 |
1,385 |
||||||
|
Operating loss |
2,284 |
1,385 |
||||||
|
Financial expenses, net |
216 |
102 |
||||||
|
Loss before income tax |
2,500 |
1,487 |
||||||
|
Income tax |
3 |
2 |
||||||
|
Net loss for the quarter
|
$ |
2,503 |
$ |
1,489 |
||||
44
Research and Development Expenses
The following table summarizes our research and
development expenses for the three-month periods ended June 30, 2025 and 2024:
|
|
Three-month
period ended
June 30,
|
|||||||
|
|
2025
|
2024
|
||||||
|
|
(U.S. dollars, in thousands)
|
|||||||
|
Payroll and related expenses |
$ |
485 |
$ |
216 |
||||
|
Share-based compensation expenses |
- |
19 |
||||||
|
Subcontractors and consultants |
442 |
497 |
||||||
|
Rent and maintenance |
55 |
18 |
||||||
|
Other |
36 |
16 |
||||||
|
Total research and development expenses |
$ |
1,018 |
$ |
766 |
||||
Research and development expenses increased
by approximately $0.2 million, or 25.0%, to $1.0 million for the three-month period ended June 30, 2025, compared to $0.8 million for
the three-month period ended June 30, 2024. The increase resulted mainly from an increase in payroll and payroll-related expenses due
to additional headcount and increases in salaries following the Closing of the Business Combination in August 2024 and bonus accrual in
the second quarter of 2025.
General and Administrative Expenses
The following table summarizes our general and
administrative expenses for the three-month periods ended June 30, 2025 and 2024:
|
|
Three-month
period ended
June 30,
|
|||||||
|
|
2025
|
2024
|
||||||
|
|
(U.S. dollars, in thousands)
|
|||||||
|
Payroll and related expenses |
$ |
407 |
$ |
151 |
||||
|
Share-based compensation expenses |
37 |
13 |
||||||
|
Professional service |
586 |
369 |
||||||
|
Depreciation |
3 |
7 |
||||||
|
Rent and maintenance |
55 |
46 |
||||||
|
Patent registration |
47 |
16 |
||||||
|
Travel expenses |
37 |
7 |
||||||
|
Other |
94 |
10 |
||||||
|
Total general and administrative expenses |
$ |
1,266 |
$ |
619 |
||||
General and administrative expenses increased by
approximately $0.7 million, or 116.7%, to $1.3 million for the three-month period ended June 30, 2025, compared to $0.6 million for the
three-month period ended June 30, 2024. The increase resulted mainly from an increase of $0.3 million in payroll and payroll-related expenses
due to headcount growth and an increase in salaries following the Closing of the Business Combination in August 2024 and bonus accrual
in the second quarter of 2025. Additionally, there was an increase in professional services costs in an amount of $0.2 million primarily
related to legal, accounting, and other expenses associated with the costs of financing activities as a public company subsequent to the
Closing of the Business Combination.
45
Financial expenses, net
Financial expenses, net increased by approximately
$0.1 million, or 100.0%, to $0.2 million for the three-month period ended June 30, 2025 compared to $0.1 million for the three-month period
ended June 30, 2024. This increase was mainly due to an increase in revaluation expenses of financial instruments.
Net loss
Net loss increased by approximately $1.0 million,
or 66.7%, to $2.5 million for the three-month period ended June 30, 2025, compared to $1.5 million for the three-month period ended June
30, 2024. The increase was mainly due to an increase in our general and administrative expenses related to our status as a public company,
research and development expenses and financial expenses.
Comparison of years ended December 31, 2024 and 2023
The following table summarizes our results of operations for the years ended December
31, 2024 and 2023:
|
|
Year ended December 31, |
|||||||
|
|
2024 |
2023 |
||||||
|
|
(U.S. dollars, in thousands) |
|||||||
|
Operating expenses: |
||||||||
|
|
||||||||
|
Research and development |
$ |
5,815 |
$ |
3,708 |
||||
|
General and administrative |
6,756 |
973 |
||||||
|
Total operating expenses |
12,571 |
4,681 |
||||||
|
Operating loss |
12,571 |
4,681 |
||||||
|
Financial expenses, net |
3,938 |
395 |
||||||
|
Loss before income tax |
16,509 |
5,076 |
||||||
|
Income tax |
10 |
32 |
||||||
|
Net loss for the year |
$ |
16,519 |
$ |
5,108 |
||||
Research and Development Expenses
The following table summarizes our research and development expenses for the years ended
December 31, 2024 and 2023:
|
|
Year ended December 31, |
|||||||
|
|
2024 |
2023 |
||||||
|
|
(U.S. dollars, in thousands) |
|||||||
|
Payroll and related expenses |
$ |
1,231 |
$ |
895 |
||||
|
Share-based compensation expenses |
2,424 |
78 |
||||||
|
Subcontractors and consultants |
1,890 |
2,467 |
||||||
|
Materials |
3 |
13 |
||||||
|
Rent and maintenance |
205 |
160 |
||||||
|
Travel expenses |
13 |
37 |
||||||
|
Other |
49 |
58 |
||||||
|
Total research and development expenses |
$ |
5,815 |
$ |
3,708 |
||||
Research and development expenses increased by approximately $2.1 million, or 56.8%,
to $5.8 million for the year ended December 31, 2024, compared to $3.7 million for the year ended December 31, 2023. The increase resulted
mainly from an increase in payroll and payroll-related expenses of $0.3 million due to additional headcount and increases in salaries
as of the Closing of the Business Combination in August 2024, and from non-cash share-based compensation expenses in an amount of $2.3
million, related to employee grants issued around the time of the Closing. The increase was partly offset, by a decrease in subcontractors
and consultants expenses, in an amount of $0.6 million.
Research and development expenses for the years ended December 31, 2024 and December
31, 2023 included approximately $0.2 million and $0.8 million, respectively, related to the development of Loder, and $5.6 million and
$2.9 million, respectively, related to the development of SIL204. Aggregate research and development expenses since inception for our
Loder program, as of December 31, 2024 and as of December 31, 2023, were approximately $18.4 million and $18.2 million, respectively.
Aggregate research and development expenses since inception for the SIL204 program, as of December 31, 2024 and as of December 31, 2023,
were approximately $9.1 million and $3.6 million, respectively.
46
General and Administrative Expenses
The following table summarizes our general and administrative expenses for the years
ended December 31, 2024 and 2023:
|
|
Years ended December 31, |
|||||||
|
|
2024 |
2023 |
||||||
|
|
(U.S. dollars, in thousands) |
|||||||
|
Payroll and related expenses |
$ |
1,154 |
$ |
304 |
||||
|
Share-based compensation expenses |
3,438 |
52 |
||||||
|
Professional services |
1,632 |
386 |
||||||
|
Depreciation |
25 |
45 |
||||||
|
Rent and maintenance |
89 |
86 |
||||||
|
Patent registration |
43 |
22 |
||||||
|
Travel expenses |
106 |
31 |
||||||
|
Other |
269 |
47 |
||||||
|
Total general and administrative expenses |
$ |
6,756 |
$ |
973 |
||||
General and administrative expenses increased by approximately $5.8 million, or 580.0%,
to $6.8 million for the year ended December 31, 2024, compared to $1.0 million for the year ended December 31, 2023. The increase resulted
mainly from an increase of $0.9 million in payroll and payroll-related expenses due to headcount growth and an increase in salaries following
the Closing of the Business Combination in August 2024 and an increase in non-cash share-based compensation expenses in an amount of $3.4
million, related to directors and employee grants issued around the time of the Closing of the Business Combination. Additionally, there
was an increase in professional services costs in an amount of $1.2 million primarily related to one-time legal, accounting, and other
expenses associated with the costs of becoming a public company and the Closing of the Business Combination.
Financial expenses, net
Financial expenses, net increased by approximately $3.5 million, or 875.0%, to $3.9
million for the year ended December 31, 2024 compared to $0.4 million for the year ended December 31, 2023. This increase was mainly due
to an increase in an amount of $4.8 million in one-time non-cash loss upon entering into the Business Combination transaction in August
2024, offset in part by an increase in revaluation income of financial instruments (warrants, promissory notes and ELOC) in an amount
of $1.2 million.
|
Net loss |
Net loss increased by approximately $11.4 million, or 223.5%, to $16.5 million for the
year ended December 31, 2024, compared to $5.1 million for the year ended December 31, 2023. The increase was mainly due to an increase
in our research and development expenses, general and administrative expenses, and financial expenses including significant non-cash items
related to share-based compensation, transaction costs related to the Closing of the Business Combination transaction in August 2024,
and costs related to becoming a public company.
Liquidity and Capital Resources
Overview
Our capital requirements will depend
on many factors, including the timing and extent of spending to further develop SIL204 and initiate pre-clinical and clinical trials,
support research and development efforts, investments in potential additional pipe-line products, and increased overall compensation as
we continue to hire additional personnel. For the six month periods ended June 30, 2025 and 2024, and for the years ended December 31,
2024 and 2023, we had net losses of $4.2, $2.9, $16.5 million and $5.1 million, respectively. As of June 30, 2025, our cash and cash equivalents
totaled $3.5 million.
To date, our principal sources
of liquidity have evolved together with our progression as a company. As a private company, we raised proceeds from private offerings
of our ordinary shares and convertible preferred shares, grants from the Israeli Innovation Authority, issuance of convertible financing
agreements (CFA), and Simple Agreement for Future Equity (SAFE) financings. Upon the Closing of the Business Combination, we raised funds
from a PIPE in which Greenstar, LP, an affiliate of the Moringa sponsor, purchased Moringa ordinary shares that converted automatically
into New Silexion ordinary shares (as described below under “PIPE Financing”). Following
the Closing, as a public company with ordinary shares and warrants registered under the Exchange Act and trading on Nasdaq, we have obtained
financing in an ongoing manner, from time to time, under the ELOC, pursuant to which we have issued ordinary shares to the ELOC Investor
which has resold those shares into the open market (as described below under “ELOC Financing”).
We have furthermore completed a registered public offering of ordinary shares and/or pre-funded warrants, along with ordinary warrants,
in January 2025 (as described below under “January 2025 Financing”),
and have raised additional funds from the induced exercise of ordinary warrants transactions in January 2025 (please see “January
2025 Warrant Inducement Transaction” below for further information)
and July 2025 (please see “January 2025 Warrant Inducement Transaction”
below for further information).
Based on our current business plan, we believe our current cash and cash equivalents,
and anticipated cash flow from operations, will not be sufficient to meet our anticipated cash requirements for the next 12 months from
the date of this registration statement. We will need to raise additional capital to finance our operations, expand our business and pipeline,
or for other reasons.
Our audited consolidated financial statements for the years ended December 31, 2024
and 2023 and our unaudited condensed financial statements for the six-month period ended June 30, 2025 included
in this registration statement note that there is substantial doubt about our ability to continue as a going concern as of such date;
and in its report accompanying our audited consolidated financial statements included herein, our independent registered public accounting
firm included an explanatory paragraph stating that our recurring losses from operations and our cash outflows from operating activities
raise substantial doubt as to our ability to continue as a going concern. This means that our management and our independent registered
public accounting firm have expressed substantial doubt about our ability to continue our operations without an additional infusion of
capital from external sources. Our audited consolidated financial statements have been prepared on a going concern basis and do not include
any adjustments that may be necessary should we be unable to continue as a going concern. If we are unable to finance our operations,
our business would be in jeopardy and we might not be able to continue operations and might have to liquidate our assets. In that case,
investors might receive less than the value at which those assets are carried on our unaudited condensed financial statements for the
six-month period ended September 30, 2025 and our consolidated financial statements for the years ended December 31, 2024 and 2023, and
it is likely that investors would lose all or a part of their investment.
47
We have lease obligations and other contractual obligations and commitments as part
of our ordinary course of business. See “Note 5: Operating Leases” and “Note
7: Commitments and Contingent Liabilities” to our consolidated financial statements for the year ended December 31, 2024
for information about our lease obligations.
We did not have during the periods presented, and we do not currently have, any off-balance
sheet arrangements involving commitments or obligations, including contingent obligations, arising from arrangements with unconsolidated
entities or persons that have or are reasonably likely to have a material current or future effect on our financial condition, results
of operations, liquidity, cash requirements or capital resources.
July 2025 Warrant Inducement
Transaction
On
July 31, 2025, New Silexion entered into an inducement letter (the “July 2025 Inducement Letter”)
with certain holders of certain of New Silexion’s existing warrants to purchase up to 152,106 New Silexion ordinary shares comprised
of (i) 22,468 warrants to purchase 22,468 ordinary shares, which were issued in the January 2025 Offering, and which had a five-year exercise
term and an exercise price of $20.25 per share, and (ii) 129,638 warrants to purchase 129,638 ordinary shares, which were issued in January
2025 Warrant Inducement Transaction, and which had a 24-month exercise term and an exercise price of $22.50 per share ((i) and (ii),
collectively, the “July 2025 Existing Warrants”).
The terms of the July 2025 Existing Warrants are described under “January 2025 Financing”
and “January 2025 Warrant Inducement Transaction” below.
Pursuant to the transaction (the “July
2025 Warrant Inducement Transaction”), the holders agreed to exercise for cash
their July 2025 Existing Warrants to purchase an aggregate of 152,106 of New Silexion’s ordinary shares at a reduced exercise price
of $11.57 per share in consideration of New Silexion’s agreement to issue new ordinary share purchase warrants (the “July
2025 New Warrants”) to purchase up to an aggregate of 304,212 of New Silexion’s
ordinary shares (the “July 2025 New Warrant Shares”), at an exercise price of $11.32
per share. New Silexion received aggregate gross proceeds of approximately $1.8 million from the exercise of the July 2025 Existing Warrants
by the Holders, before deducting placement agent fees and other offering expenses payable by New Silexion.
New
Silexion engaged H.C. Wainwright & Co. LLC (“Wainwright”) to act as its exclusive
placement agent in connection with the transactions contemplated by the July 2025 Inducement Letter. New Silexion also issued to
Wainwright or its designees placement agent warrants to purchase up to 10,647 ordinary shares (representing 7.0% of the July 2025 Existing
Warrants being exercised), which have the same terms as the New Warrants except the placement agent warrants have an exercise price equal
to $14.4625 per share (125% of the sum of the exercise price of the July 2025 Existing Warrants). Similar to the July 2025 New Warrants,
the placement agent warrants will be immediately exercisable from the date of issuance until the twenty-four month anniversary of the
effective date of the July 2025 Resale Registration Statement (as defined below).
The
closing of the transactions contemplated pursuant to the July 2025 Inducement Letter occurred on August 1, 2025 (the “July
2025 Closing Date”), subject to satisfaction of customary closing conditions.
New Silexion also agreed to file a registration statement (the “July 2025 Resale
Registration Statement”) within thirty (30) calendar days of the date of the July 2025 Inducement Letter, and to use commercially
reasonable efforts to have such July 2025 Resale Registration Statement declared effective by the SEC within sixty (60) calendar days
following the date of the July 2025 Inducement Letter (or within ninety (90) calendar days following the date of the July 2025 Inducement
Letter in case of “full review” of the July 2025 Resale Registration Statement by the SEC) and to keep the July 2025 Resale
Registration Statement effective at all times until no holder of the July 2025 New Warrants owns any July 2025 New Warrants or July 2025
New Warrant Shares. In the July 2025 Inducement Letter, New Silexion agreed not to issue any shares of ordinary shares or ordinary share
equivalents or to file any other registration statement with the SEC (in each case, subject to certain exceptions) for fifteen (15) days
following the July 2025 Closing Date. New Silexion also agreed not to effect or agree to effect any Variable Rate Transaction (as defined
in the July 2025 Inducement Letter) until one (1) year after the July 2025 Closing Date (subject to certain exceptions).
January
2025 Warrant Inducement Transaction
On January 29, 2025, New Silexion entered into an inducement letter
(the “January 2025 Inducement Letter”) with certain holders of certain of New Silexion’s
existing warrants to purchase up to 148,102 New Silexion ordinary shares issued on January 17, 2025 with a five year term at an exercise
price of $20.25 per share (the “January 2025 Existing
Warrants”). The terms of the January 2025 Existing Warrants are described under “January
2025 Financing” below.
Pursuant to the January 2025 Inducement
Letter, the Holders agreed to exercise for cash their January 2025 Existing Warrants to purchase an aggregate of 148,102 of New Silexion’s
ordinary shares at the exercise price of $20.25 per share in consideration of New Silexion’s agreement to issue new ordinary share
purchase warrants (the “January 2025 New Warrants”)
to purchase up to an aggregate of 148,102 of New Silexion’s ordinary shares (the “January
2025 New Warrant Shares”), at an exercise price of $22.50 per share. The Holders also paid New Silexion an additional $0.125
($1.88 on a post-July 2025 reverse split basis) per January 2025 New Warrant issued in the offering. New Silexion received aggregate gross
proceeds of approximately $3.3 million from the exercise of the January 2025 Existing Warrants by the Holders, before deducting placement
agent fees and other offering expenses payable by New Silexion.
New Silexion engaged Wainwright to act as its exclusive placement agent
in connection with the transactions contemplated by the January 2025 Inducement Letter. New Silexion also issued to Wainwright or
its designees placement agent warrants to purchase up to 10,368 ordinary shares (representing 7.0% of the January 2025 Existing Warrants
being exercised), which have the same terms as the New Warrants except the placement agent warrants have an exercise price equal to $27.657
per share (125% of the sum of the exercise price of the January 2025 Existing Warrants and the additional $0.125 ($1.875 on a post-July
2025 reverse split basis) paid per January 2025 New Warrant). Similar to the January 2025 New Warrants, the placement agent warrants will
be immediately exercisable from the date of issuance until the twenty-four month anniversary of the effective date of the January 2025
Resale Registration Statement (as defined below).
48
The closing of the transactions contemplated pursuant to the January
2025 Inducement Letter occurred on January 30, 2025 (the “January 2025 Closing Date”),
subject to satisfaction of customary closing conditions. New Silexion also agreed to file a registration statement (the “January
2025 Resale Registration Statement”) within thirty (30) calendar days of the date of the January 2025 Inducement Letter,
and to use commercially reasonable efforts to have such January 2025 Resale Registration Statement declared effective by the SEC within
sixty (60) calendar days following the date of the January 2025 Inducement Letter (or within ninety (90) calendar days following the date
of the January 2025 Inducement Letter in case of “full review” of the January 2025 Resale Registration Statement by the SEC)
and to keep the January 2025 Resale Registration Statement effective at all times until no holder of the January 2025 New Warrants owns
any January 2025 New Warrants or January 2025 New Warrant Shares. In the January 2025 Inducement Letter, New Silexion agreed not to issue
any shares of ordinary shares or ordinary share equivalents or to file any other registration statement with the SEC (in each case, subject
to certain exceptions) until March 18, 2025. New Silexion also agreed not to effect or agree to effect any Variable Rate Transaction (as
defined in the January 2025 Inducement Letter) until one (1) year after the January 2025 Closing Date (subject to certain exceptions).
January 2025 Financing
On January 15, 2025, New Silexion
offered and sold in a public offering on a best efforts basis (the “January 2025 Offering”)
(i) 143,067 of New Silexion ordinary shares, (ii) 103,847 pre-funded warrants to purchase up to 103,847 New Silexion ordinary shares (the
“January 2025 Pre-Funded Warrants”), and (iii) 246,914 warrants to purchase up to 246,914
New Silexion ordinary shares (the “January 2025 Investor
Warrants” and together with the Pre-Funded Warrants, the “January 2025 Warrants”),
at a purchase price of $20.25 per share and accompanying January 2025 Investor Warrant, and $20.25 per January 2025 Pre-Funded Warrant
and accompanying January 2025 Investor Warrant. Aggregate gross proceeds from the January 2025 Offering (without taking into account any
proceeds from any future exercises of January 2025 Warrants) were approximately $5 million. The January Offering closed on January 17,
2025, subject to the satisfaction of customary closing conditions. As of June 30, 2025, warrants to purchase 56,129 ordinary shares issued
in the January 2025 Warrant Inducement Transaction remain unexercised at an exercise price of $22.50 per share.
The January 2025 Pre-Funded Warrants
are immediately exercisable at an exercise price of $0.0015 per share and will not expire until exercised in full. The January 2025 Investor
Warrants have an exercise price of $20.25 per share, are immediately exercisable, and may be exercised for five years from issuance.
A holder of the January 2025 Warrants will not have the right to exercise any portion
of its Pre-Funded Warrants and Investor Warrants if the holder (together with such holder’s affiliates, and any persons acting as
a group together with such holder or any of such holder’s affiliates or any other persons whose beneficial ownership of ordinary
shares would be aggregated with the holder’s or any of the holder’s affiliates), would beneficially own ordinary shares in
excess of 4.99% (or, at the election of the holder, 9.99%) of the number of the ordinary shares outstanding immediately after giving effect
to such exercise.
Certain investors in the January 2025 Offering entered into a definitive securities
purchase agreement with the Company (the “January 2025 Purchase Agreement”). The Purchase
Agreement contains representations, warranties, indemnification and other provisions customary for transactions of this nature. Pursuant
to the January 2025 Purchase Agreement, New Silexion agreed to abide by certain customary standstill restrictions for a period of sixty
(60) days following the closing of the January 2025 Offering. In addition, subject to limited exceptions, the January 2025 Purchase Agreement
provides that for a period of one year following the closing of the January 2025 Offering, the Company will not effect or enter into an
agreement to effect a “variable rate transaction” as defined in the January 2025 Purchase Agreement.
Wainwright acted as the sole placement
agent (the “Placement Agent”), on a “best efforts” basis, in connection
with the January 2025 Offering. Pursuant to an engagement agreement that New Silexion entered into with Wainwright, New Silexion issued
to Wainwright or its designees 17,284 warrants to purchase up to 17,284 New Silexion ordinary shares, representing 7.0% of the sum of
the shares and January 2025 Pre-Funded Warrants sold in the January 2025 Offering (the “January
2025 Placement Agent Warrants”). The January 2025 Placement Agent Warrants have
an exercise price of $25.31 per share (representing 125% of the public offering price per share and accompanying January 2025 Investor
Warrant), are exercisable for five years from the date of the commencement of sales in this offering, and otherwise reflect substantially
the same terms as the January 2025 Investor Warrants.
The net proceeds to New Silexion
from the January 2025 Offering were approximately $4.26 million before deducting estimated offering expenses payable by New Silexion.
Prior to the January 2025 Warrant
Inducement Transaction, a total of 42,683 January 2025 Investor Warrants were exercised into 42,683 New Silexion ordinary shares and 103,847
January 2025 Pre-Funded Warrants were exercised into 103,847 New Silexion ordinary shares, for a total net proceeds of $0.86 million.
As of June 30, 2025, the January 2025 Pre-Funded Warrants have been exercised in full and 56,129 January 2025 Investor Warrants remain
unexercised at an exercise price of $20.25 per share.
ELOC Financing
In connection with the Closing of the Business Combination, we entered into the ELOC
Agreement, dated August 13, 2024, but effective as of the Closing, with the ELOC Investor, which agreement was amended as of January 14,
2025. Under the ELOC Agreement, we have the right to request to sell to the ELOC Investor, and the ELOC Investor is required to purchase,
via private placement transactions, up to $15.0 million of our ordinary shares from time to time after the Closing, up until December
31, 2025 (unless the agreement is terminated sooner), subject to certain limitations and conditions as described therein. The number of
ordinary shares that we may require the ELOC Investor to purchase in any single sales notice depends on a number of factors, including
the type of purchase notice that we deliver. Similarly, the purchase price to be paid by the ELOC Investor for any shares that we require
it to purchase depends on the type of sales notice that we deliver, and is derived from the market price of our ordinary shares for a
certain period of time following our purchase request or as of the date of our purchase request. We also granted registration rights to
the ELOC Investor pursuant to an accompanying registration rights agreement, also dated August 15, 2024, by and between New Silexion and
the ELOC Investor (the “ELOC Registration Rights Agreement”), for which we filed a
registration statement on Form S-1 (SEC file number 333-282017), which was declared effective by the SEC on September 17, 2024.
Pursuant to the ELOC Agreement, we agreed, among other things, that if our sales to
the ELOC Investor under the ELOC exceed 19.99% of our total number of ordinary shares outstanding, we will seek the approval of our shareholders
for the issuance of any ordinary shares under the ELOC in excess of that amount, in accordance with the Nasdaq Listing Rules, subject
to certain exceptions based on the price of our ordinary shares to be sold in excess of that limit.
In consideration for the commitments
of the ELOC Investor, we agreed to issue to the ELOC Investor an aggregate of $337,500 of our ordinary shares (the “ELOC
Commitment Shares”) based on the closing price of the ordinary shares on the day that is the earlier of (i) the business
day prior to effectiveness of the registration statement registering the resale of the shares issuable under the ELOC ordinary share purchase
agreement and (ii) the business day prior to the 180th day following the date of Closing of the Business Combination. Based on the closing
price of the ordinary shares on September 16, 2024, we issued to the ELOC Investor, on September 18, 2024, 2,707 ordinary shares in respect
of the ELOC Investor’s commitments under the ELOC Agreement.
Through June 30, 2025, we have
issued and sold an aggregate of 50,915 ordinary shares (which includes the foregoing 2,707 ordinary shares issued as a commitment fee)
to White Lion under the White Lion Purchase Agreement for aggregate proceeds to us of approximately $3.1 million.
49
Settlement of Amounts Due Under Marketing Agreement with EarlyBirdCapital
Prior to the Closing of the Business Combination, Moringa reached agreement with EarlyBirdCapital,
or EBC, on the reduction, to $1.6 million, in the aggregate, of the fee payable to EBC under the Marketing Agreement. Pursuant to the
final invoice provided by EBC under the Marketing Agreement at the Closing, Moringa paid $350,000 of cash to EBC from the trust account
at the Closing, and we issued to EBC the EarlyBird Convertible Note, which was a convertible promissory note, due December 31, 2025, in
an amount of $1.25 million to be paid by us to EBC in cash and/or via conversion of outstanding amounts into ordinary shares.
The EarlyBird Convertible Note bore interest at a rate of 6% per annum and by its terms
was to mature on December 31, 2025. If not repaid on or prior to that maturity date or such earlier date as to which the repayment obligation
may be accelerated under the note, or not converted in accordance with the terms thereof, the rate of interest applicable to the unpaid
principal amount was to be adjusted to (15%) per annum. We were required to make mandatory prepayments on the note (which were first to
be applied to accrued interest and then to principal) from time to time in amounts equal to ten percent (10%) of the gross proceeds received
by us from any equity financing consummated by us prior to the maturity date. We were entitled to voluntarily prepay any additional part
of, or all of, the principal and accrued interest, in one or more installments without penalty, prior to the maturity date.
EBC, in turn, was permitted to elect, at its sole discretion, on the maturity date,
to convert all or part of the then outstanding principal and/or accrued interest under the EarlyBird Convertible Note into ordinary shares,
at a per share conversion price equal to 95% of the volume weighted average price of an ordinary share for the five trading days immediately
prior to the date of our receipt of a conversion notice, provided, however, that we were not required to issue, and EBC was not permitted
to elect to convert the principal and/or accrued interest into, an aggregate number of ordinary shares that would exceed the maximum number
of ordinary shares permitted by Section 5635 of the Nasdaq Listing Rules to be issued without the approval of our shareholders, unless
such approval was to be obtained.
Through January 31, 2025, we made
aggregate payments of $407,556 to EBC in respect of some of the amounts due from us under the EarlyBird Convertible Note as a result of
amounts raised by us under the ELOC and the HCW Offering (as described below). On March 13, 2025, we entered into a letter agreement with
EBC, pursuant to which we paid to EBC an additional amount of $400,000 (plus $15,000 for EBC’s legal expenses) (the “Settlement
Prepayment Amount”) and EBC agreed to the partial conversion and retirement of all remaining amounts due under the EarlyBird Convertible
Note. Under that letter agreement, EBC agreed that the $880,202 principal and interest amount outstanding under the note as of the date
of the letter agreement (the “Outstanding Amount”) would be retired in consideration of: (i) our payment in cash of the Settlement
Prepayment Amount; (ii) EBC’s conversion of a certain amount of the principal and interest due under the EarlyBird Convertible Note
(the “Conversion Amount”) via the issuance by us to EBC of 18,519 ordinary shares (the “EBC Settlement Shares”),
which Conversion Amount would equal the net proceeds to be received by EBC from the sale of the EBC Settlement Shares; and (iii) the payment
in cash by us to EBC of any remaining amount due under the EarlyBird Convertible Note after deducting the Settlement Prepayment Amount
and the Conversion Amount from the Outstanding Amount (the “Remaining Amount”).
On March 17, 2025, EarlyBird sold
all 18,519 EBC Settlement Shares under our effective registration statement on Form S-1 (SEC file number 333-282556) for a Conversion
Amount of $344,204, and on March 18, 2025, we paid the Remaining Amount of $135,998 that was due to EarlyBird, resulting in the retirement
of the EarlyBird Convertible Note on March 18, 2025.
PIPE Financing
In connection with, and immediately
prior to the Closing of, the Business Combination, Moringa raised $2.0 million via a PIPE financing, whereby Moringa sold to Greenstar,
LP, an affiliate of the Moringa sponsor (the “PIPE Investor”), 1,482 newly issued Moringa
ordinary shares at a price of $1,350.00 per share, pursuant to a subscription agreement, dated as of August 15, 2024, by and among Moringa,
New Silexion and the PIPE Investor. Those 1,482 shares automatically converted upon the Closing of the Business Combination into 1,482
New Silexion ordinary shares.
The funds raised from the PIPE financing, together with remaining funds in the trust
account after payments to redeeming public shareholders, were used for financing support for Moringa and New Silexion, as well as for
payment to service providers to whom outstanding amounts were owed by Moringa, including parties that had provided financial advisory
services and capital markets advisory services to Moringa during the period leading up to the Closing.
Issuance of Amended and Restated Sponsor Promissory Note
Effective as of the Closing, we issued to the sponsor, and the sponsor accepted, in
amendment and restatement, and replacement, in their entirety, of all existing promissory notes issued by Moringa to the sponsor from
the IPO until the Closing (and as to which the obligations of Moringa were assigned to New Silexion upon the Closing), the A&R Sponsor
Promissory Note in an amount of $3,433,000, which reflected the total amount owed by Moringa to the sponsor through the Closing Date.
The maturity date of the A&R Sponsor Promissory Note is the 30-month anniversary of the Closing Date (i.e., February 15, 2027). Amounts
outstanding under the A&R Sponsor Promissory Note may be repaid (unless otherwise decided by us) only by way of conversion into ordinary
shares (“Note Shares”) in accordance with the terms set forth in the form of A&R
Sponsor Promissory Note. New Silexion and the Sponsor may also convert amounts outstanding under the A&R Sponsor Promissory Note at
the price per share at which we conduct an equity financing following the Closing, subject to a minimum conversion amount of $100,000,
in an amount of Note Shares constituting up to thirty percent (30%) of the number of ordinary shares issued and sold by us in such equity
financing. The sponsor may also elect to convert amounts of principal outstanding under the note into ordinary shares at any time following
the 24-month anniversary of the date of the Closing, subject to a minimum conversion of $10,000, at a price per share equal to the volume
weighted average price of the ordinary shares on the principal market on which they are traded during the 20 consecutive trading days
prior to the conversion date. Through the date hereof, there have been no conversions of amounts due under the A&R Sponsor Promissory
Note into our ordinary shares, and no election by us to repay any amounts under the note in cash.
50
Government Grants
Our research and development efforts
were financed, in part, through royalty-bearing grants from the Israeli Innovation Authority, or the IIA. As of June 30, 2025, we had
received IIA royalty-bearing grants totaling approximately $5.8 million.
We are committed to pay royalties to the IIA at a rate of approximately 3.0% to 5.0%
of the sales of all of our product candidates and other related revenues generated from such projects, that were developed, in whole or
in part, using the IIA royalty-bearing grants we received under IIA programs up to the total amount of royalty-bearing grants received,
linked to the U.S. dollar and bearing annual interest at rates prescribed by the IIA’s rules and guidelines.
We may in the future apply to receive additional grants from the IIA. However, we cannot
predict whether we will be entitled to any future grants, or the amounts of any such grants.
Under the Israeli Innovation Law, research and development programs that meet specified
criteria and are approved by a committee of the IIA are eligible for grants. A company that receives a royalty-bearing grant from the
IIA is typically required to pay royalties to the IIA on income generated from products incorporating IIA-funded know-how (including income
derived from services associated with such products and from IIA-funded know-how), up to 100% of the U.S. dollar-linked royalty-bearing
grant amount plus interest.
The obligation to pay royalties is contingent on actual income generated from such products
and services. In the absence of such income, no payment of royalties is required.
As of June 30, 2025, the total
royalty amount that may be payable by the Company is approximately $5.8 million ($6.6 million including interest).
Cash Flows
Cash flows for the six-month
periods ended June 30, 2025 and 2024
The following table summarizes our cash flows for
the periods indicated:
|
|
Six-month period
ended
June 30,
|
|||||||
|
|
2025
|
2024
|
||||||
|
|
(U.S. dollars, in thousands)
|
|||||||
|
Cash and cash equivalents and restricted
cash at beginning of the period |
$ |
1,270 |
$ |
4,645 |
||||
|
Net cash used in operating activities |
(4,960 |
) |
(2,817 |
) | ||||
|
Net cash used in investing activities |
(7 |
) |
(6 |
) | ||||
|
Net cash provided by financing activities |
7,237 |
- |
||||||
|
Net increase (decrease) in cash
and cash equivalents and restricted cash |
$ |
2,270 |
$ |
(2,823 |
) | |||
|
Translation adjustments on cash
and cash equivalents and restricted cash |
4 |
(75 |
) | |||||
|
Cash and cash equivalents and restricted
cash at end of the period |
$ |
3,544 |
$ |
1,747 |
||||
Cash Flows from Operating Activities
Net cash used in operating activities increased
by approximately $2.2 million, or 78.6%, to $5.0 million for the six-month period ended June 30, 2025, compared to $2.8 million for the
six-month period ended June 30, 2024. This increase was mainly due to an increase of $1.3 million in the net loss for the six-month period
ended June 30, 2025, as well as an increase of $0.9 million in net working capital in the six-month period ended June 30, 2025 relative
to the corresponding period in 2024.
51
Cash Flows from Financing Activities
Net cash used in financing activities increased
by $7.2 million, to approximately $7.2 million for the six-month period ended June 30, 2025, compared to $0 million for the six-month
period ended June 30, 2024. This increase was mainly due to an increase in cash received from the HCW Offering in an amount of $5.0 million,
net of $0.7 million cash issuance costs related to that offering, the exercise of warrants in an amount of $0.9 million, and the January
2025 warrant exercise inducement transaction in an amount of $3.3 million (each, as described above under “Liquidity
and Capital Resources”) net of $0.5 million cash issuance costs related to that warrant exercise inducement transaction,
offset in part by $0.7 million of payments under the EarlyBird Convertible Note in the six-month period ended June 30, 2025.
Cash flows for the quarters
ended June 30, 2025 and 2024
The following table summarizes our cash flows for
the periods indicated:
|
|
Three-month
period ended
June 30,
|
|||||||
|
|
2025
|
2024
|
||||||
|
|
(U.S. dollars, in thousands)
|
|||||||
|
Cash and cash equivalents and restricted
cash at beginning of the period |
$ |
6,233 |
$ |
2,831 |
||||
|
Net cash used in operating activities |
(2,507 |
) |
(1,065 |
) | ||||
|
Net cash used in investing activities |
(1 |
) |
- |
|||||
|
Net cash used in financing activities |
(195 |
) |
- |
|||||
|
Net increase (decrease) in cash
and cash equivalents and restricted cash |
$ |
2,703 |
$ |
(1,065 |
) | |||
|
Translation adjustments on cash
and cash equivalents and restricted cash |
14 |
(19 |
) | |||||
|
Cash and cash equivalents and restricted
cash at end of the period |
$ |
3,544 |
$ |
1,747 |
||||
Cash Flows from Operating Activities
Net cash used in operating activities increased
by approximately $1.4 million, or 127.3%, to $2.5 million for the three-month period ended June 30, 2025, compared to $1.1 million for
the three-month period ended June 30, 2024. This increase was mainly due to an increase of $1.0 million in the net loss for the three-month
period ended June 30, 2025, as well as an increase of $0.6 million in net working capital in the three-month period ended June 30, 2025
relative to the corresponding three-month period of 2024.
Cash Flows from Financing Activities
Net cash used in financing activities decreased by $0.2 million, to
approximately $0.2 million for the three-month period ended June 30, 2025, compared to $0 million for the three-month period ended June
30, 2024. This decrease was mainly due to cash issuance costs related to public offering that were paid in the three-month period ended
June 30, 2025.Cash flows for the years ended December 31, 2024 and
2023
The following table summarizes our cash flows for
the periods indicated:
|
|
Year ended December 31, |
|||||||
|
|
2024 |
2023 |
||||||
|
|
(U.S. dollars, in thousands) |
|||||||
|
Cash and cash equivalents and restricted cash at beginning of the period |
$ |
4,645 |
$ |
8,309 |
||||
|
Net cash used in operating activities |
(8,396 |
) |
(4,529 |
) | ||||
|
Net cash provided by (used in) investing activities |
(22 |
) |
573 |
|||||
|
Net cash provided by financing activities |
5,104 |
522 |
||||||
|
Net decrease in cash and cash equivalents and restricted cash |
$ |
(3,314 |
) |
$ |
(3,434 |
) | ||
|
Translation adjustments on cash and cash equivalents and restricted cash |
(61 |
) |
(230 |
) | ||||
|
Cash and cash equivalents and restricted cash at end of the period |
$ |
1,270 |
$ |
4,645 |
||||
Cash Flows from Operating Activities
Net cash used in operating activities increased by approximately $3.9 million, or 86.7%,
to $8.4 million for the year ended December 31, 2024, compared to $4.5 million for the year ended December 31, 2023. This increase was
mainly due to an increase of $11.4 million in the net loss for the year ended December 31, 2024, as well as increases of $1.4 million
in other non-cash financial income and $1.6 million in net working capital in the year ended December 31, 2024, offset in part by an increase
in certain other non-cash expenses such as a $5.7 million increase in share-based compensation expenses and a $4.8 million one-time loss
upon entering the Business Combination transaction in August 2024.
52
Cash Flows from Investing Activities
Net cash used in investing activities decreased by $0.6 million, or 100.0%, to $0 million
for the year ended December 31, 2024, compared to $0.6 million of cash provided by investing activities in the year ended December 31,
2023. This decrease was mainly due to a reduction in short-term deposits in the amount of $0.5 million in 2023, as cash was used for operating
activities.
Cash Flows from Financing Activities
Net cash provided by financing activities increased by $4.6 million, or 920.0%, to approximately
$5.1 million for the year ended December 31, 2024, compared to $0.5 million for the year ended December 31, 2023. This increase was mainly
due to an increase in cash received from transactions upon the Closing of the Business Combination in an amount of $2.3 million and from
an increase in proceeds from issuance of ordinary shares under the ELOC in an amount of $3.1 million, offset in part by (i) $0.3 million
of payments under the EarlyBird Convertible Note in the year ended December 31, 2024 and (ii) $0.5 million in proceeds from the issuance
of preferred shares and warrants in the year ended December 31, 2023, which did not recur in the year ended December 31, 2024.
Funding Requirements
We expect to devote substantial financial resources to our ongoing and planned activities,
particularly further development of SIL204 and as we conduct our planned pre-clinical and clinical trials.
Identifying potential product candidates and conducting pre-clinical testing and clinical
trials is a time-consuming, expensive, and uncertain process that takes years to complete, and we may never generate the necessary data
or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not
achieve commercial success. For additional information please refer to the “Risk Factors”
section of this prospectus, including “Risks Related to Our Financial Condition and Capital Requirements
— we have never generated any revenue from product sales and may never be profitable” and
“Risks Related to the Research and Development of our Product Candidates — Silexion is heavily dependent on the success of
its product candidates…”.
We expect our expenses to increase substantially in connection with our ongoing activities,
particularly as we advance our pre-clinical studies and clinical trials. In addition, if we obtain marketing approval for SIL204 in any
indication or for any other product candidate we are developing or may develop in the future, we expect to incur significant commercialization
expenses related to product manufacturing, sales, marketing, and distribution. Furthermore, upon the closing of the Business Combination,
we expect to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional
funding.
Our future capital requirements will depend on many factors, including:
|
|
● |
Material cost. |
|
|
● |
Regulatory pathway; and |
|
|
● |
Human clinical trial costs. |
As of June 30, 2025,
we had cash and cash equivalents of $3.5 million. Based on our current cash balance, as well as its history of operating losses and negative
cash flows from operation, combined with its anticipated use of cash to, among other things, (i) fund the preclinical and clinical development
of our products, (ii) identify and develop new product candidates, and (iii) seek approval for SIL204 and any other product candidates
we may develop, our management has concluded that we do not have sufficient cash to fund our operations for 12 months from the date of
our unaudited consolidated financial statements as of, and for the six-month periods ended, June 30, 2025
included in this prospectus without additional financing, and as a result, there is substantial doubt about our ability to continue as
a going concern.
In making this determination, applicable accounting
standards prohibited us from considering the potential mitigating effect of plans that have not been fully implemented as of the date
of our unaudited consolidated financial statements as of, and for the fiscal three-month and six-month periods ended, June 30, 2025, including,
without limitation, our plans to raise additional capital. Our financial information throughout this quarterly report, and our financial
statements for the fiscal three-month and six-month periods ended June 30, 2025 contained herein, have been prepared on a basis that assumes
that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments
in the normal course of business. This financial information and our unaudited consolidated financial statements for the three-month and
six-month periods ended June 30, 2025 do not include any adjustments that might result from the outcome of this uncertainty.
We currently estimate that our existing cash and
cash equivalents are sufficient to fund business operations into the fourth quarter of 2025. As part of our commitment to the Nasdaq hearings
panel that heard (and ruled favorably in respect of) our appeal to remain listed on Nasdaq, we expect to conduct additional financing
activities prior to the September 19, 2025 deadline that was set for us to evidence shareholders’ equity of at least $2.5 million
and prospective compliance with that shareholders’ equity requirement beyond that date.
We have based these estimates and expectations
on assumptions that may prove to be wrong, and our operating plan may change as a result of many factors currently unknown to us. We could
not, as of the date of this filing, determine the exact level of funds that will be available to us upon potential equity financings.
Our expected use of funds represents our intentions based upon our current plans and business condition, which could change in the future
as our plans and business condition evolve and the level of funding available to us becomes clear. In addition, changing circumstances
could cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more than currently expected
because of circumstances beyond our control. As a result, we could deplete our capital resources sooner than we currently expect. In addition,
because the successful development of SIL204 and any studies or other product candidates that we pursue is highly uncertain, at this time
we cannot definitively state or know the nature, timing and costs of the efforts that will be necessary to complete the development of
any product candidate.
53
Until such time, if ever, as we can generate
substantial revenues from product sales, we expect to finance our cash needs through a combination of public and private equity offerings
and debt financings, including registered public offerings similar to the HCW Offering completed in January 2025, warrant exercise inducement
transactions similar to those completed in late January 2025 and late July 2025, the public offering of ordinary shares pursuant to a
potential ongoing, at-the-market offering (an “ATM”), the private placement of ordinary
shares pursuant to the ELOC Agreement, strategic alliances, collaborations, and marketing, distribution, or licensing arrangements. However,
adequate additional financing may not be available to us on acceptable terms, or at all, and the availability of such financing may be
impacted by the economic climate and market conditions.
Reliance on the ELOC or other similar types of equity financings as a source of ongoing
funding for our operations following the Business Combination could involve significant issuances of ordinary shares by us that could
cause the following impacts (among others):
|
● |
significant dilution to the equity interests of our current shareholders; |
|
● |
a deemed change of control of our company due to the issuance of a substantial number of ordinary shares,
which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in a change in
the officers and directors of our company relative to our current officers and directors, to the extent any shareholders build up significant
beneficial ownership from ordinary shares issued pursuant to the ELOC; |
|
● |
may have the effect of delaying or preventing a change of control of our company by diluting the share
ownership or voting rights of a person seeking to obtain control; and |
|
● |
may adversely affect prevailing market prices for our ordinary shares or warrants. |
Critical Accounting Policies and Estimates
For a description
of our significant accounting policies, see Note 2 to our consolidated financial statements for the year ended December 31, 2024 and
Note 2 to our unaudited condensed consolidated financial statements for the three-month and six-month periods ended June 30, 2025 included
in this registration statement.
The preparation of
our consolidated financial statements for the year ended December 31, 2024 and our unaudited condensed consolidated financial statements
for the three-month and six-month periods ended June 30, 2025 in conformity with U.S. GAAP requires management
to make estimates and assumptions in certain circumstances that affect the amounts reported in the accompanying consolidated financial
statements for the year ended December 31, 2024 and related footnotes. Actual results may differ from these estimates. We base our judgments
on our experience and on various assumptions that we believe to be reasonable under the circumstances.
Of our policies, the
following are considered critical to an understanding of our consolidated financial statements for the year ended December 31, 2024 our
unaudited condensed consolidated financial statements for the three-month and six-month periods ended June 30, 2025 as
they require the application of subjective and complex judgment, involving critical accounting estimates and assumptions impacting our
consolidated financial statements for the year ended December 31, 2024 our unaudited condensed consolidated financial statements
for the three-month and six-month periods ended June 30, 2025.
The critical accounting estimates relate to the following:
Share-Based Compensation
Share-based compensation expense related to share awards is recognized based on the
fair value of the awards granted. The fair value of each option award is estimated on the grant date using the Black-Scholes option pricing
model. The Black-Scholes option pricing model requires the input of highly subjective assumptions, including, before the Business Combination
- the fair value of the underlying ordinary shares, the expected term of the option, and the expected volatility of the price of our ordinary
shares. These estimates involve inherent uncertainties and the application of management’s judgment. The related share-based compensation
expense is recognized on a straight-line basis over the requisite service period of the awards, including awards with graded vesting and
no additional conditions for vesting other than service conditions. Forfeitures are accounted for as they occur instead of estimating
the number of awards expected to be forfeited.
54
Our use of the Black-Scholes option-pricing model requires the input of highly subjective
assumptions. If factors change and different assumptions are used, our share-based compensation expense could be materially different
in the future.
We will continue to use judgment in evaluating the assumptions related to our share-based
compensation on a prospective basis, when future awards are granted. As we continue to accumulate additional data related to our ordinary
shares, we may refine our estimation process, which could materially impact our future share-based compensation expense.
Valuation of Promissory Notes
As part of the Business Combination, we issued to Moringa’s sponsor,
as well as EarlyBirdCapital, promissory notes, which we irrevocably designated to be measured at fair value. The fair value Promissory
Notes is measured using a discount rate based on a B rated US dollar zero-coupon discount curve, plus a credit spread of 6.67% - 7.56%.
The discount rate was determined with reference to benchmark interest rates of secured loans reported by venture capitals, which were
then used to extract our entity-specific credit spread. Since the Notes are not senior secured, one notch downgrade was applied. The expected
timing of conversion or redemption of the notes was determined using our management’s forecasts.
Valuation of Private Warrants
As part of the Business Combination, we assumed a derivative warrant liability related
to previously issued private warrants in connection with Moringa’s initial public offering. The private warrants were classified
as a liability. We utilize a Black-Scholes model option pricing model to estimate the fair value of the private warrants. The volatility
of the private warrants is based on implied volatility of the publicly traded warrants and the historical volatility of selected peer
companies that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon
yield curve as of the valuation date for a maturity similar to the expiration of the warrants. The dividend yield is based on the historical
rate, which we anticipate will remain at zero.
Recent Accounting Pronouncements
See Note 2 on page F-19 to our financial statements for the year ended December 31,
2024 included in this prospectus for a description of recent accounting pronouncements applicable to our financial statements for the
year ended December 31, 2024.
Smaller Reporting Company Status
We are a “smaller reporting company,” meaning that the market value of our
ordinary shares held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently
completed fiscal year. We will continue to be a smaller reporting company if either (i) the market value of our shares held by non-affiliates
is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the
market value of our shares held by non-affiliates is less than $700 million. As a smaller reporting company, we may choose to present
only the two most recent fiscal years of audited financial statements and we have reduced disclosure obligations regarding executive compensation.
Emerging Growth Company Status
Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012, or the JOBS Act,
exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies
are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to
take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any
such election to not take advantage of the extended transition period is irrevocable.
We are an “emerging growth company” as defined in Section 2(a) of the Securities
Act, and has elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards.
We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the market value of ordinary
shares that is held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter, (ii) the last day
of the fiscal year in which we have total annual gross revenue of $1.235 billion or more during such fiscal year (as indexed for inflation),
(iii) the date on which we have issued more than $1.0 billion in non-convertible debt in the prior three-year, or (iv) December 31, 2029.
We expect to continue to take advantage of the benefits of the extended transition period, although it may decide to early adopt such
new or revised accounting standards to the extent permitted by such standards. This may make it difficult or impossible to compare our
financial results with the financial results of another public company that is either not an emerging growth company or is an emerging
growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences
in accounting standards used.
55
BUSINESS
Unless the context otherwise requires, in this “Business”
section, the terms “we,” “us” and “our” generally refer to Silexion Therapeutics Ltd., an Israeli
company (“Silexion”), or, from and after the Business Combination, to Silexion Therapeutics Corp (formerly known as Biomotion
Sciences), a Cayman Islands exempted company (“New Silexion”).
Business Overview
We are a clinical-stage, oncology-focused biotechnology company engaged in the
discovery and development of proprietary treatments for KRAS-driven cancers. The KRAS gene is an oncogene that is involved in
the regulation of cell division as a result of its ability to relay external signals into the cell. Based on our research of refractory
solid tumor cancers, we are actively developing a platform focused on the silencing of the KRAS oncogene using RNA-interference therapeutics.
Our lead product candidate, SIL204, consists of locally administered small interfering RNAs, or siRNA, in a solution, as a first-line treatment
of locally advanced pancreatic cancer patients, or LAPC, in combination with standard-of-care chemotherapy.
The KRAS oncogene is considered to be the most common oncogenic gene driver in human
cancers, and the most notable in pancreatic, lung, and gastrointestinal (GI) (including colorectal, esophagus, stomach, small bowel, and
appendix) cancers. Considered a challenging therapeutic target due to its intrinsic characteristics, recent advances have been made at
directly inhibiting the KRAS proteins produced by the mutated gene. Our platform is designed to silence the gene, and thus prevent the
production of the harmful mutated KRAS proteins driving the growth of cancerous tumors.
We are currently focused on treatment for pancreatic cancer (PC) tumors bearing the
KRAS G12D or KRAS G12V mutations where metastases have not been detected and are non-resectable, i.e. they are not able to be surgically
removed. For our first indication, we are targeting the largest and least treatable form of localized pancreatic tumors referred to as
locally advanced pancreatic cancer. LAPC represents approximately 30% of the total pancreatic cancer population. We are currently
developing SIL204, a second-generation siRNA product candidate following a Phase 1 and Phase 2 clinical trial with our first-generation siRNA
product candidate, siG12D-LODER, which we also refer to as Loder. Results from the Phase 2 clinical trial showed a trend for differences
between treatment groups in patients with the KRAS G12D/V mutation, with the Loder arm suggesting an overall survival advantage of 9.3 months.
SIL204 has been designed to optimize Loder with the aim of improving uptake into tumor
cells, enhancing stability, and broadening the scope of its silencing activity. We plan to conduct a Phase 2/3 prospective, randomized,
controlled, multinational, open-label trial in LAPC subjects that harbor the KRAS G12D/V mutations to evaluate the efficacy, safety and
tolerability of SIL204 administered intratumorally in combination with standard of care (SoC) chemotherapy versus SoC chemotherapy only.
In support of our planned Phase 2/3 trial, we held a meeting with the Federal Institute for Drugs and Medical Devices in Germany (BfArM)
to discuss the planned design of the Phase 2/3 trial at which BfArM agreed, in principle, to the design. In preparation for the study,
we plan to initiate toxicology studies of SIL204 in 2025 followed by the regulatory submission in the first quarter of 2026 to initiate
the Phase 2/3 trial and trial initiation in the first half of 2026. At this time, we are focused on the further development of the core
siRNA technology, SIL204, and its clinical development.
Our Market Opportunity
Activating mutations in KRAS are among the most prevalent oncogenic driver
mutations in human cancers. In a recent study of over 400,000 patients with various cancer type malignancies, 23% of adult pan-cancer samples
had KRAS alterations, 88% of which were mutations, most commonly G12D, G12V, G12C, G13D, G12R and Q61H, making the KRAS target a sought-out target
in for many cancers (“Comprehensive pan-cancer genomic landscape of KRAS altered cancers and real-world outcomes in solid
tumors”, by Jessica K. Lee, etc., NPJ Precision Oncology 2022; 6: 91). In addition, the study found that various cancers
have an amplification of the non-mutated KRAS protein. Tumor types with a high prevalence of KRAS mutations included pancreatic ductal
adenocarcinoma (PDAC) (92%), colorectal cancer (CRC) (49%), and non-squamous non-small cell lung cancer (NSCLC) (35%). These
three cancers represent 71% of the KRAS mutant pan-tumor population studied.
56
The following chart shows the distribution of various alternations of the KRAS oncogene
in various type of cancers:
Pancreatic Cancer
By the next decade, pancreatic cancer is expected to become the second most deadly cancer.
Every year in the U.S. approximately 50,000 people die from pancreatic cancer, while approximately 66,000 new patients are diagnosed
with pancreatic cancer annually (Co-Pilot Micorsoft).
|
Region |
Estimated New Cases (2024) |
|
USA |
66,440 |
|
EU |
132,600 |
|
Rest of the world |
311,960 |
57
Studies have shown that pancreatic cancer patients have short survival rates compared
to other cancer types (see, for example, “Prognosis and survival analysis of patients with pancreatic cancer: retrospective experience
of a single institution”, by Qi Li and others, World Journal of Surgical Oncology, 2022; 20:11). There are four basic forms of pancreatic
cancer: Resectable, those where a surgeon can remove a tumor; Borderline Resectable (BRPC) where the tumor is not currently permissible
for surgery but prior treatment with chemotherapy or radiation could in some cases allow for surgical removal; LAPC where the tumor has
surrounded more than half of a major artery or vein and is not surgically removable; and Metastatic where the cancerous tumor has spread
to other organs. Of the forms of pancreatic cancer that are localized (those which have not yet spread), the largest and most life threatening
is LAPC, which constitutes approximately 30% of pancreatic cancers (“Locally Advanced Pancreatic Cancer: A Review of Local Ablative
Therapies”, by Alette Ruarus and others, Cancers BaseI, January 2018; 10(1):16).
Below is a curve of overall survival in LAPC patients:
Fig. Comparison of overall survival between different chemotherapy regimens in non-resected locally
advanced pancreatic cancer patients. CHT indicates chemotherapy; FFX, FOLFIRINOX; Gem, gemcitabine. Reference Gemenetzis, G et al. 2019.
Annals of Surgery. 270 (2):340
58
KRAS mutations across their various forms are responsible for approximately 92% of all
pancreatic cancers, of which the KRAS G12D and KRAS12V mutations account for over 70% of the cases traced to KRAS mutations (Bailey, P. et
al. Genomic analyses identify molecular subtypes of pancreatic cancer. Nature 531(7592),
47 – 52. https://doi.org/10.1038/nature16965 (2016) (Art. No. 7592)).
Unfortunately, those with LAPC have a short survival time, about 17 months, and constitute about 30% of the total pancreatic cancer
population (“Survival in Locally Advanced Pancreatic Cancer After Neoadjuvant Therapy and Surgical Resection”, by Georgio
Gemenetzis, MD, and others, Annals of Surgery. 270 (2):1, March 2018). Among those patients with KRAS mutations, those with the mutation
type G12D and G12V show the shortest OS among the G12x mutation type.
Distribution of KRAS Mutations in Pancreatic Cancer
Our Technology
Our research is focused on the development of a platform of therapeutics that is designed
to silence the KRAS oncogene using small interfering RNA, or siRNA. This function is called interference RNA (RNAi). When the RNAi is
double stranded of 19-25 nucleotides (NTs), in length, it is referred to as siRNA. This class of siRNA therapeutics exert their effect
by inducing the enzymatic breakdown of the messenger (mRNA) of a targeted gene inhibiting the process called translation, which turns
the message (mRNA) into a protein. The general mechanism for the silencing the oncogene is actually an evolutionary process developed
by cells for translation regulation or to protect against viruses.
We believe our approach also builds upon the validation of our target KRAS mutations
as a target for cancers, as seen with the two small molecule KRAS inhibitors currently on the market for non-small cell lung cancer,
and the validation of siRNA technology, as it is currently on the market for six non-oncological indications. None of these agents
is appropriate for our intended primary indication, but we believe they do support our premises regarding target (KRAS) and basic technology
(siRNA) for use in the oncological area. A key distinction between our technology and the existing inhibitors of KRAS is that our siRNA
technology prevents the production of the KRAS protein, compared to the inhibitors which inhibit the KRAS protein after it is functioning.
Thus, our approach stops the oncogenic process at an earlier level and brings us closer to stopping this important oncological process.
Our approach may also have implications for reducing limiting factors of the marketed KRAS inhibitors.
The specific mechanism of this silencing activity is depicted in the figure below. siRNAs,
usually 19-25 NTs, enter the cell as a double-standard complex. Once in the inner cell matrix, they bind to an RNA-induced silencing
complex of enzymes (RISC), which splits the siRNA into two single RNA strands referred to as the passenger (sense) strand and the guide
(antisense) strand. It is the antisense which is the active part. The single guide strand has complementary binding to the target
mRNA and thereby acts as an inducing guide for other enzymes in the RISC complex to bind and induce specific cleavage of the now
double stranded target mRNA. As the siRNA guide strand is designed to be complementary to the RNA message around the site of the mutation
of the gene to be silenced, in our case the mutated KRAS oncogene, once the message (mRNA) is destroyed, the oncogene is silenced. As
the sense-strand of the siRNA is designed to be specific for the targeted KRAS, there is a specificity to the silencing of this driver
of cancer.
59
Our first-generation siRNA product candidate, siG12D, is an extended-release formulation
of siRNA. While originally designed to combat the KRAS G12D mutation in patients with LAPC, siG12D was shown to have silencing activity
in other KRAS mutations including G12V as well as to a lesser degree in G12C and G12R. The product candidate is comprised of the anti-KRAS(G12D)
siRNA drug substance (siG12D), formulated in a biodegradable polymeric matrix (PLGA) as solid rods in order to obtain an extended-release profile.
To overcome the difficulties of a systemic drug to enter the pancreatic tumor environment and to obtain a sufficiently high level of siRNA
in the pancreatic cell without inducing unnecessary side effects, the siRNA is directly delivered intratumorally using a standard ultrasound
guided endoscopy (EUS). We refer to this first generation product formulation as siG12D-LODER or Loder. Loder has undergone extensive
pre-clinical testing as well as Phase 1 and 2s clinical trials.
Our second-generation siRNA
product candidate, SIL204, is an optimized form of the first-generation Loder. in a solution. While pre-clinical testing of
SIL204 has shown silencing activity of KRAS mutations including G12D, G12V, G12C, G12R, Q61H and G13D in varying degrees, we are
planning to concentrate on its ability to inhibit KRAS G12D and KRAS G12V mutations in patients with LAPC. The second-generation siRNA
drug substance aims to provide improved uptake into tumor cells by introducing a hydrophobic tail that enhances movement into the cells. Additionally,
second-generation siRNA drug substances include modified nucleotides in the siRNA that enhance stability and corresponding half-life.
Administration is also intratumorally via ultrasound guided endoscopy (EUS), of the type typically used for pancreatic biopsies to diagnose
pancreatic cancer and can be done by a typical gastrointestinal endoscopist, but can be administered via a smaller, more flexible needle.
As discussed further below, we plan to conduct a Phase 2/3 clinical trial of SIL204 targeting
KRAS G12D and G12V mutations. Testing against other oncogenic KRAS-mutations is also planned.
We believe the optimization of our siRNA and moving to the second generation product
allows for more of a personalized medicine approach to the dosing, allowing the siRNA dose to be adjusted to the tumor size. The potential
higher concentration of the siRNA solution, smaller, more flexible needle, and substantially more stable siRNA is expected to allow for
treatment of a broader range of tumor sizes and locations, than with Loder, without requiring additional intratumoral administrations.
Phase 2 Clinical Study with First Generation
siRNA Product, siG12DLoder
Clinical Studies
Phase 2 Clinical Study with First Generation siRNA
Product, siG12DLoder
From 2018 to 2023, we conducted a prospective, multi-center, Phase II, open label study
to evaluate the efficacy, safety and tolerability of siG12D-LODER in two separate cohorts across five sites in Israel and four in
the U.S., which followed upon a Phase 1 clinical study that had been conducted with siG12D-LODER in Israel. siG12D LODER serves
as a prototype for SIL204.
Cohort 1 was a randomized and controlled two-arm study of 37 subjects with unresectable
LAPC to assess the efficacy, safety, tolerability and pharmacokinetics of siG12D-LODER when used in combination with standard chemotherapy
treatment (gemcitabine + nab-Paclitaxel) compared to gemcitabine + nab-Paclitaxel alone in subjects. Cohort 2 was a single arm study
of 22 subjects with unresectable and borderline resectable LAPC to assess the efficacy, safety, and tolerability of siG12D-LODER in
combination with standard of care chemotherapy treatment (gemcitabine + nab-paclitaxel or FOLFIRINOX (FFX) or modified FOLFIRINOX
(mFFX)). The patients’ KRAS mutation was not an inclusion/exclusion criteria for the study and all patients meeting the other
inclusion/exclusion criteria were recruited to the trial, regardless of whether they had a KRAS mutation or which specific mutation they
had. All patients were in the safety cohort.
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The KRAS mutation status was however determined post-hoc in a sample of 31 patients
(21 of whom were Loder treated) in the table below:
|
KRAS G12x Mutation |
|
Cohort 1 Arm 2 (Control) |
|
Cohort 1 Arm 1 (Treatment) |
|
Cohort 1 % Arm 1 Tx |
|
Cohort 2 (Treatment) |
|
All Treated % |
|
R |
|
5/10 |
|
1/12 |
|
8 |
|
2/9 |
|
26 (8/31) |
|
D |
|
2/10 |
|
3/12 |
|
25 |
|
2/9 |
|
23 (7/31) |
|
V |
|
3/10 |
|
8/12 |
|
67 |
|
5/9 |
|
52 (16/31) |
A total of up to eight Loders (2.8 mg siRNA/Loder) were inserted into the pancreatic
tumor per single administration. Insertion was done using EUS. The trial consisted of a screening period (28 days), a treatment phase
(12-week Loder treatment cycles at investigator’s discretion with concomitant chemotherapy treatment cycles) and a follow-up phase
(up to six months until end of study which is defined as death, withdrawn consent or lost to follow-up). For efficacy, the primary endpoint
in the randomized section of the trial (Cohort 1) was overall survival (OS), defined as the time that passed from study entry (screening
visit) until death from any cause. For Cohort 2, the primary endpoint was the overall response rate (ORR) by end of treatment; ORR
was defined as the proportion of subjects with best overall confirmed response (BOCR) of either a complete response (CR) or partial response
(PR). Concerning the secondary endpoint of safety, the endpoints were incidence of adverse events (AEs), and serious adverse events (SAEs)
overall, by severity, by relationship to each study intervention, and those that led to discontinuation of study interventions. Other
secondary endpoints included ORR for Cohort 1, progression free survival, time to metastatis, time to response, duration of response
and rate of disease control.
Overall, a total of 59 subjects with LAPC were enrolled in the study, 38 were treated
with Loder and 48 subjects overall (81.3%) completed the study. In Cohort 1, 15/19 (78.9%) completed the Loder arm and 11/18 (61.1%)
completed the standard of care arm. In Cohort 2, 21/22 (95.5%) completed the study.
The best efficacy results were observed with those patients harboring a KRAS G12D
or KRAS G12V mutation (G12D/V). Below are the results of this subset analysis, which represents about 70% of the LAPC patients in
the general population and the population which we will use for the primary endpoint in our next trial with SIL204.
The Objective Response Rates (ORR), as determined by the standard RECIST v1.1 criteria,
in the two cohorts were similar, with 61-64% of the KRASG12D/V
patients responding positively
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The primary endpoint for the trial was OS in the KRASG12D/V
population. In the overall survival (OS) analysis of the randomized cohort (Cohort 1), the median time to death in the standard
of care chemotherapy group was 13.4 months. When the treatment included the Loder, the OS was increased to 22.7 months. This represents
a numerical advantage of 9.3 months. The Hazard ratio (HR)=0.59, (95% CI, 0.18, 1.96, p=0.39), which represents ~65% increase in
median overall survival (OS) LODER+SoC vs. SoC. . The Loder treatment group in this analysis of KRASG12D/V
was n=11 and for the Control group n=5. Despite the relatively small size, OS of the control group is consistent with that found
in the literature for non-resectable-localized-PC (Gemenetzis, G. et al, 2019). Although the trial was not powered for nor reached statistical
significance, the results indicate a positive trend for an improvement in OS and ORR with Loder + SOC in the KRASG12D/V
mutation group.
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Combining both Cohorts (1 + 2) (cohort 2 having only a single Loder + SOC treatment
arm but adding it to the randomized treatment arm of Loder + SoC chemo) and comparing it to the Control group from Cohort 1 (SoC chemo)
also showed an advantage for the Loder arm, but smaller than randomized Cohort 1 alone.
The endpoints of safety (secondary endpoints) were met. Loder treatment
was considered to be well tolerated, with adverse events mostly related to endoscopic ultrasound procedure and seen as reversible abdominal
pain. The Independent Drug Safety Monitoring Board (DSMB) Reviews did not indicate safety concerns nor safety restriction.
Overall in the trial there were approximately 93 Loder cycles to 38 subjects. Each cycle had ~4 injections to tumor for ~ 372 Loder injections.
The Serious Adverse Events (SAEs) related to treatment in patients with LAPC who
received Loder + Chemotherapy (treatment plus EUS-endoscopy administration procedure) were as follows:
In Cohort 1, all subjects in the Loder treatment group reported at least
one moderate or severe treatment emergent adverse event (TEAE) (18 subjects). One subject was reported with a TEAE leading to death (sepsis).
This event was deemed as not related to the Loder or the EUS procedure. Of the remaining 17 subjects, one subject was reported with a
life-threatening TEAE, gastrointestinal disorders (colitis). The majority of moderate and severe TEAEs reported in the Loder treatment
group were attributed to gastrointestinal disorders (10), blood/lymphatic disorders (14), general disorders and administration site conditions
(11), metabolism and nutrition disorders (11), and investigations (10). In the SoC treatment group, all subjects reported at least one
moderate or severe TEAE (11 subjects). No subjects were reported with a TEAE leading to death. Two subjects were reported with a life-
threatening TEAE. The majority of moderate and severe TEAEs reported in the SoC treatment group were attributed to gastrointestinal disorders
(10), blood/lymphatic disorders (9), general disorders and administration site conditions (9), metabolism and nutrition disorders (8),
and investigations (9).
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In Cohort 2, all subjects in the Loder treatment group reported at least one moderate
or severe TEAE (20 subjects). One subject was reported with a TEAE leading to death (gastrointestinal disorder). This event was deemed
as not related to the Loder or the EUS procedure. Three subjects were reported with a life-threatening TEAE. Of the three subjects,
one subject was investigation (neutrophil count decreased) and two subjects were metabolism/nutrition (hyperglycaemia, hyperkalaemia).
The majority of moderate and severe TEAEs reported in the Loder treatment group were attributed to gastrointestinal disorders (13), nervous
system disorder (10) and investigations (11).
These results are consistent with the good safety profiles of the marketed siRNA
products which are on the market for other indications (not oncology).
Regarding pharmacokinetics, in a subset analysis, no measurable amount of Loder was
detected (<BLQ) in any plasma samples, which suggests that the siRNA administered intratumorally did not result in any appreciable
systemic level.
|
SIL204 (second generation) Pre-Clinical Studies |
We have conducted the evaluation of SIL204 in pharmacology and pharmacokinetics (PK).
The results of the extensive in vitro and in vivo nonclinical studies demonstrated the effects of SIL204 in silencing the KRAS oncogene,
tumor development, and the halting of new metastases.
Stability of SIL204
When SIL204 was tested in human serum (ex-vivo) for 48 hours, it was found to be stable
for that period, whereas siG12DLoder degraded within the first hour. When a single subcutaneous treatment of SIL204 (solution, 10mg,
not formulated) was administered to Sprague Dawley rats, the SIL204 remained at substantial levels for >56 days in plasma and various
tissues
Broadness of silencing activity against various KRAS mutations
SIL204 shows broad silencing (inhibition) of KRAS across the human KRAS mutations that
are important for pancreatic, colorectal cancer, and lung cancer at sub-nanomolar concentrations, in a co-transfection model where human
KRAS is transfected into mouse Hepa1-6 cells with a Dual-Glo reporter plasmid, This activity not only maintains the silencing activity
of Loder but also expands its activity to additional mutations that are considered to be oncogenic.
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Effect of SIL204 on the growth of human pancreatic tumor cell line
SIL204 Robustly Inhibits Growth of Human Pancreatic Tumor Cell Line (Panc-1) in
Dose-Dependent Manner.
The inhibition of the growth of the human tumor cell lines by SIL204 was also found
to work synergistically with fluorouracil, irinotecan, and gemcitabine-containing chemotherapeutic agents. Agents of this class include
folfirinox, currently considered the gold-standard for pancreatic cancer chemotherapy, and Gemzar. This is an important property
for being a first-line treatment in pancreatic cancer.
65
These results are also consistent with the clinical results where siG12DLoder + SOC improves outcomes
compared to SOC chemotherapy alone.
In vivo models of efficacy
SIL204 administered subcutaneously (systemically) showed significant efficacy in
different mouse metastatic pancreatic orthotopic models, where the human pancreatic tumor cell lines (tumors) grow in their native pancreatic
environment.
|
|
o |
Where the tumor was the human pancreatic tumor cell line AsPC-1, which harbors the KRAS G12D
mutation, SIL204 showed a 70% reduction in overall bioluminescence, an indication of tumor cell number, by day 28, at a dose whose human
equivalency is a proposed SIL204 dose to be used clinically. |
Where the tumor was the human pancreatic tumor cell line Panc-1, which also harbors
the KRAS G12D mutation, SIL204 halted the tumor growth.
Bioluminescence or tumor cell numbers decreased dramatically in a dose-dependent manner, with the highest-dose group showing the most
significant effect (control increased by ~100% while SIL204-treated decreased by 12%).
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~80% reduction in bioluminescence by day 28 was also observed with tumors grown with
the human pancreatic cell line BxPC-3 which does not carry a KRASG12 mutation.
When the bioliluminesence was determined in the various organs of the mice, SIL204
treatment was found to significantly reduce the metastatic spread to secondary organs, substantially lowering metastatic burden across
the liver, intestine, spleen and stomach in the two models checked for the various organs, the Panc-1 and BxPC-3 models.
Safety and specificity of SIL204 as determined from in silico
analyses
Potential binding sites of SIL204 to human genome/transcriptome and regulatory microRNAs
(miR), when judged on Gibb’s free energy change (ΔG) of duplex, not mismatch penalties, like BLAST, was determined using various
software programs, including ThermoSearch and OMP DE (DNA Software).
When analyzing first for on-target binding (KRASG12V),
the binding values indicated a strong on-target binding (-31kcal/mol). When analyzing for off-target effects, which might result
in an adverse event, in the genome/transcriptome, or its ability to inhibit regulatory microRNAs or act as a regulatory microRNA mimic,
SIL204 was determined to have a high specificity, with strong on-target binding and minimal off-target binding. These results substantially
reduce the risk of a systemic side effect from SIL204.
The results from efficacy models where SIL204 was subcutaneously administered, together
with the pharmacokinetic and stability data and in silico binding data, indicate that systemic SIL204 delivery can be a viable administration
route.
Manufacturing
We rely on and intend to continue to rely on third-party contract manufacturing
organizations for drug substance and drug products for our clinical trials. We have agreements with contract manufacturers for the manufacturing
of SIL204 and its formulation development for clinical development.
Future Development Plans
We plan to conduct a Phase 2/3 prospective, randomized, controlled, multinational, two-arm,
open-label trial in LAPC subjects that harbor the KRAS G12D/V mutations to evaluate the efficacy, safety and tolerability of SIL204 administered
intratumorally in combination with SoC chemotherapy versus SoC chemotherapy only. The study design, including the dose and dosing frequency,
the combination with SoC chemotherapy, the proposed target population and safety monitoring is based on the experience with the preceding
Phase 1 and 2 clinical studies with the first-generation siRNA product candidate, Loder.
The study is initially planned to enroll approximately 388 subjects and has an adaptive
design with several segments— a screening period which includes a biopsy for KRAS mutations, and a CT scan and physiologic profiling
to ensure subjects are qualified for treatment. The first Phase will be a non-randomized safety run-in phase, followed by a randomized
Phase 2 phase leading to the Phase 3 phase of the trial. There also will be an interim analysis for sample size adjustment between the
Phase 2 and Phase 3 segments of the trial. The following period for each patient will be 24 months. The study design is powered for
statistical significance and designed to meet regulatory requirements to be considered a pivotal trial. The safety will be review by an
independent Data and Safety Monitoring Board (DSMB)
In support of our planned Phase 2/3 trial of SIL204, we held a meeting with the Federal
Institute for Drugs and Medical Devices in Germany (BfArM) to discuss the planned design of the Phase 2/3 trial, at which BfArM agreed,
in principle, to the design. In preparation for the study, we plan to initiate toxicology studies of SIL204 in 2025 followed by the regulatory
submission in Q1 2026 to initiate the Phase 2/3 trial in the first half of 2026. Currently, we manufacture SIL204 under GMP production
to be used for the clinical trial. At this time, we are focused on the further development of the core siRNA technology underlying SIL204
as well as our clinical development of SIL204. We are furthermore planning a preclinical study to expand our pipeline for additional indications
of SIL204 and combination use.
67
We expect to apply in 2026 for Orphan Drug Designation in both the U.S. and EU. In
the U.S., Orphan Drug designation by the FDA gives a company exclusive marketing rights for a seven-year period, along with other
benefits to recoup the costs of researching and developing drugs to treat rare diseases. In the EU, a company receives data exclusivity
for 10 years which provides protection from similar drugs being approved. We believe the size of the localized pancreatic cancer
market fits the requirements for this designation however there can be no assurance that we will be granted such designation and such
designation neither shortens the development time or regulatory review time of a drug nor does it increase the likelihood for any approval
in the regulatory review process. Our continued development plans for SIL204 are not dependent on whether we are granted Orphan Drug
Designation.
Our Strategy
Our goal is to have a positive impact on the health and treatment of KRAS driven cancer
patients, in general and initially with pancreatic cancer through the continued development and commercialization of our pipeline. Key
elements of our strategy to advance toward this goal include the following:
|
|
● |
Advancing the clinical development of SIL204 for
the treatment of LAPC. Our Phase 2 trial with our first-generation siRNA product, Loder in LAPC
patients acts as a validation of approach and foundation for our continued development efforts. As further described in “Future
Development Plans”, we plan to initiate toxicology studies of SIL204 in 2025 followed by the regulatory submission in Q1 2026
to initiate a Phase 2/3 trial of SIL204 powered for statistical significance. At this time, we are focused on the further development
of the core siRNA technology, SIL204, as well as the clinical development and expansion of our pipeline |
|
|
● |
Leveraging our platform to other oncological indications harboring
the KRASG12 mutation. |
|
|
● |
Advancing SIL204 to commercialization. We
have assembled a world class clinical advisory board for better understanding the market in the U.S. and EU. |
|
|
● |
Forming strategic alliances and collaborating with
partners to augment our capabilities. We may pursue strategic alliances with other biopharmaceutical companies
with well-established presences in the specialties we aim to target for our indications. This may include co-marketing, co-promotion,
and co-development relationships, or a partnership with a diagnostics company to help improve availability of rapid testing. We also
intend to explore options to work with partners to augment the study and treatment of patients and the impact of our product candidates,
including medical professionals, healthcare professional networks, pharmacy benefit managers, insurance companies, and artificial intelligence
companies. |
Our History
Silexion was established as Silenseed Ltd in 2008 as an Israeli company which underwent
a name change to Silexion Therapeutics Ltd. in May 2023. During April 2022, our management was replaced following a health condition of
the then-founder and CEO of Silexion, and the new management, after evaluating the viability of commercializing the Loder, has decided
to pivot from the first-generation siRNA product candidate to the second-generation siRNA product candidate and develop SIL204.
Competition
The biotechnology and pharmaceutical industries, and the oncology sector, are characterized
by a rapid evolution of technologies, fierce competition and strong defense of intellectual property rights. While we believe that our
discovery programs and technology provide us with competitive advantages, we face competition from major biotechnology and pharmaceutical
companies, academic institutions, governmental agencies and public and private research institutions, among others.
Any product candidates that we successfully develop and commercialize will compete with
currently approved therapies and new therapeutics that may become available in the future. Key product features that would affect our
ability to effectively compete with other therapeutics include efficacy, safety and convenience of our products as compared to other available
therapeutics.
There are a large number of companies developing or marketing treatments for cancer,
including major biotechnology and pharmaceutical companies. These treatments consist of novel treatments based on small molecule drug
products, cell-based therapies, as well as traditional chemotherapy treatments. There are also an increasing number of companies
commercializing treatments and/or developing programs specifically targeting KRAS mutations, including KRAS G12D and KRAS G12V, in a variety
of manners and for a variety of indications, including cancer, including Amgen Inc., Bristol-Myers Squibb Company (through the recently
acquired Mirati Therapeutics, Inc.), Revolution Medicines, Inc., AstraZeneca (in collaboration with Usynova), BioNTech, Roche, Merck/Moderna,
Boehringer and Gilead. Smaller and other early-stage companies may also prove to be significant competitors. In addition, academic
research departments and public and private research institutions may be conducting research on compounds that could prove to be competitive.
68
Many of the companies against which we may compete have significantly greater financial
resources and expertise in the research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory
approvals and marketing approved products than we do. Similar or early-stage companies may also prove to be significant competitors,
particularly through collaborative arrangements with large and established companies. These competitors also compete with us in recruiting
and retaining qualified scientific and management personnel, and establishing clinical trial sites and patient registration for clinical
trials, as well as acquiring technologies complementary to, or necessary for, our programs.
Our competitors have already and/or may obtain more rapidly than we may obtain approval
FDA, or other regulatory approval for commercialization of product. As a result, our competitors could establish a strong market position
before we are able to enter the market with our products. The availability of coverage and reimbursement from government and other third-party payors
for competing products at the time of commercialization of our products will also significantly affect the pricing and competitiveness
of our products.
Intellectual Property
Our business depends, in part, on our ability to develop and maintain the proprietary
aspects of our products.
We are seeking patent protection for our product (SIL204) in International Patent Application
No. PCT/IL2023/051276 filed on December 14, 2023 (the “276 Application”)
The minimum expiration date of any patent that is issued from the 276 Application is
December 14, 2043. However, given typical practice with respect to regulatory-related patent term extensions, this date may be extended
up to an additional five years in many countries, depending on the length of the regulatory process, to a maximum final expiration date
of December 14, 2048.
The 276 Application was published on June 20, 2024 as International Patent Publication
No. WO 2024/127405.
In addition to patent laws, we rely on copyright and trade secret laws to protect our
proprietary rights. We also attempt to protect our trade secrets and other proprietary information through agreements with vendors, employees,
and consultants.
Property and Facilities
Our principal executive officers are currently located in Ramat-Gan, Israel, where we
lease a space of 464 square meters consisting of offices, under a lease agreement that will expire on October 31, 2026 (initial term
of two years and extension option reasonably certain to be exercised ending October 31, 2028).
Employees
As of the date of this prospectus, we have
eleven full-time and three part-time employees. All of our employees are based in Israel. None of our employees are represented by labor
unions or covered by collective bargaining agreements. We believe that we maintain good relations with all of our employees.
Grants from the Israeli Innovation Authority
During 2009 to 2020, we received several approvals from the IIA for participation in
research and development activities performed by us in a total amount of $5.8 million.
The Company is obligated to pay royalties to the IIA amounting to 3%-5% of the sales
of all of its product candidates and other related revenues generated from such projects, up to 100% of the grants received, linked to
the U.S. dollar and bearing interest at the rate of LIBOR. The obligation to pay these royalties is contingent upon actual sales
of the products and, in the absence of such sales, no payment is required. In October 2023, it was published that the interest rate
of the grants will be replaced with the 12-month term SOFR published on the first trading day of each calendar year.
As of June 30, 2025, the total royalty amount that may be payable by the Company
is approximately $5.8 million ($6.6 million including interest).
69
Legal Proceedings
From time to time, we may become involved in actions, claims, suits, and other legal
proceedings arising in the ordinary course of our business, including assertions by third parties relating to intellectual property infringement,
breaches of contract or warranties, or employment-related matters. We are not currently subject to any material legal proceedings.
Regulatory Environment
Government Regulation
Clinical trials, the drug approval process, and the marketing of drugs are intensively
regulated in the United States and in all major foreign countries. Government authorities in the United States (including federal,
state, and local authorities) and in other countries (including federal, state, and local authorities) extensively regulate, among other
things, the manufacturing, research and clinical development, marketing, labeling and packaging, storage, distribution, post-approval monitoring
and reporting, advertising and promotion, pricing, and export and import of pharmaceutical products, such as those we are developing.
The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local, and foreign statutes
and regulations require the expenditure of substantial time and financial resources.
U.S. Government Regulation
In the United States, the Food and Drug Administration, or FDA, regulates drugs
under the Federal Food, Drug, and Cosmetic Act (FDCA) and related regulations and biologics under the FDCA and the Public Health Service
Act (PHSA) and its implementing regulations. FDA approval is required before any new unapproved drug or dosage form, including a new use
of a previously approved drug, can be marketed in the United States. Drugs and biologics are also subject to other federal, state
and local statutes and regulations. Failure to comply with the applicable United States regulatory requirements at any time
during the product development process, approval process or after approval may subject an applicant to administrative or judicial sanctions.
These sanctions could include the imposition by the FDA or an Institutional Review Board, or IRB, of a clinical hold on trials, the FDA’s
refusal to approve pending applications or supplements, license suspension or revocation, withdrawal of an approval, warning letters,
product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties or criminal
prosecution. Any agency or judicial enforcement action could have a material adverse effect on us.
The FDA and comparable regulatory agencies in state and local jurisdictions and in foreign
countries impose substantial requirements upon the clinical development, manufacture and marketing of pharmaceutical products. These agencies
and other federal, state and local entities regulate research and development activities and the testing, manufacture, quality control,
safety, effectiveness, labeling, storage, distribution, record keeping, approval, advertising and promotion of our products.
The FDA’s policies may change and additional government regulations may be enacted
that could prevent or delay regulatory approval of our platforms and candidate products or any future product candidates or approval of
new disease indications or label changes. We cannot predict the likelihood, nature or extent of adverse governmental regulation that might
arise from future legislative or administrative action, either in the United States or abroad.
Marketing Approval
The process required by the FDA before product candidates may be marketed in the United States,
the European Medicines Agency, or EMA, before a product can be marketed in Europe, and Medicines & Healthcare products Regulatory
Agency (MHRA) for the United Kingdom, generally involves the following:
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|
● |
completion of extensive preclinical laboratory tests and preclinical animal studies, all performed in accordance
with the GLP regulations; |
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● |
submission to the FDA of an investigational new drug application, or IND, Clinical Trial Application (CTA)
for Europe which must become effective or approved before human clinical studies may begin and must be updated on a regular basis;
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|
● |
approval by an independent institutional review board, or IRB, or ethics committee representing each clinical
site before each clinical study may be initiated; |
|
|
● |
performance of adequate and well-controlled human clinical studies to establish the safety and efficacy
of the product candidate for each proposed indication; |
|
|
● |
preparation of and submission to the FDA of a new drug application, or NDA, or biologics license application,
or BLA, or for Europe a Marketing Authorization Application (MAA) after completion of all pivotal clinical studies; |
70
|
|
● |
potential review of the product application by an FDA advisory committee, where appropriate and if applicable.
In the EU, the Committee for Medicinal Products for Human Use (CHMP) issues a scientific opinion to the European Commission which issues
the marketing authorization; |
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● |
a determination by the FDA within 60 days of its receipt of an NDA or BLA to file the application
for review; |
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● |
satisfactory completion of an FDA pre-approval inspection of the manufacturing facilities where the
proposed product drug substance is produced to assess compliance with cGMP; and |
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● |
FDA review and approval of an NDA or BLA or marketing authorization in the European Union (EU) in all European
Union Member States plus Norway, Iceland and Liechtenstein, prior to any commercial marketing or sale of the drug in the United States.
Note that if the centralized procedure is used, which is mandatory for all new anticancer products, a marketing authorization is issued
centrally by the EU commission, which is valid immediately in all member states of the EEA (EU plus Iceland, Norway, and Liechtenstein).
|
The testing and approval process requires substantial time and financial resources,
and we cannot be certain that any approvals for our candidate products will be granted on a timely basis, if at all.
An IND/CTA is a request for authorization from the FDA/national regulatory authorities
in Europe to administer an investigational new drug product to humans. The central focus of an IND/CTA submission is on the general investigational
plan and the protocol(s) for human studies. The IND and CTA also include results of animal and in
vitro studies assessing the toxicology, pharmacokinetics, pharmacology, and pharmacodynamic characteristics of the product;
chemistry, manufacturing, and controls information; and any available human data or literature to support the use of the investigational
new drug. An IND or a CTA must become effective before human clinical trials may begin. An IND will automatically become effective 30 days
after receipt by the FDA, unless before that time the FDA raises concerns or questions related to the proposed clinical studies. In such
a case, the IND may be placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or questions before
clinical studies can begin. Accordingly, submission of an IND may or may not result in the FDA allowing clinical studies to commence.
In Europe, a CTA is required to be approved by regulators, which may take several months. Accordingly, submission of a CTA to European
regulators may or may not result in permission to commence clinical studies in Europe.
We will need to successfully complete an extensive additional clinical trial or some
clinical trials in order to be in a position to submit a new drug application to the FDA. Our planned future clinical trials for
our candidate products may not begin or be completed on schedule, if at all. Clinical trials can be delayed for a variety of reasons,
including delays in:
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● |
obtaining regulatory approval to commence a study; |
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reaching agreement with third-party clinical trial sites and their subsequent performance in conducting
accurate and reliable studies on a timely basis; |
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obtaining institutional review board approval or an Ethics Committee approval to conduct a study at a prospective
site; |
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recruiting patients to participate in a study; and |
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supply of the drug. |
We must reach agreement with the FDA/European national authorities on the proposed protocols
for our future clinical trials in the United States and EU. A separate submission apart from any IND or initial CTA application
we submit must be made for each successive clinical trial to be conducted during product development. Further, an independent IRB or EC
for each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial before it commences at that
site. Informed consent must also be obtained from each study subject. Regulatory authorities, an IRB or EC, a data safety monitoring board
or the Sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the participants are
being exposed to an unacceptable health risk.
Clinical Studies
Clinical studies involve the administration of the investigational new drug to human
subjects under the supervision of qualified investigators in accordance with current cGCP/GCP, which include the requirement that all
research subjects provide their informed consent for their participation in any clinical study. Clinical studies are conducted under protocols
detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety, and the efficacy criteria
to be evaluated. A protocol for each clinical study and any subsequent protocol amendments must be submitted to the FDA and/or European
national authorities as part of the IND or CTA. Additionally, approval must also be obtained from each clinical study site’s
IRB or EC before the studies may be initiated, and the IRB/EC must monitor the study until completed. There are also requirements governing
the reporting of ongoing clinical studies and clinical study results to public registries.
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Our objective is to conduct additional clinical trials for our candidate products and,
if those trials are successful, seek marketing approval from the FDA and other worldwide regulatory bodies.
For purposes of NDA approval, human clinical trials are typically conducted in phases
that may overlap.
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Phase 1. The drug is initially introduced
into healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion. In the case of
some products for severe or life-threatening diseases, especially when the product may be too inherently toxic to ethically administer
to healthy volunteers, the initial human testing is often conducted in patients. |
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Phase 2. This phase involves trials
in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product
for specific targeted diseases and to determine dosage tolerance and optimal dosage. |
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Phase 3. This phase involves trials
undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population, often at geographically dispersed
clinical trial sites. These trials are intended to establish the overall risk/benefit ratio of the product and provide an adequate basis
for product labeling. |
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Phase 2/3. This type of trial incorporates the goals of Phase 2 and Phase 3 clinical trials in one
combined trial. |
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Phase 4. In some cases, the FDA or
the EMA may condition approval of an NDA or BLA or MAA for a product candidate on the Sponsor’s agreement to conduct additional
clinical studies after approval. In other cases, a sponsor may voluntarily conduct additional clinical studies after approval to gain
more information about the drug. Such post-approval studies are typically referred to as Phase 4 clinical studies. |
A pivotal study is a clinical study that adequately meets regulatory agency requirements
for the evaluation of a drug candidate’s efficacy and safety such that it can be used to justify the approval of the product. Generally,
pivotal studies are Phase 3 studies, but the FDA or EMA may accept results from a Phase 2 study if such study’s design
provides a well-controlled and reliable assessment of clinical benefit, particularly in situations where there is an unmet medical
need and the results are sufficiently robust.
The FDA/EMA, the IRB/EC, or the clinical study sponsor may suspend or terminate a clinical
study at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk.
Additionally, some clinical studies are overseen by an independent group of qualified
experts organized by the clinical study sponsor, known as a data safety monitoring board or committee. This group provides authorization
or recommendation for whether or not a study may move forward at designated check points based on access to certain data from the study.
We may also suspend or terminate a clinical study based on evolving business objectives and/or competitive climate. All of these trials
must be conducted in accordance with cGCP requirements in order for the data to be considered reliable for regulatory purposes.
The clinical study process can take several (2- 12 or more) years to complete, and there
can be no assurance that the data collected will support FDA or EU Commission approval or licensure of the product. Government regulation
may delay or prevent marketing of product candidates or new drugs for a considerable period of time and impose costly procedures upon
our activities. We cannot be certain that the FDA or any other regulatory agency will grant approvals for our candidate products or any
future product candidates on a timely basis, if at all. Success in early stage clinical trials does not ensure success in later stage
clinical trials. Data obtained from clinical activities is not always conclusive and may be susceptible to varying interpretations, which
could delay, limit or prevent regulatory approval.
The NDA Approval Process
Assuming successful completion of all required testing in accordance with all applicable
regulatory requirements, detailed investigational new drug product information is submitted to the FDA in the form of an NDA or BLA requesting
approval to market the product for one or more indications. Under federal law, the submission of most NDAs and BLAs is subject to an application
user fee. For fiscal year 2014, the application user fee exceeds $2.1 million, and the Sponsor of an approved NDA or BLA is also
subject to annual product and establishment user fees, set at $104,060 per product and $554,600 per establishment. These fees are typically
increased annually. Applications for orphan drug products are exempted from the NDA and BLA user fees and may be exempted from product
and establishment user fees, unless the application includes an indication for other than a rare disease or condition.
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An NDA or BLA must include all relevant data available from pertinent preclinical and
clinical studies, including negative or ambiguous results as well as positive findings, together with detailed information relating to
the product’s chemistry, manufacturing, controls, and proposed labeling, among other things. Data can come from company-sponsored clinical
studies intended to test the safety and effectiveness of a use of a product, or from a number of alternative sources, including studies
initiated by investigators. To support marketing approval, the data submitted must be sufficient in quality and quantity to establish
the safety and effectiveness of the investigational new drug product to the satisfaction of the FDA.
The FDA will initially review the NDA for completeness before it accepts it for filing.
The FDA has 60 days from its receipt of an NDA to determine whether the application will be accepted for filing based on the agency’s
threshold determination that the application is sufficiently complete to permit substantive review. After the NDA submission is accepted
for filing, the FDA reviews the NDA to determine, among other things, whether the proposed product is safe and effective for its intended
use, and whether the product is being manufactured in accordance with cGMP to assure and preserve the product’s identity, strength,
quality and purity. The FDA may refer applications for novel drug products or drug products that present difficult questions of safety
or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation
as to whether the application should be approved and, if so, under what conditions. The FDA is not bound by the recommendations of an
advisory committee, but it considers such recommendations carefully when making decisions.
Based on pivotal Phase 3 trial results submitted in an NDA, upon the request of
an applicant, the FDA may grant a priority review designation to a product, which sets the target date for FDA action on the application
at six months, rather than the standard ten months. Priority review is given where preliminary estimates indicate that a product,
if approved, has the potential to provide a significant improvement compared to marketed products or offers a therapy where no satisfactory
alternative therapy exists. Priority review designation does not change the scientific/medical standard for approval or the quality of
evidence necessary to support approval.
After the FDA completes its initial review of an NDA, it will communicate to the sponsor
that the drug will either be approved, or it will issue a complete response letter to communicate that the NDA will not be approved in
its current form and inform the sponsor of changes that must be made or additional clinical, nonclinical or manufacturing data that must
be received before the application can be approved, with no implication regarding the ultimate approvability of the application.
Before approving an NDA or BLA, the FDA will typically inspect the facilities at which
the product is manufactured. The FDA will not approve the product unless it determines that the manufacturing processes and facilities
are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.
Additionally, before approving an NDA, the FDA may inspect one or more clinical sites
to assure compliance with GCPs. If the FDA determines the application, manufacturing process or manufacturing facilities are not acceptable,
it typically will outline the deficiencies and often will request additional testing or information. This may significantly delay further
review of the application. If the FDA finds that a clinical site did not conduct the clinical trial in accordance with GCP, the FDA may
determine the data generated by the clinical site should be excluded from the primary efficacy analyses provided in the NDA. Additionally,
notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy
the regulatory criteria for approval.
The testing and approval process for a drug requires substantial time, effort and financial
resources, and this process may take several years to complete. Data obtained from clinical activities are not always conclusive
and may be susceptible to varying interpretations, which could delay, limit or prevent regulatory approval. The FDA may not grant approval
on a timely basis, or at all. We may encounter difficulties or unanticipated costs in our efforts to secure necessary governmental approvals,
which could delay or preclude us from marketing our products.
The FDA may require, or companies may pursue, additional clinical trials after a product
is approved. These so-called Phase 4 studies may be made a condition to be satisfied for continuing drug approval. The results
of Phase 4 studies can confirm the effectiveness of a product candidate and can provide important safety information. In addition,
the FDA now has express statutory authority to require sponsors to conduct post-market studies to specifically address safety issues
identified by the agency.
Any approvals that we may ultimately receive could be withdrawn if required post-marketing trials
or analyses do not meet the FDA requirements, which could materially harm the commercial prospects for our candidate products.
The FDA also has authority to require a Risk Evaluation and Mitigation Strategy, or
REMS, from manufacturers to ensure that the benefits of a drug or biological product outweigh its risks. A sponsor may also voluntarily
propose a REMS as part of the NDA submission. The need for a REMS is determined as part of the review of the NDA. Based on statutory
standards, elements of a REMS may include “dear doctor letters,” a medication guide, more elaborate targeted educational programs,
and in some cases restrictions on distribution. These elements are negotiated as part of the NDA approval, and in some cases if consensus
is not obtained until after the PDUFA review cycle, the approval date may be delayed. Once adopted, REMS are subject to periodic assessment
and modification.
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Even if a product candidate receives regulatory approval, the approval may be limited
to specific disease states, patient populations and dosages, or might contain significant limitations on use in the form of warnings,
precautions or contraindications, or in the form of onerous risk management plans, restrictions on distribution, or post-marketing study
requirements. Further, even after regulatory approval is obtained, later discovery of previously unknown problems with a product may result
in restrictions on the product or even complete withdrawal of the product from the market. Delay in obtaining, or failure to obtain, regulatory
approval for our candidate products, or obtaining approval but for significantly limited use, would harm our business. In addition, we
cannot predict what adverse governmental regulations may arise from future U.S. or foreign governmental action.
Expedited Review and Accelerated Approval Programs
A sponsor may seek approval of its product candidate under programs designed to accelerate
FDA’s review and approval of NDAs and BLAs. For example, Fast Track Designation may be granted to a drug intended for treatment
of a serious or life-threatening disease or condition that has potential to address unmet medical needs for the disease or condition.
The key benefits of fast track designation are the eligibility for priority review, rolling review (submission of portions of an application
before the complete marketing application is submitted), and accelerated approval, if relevant criteria are met. Based on results of the
Phase 3 clinical study(ies) submitted in an NDA or BLA, upon the request of an applicant, the FDA may grant the NDA or BLA a priority
review designation, which sets the target date for FDA action on the application at six months after the FDA accepts the application
for filing. Priority review is granted where there is evidence that the proposed product would be a significant improvement in the safety
or effectiveness of the treatment, diagnosis, or prevention of a serious condition. If criteria are not met for priority review, the application
is subject to the standard FDA review period of ten months after FDA accepts the application for filing. Priority review designation
does not change the scientific/medical standard for approval or the quality of evidence necessary to support approval.
Under the accelerated approval program, the FDA may approve an NDA or a BLA on the basis
of either a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier
than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other
clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative
treatments. Post-marketing studies or completion of ongoing studies after marketing approval are generally required to verify the
drug’s clinical benefit in relationship to the surrogate endpoint or ultimate outcome in relationship to the clinical benefit. In
addition, the Food and Drug Administration Safety and Innovation Act (FDASIA), which was enacted and signed into law in 2012, established
the new “breakthrough therapy” designation. A sponsor may seek FDA designation of its product candidate as a breakthrough
therapy if the drug is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease
or condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies
on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
FDA Post-Approval Requirements
Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive
and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product
sampling and distribution, advertising and promotion and reporting of adverse experiences with the product. After approval, most changes
to the approved product, such as adding new indications or other labeling claims are subject to prior FDA review and approval. There also
are continuing, annual user fee requirements for any marketed products and the establishments at which such products are manufactured,
as well as new application fees for supplemental applications with clinical data.
Drug manufacturers are subject to periodic unannounced inspections by the FDA and state
agencies for compliance with cGMP requirements. Changes to the manufacturing process are strictly regulated, and, depending on the significance
of the change, may require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any
deviations from cGMP and impose reporting and documentation requirements upon us and any third-party manufacturers that we may decide
to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain
compliance with cGMP and other aspects of regulatory compliance.
We rely, and expect to continue to rely, on third parties for the production of clinical
quantities of our product candidates, and expect to rely in the future on third parties for the production of commercial quantities. Future
FDA and state inspections may identify compliance issues at our facilities or at the facilities of our contract manufacturers that may
disrupt production or distribution, or require substantial resources to correct. In addition, discovery of previously unknown problems
with a product or the failure to comply with applicable requirements may result in restrictions on a product, manufacturer or holder of
an approved NDA or BLA, including withdrawal or recall of the product from the market or other voluntary, FDA-initiated or judicial
action that could delay or prohibit further marketing. Also, new government requirements, including those resulting from new legislation,
may be established, or the FDA’s policies may change, which could delay or prevent regulatory approval of our products under development.
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The FDA may withdraw approval if compliance with regulatory requirements and standards
is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product,
including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory
requirements, may result in revisions to the approved labeling to add new safety information, imposition of post-market studies or
clinical studies to assess new safety risks, or imposition of distribution restrictions or other restrictions under a REMS program. Other
potential consequences include, among other things:
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restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from
the market or product recalls; |
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fines, warning letters or holds on post-approval clinical studies; |
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refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation
of product license approvals; |
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injunctions or the imposition of civil or criminal penalties; or |
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product seizure or detention, or refusal to permit the import or export of products. |
The FDA strictly regulates marketing, labeling, advertising, and promotion of products
that are placed on the market. Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved
label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company
that is found to have improperly promoted off-label uses may be subject to significant liability.
Orphan Designation and Exclusivity
The FDA may grant orphan drug designation to drugs intended to treat a rare disease
or condition that affects fewer than 200,000 individuals in the United States, or, if it affects more than 200,000 individuals in
the United States, when there is no reasonable expectation that the cost of developing and making the drug for this type of disease
or condition will be recovered from sales in the United States.
Orphan drug designation entitles a party to financial incentives such as opportunities
for grant funding of clinical study costs, tax advantages, and user-fee waivers. In addition, if a product receives FDA approval
for the indication for which it has orphan designation, the product is entitled to orphan drug exclusivity, which means the FDA may not
approve any other application to market the same drug for the same indication for a period of seven years, except in limited circumstances,
such as a showing of clinical superiority over the product with orphan exclusivity.
Patent Term Restoration
Depending upon the timing, duration, and specifics of the FDA approval of the use of
our product candidates, U.S. patents that may be granted to us in the future may be eligible for limited patent term extension under
the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments.
The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during
product development and the FDA regulatory review process. However, patent term restoration cannot extend the remaining term of a patent
beyond a total of 14 years from the product’s approval date. The patent term restoration period is generally one-half the
time between the effective date of an IND and the submission date of an NDA or BLA, plus the time between the submission date and the
approval of that application. Only one patent applicable to an approved product is eligible for the extension and the application for
the extension must be submitted prior to the expiration of the patent. The USPTO, in consultation with the FDA, reviews and approves the
application for any patent term extension or restoration. In the future, we may apply for restoration of patent term for one of our currently
owned or licensed patents to add patent life beyond its current expiration date, depending on the expected length of the clinical studies
and other factors involved in the filing of the relevant NDA or BLA.
Biosimilars and Exclusivity
The Patient Protection and Affordable Care Act, or Affordable Care Act, signed into
law on March 23, 2010, includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (BPCI Act),
which created an abbreviated approval pathway for biological products shown to be similar to, or interchangeable with, an FDA-licensed reference
biological product. This amendment to the PHSA attempts to minimize duplicative testing. Biosimilarity, which requires that there be no
clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency, can
be shown through analytical studies, animal studies, and a clinical study or studies. Interchangeability requires that a product is biosimilar
to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference
product and, for products administered multiple times, the biologic and the reference biologic may be switched after one has been previously
administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic. However,
complexities associated with the larger, and often more complex, structure of biological products, as well as the process by which such
products are manufactured, pose significant hurdles to implementation that are still being worked out by the FDA.
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A reference biologic is granted twelve years of exclusivity from the time of first
licensure of the reference product. The first biologic product submitted under the abbreviated approval pathway that is determined to
be interchangeable with the reference product has exclusivity against other biologics submitting under the abbreviated approval pathway
for the lesser of (i) one year after the first commercial marketing, (ii) eighteen months after approval if there is no
legal challenge, (iii) eighteen months after the resolution in the applicant’s favor of a lawsuit challenging the biologics’
patents if an application has been submitted, or (iv) 42 months after the application has been approved if a lawsuit is ongoing
within the 42-month period.
Abbreviated New Drug Applications for Generic Drugs
In 1984, with passage of the Hatch-Waxman Act, Congress authorized the FDA to approve
generic drugs that are the same as drugs previously approved by the FDA under the NDA provisions of the statute. To obtain approval of
a generic drug, an applicant must submit an abbreviated new drug application (ANDA) to the agency. In support of such applications, a
generic manufacturer may rely on the preclinical and clinical testing previously conducted for a drug product previously approved under
an NDA, known as the reference listed drug (RLD).
Specifically, in order for an ANDA to be approved, the FDA must find that the generic
version is identical to the RLD with respect to the active ingredients, the route of administration, the dosage form, and the strength
of the drug. At the same time, the FDA must also determine that the generic drug is “bioequivalent” to the innovator drug.
Under the statute, a generic drug is bioequivalent to an RLD if “the rate and extent of absorption of the [generic] drug do not
show a significant difference from the rate and extent of absorption of the listed drug. . . .”
Upon approval of an ANDA, the FDA indicates that the generic product is “therapeutically
equivalent” to the RLD and it assigns a therapeutic equivalence rating to the approved generic drug in its publication “Approved
Drug Products with Therapeutic Equivalence Evaluations,” also referred to as the “Orange Book.” Physicians and pharmacists
consider an “AB” therapeutic equivalence rating to mean that a generic drug is fully substitutable for the RLD. In addition,
by operation of certain state laws and numerous health insurance programs, the FDA’s designation of an “AB” rating often
results in substitution of the generic drug without the knowledge or consent of either the prescribing physician or patient.
The FDCA provides a period of five years of non-patent exclusivity for a new
drug containing a new chemical entity. In cases where such exclusivity has been granted, an ANDA may not be filed with the FDA until the
expiration of five years unless the submission is accompanied by a Paragraph IV certification, in which case the applicant may
submit its application four years following the original product approval. The FDCA also provides for a period of three years
of exclusivity if the NDA includes reports of one or more new clinical investigations, other than bioavailability or bioequivalence studies,
that were conducted by or for the applicant and are essential to the approval of the application. This three-year exclusivity period
often protects changes to a previously approved drug product, such as a new dosage form, route of administration, combination or indication.
Hatch-Waxman Patent Certification and the 30-Month Stay
Upon approval of an NDA or a supplement thereto, NDA sponsors are required to list with
the FDA each patent with claims that cover the applicant’s product or a method of using the product. Each of the patents listed
by the NDA sponsor is published in the Orange Book. When an ANDA applicant files its application with the FDA, the applicant is required
to certify to the FDA concerning any patents listed for the reference product in the Orange Book, except for patents covering methods
of use for which the ANDA applicant is not seeking approval.
Specifically, the applicant must certify with respect to each patent that:
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the required patent information has not been filed; |
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the listed patent has expired; |
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the listed patent has not expired, but will expire on a particular date and approval is sought after patent
expiration; or |
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the listed patent is invalid, unenforceable or will not be infringed by the new product. |
A certification that the new product will not infringe the already approved product’s
listed patents or that such patents are invalid or unenforceable is called a Paragraph IV certification. If the applicant does not
challenge the listed patents or indicates that it is not seeking approval of a patented method of use, the ANDA application will not be
approved until all the listed patents claiming the referenced product have expired.
If the ANDA applicant has provided a Paragraph IV certification to the FDA, the
applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the ANDA has been accepted for
filing by the FDA. The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV
certification. The filing of a patent infringement lawsuit within 45 days after the receipt of a Paragraph IV certification
automatically prevents the FDA from approving the ANDA until the earlier of 30 months after the receipt of the Paragraph IV
notice, expiration of the patent, or a decision in the infringement case that is favorable to the ANDA applicant.
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European Union/Rest of World Government Regulation
In addition to regulations in the United States, we will be subject to a variety
of regulations in other jurisdictions governing, among other things, clinical studies and any commercial sales and distribution of our
products.
Whether or not we obtain FDA approval for a product, we must obtain the requisite approvals
from regulatory authorities in foreign countries prior to the commencement of clinical studies or marketing of the product in those countries.
Certain countries outside of the United States have a similar process that requires the submission of a clinical study application
much like the IND prior to the commencement of human clinical studies. In the European Union, for example, a clinical study application,
or CTA, must be submitted for each clinical protocol to each country’s national health authority and an independent ethics committee,
much like the FDA and IRB, respectively. Once the CTA is accepted in accordance with a country’s requirements, the clinical study
may proceed.
The requirements and process governing the conduct of clinical studies vary from country
to country. In all cases, the clinical studies are conducted in accordance with cGCP, the applicable regulatory requirements, and the
ethical principles that have their origin in the Declaration of Helsinki.
To obtain regulatory approval of an investigational medicinal product under European
Union regulatory systems, we must submit a marketing authorization application. The content of the NDA or BLA filed in the United States
is similar to that required in the European Union, with the exception of, among other things, country-specific document requirements.
For other countries outside of the European Union, such as countries in Eastern Europe,
Latin America or Asia, the requirements governing product licensing, pricing, and reimbursement vary from country to country.
Countries that are part of the European Union, as well as countries outside of the European
Union, have their own governing bodies, requirements, and processes with respect to the approval of pharmaceutical products. If we fail
to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of
regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.
Authorization Procedures in the European Union
Medicines can be authorized in the European Union by using either the centralized authorization
procedure or national authorization procedures.
Centralized procedure
The EMA implemented the centralized procedure for the approval of human medicines to
facilitate marketing authorizations that are valid throughout the European Economic Area, or EEA, which is comprised of the 27 member
states of the European Union plus Norway, Iceland, and Lichtenstein. This procedure results in a single marketing authorization issued
by the EMA that is valid across the EEA. The centralized procedure is compulsory for human medicines that are: derived from biotechnology
processes, such as genetic engineering, contain a new active substance indicated for the treatment of certain diseases, such as HIV/AIDS,
cancer, diabetes, neurodegenerative disorders or autoimmune diseases and other immune dysfunctions, and officially designated orphan medicines.
For medicines that do not fall within these categories, an applicant has the option
of submitting an application for a centralized marketing authorization to the European Commission following a favorable opinion by the
EMA, as long as the medicine concerned is a significant therapeutic, scientific or technical innovation, or if its authorization would
be in the interest of public health.
National authorization procedures
There are also two other possible routes to authorize medicinal products in several
European Union countries, which are available for investigational medicinal products that fall outside the scope of the centralized procedure:
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Decentralized procedure. Using the decentralized
procedure, an applicant may apply for simultaneous authorization in more than one European Union country of medicinal products that have
not yet been authorized in any European Union country and that do not fall within the mandatory scope of the centralized procedure.
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Mutual recognition procedure. In the mutual
recognition procedure, a medicine is first authorized in one European Union Member State, in accordance with the national procedures of
that country. Following this, further marketing authorizations can be sought from other European Union countries in a procedure whereby
the countries concerned agree to recognize the validity of the original, national marketing authorization. |
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In most cases, a Pediatric Investigation Plan, and/or a request for waiver or deferral,
is required for submission prior to submitting a marketing authorization application. A PIP describes, among other things, proposed pediatric
studies and their timing relative to clinical studies in adults.
New Chemical Entity Exclusivity
In the European Union, new chemical entities, sometimes referred to as new active substances,
qualify for eight years of data exclusivity upon marketing authorization and an additional two years of market exclusivity.
This data exclusivity, if granted, prevents regulatory authorities in the European Union from referencing the innovator’s data to
assess a generic (abbreviated) application for eight years, after which generic marketing authorization can be submitted, and the
innovator’s data may be referenced, but not approved for two years. The overall ten-year period will be extended to a
maximum of eleven years if, during the first eight years of those ten years, the marketing authorization holder obtains
an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are
held to bring a significant clinical benefit in comparison with existing therapies.
Orphan Designation and Exclusivity
In the European Union, the EMA’s Committee for Orphan Medicinal Products, or COMP,
grants orphan drug designation to promote the development of products that are intended for the diagnosis, prevention or treatment of
life-threatening or chronically debilitating conditions affecting not more than 5 in 10,000 persons in the European Union Community
and for which no satisfactory method of diagnosis, prevention, or treatment has been authorized (or the product would be a significant
benefit to those affected). Additionally, designation is granted for products intended for the diagnosis, prevention, or treatment of
a life-threatening, seriously debilitating or serious and chronic condition and when, without incentives, it is unlikely that sales of
the drug in the European Union would be sufficient to justify the necessary investment in developing the medicinal product.
In the European Union, orphan drug designation entitles a party to financial incentives
such as reduction of fees or fee waivers and 10 years of market exclusivity is granted following medicinal product approval. This
period may be reduced to six years if the orphan drug designation criteria are no longer met, including where it is shown that the
product is sufficiently profitable not to justify maintenance of market exclusivity, and may be prolonged to a total of 12 years, if pediatric
studies in accordance with a PIP are being performed.
Orphan drug designation must be requested before submitting an application for marketing
approval. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.
Exceptional Circumstances/Conditional Approval
Orphan drugs or drugs with unmet medical needs may be eligible for EU approval under
exceptional circumstances or with conditional approval. Approval under exceptional circumstances is applicable to orphan and non-orphan products
and is used when an applicant is unable to provide comprehensive data on the efficacy and safety under normal conditions of use because
the indication for which the product is intended is encountered so rarely that the applicant cannot reasonably be expected to provide
comprehensive evidence, when the present state of scientific knowledge does not allow comprehensive information to be provided, or when
it is medically unethical to collect such information. Conditional marketing authorization is applicable to orphan medicinal products,
medicinal products for seriously debilitating or life-threatening diseases, or medicinal products to be used in emergency situations
in response to recognized public threats. Conditional marketing authorization can be granted on the basis of less complete data than is
normally required in order to meet unmet medical needs and in the interest of public health, provided the risk-benefit balance is
positive, it is likely that the applicant will be able to provide the comprehensive clinical data, and unmet medical needs will be fulfilled.
Conditional marketing authorization is subject to certain specific obligations to be reviewed annually.
Accelerated Review
Under the Centralized Procedure in the European Union, the maximum timeframe for the
evaluation of a marketing authorization application is 210 days (excluding clock stops, when additional written or oral information
is to be provided by the applicant in response to questions asked by the EMA’s Committee for Medicinal Products for Human Use (CHMP)).
Accelerated evaluation might be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of a major public
health interest, particularly from the point of view of therapeutic innovation. In this circumstance, EMA ensures that the opinion of
the CHMP is given within 150 days, excluding clock stops.
Pharmaceutical Coverage, Pricing and Reimbursement
Significant uncertainty exists as to the coverage and reimbursement status of any drug
products for which we obtain regulatory approval. In the United States and markets in other countries, sales of any products for
which we receive regulatory approval for commercial sale will depend in part on the availability of coverage and reimbursement from third-party payors.
Third-party payors include government authorities, managed care providers, private health insurers and other organizations. The process
for determining whether a payor will provide coverage for a drug product may be separate from the process for setting the reimbursement
rate that the payor will pay for the drug product. Third-party payors may limit coverage to specific drug products on an approved
list, or formulary, which might not include all of the FDA-approved drugs for a particular indication. Moreover, a payor’s
decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Adequate third-party reimbursement
may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.
78
Third-party payors are increasingly challenging the price and examining the medical
necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. In order to obtain coverage
and reimbursement for any product that might be approved for sale, we may need to conduct expensive pharmacoeconomic studies in order
to demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs required to obtain regulatory
approvals. Our product candidates may not be considered medically necessary or cost-effective. If third-party payors do not consider
a product to be cost-effective compared to other available therapies, they may not cover the product after approval as a benefit
under their plans or, if they do, the level of payment may not be sufficient to allow a company to sell its products at a profit.
The U.S. government, state legislatures and foreign governments have shown significant
interest in implementing cost containment programs to limit the growth of government-paid health care costs, including price controls,
restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs. By way of example,
the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively, the Healthcare
Reform Law, contains provisions that may reduce the profitability of drug products, including, for example, increased rebates for drugs
sold to Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part D
beneficiaries and annual fees based on pharmaceutical companies’ share of sales to federal health care programs. Adoption of government
controls and measures, and tightening of restrictive policies in jurisdictions with existing controls and measures, could limit payments
for pharmaceuticals.
In the European Community, governments influence the price of pharmaceutical products
through their pricing and reimbursement rules and control of national health care systems that fund a large part of the cost of those
products to consumers. Some jurisdictions operate positive and negative list systems under which products may only be marketed once a
reimbursement price has been agreed to by the government. To obtain reimbursement or pricing approval, some of these countries may require
the completion of clinical studies that compare the cost-effectiveness of a particular product candidate to currently available therapies.
Other member states allow companies to fix their own prices for medicines, but monitor and control company profits. The downward pressure
on health care costs in general, particularly prescription drugs, has become very intense. As a result, increasingly high barriers are
being erected to the entry of new products. In addition, in some countries, cross-border imports from low-priced markets exert
a commercial pressure on pricing within a country.
The marketability of any products for which we receive regulatory approval for commercial
sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement. In addition, an increasing
emphasis on cost containment measures in the United States and other countries has increased and we expect will continue to increase
the pressure on pharmaceutical pricing. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable
coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage
policies and reimbursement rates may be implemented in the future.
Other Healthcare Laws and Compliance Requirements
If we obtain regulatory approval for any of our product candidates, we may be subject
to various federal and state laws targeting fraud and abuse in the healthcare industry. These laws may impact, among other things, our
proposed sales, marketing and education programs. In addition, we may be subject to patient privacy regulation by both the federal government
and the states in which we conduct our business. The laws that may affect our ability to operate include:
|
|
● |
the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and
willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, the purchase or
recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs;
|
|
|
● |
federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other
things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or
other third-party payers that are false or fraudulent; |
|
|
● |
the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created
new federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program and making false statements relating
to healthcare matters; |
|
|
● |
the federal transparency laws, including the federal Physician Payment Sunshine Act, that requires drug
manufacturers to disclose payments and other transfers of value provided to physicians and teaching hospitals; |
79
|
|
● |
HIPAA, as amended by HITECH and its implementing regulations, which imposes certain requirements relating
to the privacy, security and transmission of individually identifiable health information; and |
|
|
● |
state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws
which may apply to items or services reimbursed by any third-party payer, including commercial insurers, and state laws governing
the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and
may not have the same effect, thus complicating compliance efforts. |
The Healthcare Reform Law broadened the reach of the fraud and abuse laws by, among
other things, amending the intent requirement of the federal Anti-Kickback Statute and the applicable criminal healthcare fraud statutes
contained within 42 U.S.C. § 1320a-7b, effective March 23, 2010. Pursuant to the statutory amendment, a person or
entity no longer needs to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation.
In addition, the Healthcare Reform Law provides that the government may assert that a claim including items or services resulting from
a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act
(discussed below) or the civil monetary penalties statute. Many states have adopted laws similar to the federal Anti-Kickback Statute,
some of which apply to the referral of patients for healthcare items or services reimbursed by any source, not only the Medicare and Medicaid
programs.
We are also subject to the Foreign Corrupt Practices Act, or FCPA, which prohibits improper
payments or offers of payments to foreign governments and their officials for the purpose of obtaining or retaining business.
Safeguards we implement to discourage improper payments or offers of payments by our
employees, consultants, and others may be ineffective, and violations of the FCPA and similar laws may result in severe criminal or civil
sanctions, or other liabilities or proceedings against us, any of which would likely harm our reputation, business, financial condition
and result of operations.
If our operations are found to be in violation of any of the laws described above or
any other governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, exclusion
from participation in government healthcare programs, such as Medicare and Medicaid and imprisonment, damages, fines and the curtailment
or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
Labeling, Marketing and Promotion
The FDA closely regulates the labeling, marketing and promotion of drugs. While doctors
are free to prescribe any drug approved by the FDA for any use, a company can only make claims relating to safety and efficacy of a drug
that are consistent with FDA approval, and the Company is allowed to actively market a drug only for the particular use and treatment
approved by the FDA. In addition, any claims we make for our products in advertising or promotion must be appropriately balanced
with important safety information and otherwise be adequately substantiated. Failure to comply with these requirements can result in adverse
publicity, warning letters, corrective advertising, injunctions and potential civil and criminal penalties. Government regulators recently
have increased their scrutiny of the promotion and marketing of drugs.
Pediatric Research Equity Act
The Pediatric Research Equity Act (PREA) amended the FDCA to authorize the FDA to require
certain research into drugs used in pediatric patients. The intent of PREA is to compel sponsors whose drugs have pediatric applicability
to study those drugs in pediatric populations, rather than ignoring pediatric indications for adult indications that could be more economically
desirable. The Secretary of Health and Human Services may defer or waive these requirements under specified circumstances.
Anti-Kickback and False Claims Laws
In the United States, the research, manufacturing, distribution, sale and promotion
of drug products and medical devices are potentially subject to regulation by various federal, state and local authorities in addition
to the FDA, including the Centers for Medicare & Medicaid Services, other divisions of the U.S. Department of Health and
Human Services (e.g., the Office of Inspector General), the U.S. Department of Justice, state Attorneys General, and other state
and local government agencies. For example, sales, marketing and scientific/educational grant programs must comply with the Medicare-Medicaid Anti-Fraud and
Abuse Act, as amended (the “Anti-Kickback Statute”), the False Claims Act, as amended, the privacy regulations promulgated
under the Health Insurance Portability and Accountability Act, or HIPAA, and similar state laws. Pricing and rebate programs must comply
with the Medicaid Drug Rebate Program requirements of the Omnibus Budget Reconciliation Act of 1990, as amended, and the Veterans
Health Care Act of 1992, as amended. If products are made available to authorized users of the Federal Supply Schedule of the
General Services Administration, additional laws and requirements apply. All of these activities are also potentially subject to federal
and state consumer protection and unfair competition laws.
In the United States, we are subject to complex laws and regulations pertaining
to healthcare “fraud and abuse,” including, but not limited to, the Anti-Kickback Statute, the federal False Claims Act,
and other state and federal laws and regulations. The Anti-Kickback Statute makes it illegal for any person, including a prescription
drug manufacturer (or a party acting on its behalf) to knowingly and willfully solicit, receive, offer, or pay any remuneration that is
intended to induce the referral of business, including the purchase, order, or prescription of a particular drug, for which payment may
be made under a federal healthcare program, such as Medicare or Medicaid.
80
The federal False Claims Act prohibits anyone from knowingly presenting, or causing
to be presented, for payment to federal programs (including Medicare and Medicaid) claims for items or services, including drugs, that
are false or fraudulent, claims for items or services not provided as claimed, or claims for medically unnecessary items or services.
There are also an increasing number of state laws that require manufacturers to make
reports to states on pricing and marketing information. Many of these laws contain ambiguities as to what is required to comply with the
laws. In addition, as discussed below, beginning in 2013, a similar federal requirement will require manufacturers to track and report
to the federal government certain payments made to physicians and teaching hospitals made in the previous calendar year. These laws may
affect our sales, marketing, and other promotional activities by imposing administrative and compliance burdens on us. In addition, given
the lack of clarity with respect to these laws and their implementation, our reporting actions could be subject to the penalty provisions
of the pertinent state, and soon federal, authorities.
Patient Protection and Affordable Health Care Act
In March 2010, the Patient Protection and Affordable Health Care Act, as amended
by the Health Care and Education Reconciliation Act of 2010 (collectively, PPACA) was enacted, which includes measures that
have or will significantly change the way health care is financed by both governmental and private insurers. The fees, discounts and other
provisions of this law are expected to have a significant negative effect on the profitability of pharmaceuticals.
Many of the details regarding the implementation of PPACA are yet to be determined,
and at this time, it remains unclear the full effect that PPACA would have on our business.
Other Regulations
We are also subject to numerous federal, state and local laws relating to such matters
as safe working conditions, manufacturing practices, environmental protection, fire hazard control, and disposal of hazardous or potentially
hazardous substances. We may incur significant costs to comply with such laws and regulations now or in the future.
Israel
Clinical Testing in Israel
In order to conduct clinical testing on humans in the State of Israel, special authorization
must first be obtained from the ethics committee and general manager of the institution in which the clinical studies are scheduled to
be conducted, as required under the Guidelines for Clinical Trials in Human Subjects implemented pursuant to the Israeli Public Health
Regulations (Clinical Trials in Human Subjects) 5741-1980, as amended from time to time, and other applicable legislation. These
regulations require authorization by the institutional ethics committee and general manager as well as from the Israeli Ministry of Health,
except in certain circumstances, and in the case of genetic trials, special fertility trials and complex clinical trials, an additional
authorization of the Ministry of Health’s overseeing ethics committee. The institutional ethics committee must, among other things,
evaluate the anticipated benefits that are likely to be derived from the project to determine if it justifies the risks and inconvenience
to be inflicted on the human subjects, and the committee must ensure that adequate protection exists for the rights and safety of the
participants as well as the accuracy of the information gathered in the course of the clinical testing. Since we perform a portion of
the clinical studies on certain of our therapeutic candidates in Israel, we are required to obtain authorization from the ethics committee
and general manager of each institution in which we intend to conduct our clinical trials, and in most cases, from the Israeli Ministry
of Health.
New Silexion Corporate Information
New Silexion was formed on April
2, 2024 under the name Biomotion Sciences as a Cayman Islands exempted limited company for the purpose of effecting a business combination
with Moringa and Silexion. On April 3, 2024, New Silexion entered into the Business Combination Agreement by and among New Silexion, Moringa,
Silexion, and New Silexion’s two wholly-owned subsidiaries— Merger Sub 1 and Merger Sub 2. On the Closing Date of August 15,
2024, following the approval of the Business Combination (among other matters) at Moringa’s extraordinary general meeting that was
held on August 6, 2024, the transactions contemplated by the Business Combination Agreement were completed. As a result, Moringa and Silexion
merged with Merger Sub 2 and Merger Sub 1 pursuant to the SPAC Merger and Acquisition Merger, respectively, and became New Silexion’s
wholly-owned subsidiaries, and their securityholders became securityholders of New Silexion at previously agreed-upon exchange ratios.
In addition, New Silexion’s ordinary shares and warrants were listed, and began trading, on the Nasdaq on August 16, 2024, and its
name was changed to Silexion Therapeutics Corp.
New Silexion’s principal executive offices are located at 12 Abba Hillel Road,
Ramat Gan, Israel 5250606, and its phone number is +972-8-6286005. New Silexion’s corporate website address is www.silexion.com.
Information contained on or accessible through that website is not a part of this prospectus, and the inclusion of that website address
in this prospectus is an inactive textual reference only.
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Properties
We currently lease 464 square meters of office space at 12
Abba Hillel Road, Ramat Gan, Israel. The lease term is for 24 months beginning on November 1, 2024 and ending on 31 October 2026,
with an option to extend for an additional 24 months. Monthly rent payments, including utilities, amount to approximately $12,839 per
month.
Access to Company Information
The Company files or furnishes periodic reports and amendments thereto, including its
Annual Reports on Form 10-K, its Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, proxy statements and other information
with the SEC. In addition, the SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other
information regarding issuers that file electronically. New Silexion’s internet address is https://www.silexion.com. The Company
makes available, free of charge, its Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all
amendments to those reports as soon as reasonably practicable after such reports have been filed with or furnished to the SEC through
its internet website.
MANAGEMENT
Management and Board of Directors
Our board of directors (sometimes referred to as the “New Silexion Board”)
is comprised of the six directors listed below.
Each director will hold office until his or her successor is duly elected or appointed
and qualified in accordance with applicable law or until his or her death, resignation or removal in accordance with law and our governing
documents, including our Amended and Restated Memorandum and Articles of Association (the “Articles”), which went into effect
upon the Closing of the Business Combination.
The following sets forth certain information known as of the date hereof concerning
the persons who currently serve as directors and executive officers of New Silexion (who have served as such since the consummation of
the Business Combination):
|
Name |
|
Age |
|
Position(s)
|
|
Directors |
|
|
|
|
|
Ilan Hadar |
|
56 |
|
Chairman and Chief Executive Officer |
|
Dror J. Abramov |
|
64 |
|
Director |
|
Ruth Alon |
|
73 |
|
Director |
|
Ilan Levin |
|
59 |
|
Director |
|
Avner Lushi |
|
58 |
|
Director |
|
Shlomo Noy |
|
72 |
|
Director |
|
Amnon Peled |
|
65 |
|
Director |
|
Executive Officers (who are not also directors)
|
|
|
|
|
|
Dr. Mitchell Shirvan |
|
71 |
|
Chief Scientific and Development Officer |
|
Mirit Horenshtein Hadar, CPA |
|
41 |
|
Chief Financial Officer and Secretary |
Directors
Ilan
Hadar, 56, was appointed as Chief Executive
Officer of New Silexion, serving on a full-time basis, effective upon the Business Combination, and has served as our (previously,
Silexion’s) Chairman of the Board since May 2024. Previously, he served as Managing Director of Silexion from April 2022 until the
Business Combination. Mr. Hadar has over 20 years of multinational managerial and corporate experience with pharmaceutical and high-tech companies,
as described below, over which time period he has acquired the experience and skills to serve as a valuable member of the board of directors
of a company such as Biomotion Sciences. In addition to his current role at Silexion, Mr. Hadar has served as the Chief Executive
Officer of Painreform Ltd (Nasdaq: PRFX) since November 2020, a position he will relinquish following the consummation of the Business
Combination. Prior to joining Painreform and Silexion, Mr. Hadar served as Country Manager Israel and Chief Financial Officer at
Foamix Pharmaceuticals Ltd. (currently, Nasdaq: VYNE) from 2014 until August 2020, where he was instrumental in building the organization
and launching new innovative topical drugs in the U.S., and also focused on capital markets and mergers and acquisitions. Prior to his
role at Foamix, Mr. Hadar was Finance Director at Pfizer PFR Pharmaceuticals Israel Ltd., where he oversaw all commercial, financial
and operational activities of the local entity of the large pharmaceutical company. Before his tenure at Pfizer, Mr. Hadar served
as Finance Manager at HP Indigo Ltd., a world-leading company in digital printing and, prior to that, served as Finance Director
at BAE Systems, the third-largest defense company in the world, where he was responsible for all financial activities of BAE Systems
Israel. From 1998 to 2006, Mr. Hadar was Chief Financial Officer at Mango DSP, a global leader of Intelligent Video Solutions. Mr. Hadar
served on the board of directors of Kadimastem, a public Israeli biopharmaceutical company from 2019 to 2022. He received his MBA in Finance
and Business Entrepreneurship and BA from The Hebrew University in Jerusalem, Israel. We believe Mr. Hadar is qualified to serve
on our board of directors due to his extensive knowledge as Silexion’s Managing Director, and his extensive commercial, financial
and managerial experience with high-tech and pharmaceutical companies, both private and public.
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Dror
J. Abramov, 64, was appointed as a director of New Silexion effective upon
the consummation of the Business Combination. Mr. Abramov’s experience of over 15 years in multiple roles in changing and growing
companies and markets within dynamic environments, and in particular his multi-disciplinary experience in R&D, consulting, taxes,
sales, business development, finance and government, lend to his being an appropriate board member of Biomotion Sciences. Mr. Abramov
has served as Managing Director of Hewlett Packard Inc. Israel since 2015. Mr. Abramov held several other management positions in
Hewlett Packard Inc. Israel from 2006 to 2015, including finance director, general manager of imaging and printing divisions and general
manager of printing and personal systems division. From 2002 through 2006, Mr. Abramov served as Chief Financial Officer of Applied
Materials UK and Applied Materials Israel, both part of Applied Materials, Inc. (Nasdaq: AMAT), a nanomanufacturing company that supplies
equipment, services and software for the manufacture of semiconductor chips for electronics. From 2000 through 2002, Mr. Abramov
served as Vice President of business management at Avaya Communication, a cloud communications and workstream collaboration technology
company. From 1997 until 2000, Mr. Abramov held positions in Mainsoft Corporation, first as director of finance and operations and
later as general manager. From 1991 through 1997, Mr. Abramov served as consultant and manager at Maron, Sobel, Shor & Co., an
Israeli CPA firm. Mr. Abramov is a licensed CPA and holds a Bachelor of Accounting, Master of Business Administration and Bachelor
of Science in physics and computer sciences, all three degrees from Tel Aviv University. We believe Mr. Abramov is qualified to serve
on our board of directors due to his extensive financial and business management experience.
Ruth Alon, 73, became
a director of New Silexion effective upon the consummation of the Business Combination. Ms. Alon’s international experience of over
30 years in the high-tech medical industry and with Israeli life sciences companies, in particular, make her a prospective valuable
member of the board of directors of Biomotion Sciences. Ms. Alon is the Founder and Chief Executive Officer of Medstrada, which was started
in 2016. From 1997 until 2016, Ms. Alon served as a General Partner in Pitango Venture Capital, where she headed the life sciences activities
and helped to facilitate the acquisition of several of the company’sportfolio companies. Currently, Ms. Alon also serves on the
board of directors of a number of private and public companies as a member or chairperson, including Vascular Biogenics Ltd. (Nasdaq:
VBLT), Brainsgate and KadimaStem. Ms. Alon previously worked on Wall Street where she held senior positions as a senior medical device
analyst with Montgomery Securities (from 1981 to 1987) and Kidder Peabody & Co. (from 1987 to 1993). She also managed her own
independent consulting business in San Francisco from 1995 to 1996, providing broad-based services to early-stage companies
and venture capitalists in the medical devices industry. Ms. Alon was also instrumental in the establishment, in 2005, of Israel Life
Science Industry (ILSI), a not-for-profit organization which represented, as of 2005, the mutual goals of approximately 700 Israeli
life science companies. She is the Co-Founder of IATI, an umbrella organization established in 2012, representing Israel’s
High Tech and Life Sciences industries. Ms. Alon holds a B.A. in Economics from the Hebrew University of Jerusalem, an M.B.A. from Boston
University, and an M.Sc. from the Columbia University School of Physicians and Surgeons. We believe Ms. Alon is qualified to serve on
our board of directors given her above-described extensive experience in the high-tech medical industry and with Israeli life
sciences companies, in particular.
Ilan Levin, 59, who
was the co-founder, Chairman and Chief Executive Officer of Moringa, was appointed as a director of New Silexion after its formation in
April 2024 and has continued as a director following the consummation of the Business Combination. Mr. Levin has been involved, for
approximately 25 years, as an executive and venture capital/private equity investor in high-tech, Israel-related ventures. His
experience as an executive and board member in managing growth companies that develop technology, and his knowledge of that industry in
Israel in particular, suit him well to serve as a director of Biomotion Sciences. From 2000 to 2018, Mr. Levin was a member of the
Board and Executive Committee of Objet Ltd., which as a result of a merger with Stratasys, Inc. in 2012, formed Stratasys Ltd. (Nasdaq:
SSYS), the pioneer and global leader in 3D printing. During his tenure at Objet/Stratasys, Mr. Levin held various positions including
President, Vice Chairman and from 2016 to 2018, Chief Executive Officer. From 2004 to 2009, Mr. Levin was the Chief Executive Officer
of CellGuide, a developer of software-based GPS for mobile devices. Since 1997, Mr. Levin has also served as a member of the
board of directors and as an advisor for a wide variety of Israel-based technology-related companies, including currently serving
as Chairman of Vision Sigma (TLV: VISN: IT), an Israel-based real estate and investment company. Early in his career, Mr. Levin
was a practicing attorney focusing on corporate and securities related matters. In addition to his role as our Chairman and Chief Executive
Officer, Mr. Levin also serves as the sole director and sole equity owner of an Israeli company that serves as the sole general partner
of the Sponsor. Mr. Levin earned an LL.B. from Tel Aviv University and a B.A.Sc. in Industrial Engineering from the University of
Toronto. We believe Mr. Levin is qualified to serve on our board of directors given his above-described experience in managing
growth companies that develop technology, and his knowledge of that industry in Israel in particular.
Avner Lushi, 58, was
appointed as a director of New Silexion effective upon the consummation of the Business Combination. His experience of over 20 years and
skills acquired in his managing roles at an Israeli life sciences venture capital fund and in life sciences investment banking make him
suitable to provide similar support as a member of the board of directors of Biomotion Sciences. Mr. Lushi co-founded Guangzhou
Sino-Israel Bio-industry Investment Fund (GIBF), which currently includes two approximately $100 million funds focused on introducing
Israeli and other foreign companies in the field of life sciences to the Chinese market, in which he also serves as a Managing Partner &
CEO of the GP since 2016. From 2004 to 2015, Mr. Lushi served as a Partner and Managing Director of Israel Healthcare Ventures (IHCV),
a prominent Israeli life sciences venture capital fund. Before joining IHCV, Mr. Lushi was the Co-Founder & CEO of Life
Sciences Transaction Support Ltd. (LTS), a PwC subsidiary dealing with life sciences investment banking. Since 2005, Mr. Lushi has
served as an independent director on the boards of nine public companies, including, currently, Brainsway Ltd. (Nasdaq: BWAY) and Ginegar
Plastic Products Ltd. In addition, he serves as a board member of several private companies as part of his role at GIBF. From 1997
to 2001, prior to turning to the private sector, he held increasingly senior roles within the Israeli Prime Minister’s Chamber and
the Israeli Supreme Court. Mr. Lushi holds an LLM in Law from the Hebrew University of Jerusalem, LLB in Law and a BA in Economics
from the Haifa University. We believe Mr. Lushi is qualified to serve on our board of directors due to his extensive executive and
board experience with life sciences companies.
83
Shlomo
Noy, MD PhD, 72, was appointed as a
director of New Silexion effective upon the consummation of the Business Combination. Professor Noy’s international-level expertise
in healthcare management, tech transfer, building ecosystems and focusing hospitals on research and clinical trials will provide important
knowledge to the Biomotion Sciences board of directors in the realm of Israeli research and clinical trial activities. Professor Noy has
served as Chief Medical Officer of GIBF since January 2017. Professor Noy served as the Director of the Rehabilitation
Hospital at Sheba Medical Center from 1993 to 2017 and Vice President of Research and Development and Academic Affairs at Sheba Medical
Center from 2000 to 2017. Prof. Noy was a Professor at Sackler School of Medicine at Tel-Aviv University from 1993 to 2016. Prof. Noy
serves as a board member of several private companies as part of his role at GIBF. Prof. Noy possesses 25 years’ experience
in health care management and is active in promoting research and education at an Israeli national level as well as at an international
level. Prof. Noy received his MD from the Hebrew University, Hadassah Medical School, Jerusalem, Israel, and completed his MBA at the
European School of Business Administration (INSEAD) Fontainebleau, France, and holds a PhD degree from Tel-Aviv University, Faculty
of Medicine and Management. We believe Mr. Noy is qualified to serve on our board of directors due to his extensive medical and health
care management experience.
Amnon Peled, PhD, 65, was appointed as a director
in December 2024. Professor Peled has served as an associate professor at Hadassah Medical Center, Jerusalem since August 2000. Professor
Peled also served as Director of the Gene Therapy Institute at Hadassah Medical Center from October 2021 to February 2024. He specializes
in cytokine research, hematopoietic stem cell biology, inflammation, and cancer, leading the development of therapies now in Phase II/III
trials. Professor Peled served as Founder and CEO of Biokine Therapeutics, and as its Chief Scientific Officer, from July 2000 to February
2024, where he advanced the CXCR4 antagonist BKT140/BL8040. Prof. Peled is an author of over 100 publications and holder of 200+ patents
and patent applications, and holds a Bachelor’s degree in agriculture from the Hebrew University of Jerusalem, a Master’s
degree in cell biology and histology from Tel Aviv University, and a Ph.D. from the Weizmann Institute. He completed postdoctoral training
at Harvard Medical School and the Weizmann Institute.
Executive Officers
Mitchell
Shirvan, 71, has served as the Chief Scientific and Development Officer of New
Silexion since the Business Combination, and, before the Business Combination, of Silexion, since April 2022. Prior to joining Silexion,
Dr. Shirvan served as the Senior Vice President of R&D and V.P. Innovation and Discovery at Foamix Pharmaceuticals
Ltd. from 2014 to 2019. Dr. Shirvan has over 25 years of industry experience, previously holding positions as Chief Executive
Officer at Macrocure Ltd. from 2008 to 2012. From 1992 until 2008, Dr. Shirvan held various positions of increasing responsibility
at Teva Pharmaceutical Industries, including Senior Director, Strategic Business Planning and Senior Manager, Research & Development.
Prior to his tenure at Teva, he was a research fellow at the U.S. National Institutes of Health. Dr. Shirvan holds a Ph.D. in
microbiology from The Hebrew University of Jerusalem and an MBA from the University of Bradford.
Mirit
Horenshtein Hadar, 41, has served as the Chief Financial Officer and Secretary of New Silexion since the Business Combination,
and served as the Executive Vice President of Finance Affairs at Silexion before the Business Combination, beginning in January 2024.
From August 2023 to January 2024, Ms. Horenshtein Hadar served as a part-time consultant in a Strategy & Corporate Finance Advisory
capacity. Ms. Horenshtein Hadar has over 15 years of corporate finance experience in senior financial positions of public companies
and privately held companies, in the pharmaceutical and high-tech industries, where she has been instrumental in building financial
infrastructures for growth, U.S. GAAP financial reporting and FP&A functions, and has led the accounting and reporting of complex
M&A transactions, integration processes and public offerings. Prior to joining Silexion, from January 2021 to December 2022,
Ms. Horenshtein Hadar served as VP of Finance and then CFO Israel of Gauzy Ltd. (currently, Nasdaq: GAUZ), a nanotechnology company that
develops and markets smart glass and vision control technologies. From December 2022 to August 2025, Ms. Horenshtein Hadar served
as an external advisor to Gauzy. Prior to Gauzy, Ms. Horenshtein Hadar served as Senior Director of Finance and Head of FP&A, Accounting
and Financial Reporting at Foamix Pharmaceuticals Ltd. (currently, Nasdaq: VYNE) from July 2016 until December 2020. Prior to
Foamix, Ms. Horenshtein Hadar was a Senior Manager at PwC Israel, as an external auditor, from 2008 to 2016. Ms. Horenshtein Hadar became
a Qualified CPA in 2011 and received a BA in Accounting, Economics and Business Management from Tel Aviv University.
Family Relationships
Mirit Horenshtein Hadar and Ilan Hadar are married to one another. There are no other
family relationships between the individuals who serve as directors and executive officers of the Company.
84
Corporate Governance Practices
Overall
The Company does not qualify as a “foreign private issuer” under U.S. securities
laws and is therefore not currently eligible to exempt itself from any of the Nasdaq listing rule requirements in a manner that other
non-U.S. issuers often do.
Composition of the New Silexion Board After the Business Combination
New Silexion’s business and affairs are managed under the direction of the New
Silexion Board. Under the terms of the Articles, the New Silexion Board may be composed of between three and nine directors, as may be
amended from time to time exclusively by ordinary resolution under Cayman Islands law, being a resolution passed by a simple majority
of the shareholders of New Silexion as, being entitled to do so, vote in person or by proxy at a general meeting (an “Ordinary
Resolution”). The size of the New Silexion Board was set by our shareholders as seven members effective upon the Closing.
Ilan Hadar serves as Chairman of the New Silexion Board. Subsequent to the Closing, Ilan Shiloah stepped down from the Board, citing competing
demands on his time, thereby leaving the current size of the Board as six members.
Pursuant to the Articles, New Silexion’s directors are appointed by an Ordinary
Resolution at an annual general meeting. Unless the Board resolves that the election of nominees of the Board (referred to as “Nominees”)
or of nominees of any shareholders entitled to present such nomination (referred to as “Alternate
Nominees”) will be determined by plurality vote, the Nominees or Alternate Nominees shall be appointed by Ordinary Resolution
at the annual general meeting at which they are proposed for election.
Officers
New Silexion’s Chief Executive Officer is responsible for the company’s day-to-day management.
The Chief Executive Officer is appointed by, and serves at the discretion of, the New Silexion Board, subject to his employment agreement.
All other executive officers are proposed for appointment by the Chief Executive Officer, subject to approval by the New Silexion Board,
and will be subject to the terms of any applicable employment or consulting agreements that Silexion may enter into with them.
Director Independence
Nasdaq listing standards require that a majority of the New Silexion Board be independent.
An “independent director” is defined generally as a person who has no disqualifying relationship with the Company described
under Nasdaq Listing Rule 5605(a)(2), as well as no other material relationship with the Company (either directly or as a partner, shareholder
or officer of an organization that has a relationship with the listed company) that would interfere with the exercise of independent judgment
in carrying out the responsibilities of a director. In making a determination of director independence, the New Silexion Board considers
the current and prior relationships that each director has with the Company and all other facts and circumstances the New Silexion Board
deems relevant in determining his or her independence, including the beneficial ownership of our securities by such director, and
the transactions described in the sub-section above titled “Related Party Transactions.”
The New Silexion Board has determined that each of Messrs. Dror J. Abramov, Ilan Levin,
Avner Lushi, Shlomo Noy, and Amon Peled, and Ms. Ruth Alon, meets the definition of “independent director” as defined in Nasdaq
listing standards. For purposes of SEC rules applicable to members of the audit committee and compensation committee, each of Messrs.
Abramov and Peled, and Ms. Alon, is deemed independent.
Board Committees
The New Silexion Board has established an audit committee, a compensation committee
and a nominating and corporate governance committee, each of which has the composition and the responsibilities described below. Each
of these committees operates under a written charter, approved by the New Silexion Board and effective upon the Closing, that satisfies
the applicable Nasdaq rules, copies of which are available on the investor relations portion of our website. Members will serve on these
committees until their resignation or until otherwise determined by the New Silexion Board. The New Silexion Board may establish other
committees as it deems necessary or appropriate from time to time.
Audit Committee
Our audit committee consists of Dror J. Abramov, Amnon Peled and Ruth Alon, with
Mr. Abramov serving as chair. Ilan Shiloah had served as the third member of the audit committee from the Closing until his resignation
from the New Silexion Board on September 16, 2024. Rule 10A-3 of the Exchange Act and the Nasdaq listing standards require
that our audit committee be composed entirely of independent members. The Nasdaq listing standards require that the audit committee be
composed of at least three members. With the resignation of Mr. Siloah from the New Silexion Board and its audit committee, we will have
until the earlier of our 2025 annual general meeting or one year after Mr. Shiloah’s resignation to restore the size of the audit
committee to three members. The New Silexion Board has determined that each of Messrs Abramov and Peled and Ms. Alon meets the definition
of “independent director” for purposes of serving on the audit committee under Rule 10A-3 of the Exchange Act
and the Nasdaq listing standards and also meets the financial literacy requirements of the Nasdaq listing standards. In addition, the
New Silexion Board has determined that Mr. Abramov qualifies as an “audit committee financial expert” within the meaning
of the SEC regulations.
85
The primary purpose of the audit committee is to discharge the responsibilities of the
New Silexion Board with respect to our corporate accounting and financial reporting processes, systems of internal control and financial
statement audits and to oversee our independent registered public accounting firm. The principal functions of the audit committee include,
among other things:
|
|
● |
helping the New Silexion Board oversee our corporate accounting and financial reporting processes;
|
|
|
● |
managing the selection, engagement, qualifications, independence, and performance of a qualified firm to
serve as the independent registered public accounting firm to audit our financial statements; |
|
|
● |
reviewing and discussing the scope and results of the audit with the independent registered public accounting
firm, and reviewing, with management and the independent accountants, our interim and year-end operating results; |
|
|
● |
obtaining and reviewing a report by the independent registered public accounting firm at least annually
that describes our internal quality control procedures, any material issues with such procedures and any steps taken to deal with such
issues when required by applicable law; |
|
|
● |
establishing procedures for employees to submit concerns anonymously about questionable accounting or audit
matters; |
|
|
● |
overseeing our policies on risk assessment and risk management; |
|
|
● |
overseeing compliance with our code of business conduct and ethics; |
|
|
● |
reviewing related person transactions; and |
|
|
● |
approving or, as required, pre-approving audit and permissible non-audit services to be performed
by the independent registered public accounting firm. |
Compensation Committee
Our compensation committee consists of Dror J. Abramov, Amon Peled and Ruth Alon. The
chair of the compensation committee will be chosen from among the committee’s members. The New Silexion Board has determined that
each of Messrs. Abramov and Peled and Ms. Alon meets the definition of “independent director” for purposes of serving
on the compensation committee under the Nasdaq listing standards, including the heightened independence standards for members of a compensation
committee.
The primary purpose of our compensation committee is to discharge the responsibilities
of the New Silexion Board in overseeing our compensation policies, plans and programs and to review and determine the compensation to
be paid to our executive officers, directors and other senior management, as appropriate. The principal functions of the compensation
committee include, among other things:
|
|
● |
reviewing, approving and determining, or making recommendations to the New Silexion Board regarding the
compensation of our chief executive officer, other executive officers and senior management; |
|
|
● |
reviewing, evaluating and recommending to the New Silexion Board succession plans for our executive officers;
|
|
|
● |
reviewing and recommending to the New Silexion Board the compensation paid to our non-employee directors;
|
|
|
● |
administering our equity incentive plans and other benefit programs; |
|
|
● |
reviewing, adopting, amending and terminating incentive compensation and equity plans, severance agreements,
profit sharing plans, bonus plans, change-of-control protections and any other compensatory arrangements for our executive officers
and other senior management; and |
|
|
● |
reviewing and establishing general policies relating to compensation and benefits of our employees, including
our overall compensation philosophy. |
86
Corporate Governance and Nominating Committee
We have appointed a corporate governance and nominating committee that currently consists
of Dror J. Abramov, Ilan Levin, Amnon Peled and Ruth Alon. The chair of the committee will be chosen from among the committee’s
members. The New Silexion Board has determined that each of Messrs. Abramov, Peled and Levin, and Ms. Alon, meets the definition of “independent
director” under the Nasdaq listing standards.
Our corporate governance and nominating committee is responsible for, among other things:
|
|
● |
identifying and evaluating candidates, including the nomination of incumbent directors for reelection and
nominees recommended by shareholders, to serve on the New Silexion Board; |
|
|
● |
considering and making recommendations to the New Silexion Board regarding the composition and chairmanship
of the committees of the New Silexion Board; |
|
|
● |
instituting plans or programs for the continuing education of the New Silexion Board and the orientation
of new directors; |
|
|
● |
developing and making recommendations to the New Silexion Board regarding corporate governance guidelines
and matters; |
|
|
● |
overseeing our corporate governance practices; |
|
|
● |
overseeing periodic evaluations of the New Silexion Board’s performance, including committees of
the New Silexion Board; and |
|
|
● |
contributing to succession planning. |
Compensation Committee Interlocks and Insider Participation
None of the members of Silexion’s compensation committee is currently, or has
been at any time, one of Silexion’s, Moringa’s or Silexion’s executive officers or employees. None of our executive
officers serves as a member of the board of directors or compensation committee (or other committee performing equivalent functions) of
any entity that had one or more executive officers serving on our board of directors or compensation committee during 2023.
Code of Business Conduct and Ethics
Prior to the completion of the Business Combination, we adopted a written code of business
conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial
officer, principal accounting officer or controller, or persons performing similar functions. A copy of the code is posted on the investor
relations portion of our website. In addition, we intend to post on our website all disclosures that are required by law or Nasdaq listing
standards concerning any amendments to, or waivers from, any provision of the code.
EXECUTIVE COMPENSATION
Silexion
Unless the context requires otherwise, references in this “Executive
Compensation” section to “we,” “our,” “us” and the “Company” generally refer to
our company on a consolidated basis, for all periods following the completion of the Business Combination (on August 15, 2024), and to
our wholly-owned subsidiary, Silexion Therapeutics Ltd., an Israeli company (“Silexion”), and its subsidiaries, for all periods
prior to the completion of the Business Combination.
Overview
The following tables and accompanying narrative set forth information about the compensation,
for 2024 and 2023, provided to our chief executive officer (or person serving in an equivalent position) and the two most highly compensated
executive officers (other than our chief executive officer) who were serving as executive officers as of December 31, 2024, each
of whom served as an executive officer of Silexion prior to the completion of the Business Combination. These executive officers consist
of: Ilan Hadar, who was Silexion’s Managing Director and now serves as New Silexion’s Chairman and Chief Executive Officer;
Mirit Horenshtein Hadar, who was Silexion’s EVP Finance and now serves as New Silexion’s Chief Financial Officer; and Dr. Mitchell
Shirvan, who was Silexion’s— and is now New Silexion’s— Chief Scientific and Development Officer. These executive
officers are referred to in this section as our “named executive officers” or “NEOs.”
87
This discussion may contain forward-looking statements that are based on our current
plans, considerations, expectations and determinations regarding future compensation programs, in the period immediately following the
Business Combination. Actual compensation programs that we adopt in the future may differ materially from the plans summarized in this
discussion.
Summary Compensation Table
The following table presents summary information regarding the total compensation for
services rendered in all capacities that was awarded to, earned by, or paid to our named executive officers for 2024.
|
Name and Principal Position |
|
Year |
|
Base Gross
Salary ($)(1) |
|
|
Stock Awards ($) |
|
|
All Other
Compensation ($)(1)(2) |
|
|
Total
($)(1) |
| ||||
|
Ilan Hadar Chief Executive Officer (formerly Managing Director of Silexion)(3) |
|
2024 |
|
|
240,560 |
|
|
|
1,192,785 |
|
|
|
107,283 |
|
|
|
1,540,628 |
|
|
|
2023 |
|
|
182,976 |
|
|
|
- |
|
|
|
70,638 |
|
|
|
253,614 |
| |
|
Mirit Horenshtein Hadar Chief Financial Officer (formerly EVP Finance of Silexion)(4) |
|
2024 |
|
|
233,532 |
|
|
|
447,291 |
|
|
|
89,267 |
|
|
|
770,090 |
|
|
|
|
2023 |
|
|
26,238 |
|
|
|
- |
|
|
|
- |
|
|
|
26,238 |
|
|
Dr. Mitchell Shirvan
Chief Scientific and Development Officer(5) |
|
2024 |
|
|
190,286 |
|
|
|
1,043,699 |
|
|
|
67,505 |
|
|
|
1,301,490 |
|
|
|
|
2023 |
|
|
156,140 |
|
|
|
- |
|
|
|
50,660 |
|
|
|
206,800 |
|
|
(1) |
Amounts reported for the named executive officer and paid in New Israeli Shekels are converted from New
Israeli Shekels to U.S. dollars using the 2024 and 2023 (as applicable) average exchange rates as published by Bank of Israel of
3.699 and 3.689 New Israeli Shekels, respectively, to 1 U.S. Dollar. |
|
(2) |
The amounts in this column include payments for a leased car or car maintenance, contributions to a pension
fund, compensation fund, and continuing education fund, or payments in lieu of a continuing education fund. |
|
(3) |
This was for a part-time (75%) position prior to, and a full-time position following, completion of
the Business Combination. |
|
(4) |
For 2023, Ms. Horenshtein Hadar’s compensation was for a period of 4.5 months during which she
served as a part-time consultant in a Strategy & Corporate Finance Advisory capacity. |
|
(5) |
This was for a part-time (80%) position prior to, and a full-time position following, completion of
the Business Combination. |
Narrative Disclosure to Summary Compensation Table
Base Salary
The named executive officers receive base salaries to compensate them for services rendered
to us. The base gross salary payable to each named executive officer is intended to provide a fixed component of compensation reflecting
the executive’s skill set, experience, role, and responsibilities. The annual base salaries for Ilan Hadar, Mirit Horenshtein Hadar
and Dr. Mitchell Shirvan, for 2024 and 2023 were $240,560 and $182,976 for Mr. Hadar, $233,532 and $26,238 for Ms. Horenshtein Hadar,
and $190,286 and $156,140 for Dr. Shirvan, respectively.
Equity Compensation
From time to time, we have granted equity
awards under the Silexion Therapeutics Ltd. 2013 Equity Incentive Plan, which was replaced by the Silexion Therapeutics Ltd. 2023 Equity
Incentive Plan (the “2013 Plan” and “2023 Plan”, respectively, collectively referred to as the “Silexion
Plans”), as incentives to attract, retain and motivate our named executive officers. During 2024, we granted restricted share units
(RSUs) that could be settled for 1,121, 420 and 981 ordinary shares of Silexion, to Ilan Hadar, Mirit Horenshtein Hadar, and Dr.
Mitchell Shirvan, respectively (each such number of Silexion ordinary shares does not reflect the exchange ratio in the Business Combination
or the subsequent reverse share split of New Silexion). The vesting of those RSUs accelerated upon the Closing of the Business Combination,
entitling each such officer to receive New Silexion ordinary shares in accordance with the exchange ratio upon the Closing.
During 2022, Silexion granted 956 and 478
options to purchase Silexion ordinary shares to Ilan Hadar and Dr. Mitchell Shirvan, respectively (each such number of options does
not reflect the equity exchange ratio in the Business Combination or the subsequent reverse share split of New Silexion). Vesting of those
options was to occur over a period of 48 months, provided that Ilan Hadar or Dr. Mitchell Shirvan, as applicable, remains engaged
by Silexion (or a Silexion affiliate), and is subject to the Silexion Plans. Upon consummation of an initial public offering of Silexion’s
securities or an M&A Transaction (as defined in Silexion’s articles of association), which included the Business Combination,
the vesting of those options was to accelerate, such that all unvested options were to immediately vest, provided that such IPO or M&A
Transaction was to be consummated after January 1, 2023. That acceleration of vesting occurred upon the Closing of the Business Combination
on August 15, 2024.
88
Employment Agreements
Following the Closing, Silexion has entered or will enter into employment agreements
with each of its NEOs.
Silexion 2013 Equity Incentive Plan and Silexion 2023 Equity Incentive
Plan
Silexion (and, following the Business Combination, New Silexion) has maintained the
Silexion Plans in order to provide additional incentives for employees, directors and consultants, and to provide incentives to attract,
retain and motivate eligible persons whose present and potential contributions are important to Silexion’s (and New Silexion’s)
success. The 2013 Plan was adopted on July 25, 2013 and was replaced by the 2023 Plan, which was adopted on April 4, 2023. For
a complete description of the 2013 Plan and the 2023 Plan, please see “Silexion Share Incentive
Plans” below.
The Silexion Plans provide for grants of options to purchase ordinary shares of Silexion
(following the Business Combination, New Silexion), shares, restricted shares and RSUs. As described above, during 2022, Silexion granted
option awards under the Silexion Plans to Ilan Hadar and Dr. Mitchell Shirvan and during 2024, Silexion granted RSUs to Ilan Hadar,
Mirit Horenshtein Hadar, and Dr. Mitchell Shirvan, respectively.
Immediately prior to the effective time of the Acquisition Merger, all outstanding Silexion
options and Silexion RSUs accelerated and became fully vested (and, in the case of RSUs, settled for underlying shares). At the effective
time of the Acquisition Merger, all Silexion options outstanding immediately prior to the Acquisition Merger automatically and without
any action on the part of any Silexion option holder or beneficiary thereof, were assumed by New Silexion, and each such Silexion option
was converted into an option to purchase New Silexion ordinary shares (based on the equity exchange ratio for Silexion under the Business
Combination Agreement).
In addition, immediately prior to the completion of the Business Combination, New Silexion
adopted the 2024 Equity Incentive Plan (described below), which provides for the grant of equity-based incentive awards to its employees,
directors, office holders, service providers and consultants in order to incentivize them to increase their efforts on behalf of New Silexion
and to promote the success of New Silexion’s business.
Outstanding Equity Awards at Fiscal Year-End
The following table provides information regarding equity awards held by Silexion’s
named executive officers that were outstanding as of December 31, 2024. The awards listed in this table were granted under the Silexion
Plans, which are summarized above under “— Narrative Disclosure to Summary Compensation
Table — Silexion 2013 Equity Incentive Plan and Silexion 2023 Equity Incentive Plan.”
|
|
Option awards
|
|||||||||||||||||||
|
Name |
Number of securities underlying
unexercised options (#) exercisable |
Number of securities underlying unexercised options (#) unexercisable |
Equity incentive plan awards: Number of securities underlying unexercised unearned options (#) |
Option exercise price ($) |
Option expiration date |
|||||||||||||||
|
Ilan Hadar Chief Executive Officer (formerly Managing Director of Silexion |
956 |
- |
- |
907.71 |
24/03/2032 |
|||||||||||||||
|
Mirit Horenshtein Hadar Chief Financial Officer (formerly EVP Finance of Silexion |
-- |
- |
- |
- |
- |
|||||||||||||||
|
Dr. Mitchell Shirvan Chief Scientific and Development Officer( |
478 |
- |
- |
907.71 |
07/06/2032 |
|||||||||||||||
89
Director Compensation
|
Name |
|
Fees earned or paid in cash ($) |
|
|
Stock awards ($) |
|
|
Option awards ($) |
|
|
All other compensation ($) |
|
|
Total ($) |
| |||||
|
Ilan Hadar |
|
See Summary Compensation Table above
|
See Summary Compensation Table above
|
See Summary Compensation Table above
|
See Summary Compensation Table above
|
See Summary Compensation Table above
|
| |||||||||||||
|
Dror Abramov |
|
|
- |
|
|
|
313,800 |
|
|
|
- |
|
|
|
- |
|
|
|
313,800 |
|
|
Ruth Alon |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Ilan Levin |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
45,000(1 |
) |
|
|
45,000 |
|
|
Avner Lushi |
|
|
- |
|
|
|
313,800 |
|
|
|
- |
|
|
|
- |
|
|
|
313,800 |
|
|
Shlomo Noy |
|
|
- |
|
|
|
313,800 |
|
|
|
- |
|
|
|
- |
|
|
|
313,800 |
|
|
Amnon Peled |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Ilan Shiloah (former director) |
|
|
- |
|
|
|
313,800 |
|
|
|
- |
|
|
|
- |
|
|
|
313,800 |
|
(1) Represents a consulting fee at a rate of $10,000 per month payable to Ilan Levin, as provided for under
the Business Combination Agreement, as amended, for the four and one-half months following the Closing of the Business Combination through
the end of 2024.
In the year ended December 31, 2024, other
than the monthly consulting fees paid to Mr. Levin following the Closing of the Business Combination, as reflected in the “Director
Compensation” table, we did not pay any cash fees to, but we did grant equity awards, consisting of 1,472 RSUs that could be
settled for New Silexion ordinary shares (such number of RSUs reflects the one-for-nine reverse share split of New Silexion), all of which
became fully vested at the Closing, to each non-employee member of our board of directors for his or her service as a director.
New Silexion Executive Compensation
Following the Closing, we are developing an executive compensation program that is designed
to align compensation with our business objectives and the creation of shareholder value, while enabling us to attract, retain, incentivize
and reward individuals who contribute to the long-term success of New Silexion. Decisions regarding the executive compensation program
will be made by our compensation committee.
New Silexion Equity Compensation
It is anticipated that equity-based
compensation will continue to be an important element of executive compensation following the consummation of the Business Combination
in order to maintain a strong link between executive incentives and the creation of shareholder value. Upon the consummation of the Business
Combination, we granted 5,242 RSUs, in the aggregate, to directors of New Silexion and employees of New Silexion and its subsidiaries
(of which 1,472 RSUs were granted to New Silexion directors) as a means of incentivizing them and aligning their interests with those
of the shareholders of the Company. We furthermore expect that the additional 4,264 New Silexion ordinary shares that will be available
under the 2024 Equity Incentive Plan (as referenced below) following the consummation of the Business Combination will be an important
element of the new compensation arrangements for New Silexion.
The foregoing description of the 2013 Plan is qualified in its entirety by the full
text of the 2013 Plan, which is attached as Exhibit 10.14 to this registration statement and is incorporated herein by reference.
Silexion Share Incentive Plans
2013 Share Option Plan
Shares Reserved under the 2013 Share Option Plan.
The total number of authorized but unissued Silexion ordinary shares currently remaining available for issuance under the 2013 Plan is
1,588 (which number reflects the exchange ratio in the Business Combination, as well as New Silexion’s 1-for-9 reverse share
split in November 2024 and 1-for-15 reverse share split in July 2025). Upon the termination of the 2013 Plan, any unissued New Silexion
ordinary shares available under the 2013 Plan ceased to be reserved for the purpose of the 2013 Plan, other than New Silexion ordinary
shares underlying then-outstanding options under the 2013 Plan.
Administration. Our board
of directors, or a duly authorized compensation committee of the board of directors, has the power to administer the 2013 Plan. Subject
to applicable laws and the relevant provisions of the 2013 Plan, any member of the designated committee is eligible to receive options
under the 2013 Plan. The committee has the authority, subject to applicable law and our articles of association, to interpret the terms
of the 2013 Plan and any option agreements granted thereunder, designate participants in the 2013 Plan, determine and amend the terms
of respective option agreements, including the exercise price of an option, the fair market value of the New Silexion ordinary shares,
the time and vesting schedule applicable to the option, accelerate or amend the vesting schedule applicable to an option, prescribe the
forms of option agreement for use under the 2013 Plan and take all other actions and make all other determinations necessary for the administration
of the 2013 Plan.
Eligibility. The 2013
Plan provides for granting options under various tax regimes, including, without limitation, in compliance with Section 102 or Section 3(i) of
the Israeli Tax Ordinance (the “Ordinance”), and for awards granted to Silexion’s
United States employees or service providers, including those who are deemed to be residents of the United States for tax purposes,
Section 422 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”)
and Section 409A of the Code.
90
Options. All options
granted pursuant to the 2013 Plan are evidenced by an option agreement, in a form approved, from time to time, by the committee in its
sole discretion. The option agreement sets forth the terms and conditions of the number of shares to which the option relates and the
type of option granted thereunder, the purchase price per share and the vesting schedule to which such option shall become exercisable.
Unless otherwise determined by the committee or the board of directors and as stated
in the option agreement, and subject to the conditions of the 2013 Plan, options become exercisable under the following schedule: 25%
of the shares covered by the option on the first anniversary of the date on which such option was granted and 12.5% of the shares covered
by the option at the end of each subsequent six-month period during the second, third and fourth years from the date of grant,
with the committee and/or board of directors reserving the exclusive authority to accelerate the periods for exercising an option.
Each option shall expire 10 years from the date of the grant thereof, or five years
with respect to an incentive stock option unless a shorter term of expiration is otherwise designated by the committee.
Grants. The 2013 Plan
provides for the grant of options (including incentive stock options and nonqualified stock options).
Options granted under the 2013 Plan to Silexion employees who are U.S. residents
may qualify as “incentive stock options” within the meaning of Section 422 of the Code, or may be non-qualified stock
options. The exercise price of an option may not be less than the par value of the shares (if the shares bear a par value) for which such
option is exercisable. The exercise price of an Incentive Stock Option may not be less than 100% of the fair market value of the underlying
share on the date of grant or such other amount as may be required pursuant to the Code, and in the case of Incentive Stock Options granted
to ten percent (10%) shareholders, not less than 110%.
Exercise. An option under
the 2013 Plan may be exercised by providing us with a written notice of exercise and full payment of the exercise price for such shares
underlying the award, if applicable, in such form and method as may be determined by the committee and the trustee and permitted by applicable
law.
Transferability. No option
shall be assignable, transferable or given as collateral or any right with respect to them given to any third party whatsoever, and during
the lifetime of the option-holder each and all of such option-holder’s rights to purchase New Silexion ordinary shares thereunder
shall be exercisable only by the option-holder.
Termination of Employment. An
option may be exercised after the date of termination of option-holder’s service or employment with Silexion or any of its affiliates
or termination of an affiliate’s status as such only with respect to the number of options already vested and unexpired at the time
of such termination according to the vesting and expiration periods of the options set forth in the 2013 Plan, or under a different period
prescribed by the committee or by the board of directors and specified in relevant option agreement, provided however, that (i) such
termination is without cause, in which case the options shall be exercisable within not more than 90 days from the effective date
of such termination, or (ii) such termination is the result of death or disability of the option-holder, in which case the options
shall be exercisable within 12 months, and in the event of death, the option shall be exercisable by the option-holder’s estate,
all in accordance the 2013 Plan. If termination of employment or service is for cause, any outstanding unexercised option (whether vested
or non-vested), will immediately expire and terminate, and the option-holder shall not have any right in connection to such outstanding
options.
Voting Rights. Option-holders shall
not have any of the rights or privileges of shareholders of New Silexion in respect of any New Silexion ordinary shares purchasable upon
the exercise of any part of an option unless and until, following exercise in accordance with the terms of the 2013 Plan and the option,
registration of the option-holder as holder of such New Silexion ordinary shares in New Silexion’s register of members, but
in case of options and New Silexion ordinary shares held by the trustee, subject to the provisions of the 2013 Plan.
Dividends. With respect
to all New Silexion ordinary shares (in contrast to options not exercised for New Silexion ordinary shares) issued upon the exercise of
options purchased by an option holder, the option holder, as a shareholder of New Silexion shall be entitled to receive dividends in accordance
with the quantity of such New Silexion ordinary shares and the amended and restated memorandum and articles of association of New Silexion,
and subject to any applicable taxation on distribution of dividends.
Transactions. If the
outstanding shares of New Silexion shall at any time be changed or exchanged by declaration of a dividend, split, share subdivision, combination
or exchange of shares, recapitalization, or any other like event of New Silexion, then in such event only and as often as the same shall
occur, the number, class and kind of New Silexion ordinary shares (including New Silexion ordinary shares issuable pursuant to the 2013
Plan, in respect of which options have not yet been exercised) subject to the 2013 Plan or subject to any options granted thereunder,
and the purchase prices of the options, shall be appropriately and equitably adjusted so as to maintain the proportionate number of New
Silexion ordinary shares without changing the aggregate purchase price of the options.
In the event of a merger or consolidation of New Silexion or a sale of all, or substantially
all, of our shares or assets or other transaction having a similar effect on New Silexion, or change in the composition of the board of
directors, or such other transaction or circumstances that the New Silexion Board determines to be a relevant transaction, the merger
agreement will provide for one or more of the following, without the consent of the option-holder: (i) any outstanding option will
be assumed or substituted by the successor corporation; (ii) the cancellation of such options and a payment to the option-holder,
as provided in the 2013 Plan; and (iii) the full exercisability of the option and full vesting of the New Silexion ordinary shares
subject to the option, followed by the cancellation of the option.
The foregoing description of the
2013 Plan is qualified in its entirety by the full text of the 2013 Plan, which is attached as Exhibit 10.11 to the registration statement
of which this prospectus forms a part and is incorporated herein by reference.
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2023 Equity Incentive Plan
The 2023 Equity Incentive (the “2023 Plan”)
was adopted by our board of directors in 2023. The purpose of the 2023 Plan is to provide equity-based incentive awards in order
to link the compensation and benefits of the individuals and entities providing services to Silexion or its affiliates with the success
of Silexion and long-term shareholder value. The 2023 Plan enabled Silexion to grant options to purchase ordinary shares of Silexion
(currently, following the Business Combination, New Silexion ordinary shares), restricted shares and restricted share units, all of which
are referred to as “awards”.
Shares Available
for Grants. The total number of shares available for issuance under the 2023 Plan was determined from time
to time by our board of directors, subject to certain adjustments as described in the 2023 Plan. If any shares subject to awards under
the 2023 Plan expires or otherwise terminates in accordance with the terms thereunder, such shares shall become available for future grants
thereunder. No shares are currently available for issuance under the 2023 Plan.
Administration. our board
of directors (currently, following the Business Combination, the board of directors of New Silexion), or a duly authorized committee of
its board of directors (the “Administrator”), is authorized to administer the
2023 Plan. Under the 2023 Plan, the Administrator has the authority, subject to applicable law, to interpret the terms of the 2023 Plan
and any award agreements or awards granted thereunder, designate recipients of awards, determine and amend the terms of awards, including
the number of awards granted, the exercise price of an award, the time and vesting schedule applicable to an award or the method of payment
for an award, accelerate or amend the vesting schedule applicable to an award, prescribe the forms of agreement for use under the 2023
Plan and take all other actions and make all other determinations necessary for the administration of the 2023 Plan.
The Administrator also has the authority to determine the circumstances under which
awards may be settled, cancelled, forfeited, exchanged, or surrendered under and in accordance with the 2023 Plan of any or all awards
or shares, and the authority to prescribe, amend and rescind rules and regulations relating to the 2023 Plan, including the form of award
agreements and rules governing the grant of awards in jurisdictions in which Silexion or any affiliate operate, or to terminate the 2023
Plan at any time before the date of expiration of its ten-year term, provided that such termination shall not materially affect the
rights of grantees, to whom awards have already been granted.
Eligibility. The 2023
Plan provides for granting awards under the Israeli tax regime, including compliance with Section 102 or Section 3(i) of
the Ordinance.
Grants. All awards granted
pursuant to the 2023 Plan are evidenced by an award letter, in a form approved, from time to time, by the administrator in its sole discretion.
The award letter sets forth the terms and conditions of the award, including the type of award, number of shares subject to such award,
vesting schedule and conditions (including performance goals or measures) and the exercise price, if applicable.
Unless otherwise determined by the Administrator and stated in the award letter, and
subject to the conditions of the 2023 Plan, awards vest and become exercisable under the following schedule: 25% of the shares covered
by the award on the first anniversary of the vesting commencement date determined by the Administrator (and in the absence of such determination,
the date on which such award was granted) and the remaining 75% of the award shall vest (equally) on a quarterly basis, over 12 quarters
as of the commencement date’s first annual anniversary; provided that the grantee remains continuously as an employee or provides
services to Silexion throughout such vesting dates.
Each award will expire ten years from the date of the grant thereof, unless a shorter
term of expiration is otherwise designated by the Administrator.
Awards. The 2023 Plan
provides for the grant of options, shares, restricted shares, RSUs, and other share-based awards.
Exercise. An award under
the 2023 Plan may be exercised by providing Silexion (currently, New Silexion) a written notice of exercise and full payment of the exercise
price for such shares underlying the award, if applicable, in such form and method as may be determined by the Administrator and permitted
by applicable law. The 2023 Plan allows for a net exercise of awards (as may be included in the award letter or otherwise approved by
the Administrator). An award may not be exercised for a fraction of a share.
Transferability. No person
other than the grantee shall have any right with respect to any award granted under the 2023 Plan. No transfer of any right to any award
or its underlying shares, by will or by the laws of descent, shall effectively bind Silexion (currently, New Silexion) unless and until
furnished with the certain signed and notarized documents, as described in the 2023 Plan.
Termination of Engagement. In
the event of termination of a grantee’s employment or service with Silexion or any of its affiliates, for any reason other than
death, retirement, disability or cause, any vested and unexercised awards held by such grantee as of the date of termination may be exercised
within 90-days after such date of termination, unless otherwise determined by the Administrator, but in no event later than the date
of expiration of the award as set forth in the award letter. After such 90-days period, all such unexercised awards will terminate
and the shares covered by such awards become available for issuance under the 2023 Plan.
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In the event of termination of a grantee’s employment or service with Silexion
or any of its affiliates due to such grantee’s death, retirement or permanent disability, any vested but unexercised awards shall
be exercisable (a) in the case of death, by such grantee’s estate, personal representative or beneficiary, or (b) in the
case of retirement or Disability, by such grantee or his/her personal representative (as the case may be), until the earlier of (i) 180 days
following the date of termination for any such reason; or (ii) the date of expiration of each such as set forth in the award letter.
All such grantee’s other awards shall expire upon the date of such termination.
Notwithstanding any of the foregoing, if a grantee’s employment or services with
Silexion or any of its affiliates is terminated for “cause” (as defined in the 2023 Plan), all outstanding awards held by
such grantee (whether vested or unvested) shall expire. With respect to any and all shares owned by such grantee pursuant to the exercise
of any and all awards granted under the 2023 Plan, the board of directors of Silexion may convert such shares into deferred shares of
Silexion.
Voting Rights. Until
consummation of our initial public offering (or equivalent transaction, such as the Business Combination), shares underlying awards held
by grantees or the trustee, as applicable, were to be voted by an irrevocable proxy assigned to a person appointed by the board of directors.
Dividends. Grantees holding
shares issuable or issued upon exercise of awards granted under the 2023 Plan will, as a shareholder of New Silexion, be entitled to receive
dividends and other distributions with respect to the underlying shares.
Transactions. In the
event of any division or subdivision of Silexion’s (currently, New Silexion’s) issued and outstanding share capital, any distribution
of bonus shares (share split or subdivision), consolidation or combination of the share capital (reverse share split), reclassification
of the shares or any similar recapitalization event, as well as any reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of the shares or other securities of Silexion (currently, New Silexion), or any other change in Silexion’s
(currently, New Silexion’s) corporate structure affecting the shares, the administrator may, in order to prevent diminution or enlargement
of the benefits or potential benefits intended to be made available under the 2023 Plan, adjust (A) the number and class of shares
that may be issued under the 2023 Plan; (B) the number, class, and exercise price of underlying shares for each outstanding award;
(C) any other term of the awards that in the administrator’s opinion should be adjusted (including those concerning the vesting,
exercisability and term of outstanding awards); provided, that no adjustment shall be made by reason of the distribution of subscription
rights (rights offering) on outstanding shares.
Upon any such adjustment, references herein to shares and underlying shares shall be
construed to mean those shares of Silexion (currently, New Silexion) subject to the 2023 Plan as determined by the Administrator following
such adjustment. Any fractional shares resulting from such adjustment shall be rounded down to the nearest whole number of share and Silexion
(currently, New Silexion) shall have no obligation to make any cash or other payment with respect to such fractional shares. The adjustments
shall be made by the Administrator. If the applicable awards or underlying shares are deposited with a trustee, all of the shares formed
by such adjustments shall also be deposited with the trustee on the same terms as such awards or underlying shares.
In the event of a merger, reorganization or consolidation of Silexion (currently, New
Silexion) with or into another incorporated entity, or its acquisition by another incorporated entity by means of any transaction or series
of related transactions, except any such merger, reorganization or consolidation in which the issued shares of Silexion (currently, New
Silexion) as of immediately prior to such transaction continue to represent, or are converted into or exchanged for shares that represent,
immediately following such merger, reorganization, or consolidation, at least a majority, by voting power, of the outstanding shares of
the surviving or acquiring incorporated entity; or a sale of all, or substantially all, of our shares or assets or other transaction having
a similar effect on our company, or change in the composition of the board of directors, or liquidation or dissolution, or such other
transaction or circumstances that our board of directors determines to be a relevant transaction, then without the consent of the grantee,
(i) unless otherwise determined by the Administrator, any outstanding award will be assumed or substituted by such successor corporation
or substituted by our company or by any affiliate of the successor corporation, as determined by the Administrator, and (ii) regardless
of whether or not the award is assumed or substituted, the Administrator may:
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entitle a grantee to exercise an award, or to otherwise provide for the acceleration of such award’s
vesting schedule, as to all or part of its underlying shares, including with respect to awards that would not otherwise be exercisable
or vested, under such terms and conditions as the Administrator shall determine, including the cancellation of all unexercised awards
upon or immediately prior to the closing of a transaction or as of such other date (the “Cut-Off Date”),
and/or the termination of all awards (whether vested but un-exercised or un-vested) as of the relevant Cut-Off Date, as of which
they shall no longer be exercisable by the applicable grantees; and/or |
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provide for the cancellation of outstanding awards at or immediately prior to the closing of a transaction,
and payment to the applicable grantee of a consideration determined by the Administrator to be fair in the circumstances (whether in shares,
cash, other securities, property, or any combination thereof), taking into account the value of each underlying share of any such award’s
vested portion as reflected by the terms of such transaction, and the exercise price of each such underlying share, and subject to such
terms and conditions as determined by the Administrator. |
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The Administrator shall have full authority to select the method for determining
the payment to the grantees, as well as to set such payment to zero, with respect to underlying shares valued at less than their exercise
price or to those of awards that would not otherwise be exercisable or vested, or to determine that such payment be made only in excess
of the exercise price.
The foregoing description of the 2023 Plan is qualified in its entirety by the full
text of the 2023 Plan, which is attached as Exhibit 10.13 to this registration statement and is incorporated herein by reference.
New Silexion Share Incentive Plans
2024 Equity Incentive Plan
Pursuant to written resolutions adopted by our board of directors and shareholders prior
to the Closing of the Business Combination, we have approved and adopted the 2024 Equity Incentive Plan (the “2024
Plan”), which became effective immediately upon the Closing.
Upon the Closing, a total of 4,264
New Silexion ordinary shares were reserved for issuance under the terms of the 2024 Plan, which, together with New Silexion ordinary shares
allocated for issuance under the existing 2013 Plan and 2023 Plan, equaled 10% of the total number of New Silexion ordinary shares on
a fully diluted basis immediately following the Closing. A summary of the other material terms of the 2024 Incentive Plan is provided
below:
Administration
The compensation committee of our board of directors is the administrator of the 2024
Plan. Except as provided otherwise under the 2024 Plan, the administrator has plenary authority to grant awards pursuant to the terms
of the 2024 Plan to eligible individuals, determine the types of awards and the number of shares covered by the awards, establish the
terms and conditions for awards and take all other actions necessary or desirable to carry out the purpose and intent of the 2024 Plan.
Eligibility and Participation
The administrator selects the individuals who participate in the 2024 Plan. Eligibility
to participate is open to officers, directors and employees of, and other individuals who provide bona fide services to or for, us or
any of our subsidiaries. Our board of directors may also select as participants prospective officers, employees and individual service
providers who have accepted an offer of employment or another service relationship from us or one of our subsidiaries. Any awards granted
to such a prospect before the individual’s start date may not become vested or exercisable, and no shares may be issued to such
individual, before the date the individual first commences performance of services with us.
Share Pool Under the 2024 Plan
The initial number of New Silexion
ordinary shares allocated to the 2024 Plan was 4,264. The number of New Silexion ordinary shares available under the 2024 Plan (the “Share
Pool”) is subject to the following annual allocations and adjustments:
The Share Pool will be increased
automatically on January 1 of each calendar year, beginning on January 1, 2025 and for each of the subsequent nine calendar years, through
(and including) January 1, 2034, in an amount equal to the lesser of (i) 5% of the number of New Silexion ordinary shares issued and outstanding
as of that January 1 date, or (ii) an amount determined by our board of directors prior to such date. Pursuant to that annual increase,
the Share Pool increased by 6,164 ordinary shares on January 1, 2025.
The following additional rules apply to the number of New Silexion ordinary shares available
under the Share Pool on an ongoing basis:
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The Share Pool will be reduced by one share for each
share issued pursuant to an award granted under the 2024 Plan; |
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The Share Pool will be increased by the number of unissued shares underlying or used as a reference measure
for any award or portion of an award granted under the 2024 Plan that is cancelled, forfeited, expired, terminated unearned or settled
in cash, in any such case without the issuance of shares; |
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The Share Pool will be increased by the number of shares that are forfeited back or surrendered for no
consideration to us after issuance due to a failure to meet an award contingency or condition with respect to any award or portion of
an award granted under the 2024 Plan; |
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The Share Pool shall be increased, on the exercise date, by the number of shares withheld by or surrendered
(either actually or through attestation) to the Company in payment of the exercise price of any award granted under the 2024 Plan; and
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The Share Pool shall be increased, on the relevant date, by the number of shares withheld by or surrendered
(either actually or through attestation) to the Company in payment of any tax withholding obligation that arises in connection with any
award granted under the 2024 Plan. |
In the event of a merger, consolidation, share rights offering, statutory share exchange
or similar event affecting the Company or a share dividend, share split, reverse share split, separation, spinoff, reorganization, extraordinary
dividend of cash or other property, share combination or subdivision, or recapitalization or similar event affecting the capital structure
of the Company, our board of directors will make equitable and appropriate substitutions or proportionate adjustments to the Share Pool
to reflect the transaction or event. Similar adjustments will be made to the award limitations described below and to the terms of outstanding
awards.
ISO Award Limit
The maximum number of New Silexion ordinary
shares that may be issued in connection with awards granted under the 2024 Plan that are intended to qualify as incentive stock options
under Section 422 of the Code is 95,219.
Types of Awards
General. The 2024 Plan enables the grant of
share awards, performance shares, restricted share units, cash-based performance units, other share-based awards, share options, share
appreciation rights, and share unit awards, each of which may be granted separately or in tandem with other awards. The administrator
may establish sub-plans under the 2024 Plan under which awards that qualify for preferred tax treatment for recipients in jurisdictions
outside the U.S. may be granted.
We have adopted a sub-plan for Israeli participants, which provides for granting awards
in compliance with Section 102 (“Section 102”) and Section 3(i) of the Israeli Income
Tax Ordinance (New Version), 5721-1961, as amended (the “ITO”). Section 102 allows
employees, directors and officers who are not controlling shareholders and who are considered Israeli residents for tax purposes to receive
favorable tax treatment for compensation in the form of shares, options or certain other types of equity awards, subject to certain terms
and conditions. Our non-employee service providers and controlling shareholders who are considered Israeli residents for tax purposes
may be granted awards under Section 3(i) of the ITO, which do not provide for similar tax benefits as Section 102.
Out of the three tax tracks that are available under Section 102 ((i) the “ordinary
income track” with a trustee, (ii) the “capital gains track” with a trustee and (iii) grants without a trustee and without
a trust period), we have elected the “capital gain track” for grants to eligible Israeli grantees as provided above, which
may allow favorable tax treatment for such grantees.
Adjustments to Awards for Corporate Transactions and Other Events
Mandatory Adjustments.
In the event of a merger, amalgamation, consolidation, share rights offering, share
exchange or similar event affecting the Company (a “Corporate Event”) or a share dividend,
share split, reverse share split, separation, spinoff, reorganization, extraordinary dividend of cash or other property, share combination
or subdivision, or recapitalization, capital reduction distribution or similar event affecting the capital structure of the Company, the
administrator will make equitable and appropriate substitutions or proportionate adjustments to:
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the aggregate number and kind of shares or other securities that may be granted to eligible individuals
under the 2024 Plan; |
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the maximum number of shares or other securities that may be issued with respect to incentive share options
granted under the 2024 Plan; |
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the number of shares or other securities covered by each outstanding award and the exercise price, base
price or other price per share, if any, and other relevant terms of each outstanding award; and |
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all other numerical limitations relating to awards, whether contained in the 2024 Plan or in award agreements.
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Notwithstanding the foregoing, any fractional shares resulting from the above mandatory
adjustments will be eliminated.
Discretionary Adjustments.
In addition to the adjustments specified above, in the case of Corporate Events, the
administrator may make such other adjustments to outstanding awards as it determines to be appropriate and desirable, which adjustments
may include, without limitation, (i) the cancellation of outstanding awards in exchange for payments of cash, securities or other property
or a combination thereof having an aggregate value equal to the value of such awards, (ii) the substitution of securities or other property
(including, without limitation, cash or other securities of the Company and securities of entities other than the Company) for the shares
subject to outstanding awards, and (iii) the substitution of equivalent awards, as determined in the sole discretion of the administrator,
of the surviving or successor entity or a parent thereof. The administrator may, in its discretion, adjust the performance goals applicable
to any awards to reflect any unusual or non-recurring events and other extraordinary items, impact of charges for restructurings, discontinued
operations and the cumulative effects of accounting or tax changes.
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Repricing.
The administrator may reprice any share options or share appreciation rights without
the approval of the shareholders of the Company. For this purpose, “reprice” means (i) any of the following or any other action
that has the same effect: (A) lowering the exercise price or base price of an option or share appreciation right after it is granted other
than an adjustment made pursuant to the provisions of the 2024 Plan, (B) any other action that is treated as a repricing under applicable
accounting principles; (C) cancelling a share option or share appreciation right at a time when its exercise price or base price exceeds
the fair market value of the underlying share, in exchange for another share option, share appreciation right, restricted share or other
equity, unless the cancellation and exchange occurs in connection with a merger, acquisition, spin-off or other similar corporate transaction;
and (ii) any other action that is considered to be a repricing under formal or informal guidance issued by the primary securities market
or exchange on which the shares are listed or admitted for trading.
Treatment of Awards upon Dissolution or Liquidation or a Change in Control
Dissolution or Liquidation.
Unless the administrator determines otherwise, all awards outstanding under the 2024
Plan will terminate upon the winding up, liquidation or dissolution of the Company.
Amendment and Termination
Our board of directors or the compensation committee may terminate, amend or modify
the 2024 Plan or any portion of it at any time; provided, that, (i) if required to comply with Cayman Islands law and any other applicable
laws or marketplace or listing rules of a securities market or securities exchange (other than any requirement from which the Company
may opt out based on any available home country exemption), the Company shall obtain shareholder approval of any 2024 Plan amendment in
such a manner and to such a degree as required, and (ii) no such termination or amendment may materially impair the rights of a participant
with respect to a previously granted award (other than as required to comply with applicable law or the rules of any securities exchange
or market on which the shares are listed or to prevent adverse tax or accounting consequences to the Company or the participant) without
such participant’s consent.
The 2024 Plan is scheduled to expire on August 14, 2034, which is ten years after the
effective date of its adoption by our board of directors. After that time, no further grants may be made under the 2024 Plan, but any
then-outstanding grants will remain subject to the terms of the plan.
The foregoing description of the 2024 Incentive Plan is qualified in its entirety by
the full text of the 2024 Incentive Plan, which is attached to the registration statement of which this prospectus forms a part as Exhibit
10.12 and incorporated herein by reference.
Rule 10b5-1 Sales Plans
Our directors and executive officers may adopt written plans, known as Rule 10b5-1 plans,
in which they will contract with a broker to buy or sell ordinary shares on a periodic basis. Under a Rule 10b5-1 plan, a broker executes
trades pursuant to parameters established by the director or executive officer when entering into the plan, without further direction
from them. The director or executive officer may amend a Rule 10b5-1 plan in some circumstances and may terminate a plan at any time.
Our directors and executive officers also may buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession
of material nonpublic information, subject to compliance with the terms of our insider trading policy.
Emerging Growth Company Status
We are an “emerging growth company,” as defined in the JOBS Act. As an emerging
growth company, it is exempt from certain requirements related to executive compensation, including the requirements to hold a nonbinding
advisory vote on executive compensation and to provide information relating to the ratio of total compensation of its chief executive
officer to the median of the annual total compensation of all of its employees, each as required by the Investor Protection and Securities
Reform Act of 2010, which is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
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CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Other than the compensation arrangements for our directors and executive officers, which
are described in the section titled “Executive Compensation”, below is a description of transactions since our formation on
April 2, 2024 to which we have been a party, in which:
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the amounts involved exceeded or will exceed $120,000; and |
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any of our directors, executive officers or holders of more than 5% of our share capital, or any member
of the immediate family of, or person sharing the household with, the foregoing persons, had or will have a direct or indirect material
interest. |
Related Party Transactions
Arrangements with Executive Officers
Ilan Hadar serves as our Chief
Executive Officer and Chairman of our Board. Mr. Hadar’s employment agreement with us, as to be amended in the period following
the Closing of the Business Combination, subject to corporate approvals, will provide for him to receive an annual base salary of $357,820
(based on the average exchange rate for 2023, as published by the Bank of Israel), customary disbursements toward his providence fund,
further education fund and severance pay fund, and other fringe benefits commensurate with such position. During 2022, Silexion granted
Mr. Hadar 956 options to purchase New Silexion ordinary shares, vesting over a period of 48 months, provided that Mr. Hadar remains engaged
by us (or a Silexion affiliate) at the end of each vesting period and subject to the Silexion Plan. Upon completion of the Business Combination,
the vesting of all such options is expected to accelerate, such that all unvested options shall become fully vested at that time.
Mirit Horenshtein Hadar, our Executive VP of Finance, Chief Financial Officer and Secretary,
is Mr. Hadar’s spouse. Ms. Horenshtein Hadar’s employment agreement with us provides for her to receive an annual base salary
of $234,210 (based on the average exchange rate for 2023, as published by the Bank of Israel), as well as customary disbursements toward
her providence fund, further education fund and severance pay fund, and other fringe benefits commensurate with such position.
Indemnification Agreements
On the date of, and in connection with, the Closing of the Business Combination, the
Company entered into indemnification agreements with each of its directors and executive officers, which provide for indemnification and
advancements by the Company of certain expenses and costs under certain circumstances. The indemnification agreements provide that we
will indemnify each of its directors and executive officers against any and all expenses incurred by that director or executive officer
because of his or her status as a director or officer of New Silexion, to the fullest extent permitted under Cayman law and the Articles.
The foregoing description of the indemnification agreements does not purport to be complete
and is qualified in its entirety by reference to the text of the form of indemnification agreement that is filed as Exhibit 10.6 to the
registration statement of which this prospectus forms a part, which is incorporated herein by reference.
Conversion Transaction with GIBF
Immediately following the Closing
of the Business Combination, Guangzhou Sino-Israel Bio-Industry Investment Fund I (“GIBF”) beneficially owned 20.3% of our
issued and outstanding share capital. GIBF had held the remaining 49% of the issued and outstanding share capital of our 51%-held Chinese
subsidiary, Silenseed (China) Ltd. (which 49% interest had been received by it in return for its equity investments in the Chinese subsidiary,
rather than equity investments directly in us). In connection with the consummation of the Business Combination, GIBF was to exchange
its entire holdings in the Chinese subsidiary for preferred shares of Silexion according to the terms set out in the contract for the
establishment of the Chinese subsidiary, dated August 30, 2021, as amended, which preferred shares were to be automatically converted
into 13,599 New Silexion ordinary shares in accordance with the equity exchange ratio for our shareholders’ exchange of shares of
Silexion for our shares under the Business Combination Agreement.
However, in order to simplify the transfer
of GIBF’s 49% interest in our Chinese subsidiary to our company, in lieu of transferring that interest to Silexion, GIBF instead
transferred the interest directly to New Silexion pursuant to an Agreement on Arrangements Related to Equity Interest Conversion, dated
as of August 5, 2024 (the “GIBF Conversion Agreement”). As consideration for its transfer of that 49% interest to us, GIBF
received 13,599 New Silexion ordinary shares at the Closing. GIBF furthermore received an additional 1,122 of our ordinary shares upon
consummation of the Business Combination due to the conversion of our shares that were issued to it upon settlement of RSUs of Silexion
that were subject to accelerated vesting at the Closing. Those RSUs were granted to GIBF subject to GIBF’s providing certain services
to us in connection with the transfer of funds from our Chinese subsidiary to us. Avner Lushi and Shlomo Noy, both of whom serve as our
directors since the Closing, share voting and investment power over the 14,721 of our ordinary shares beneficially owned by GIBF after
the Closing.
PIPE Financing
In connection with, and immediately
prior to the Closing of, the Business Combination, Moringa raised $2.0 million via a private investment in public entity financing (the
“PIPE Financing”), whereby Moringa sold to Greenstar, LP (the “PIPE Investor”), a Cayman Islands exempted limited
partnership and affiliate of the Moringa Sponsor, 1,482 newly issued Moringa ordinary shares (the “PIPE Shares”) at a price
of $1,350.00 per share, pursuant to the PIPE Agreement, dated as of August 15, 2024, by and among Moringa, us and the PIPE Investor. Those
1,482 shares automatically converted upon the Closing of the Business Combination into an equivalent number of our ordinary shares, or
the PIPE Shares. The PIPE Investor is entitled to customary registration rights in respect of the PIPE Shares under the PIPE Agreement,
pursuant to which we agreed that, within 60 days after the Closing Date, we would file with the SEC a registration statement registering
the resale of the PIPE Shares by the PIPE Investor, and use our commercially reasonable efforts to have that registration statement be
declared effective by 180 days after the Closing Date (or 90 days after the Closing Date if the SEC were not to review that filing).
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The funds raised from the PIPE Financing, together with remaining funds in Moringa’s
trust account after payments to redeeming public shareholders of Moringa, were used for financing support for Moringa and New Silexion,
as well as for payment to service providers to whom outstanding amounts were owed by Moringa, including parties that had provided financial
advisory services and capital markets advisory services to Moringa during the period leading up to the Closing.
Amended and Restated Sponsor Promissory Note
Effective as of the Closing, we issued to the Sponsor, and Sponsor accepted, in amendment
and restatement, and replacement, in their entirety, of all existing promissory notes issued by Moringa to the Sponsor from the IPO until
the Closing (and as to which the obligations of Moringa were assigned to us upon the Closing), the A&R Sponsor Promissory Note in
an amount of $3,433,000, which reflected the total amount owed by Moringa to the Sponsor through the Closing Date. The maturity date of
the A&R Sponsor Promissory Note is the 30-month anniversary of the Closing Date (i.e., February 15, 2027). Amounts outstanding under
the A&R Sponsor Promissory Note may be repaid (unless otherwise decided by us) only by way of conversion into our ordinary shares
(“Note Shares”) in accordance with the terms set forth in the form of A&R Sponsor
Promissory Note. Us and the Sponsor may also convert amounts outstanding under the A&R Sponsor Promissory Note at the price per share
at which we conduct an equity financing following the Closing, subject to a minimum conversion amount of $100,000, in an amount of Note
Shares constituting up to thirty percent (30%) of the number of our ordinary shares issued and sold by us in such equity financing. The
Sponsor may also elect to convert amounts of principal outstanding under the note into our ordinary shares at any time following the 24-month
anniversary of the Closing Date, subject to a minimum conversion of $10,000, at a price per share equal to the volume weighted average
price of our ordinary shares on the principal market on which they are traded during the 20 consecutive trading days prior to the conversion
date.
The foregoing summary provides only a brief description of the A&R Sponsor Promissory
Note and does not purport to be complete. The summary is qualified in its entirety by the full text of the A&R Sponsor Promissory
Note, a copy of which serves as Exhibit 10.5 to the registration statement of which this prospectus forms a part, and which is incorporated
herein by reference.
Amended and Restated Registration Rights and Lock-Up Agreement
Prior to the Closing under the
Business Combination Agreement, on August 14, 2024, our company, Moringa, Moringa Sponsor, the distributees of the Sponsor Investment
Shares (as defined under the Business Combination Agreement), certain of our pre-Business Combination shareholders and the PIPE Investor
entered into (and EarlyBird will be bound by) an amended and restated registration rights and lock-up agreement which became effective
as of the Closing of the Business Combination (the “A&R Registration Rights and Lock-Up Agreement”). Under the agreement,
we have assumed Moringa’s existing obligations under Moringa’s prior registration rights agreement (entered into in connection
with Moringa’s initial public offering, or IPO) and has granted registration rights to the Moringa Sponsor, the distributees of
Sponsor Investment Shares, certain of our pre-Business Combination shareholders, the PIPE Investor and EarlyBird with respect to certain
securities of ours.
Under the A&R Registration Rights and Lock-Up Agreement, we have agreed to provide
the holders party thereto customary demand and shelf registration rights (subject to certain minimum size offerings) and piggy-back rights
on primary and secondary offerings, subject to customary cut-back provisions.
Under the lock-up provisions of the agreement, lock-up periods applied following the
Closing to our securities that are held by the holders who are party to the agreement, subject to permitted transfers to certain categories
of “Permitted Transferees”. Each of those lock-up periods has expired as of the date of this prospectus.:
The foregoing summary provides only a brief description of the A&R Registration
Rights and Lock-Up Agreement and does not purport to be complete. The summary is qualified in its entirety by the full text of the A&R
Registration Rights and Lock-Up Agreement, which serves as Exhibit 10.4 to the registration statement of which this prospectus forms a
part, and which is incorporated herein by reference.
BENEFICIAL
OWNERSHIP OF SECURITIES
The following table sets
forth information known to the Company regarding the beneficial ownership of New Silexion ordinary shares as of September 4, 2025 by:
|
|
● |
each person who is the beneficial owner of more than 5% of the outstanding New Silexion
ordinary shares; |
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|
● |
our named executive officer and directors; and |
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|
|
● |
all of our executive officers and directors as a group. |
Beneficial ownership is determined according
to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole
or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable
within 60 days. In computing the number of ordinary shares beneficially owned by a person and the percentage ownership, we include, as
outstanding, those ordinary shares that are subject to warrants held by that person that are currently exercisable or exercisable within
60 days of September 4, 2025. We do not deem those shares to be outstanding, however, for the purpose of computing the percentage ownership
of any other person.
Unless otherwise indicated, we believe that
all persons named in the table have sole voting and investment power with respect to all New Silexion ordinary shares beneficially owned
by them.
The percentage ownership of New Silexion
ordinary shares is based on 731,642 New Silexion ordinary shares outstanding as of September 4, 2025.
|
Name and Address of Beneficial
Owner(1) |
Number of Shares
Beneficially
Owned |
Approximate
Percentage of Outstanding
Ordinary Shares
|
||||||
|
Directors and
Executive Officers of New Silexion: |
||||||||
|
Ilan Hadar |
2,077 |
(2)
|
* |
|||||
|
Dror Abramov |
295 |
* |
||||||
|
Ruth Alon |
403 |
* |
||||||
|
Ilan Levin(3) |
15,309 |
(4)
|
2.1 |
% | ||||
|
Avner Lushi(5) |
14,721 |
(6)
|
2.0 |
% | ||||
|
Shlomo Noy(7) |
14,721 |
(6)
|
2.0 |
% | ||||
|
Amnon Peled |
- |
- |
||||||
|
Dr. Mitchell Shirvan |
1,459 |
(8)
|
* |
% | ||||
|
Mirit Horenshtein Hadar, CPA |
420 |
* |
||||||
|
All executive
officers and directors as a group (8 individuals) |
34,684 |
4.7 |
% | |||||
|
Five Percent
Holders: |
||||||||
|
Hudson Bay Master Fund (9) |
98,766 |
11.9 |
% | |||||
|
Entities affiliated with Anson Advisors Inc and Anson
Funds Management LP (10) |
98,768 |
11.9 |
% | |||||
|
CVI Investments, Inc. (11) |
49,383 |
6.3 |
% | |||||
|
* |
Less than 1%. |
|
(1) |
Unless otherwise noted, the business address of each beneficial owner listed in the above table is c/o
Silexion Therapeutics Corp, 12 Abba Hillel Road, Ramat Gan, Israel 5250606. |
|
(2) |
Includes 956 New Silexion ordinary
shares issuable upon exercise of options, at an exercise price of $907.71 per share, all of which are vested and currently exercisable.
|
|
|
|
|
(3) |
The shares reported in this row are held of record by the Sponsor, Moringa Sponsor, LP, and/or by the PIPE
Investor, Greenstar, L.P., each a Cayman Islands exempted limited partnership, as described in footnote (4) below. Moringa Partners Ltd.,
an Israeli company that is wholly-owned by Mr. Ilan Levin, serves as the sole general partner of each of the Sponsor and the PIPE Investor.
Mr. Levin, a director of New Silexion, is the sole director of that general partner. As a result of his ownership of that general partner,
Mr. Levin possesses sole voting and investment authority with respect to the shares indirectly held by the Sponsor and the PIPE Investor.
The limited partnership interests of the Sponsor and the PIPE Investor are held by various individuals and entities, including Mr. Levin.
Mr. Levin disclaims beneficial ownership of the securities held by the Sponsor and the PIPE Investor other than to the extent of his direct
or indirect pecuniary interest in such securities. The address of each of the entities beneficially owning the shares that are reported
in this row is c/o Moringa Acquisition Corp, 250 Park Avenue, 7th
floor, New York, NY 10177. |
|
(4) |
Consists of the total of: (i)
9,906 New Silexion ordinary shares issued to the Sponsor as Sponsor Investment Shares (as defined under the Business Combination Agreement);
(ii) 2,614 New Silexion ordinary shares issued to the Sponsor upon the Closing of the Business Combination due to the conversion, on a
one-for-one basis, of the 2,614 Moringa private shares held by it; (iii) 1,307 New Silexion ordinary shares underlying New Silexion warrants
issued to the Sponsor upon the Closing of the Business Combination due to the conversion, on a one-for-one basis, of the 1,307 Moringa
private warrants held by the Sponsor (which New Silexion warrants became exercisable 30 days after the Closing Date); and (iv) 1,482 New
Silexion ordinary shares issued to Greenstar, L.P., the PIPE Investor, as PIPE Shares in respect of the PIPE Financing. The foregoing
beneficial ownership of New Silexion ordinary shares by the Sponsor does not include any Note Shares that may be issued to the Sponsor
following the Closing upon conversion of amounts owed by New Silexion to the Sponsor under the A&R Sponsor Promissory Note, as the
potential number of Note Shares, and the timing of issuance of Note Shares, cannot be determined in advance. |
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|
(5) |
The shares reported in this row consist entirely of New Silexion ordinary shares held of record by Guangzhou
Sino-Israel Biotech Fund (“GIBF”), with respect to which Mr. Lushi possesses shared
voting and investment authority as a result of his serving as a Managing Partner and CEO of GIBF. |
|
(6) |
Includes 13,599 New Silexion
ordinary shares issued to GIBF at the Closing in respect of its transfer of its noncontrolling interest in our Chinese subsidiary, Silenseed
(China) Ltd., to New Silexion pursuant to the Chinese Subsidiary Transfer. |
|
(7) |
The shares reported in this row consist entirely of New Silexion ordinary shares held of record by GIBF,
with respect to which Mr. Noy possesses shared voting and investment authority as a result of his serving as Chief Medical Officer of
GIBF. |
|
|
|
|
(8) |
Includes 478 New Silexion ordinary
shares issuable upon exercise of options, at an exercise price of $907.71 per share, all of which are vested and currently exercisable.
|
|
|
|
|
(9) |
Represents 98,766 ordinary shares
issuable upon exercise of warrants issued in connection with the Warrant Repricing. Hudson Bay Capital Management LP, the investment manager
of Hudson Bay Master Fund Ltd., has voting and investment power over these securities. Sander Gerber is the managing member of Hudson
Bay Capital GP LLC, which is the general partner of Hudson Bay Capital Management LP. Each of Hudson Bay Master Fund Ltd. and Sander Gerber
disclaims beneficial ownership over these securities. |
|
|
|
|
(10) |
Represents (i) 77,038 ordinary
shares issuable upon exercise of warrants issued in connection with the Warrant Repricing held by Anson Investments Master Fund LP (“AIMF”)
and (ii) 21,730 ordinary shares issuable upon exercise of warrants issued in connection with the Warrant Repricing held by Anson East
Master Fund LP (“AEMF”). Anson Advisors Inc and Anson Funds Management LP, the Co-Investment Advisers of AIMF and AEMF, hold
voting and dispositive power over the ordinary shares held by each of AIMF and AEMF. Tony Moore is the managing member of Anson Management
GP LLC, which is the general partner of Anson Funds Management LP. Moez Kassam and Amin Nathoo are directors of Anson Advisors Inc. Mr.
Moore, Mr. Kassam and Mr. Nathoo each disclaim beneficial ownership of these ordinary shares except to the extent of their pecuniary interest
therein. The principal business address of each of AIMF and AEMF is Maples Corporate Services Limited, PO Box 309, Ugland House, Grand
Cayman, KY1-1104, Cayman Islands. |
|
(11) |
Represents (i) 30,917 ordinary
shares issuable upon exercise of warrants issued in our January 2025 financing, (ii) 18,464 ordinary shares issuable upon exercise of
warrants issued in connection with the Warrant Repricing and (iii) 2 ordinary shares issuable upon the exercise of warrants issued by
Moringa that the Company assumed in connection with the Business Combination. Heights Capital Management, Inc., the authorized agent of
CVI Investments, Inc. (“CVI”), has discretionary authority to vote and dispose of the shares held by CVI and may be deemed
to be the beneficial owner of these shares. Martin Kobinger, in his capacity as President of Heights Capital Management, Inc., may also
be deemed to have investment discretion and voting power over the shares held by CVI. Mr. Kobinger disclaims any such beneficial ownership
of the shares. CVI Investments, Inc.is affiliated with one or more FINRA member, none of whom are currently expected to participate in
the sale pursuant to the prospectus contained in the Registration Statement of shares purchased by the investor in this offering.
|
DESCRIPTION
OF SHARE CAPITAL
In connection with the consummation of the Business Combination, New Silexion adopted
the Articles. The following summary of the material terms of New Silexion’s securities is not intended to be a complete summary
of the rights and preferences of such securities. You are encouraged to read the Articles and the agreements governing New Silexion’s
warrants in their entirety, which serve as Exhibit 3.1 and Exhibits 4.1 and 4.2, respectively, to the registration statement of which
this prospectus forms a part, along with the applicable provisions of Cayman Islands law, for a complete description of the rights and
preferences of New Silexion’s securities.
Authorized and Outstanding Share Capital
The authorized share capital of New Silexion
is US$121,500, divided into 9,000,000 ordinary shares, par value of US$0.0135 per share. As of September 4, 2025, there were
731,642 New Silexion ordinary shares outstanding. All of such outstanding New Silexion ordinary shares were validly issued, fully paid
and non-assessable.
Ordinary Shares
Voting Power
Holders of New Silexion ordinary shares are entitled to one vote in respect of each
share held of record by such holder on all matters to be voted on by shareholders.
100
Dividends
Subject to applicable law, holders of New Silexion ordinary shares are entitled to receive
dividends when, as and if declared by the New Silexion Board, payable in cash, property or shares.
Winding Up, Liquidation and Dissolution
Upon New Silexion’s winding up and liquidation and after payment in full of all
amounts required to be paid to creditors, the holders of New Silexion ordinary shares are entitled to receive a pro rata share of New
Silexion’s remaining assets available for distribution.
Preemptive or Other Rights
Holders of New Silexion ordinary shares will not be entitled to preemptive rights, and
New Silexion ordinary shares will not be subject to conversion, redemption or sinking fund provisions.
Appointment of Directors
The New Silexion Board will consist of up to nine (9) directors and not less than three
(3) directors, unless increased or decreased from time to time by Ordinary Resolution in a general meeting.
Directors will generally be appointed by an Ordinary Resolution passed at each annual
general meeting.
Prior to each annual general meeting, the New Silexion Board (or a nominating committee
established by the New Silexion Board for such purpose) may select, via a resolution adopted by a majority of the New Silexion Board or
such committee, a number of persons to be proposed to the shareholders for appointment as directors at such annual general meeting, for
service until the next annual general meeting (the “Nominees”). Any shareholder entitled under applicable law to propose one
or more persons as nominees for appointment as directors at an annual general meeting (each such nominee, an “Alternate Nominee”)
may make such proposal only if a written notice of such shareholder’s intent to that effect has been given to the Secretary of the
Company (or, if there is no such Secretary, the chief executive officer) within the periods set out in the Articles.
Unless the New Silexion Board resolves that the appointment of Nominees or Alternate
Nominees will be determined based on those Nominees or Alternate Nominees receiving the highest number of votes of Members in favor of
their appointment— even if less than a majority of all Members’ votes that are cast, the Nominees or Alternate Nominees shall
be appointed by Ordinary Resolution at the annual general meeting at which they are proposed for appointment. If the appointment of the
Nominees or Alternate Nominees proposed to be appointed would cause the total number of directors (including those then in office) to
exceed the maximum number, then any directors then in office who are not named as Nominees or Alternate Nominees will cease to hold office
following the conclusion of such annual general, if any such Nominees or Alternate Nominees are appointed in such meeting, and upon such
Nominees or Alternate Nominees taking office. If (a) the appointment of the Nominees or Alternate Nominees proposed to be appointed would
not cause the total number of directors to exceed the maximum, or (b) no Nominees or Alternate Nominees are proposed to be appointed at
an annual general meeting by either the Board or Members, or (c) no Nominees or Alternate Nominees are eventually appointed in such annual
general meeting — all directors then in office shall continue to hold office until the convening of a general meeting at which Nominees
or Alternate Nominees shall be proposed and appointed, and where such appointment would cause the total number of directors to exceed
the maximum.
Each director will hold office until the next succeeding annual general meeting and
until his or her successor is appointed and qualified, or until such director’s earlier death, resignation, disqualification or
removal. The Articles will not provide for cumulative voting for the appointment of directors.
New Silexion Warrants
As of August 1, 2025 (following the warrant
exercise inducement transaction completed on that day), there were 438,636 New Silexion warrants to purchase New Silexion ordinary shares
outstanding, consisting of (i) 42,592 New Silexion public warrants issued upon conversion of an equivalent number of Moringa public warrants
and 1,408 New Silexion private warrants issued upon conversion of an equivalent number of Moringa private warrants (of which 1,307 and
101 private warrants are held by the Sponsor and EarlyBird, respectively), (ii) 33,661 remaining outstanding ordinary warrants and 17,284
placement agent warrants issued in our January 2025 public offering; (iii) 18,464 remaining outstanding investor warrants and 10,368 placement
agent warrants issued in our late January 2025 warrant exercise inducement transaction; and (iv) 304,212 investor warrants and 10,647
placement agent warrants issued in our August 1, 2025 warrant exercise inducement transaction. In connection with the Closing of the Business
Combination, each Moringa warrant was exchanged for a New Silexion warrant on substantially similar terms, including exercise price.
Each New Silexion public warrant
entitles the registered holder to purchase one New Silexion ordinary share at a price of $1,552.50 per share, subject to adjustment as
discussed below, at any time commencing 30 days after the Closing. However, no New Silexion public warrants will be exercisable for cash
unless there is an effective and current registration statement covering the New Silexion ordinary shares issuable upon exercise of the
New Silexion public warrants and a current prospectus relating to such New Silexion ordinary shares. Notwithstanding the foregoing, if
a registration statement covering the New Silexion ordinary shares issuable upon exercise of the New Silexion public warrants is not effective
within 60 business days from the closing of the Business Combination, warrant holders may, until such time as there is an effective registration
statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise New Silexion
public warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption
is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless
basis. In the case of a cashless exercise, each holder would pay the exercise price by surrendering the warrants for that number of New
Silexion ordinary shares equal to the quotient obtained by dividing (x) the product of the number of New Silexion ordinary shares underlying
the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined
below) by (y) the fair market value. The “fair market value” for this purpose will mean the average reported last sale price
of the ordinary shares for the five trading days ending on the trading day prior to the date of exercise. The New Silexion public warrants
will expire five years from the Closing of the Business Combination (i.e., on August 15, 2029) at 5:00 p.m., New York City time.
101
The New Silexion private warrants are identical to the New Silexion public warrants,
except that each New Silexion private warrant is exercisable for cash (even if a registration statement covering the New Silexion ordinary
shares issuable upon exercise of such warrants is not effective) or on a cashless basis, at the holder’s option, and will not be
redeemable by the Company, in each case so long as they are still held by the Sponsor, EarlyBird or their respective affiliates.
From and after the time the New Silexion warrants become exercisable, we may call them
for redemption (excluding the New Silexion private warrants), in whole and not in part, at a price of $0.01 per warrant, upon not less
than 30 days’ prior written notice of redemption to each warrant holder, if and only if
|
|
● |
the reported last sale price
of the ordinary shares equals or exceeds $2,430.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations
and recapitalizations), for any 20 trading days within a 30 trading day period commencing after the warrants become exercisable and ending
on the third business day prior to the notice of redemption to warrant holders; and |
|
|
● |
a registration statement is then in effect with respect to the New Silexion ordinary shares underlying
such warrants. |
The right to exercise will be forfeited unless the New Silexion warrants are exercised
prior to the date specified in the notice of redemption. On and after the redemption date, a record holder of a New Silexion warrant will
have no further rights except to receive the redemption price for such holder’s warrant upon surrender of such warrant.
The redemption criteria for New Silexion warrants have been established at a price which
is intended to provide warrant holders a reasonable premium to the initial exercise price and provide a sufficient differential between
the then-prevailing share price and the warrant exercise price so that if the share price declines as a result of our redemption
call, the redemption will not cause the share price to drop below the exercise price of the warrants.
If New Silexion calls the New Silexion warrants for redemption as described above, its
management will have the option to require all holders that wish to exercise warrants prior to redemption to do so on a “cashless
basis.” In such event, each holder would pay the exercise price by surrendering the warrants for that number of New Silexion ordinary
shares equal to the quotient obtained by dividing (x) the product of the number of New Silexion ordinary shares underlying the warrants,
multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the
fair market value. The “fair market value” shall mean the average reported last sale price of the New Silexion ordinary shares
for the 5 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders
of warrants.
The New Silexion warrants were issued in registered form under a warrant agreement between
Continental Stock Transfer & Trust Company, as warrant agent, and New Silexion (as assignee of Moringa). The warrant agreement
provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective
provision, but requires the approval, by written consent or vote, of the holders of at least 50% of the then outstanding public warrants
in order to make any change that adversely affects the interests of the registered holders.
The exercise price and number of New Silexion ordinary shares issuable on exercise of
the warrants may be adjusted in certain circumstances including in the event of a share capitalization or our recapitalization, reorganization,
merger or consolidation. However, the warrants will not be adjusted for issuances of New Silexion ordinary shares at a price below their
respective exercise prices.
The New Silexion warrants may be exercised upon surrender of the warrant certificate
on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate
completed and executed as indicated, accompanied by full payment of the exercise price, by certified or official bank check payable to
us, for the number of warrants being exercised. The warrant holders do not have the rights or privileges of holders of New Silexion ordinary
shares and any voting rights until they exercise their warrants and receive New Silexion ordinary shares. After the issuance of New Silexion
ordinary shares upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to
be voted on by shareholders.
Under the terms of the warrant agreement, New Silexion (as assignee of Moringa) has
agreed to use its best efforts to have declared effective a registration statement relating to the New Silexion ordinary shares issuable
upon exercise of the warrants and keep such registration statement and its included prospectus current until the expiration of the warrants.
However, we cannot assure you that we will be able to do so and, if we do not maintain a current prospectus relating to the New Silexion
ordinary shares issuable upon exercise of the warrants, holders will be unable to exercise their warrants for cash and we will not be
required to net cash settle or cash settle the warrant exercise.
102
Warrant holders may elect to be subject to a restriction on the exercise of their warrants
such that an electing warrant holder would not be able to exercise their warrants to the extent that, after giving effect to such exercise,
such holder would beneficially own in excess of 9.9% of the New Silexion ordinary shares outstanding.
No fractional shares will be issued upon exercise of the New Silexion warrants. If,
upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round up
to the nearest whole number the number of New Silexion ordinary shares to be issued to the warrant holder.
Contractual Arrangements with respect to the New Silexion private
warrants
So long as the New Silexion private warrants are still held by the Sponsor, EarlyBird
or their affiliates, the Company will not redeem such warrants, and the Company will allow the holders to exercise such warrants on a
cashless basis (even if a registration statement covering the New Silexion ordinary shares issuable upon exercise of such warrants is
not effective). However, once any of the New Silexion private warrants are transferred from the Sponsor, EarlyBird or their affiliates,
these arrangements will no longer apply. Furthermore, because the New Silexion private warrants were issued in a private transaction,
the holders and their transferees will be allowed to exercise the New Silexion private warrants for cash even if a registration statement
covering the New Silexion ordinary shares issuable upon exercise of such warrants is not effective and receive unregistered New Silexion
ordinary shares.
Listing of Securities
Our ordinary shares and New Silexion
warrants are listed on the Nasdaq Capital Market under the symbols “SLXN” and “SLXNW”, respectively.
Transfer Agent and Registrar
The transfer agent and registrar for the New Silexion ordinary shares and warrant agent
for the New Silexion warrants is Continental Stock Transfer & Trust Company.
Anti-Takeover Provisions in Our Articles.
Some provisions of our Articles may discourage, delay or prevent a change in control
of our company or management that shareholders may consider favorable.
However, under Cayman Islands law, our directors may only exercise the rights and powers
granted to them under our Articles, as amended and restated from time to time, for a proper purpose and for what they believe in good
faith to be in the best interests of our company.
Authorized but Unissued Shares
The authorized but unissued New Silexion ordinary shares are available for future issuance
without shareholder approval, subject to any limitations imposed by the listing standards of the Nasdaq and the Articles. These additional
shares may be used for a variety of corporate finance transactions, acquisitions and employee benefit plans. The existence of authorized
but unissued and unreserved New Silexion ordinary shares could make more difficult or discourage an attempt to obtain control of New Silexion
by means of a proxy contest, tender offer, merger or otherwise.
Shareholder Action; Extraordinary General Meetings
Our Articles provide that shareholders may take action by unanimous written resolutions
or at annual or extraordinary general meetings. As a result, a holder controlling a majority of New Silexion ordinary shares would not
be able to amend the Articles or remove directors without holding a meeting of shareholders called in accordance with the Articles or
the shareholders of New Silexion passing unanimous written resolutions to approve the same. Further, the Articles provide that only the
chairperson of the Board, or the New Silexion Board pursuant to a resolution adopted by a majority of the directors then in office — and
not shareholders — may call extraordinary general meetings of shareholders, thus prohibiting a holder of New Silexion
ordinary shares from calling an extraordinary general meeting. These provisions might delay the ability of shareholders to force consideration
of a proposal or for shareholders controlling a majority of New Silexion to take any action, including the removal of directors.
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Advance Notice Requirements for Shareholder Proposals and Director Nominations
The Articles provide that shareholders seeking to bring business before our annual general
meeting, or to nominate candidates for appointment as directors at its annual general meeting, must provide timely notice. To be timely,
a shareholder’s notice will need to be delivered to the Secretary of New Silexion at its principal executive offices not less than
90 days nor more than 120 calendar days prior to the one-year anniversary of the preceding year’s annual general
meeting. In the event that no annual general meeting was held during the preceding year or the date of the annual general meeting is more
than 30 days before or more than 60 days after such anniversary date, to be timely, a shareholder’s notice must be so
delivered no earlier than the close of business on the 120th day
prior to such annual general meeting and not later than the 90th day
prior to such annual general meeting or, if later, the 10th day
following the day on which public disclosure of the date of such annual general meeting is first made by New Silexion. The Articles
also specify certain requirements as to the form and content of a shareholders’ notice. These provisions may preclude New Silexion
shareholders from bringing matters before our annual general meeting or from making nominations for directors at our annual general meeting.
Supermajority Requirements for the Amendment of the Articles
Under the Companies Act (As Revised) of the Cayman Islands, the Articles may be amended
by a special resolution of shareholders, being a resolution passed by not less than two-thirds (2/3) of our shareholders as being
entitled to do so, vote in person or by proxy at a general meeting.
Board Vacancies
The Articles provide that any vacancy on the New Silexion Board may be filled by the
affirmative vote of a majority of the directors then in office, even if less than a quorum, or by a sole remaining director, and not by
our shareholders. Any director chosen to fill a vacancy will hold office until the next annual general meeting and until his or her successor
is duly appointed and qualified, or until his or her earlier death, resignation, disqualification or removal. In addition, the number
of directors constituting the then-authorized size of the New Silexion Board is permitted to be set only by a resolution adopted
by the Board.
Exclusive Forum Selection
The Articles provide that, unless New Silexion consents in writing to the selection
of an alternative forum and to the fullest extent permitted by law, the courts of the Cayman Islands have exclusive jurisdiction over
any claim or dispute arising out of or in connection with the Articles or otherwise related in any way to each shareholder’s shareholding
in the Company, including but not limited to (i) any derivative action or proceeding brought on behalf of the Company, (ii) any
action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or
our shareholders, or (iii) any action asserting a claim arising pursuant to any provision of the Companies Act (As Revised) of the
Cayman Islands or the Articles, and each shareholder shall be deemed to have irrevocably submitted to the exclusive jurisdiction of the
courts of the Cayman Islands over all such claims or disputes.
However, such forum selection provisions will not apply to suits brought to enforce
any liability or duty created by the Securities Act or the Exchange Act. The Articles also provide that, unless New Silexion consents
in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the exclusive
forum for the resolution of any complaint asserting a cause of action arising under the Securities Act or the Exchange Act. There is uncertainty
as to whether a court would enforce that exclusivity provision. Furthermore, investors cannot waive compliance with the U.S. federal securities
laws and the rules and regulations thereunder.
Any person or entity purchasing or otherwise acquiring any interest in New Silexion
shares shall be deemed to have notice of and consented to the forum selection provisions in the Articles.
The choice of forum provisions may limit a shareholder’s ability to bring a claim
in a judicial forum that it finds favorable for disputes with New Silexion or its directors, officers, or other employees, which may discourage
such lawsuits against New Silexion and its directors, officers, and other employees. Alternatively, if a court were to find the choice
of forum provisions contained in the Articles to be inapplicable or unenforceable in an action, New Silexion may incur additional costs
associated with resolving such action in other jurisdictions, which could harm its business, results of operations, and financial condition.
Transactions with Interested Shareholders.
Cayman Islands law does not have a business combination statute (like in Delaware) applicable
to public companies prohibiting them from engaging in certain business combinations with an “interested shareholder”. As a
result, we cannot avail ourselves of the types of protections afforded by a business combination statute. However, although Cayman Islands
law does not regulate transactions between a company and its significant shareholders, it does provide that such transactions must be
entered into bona fide in the best interests of the company and for a proper corporate purpose and not with the effect of constituting
a fraud on the minority shareholders.
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Limitation on Liability and Indemnification of Directors and Officers
Cayman Islands law does not limit the extent
to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to
the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification
against willful default, willful neglect, actual fraud or the consequences of committing a crime. Our Articles provide that our directors
and officers shall be indemnified out of the assets of New Silexion against any liability, action, proceeding, claim, demand, costs, damages
or expenses, including legal expenses, whatsoever which they or any of them may incur as a result of any act or failure to act in carrying
out their functions other than such liability (if any) that they may incur by reason of their own actual fraud, willful neglect or willful
default. No such indemnified person shall be liable to New Silexion for any loss or damage incurred by New Silexion as a result (whether
direct or indirect) of the carrying out of their functions unless that liability arises through the actual fraud, willful neglect or willful
default of such indemnified person. No person shall be found to have committed actual fraud, willful neglect or willful default under
the foregoing unless or until a court of competent jurisdiction shall have made a finding to that effect. In addition, the Articles provide
for the advancing of certain fees and costs to such indemnified persons and the purchase by New Silexion for insurance for the benefit
of its directors and officers as further described in the Articles.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted
to New Silexion directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, in the opinion of the
SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Shareholders’
Suits.
Conyers, Dill & Pearman LLP, our
Cayman Islands legal counsel, is not aware of any reported class action having been brought in a Cayman Islands court. Derivative
actions have been brought in the Cayman Islands courts, and the Cayman Islands courts have confirmed the availability for such actions.
In most cases, we will be the proper plaintiff in any claim based on a breach of duty owed to us, and a claim against (for example) our
officers or directors usually may not be brought by a shareholder. However, based both on Cayman Islands authorities and on English authorities,
which would in all likelihood be of persuasive authority and be applied by a court in the Cayman Islands, exceptions to the foregoing
principle apply in circumstances in which:
| ● |
a company is acting, or proposing to act, illegally or beyond
the scope of its authority; |
| ● |
the act complained of, although not beyond the scope of the
authority, could be effected if duly authorized by more than the number of votes which have actually been obtained; or |
| ● |
those who control the company are perpetrating a “fraud
on the minority.” |
A shareholder may have a direct right
of action against us where the individual rights of that shareholder have been infringed or are about to be infringed.
Ani-Money Laundering
– Cayman Islands.
If any person in the Cayman Islands knows
or suspects, or has reasonable grounds for knowing or suspecting that another person is engaged in criminal conduct or money laundering,
or is involved with terrorism or terrorist financing and property, and the information for that knowledge or suspicion came to their attention
in the course of business in the regulated sector, or other trade, profession, business or employment, the person will be required to
report such knowledge or suspicion to (i) the Financial Reporting Authority of the Cayman Islands (“FRA”),
pursuant to the Proceeds of Crime Act (As Revised) of the Cayman Islands, if the disclosure relates to criminal conduct or money laundering,
or (ii) a police officer of the rank of constable or higher, or the FRA, pursuant to the Terrorism Act (As Revised) of the Cayman Islands,
if the disclosure relates to involvement with terrorism or terrorist financing and property.
Special
Considerations for Exempted Companies.
We are an exempted company with limited
liability under the Companies Act (As Revised) of the Cayman Islands. The Companies Act (As Revised) of the Cayman Islands distinguishes
between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business
mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially
the same as for an ordinary company except for the exemptions and privileges listed below:
| ● |
an exempted company does not have to file
an annual return of its shareholders with the Registrar of Companies; |
| ● |
an exempted company’s register of
members is not open to inspection; |
| ● |
an exempted company does not have to hold
an annual general meeting; |
| ● |
an exempted company may issue negotiable
or bearer shares or shares with no par value; |
| ● |
an exempted company may obtain an undertaking
against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance); |
| ● |
an exempted company may register by way
of continuation in another jurisdiction and be deregistered in the Cayman Islands; |
| ● |
an exempted company may register as a
limited duration company; and |
| ● |
an exempted company may register as a
segregated portfolio company. |
“Limited liability” means that
the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company (except in exceptional
circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances
in which a court may be prepared to pierce or lift the corporate veil).
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DESCRIPTION
OF SECURITIES OFFERED
We are offering up to 832,177
ordinary shares, together with 832,177 Series A ordinary warrants to purchase up to 832,177 ordinary shares and 832,177 Series
B ordinary warrants to purchase up to 832,177 ordinary shares. We are also offering to those purchasers, if any, whose purchase of
our ordinary shares in this offering would otherwise result in such purchaser, together with its affiliates and certain related parties,
beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding ordinary shares immediately following
the consummation of this offering, the opportunity, in lieu of purchasing ordinary shares, to purchase pre-funded warrants to purchase
ordinary shares. For each pre-funded warrant we sell, the number of ordinary shares we are offering will be decreased on a one-for-one
basis. The pre-funded warrants will be sold together with ordinary warrants in a fixed combination, with each pre-funded warrant to purchase
one ordinary share accompanied by one ordinary warrant to purchase one ordinary share. We are also registering the ordinary shares issuable
from time to time upon exercise of the pre-funded warrants and ordinary warrants offered hereby.
Ordinary Shares
The material terms and provisions of our ordinary shares are described under the caption
“Description of Share Capital” in this prospectus.
Pre-Funded Warrants
The following summary of certain terms and provisions of the pre-funded
warrants offered hereby is not complete and is subject to, and qualified in its entirety by, the provisions of pre-funded warrant the
form of which will be filed as an exhibit to the registration statement of which this prospectus forms a part. Prospective investors should
carefully review the terms and provisions of the form of pre-funded warrant for a complete description of the terms and conditions of
the pre-funded warrants.
The term “pre-funded” refers to the fact that the purchase price of our
ordinary shares in this offering includes almost the entire exercise price that will be paid under the pre-funded warrants, except for
a nominal remaining exercise price of $0.0001. The purpose of the pre-funded warrants is to enable investors that may have restrictions
on their ability to beneficially own more than 4.99% (or, at the election of each purchaser, 9.99%) of our outstanding ordinary shares
following the consummation of this offering the opportunity to make an investment in us without triggering their ownership restrictions,
by receiving pre-funded warrants in lieu of our ordinary shares which would result in such ownership of more than 4.99% (or, at the election
of each purchaser, 9.99%), and receive the ability to exercise their option to purchase the shares underlying the pre-funded warrants
at such nominal price at a later date.
Each pre-funded warrant is exercisable for one ordinary share, with an exercise price
equal to $0.0001 per share, at any time that the pre-funded warrant is outstanding. There is no expiration date for the pre-funded warrants.
The holder of a pre-funded warrant will not be deemed a holder of our underlying ordinary shares until the pre-funded warrant is exercised.
Subject to limited exceptions, a holder of pre-funded warrants will not have the right
to exercise any portion of its pre-funded warrants if the holder (together with such holder’s affiliates, and any persons acting
as a group together with such holder or any of such holder’s affiliates) would beneficially own a number of ordinary shares in excess
of 4.99% (or, at the election of each purchaser, 9.99%) of the ordinary shares then outstanding after giving effect to such exercise.
The exercise price and the number of ordinary shares issuable upon exercise of the pre-funded
warrants is subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations,
reclassifications, reorganizations or similar events affecting our ordinary shares. The pre-funded warrant holders must pay the exercise
price in cash upon exercise of the pre-funded warrants, unless such pre-funded warrant holders are utilizing the cashless exercise provision
of the pre-funded warrants.
Upon the holder’s exercise of a pre-funded warrant, we will issue the ordinary
shares issuable upon exercise of the pre-funded warrant within two trading days following our receipt of a notice of exercise, provided
that payment of the exercise price has been made (unless exercised to the extent permitted via the “cashless” exercise provision).
Prior to the exercise of any pre-funded warrants to purchase ordinary shares, holders of the pre-funded warrants will not have any of
the rights of holders of ordinary shares purchasable upon exercise, including the right to vote, except as set forth therein.
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As an alternative to payment in immediately available funds, the holder may elect to
exercise the pre-funded warrant through a cashless exercise, in which the holder would receive upon such exercise the net number of ordinary
shares determined according to the formula set forth in the pre-funded warrant (in which case, the pre-funded warrants may only be exercised
via a “cashless” exercise provision).
In the event of a fundamental transaction, as described in the pre-funded warrants and
generally including any reorganization, recapitalization or reclassification of our ordinary shares, the sale, transfer or other disposition
of all or substantially all of our properties or assets, our consolidation or merger with or into another person, the acquisition of more
than 50% of our outstanding ordinary shares, or any person or group becoming the beneficial owner of more than 50% of the voting power
represented by our outstanding ordinary shares, the holders of the pre-funded warrants will be entitled to receive upon exercise of the
pre-funded warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised
the pre-funded warrants immediately prior to such fundamental transaction without regard to any limitations on exercised contained in
the pre-funded warrants.
We do not intend to apply to list the pre-funded warrants on any securities exchange
or other trading system. Without an active trading market, the liquidity of the pre-funded warrants will be limited.
Ordinary Warrants
The following summary of certain terms and provisions of the ordinary
warrants offered together with the ordinary shares hereby is not complete and is subject to, and qualified in its entirety by, the form
of ordinary warrant, which will be filed as an exhibit to the registration statement of which this prospectus is a part. Prospective investors
should carefully review the terms and provisions set forth in the form of ordinary warrant.
Exercisability. The ordinary warrants are exercisable
beginning on the effective date of the Warrant Shareholder Approval, provided however, if the Pricing Conditions are met, the ordinary
warrants will be exercisable upon issuance and at any time up to the date that is five years after the Initial Exercise Date with respect
to the Series A ordinary warrants and twelve months after the Initial Exercise Date with respect to the Series B ordinary warrants. The
ordinary warrants will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise
notice and, at any time a registration statement registering the issuance of the ordinary shares underlying the ordinary warrants under
the Securities Act of 1933, as amended, or the Securities Act, is effective and available for the issuance of such shares, by payment
in full in immediately available funds for the number of ordinary shares purchased upon such exercise. If a registration statement registering
the issuance of ordinary shares underlying the ordinary warrants under the Securities Act is not effective or available the holder may,
in its sole discretion, elect to exercise the ordinary warrant through a cashless exercise, in which case the holder would receive upon
such exercise the net number of ordinary shares determined according to the formula set forth in the ordinary warrant. No fractional shares
will be issued in connection with the exercise of an ordinary warrant. In lieu of fractional shares, we will either pay the holder an
amount in cash equal to the fractional amount multiplied by the exercise price or round up to the next whole share.
We intend to promptly, and in no event later than 90 days after the consummation of
this offering, seek Warrant Shareholder Approval for the issuance of ordinary shares issuable upon exercise of the ordinary warrants but
we cannot assure you that such shareholder approval will be obtained, provided, however, that, if and only if the Pricing Conditions are
satisfied, then we will not seek Warrant Shareholder Approval. We have agreed with the investors in this offering that, if we do not obtain
shareholder approval for the issuance of the ordinary shares upon exercise of the ordinary warrants at the first shareholder meeting for
such purpose after this offering, we will call a shareholder meeting every 90 days thereafter until the earlier of the date we obtain
such approval or the ordinary warrants are no longer outstanding, provided, however, that, if and only if the Pricing Conditions are satisfied,
then we will not seek Warrant Shareholder Approval.
Exercise Limitation. A holder will not have
the right to exercise any portion of the ordinary warrant if the holder (together with its affiliates) would beneficially own in excess
of 4.99% (or, at the election of each purchaser, 9.99%) of the number of ordinary shares outstanding immediately after giving effect to
the exercise, as such percentage ownership is determined in accordance with the terms of the ordinary warrants. However, any holder may
increase or decrease such percentage to any other percentage not in excess of 9.99%, provided that any increase in such percentage shall
not be effective until 61 days following notice from the holder to us.
Exercise
Price. The exercise price per whole ordinary share purchasable upon exercise of the ordinary warrants is $
per share. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions,
stock splits, stock combinations, reclassifications or similar events affecting our ordinary shares and also upon any distributions of
assets, including cash, stock or other property to our stockholders.
Transferability. Subject to applicable laws,
the ordinary warrants may be offered for sale, sold, transferred or assigned without our consent.
Exchange Listing. We do not intend to apply
to list the ordinary warrants on any securities exchange or nationally recognized trading system. Without an active trading market, the
liquidity of the ordinary warrants will be limited.
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Fundamental Transactions. In the event
of a fundamental transaction, as described in the ordinary warrants and generally including any reorganization, recapitalization or reclassification
of our ordinary shares, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation
or merger with or into another person, the acquisition of more than 50% of our outstanding ordinary shares, or any person or group becoming
the beneficial owner of more than 50% of the voting power represented by our outstanding ordinary shares, the holders of the ordinary
warrants will be entitled to receive upon exercise of the ordinary warrants the kind and amount of securities, cash or other property
that the holders would have received had they exercised the ordinary warrants immediately prior to such fundamental transaction without
regard to any limitations on exercised contained in the ordinary warrants. Notwithstanding the foregoing, in the event of a fundamental
transaction, the holders of the ordinary warrants have the right to require us or a successor entity to redeem the ordinary warrants for
cash in the amount of the Black-Scholes Value (as defined in each ordinary warrant) of the unexercised portion of the ordinary warrants
concurrently with or within 30 days following the consummation of a fundamental transaction.
However, in the event of a fundamental transaction which is not in our control, including
a fundamental transaction not approved by our board of directors, the holders of the ordinary warrants will only be entitled to receive
from us or our successor entity, as of the date of consummation of such fundamental transaction the same type or form of consideration
(and in the same proportion), at the Black Scholes Value of the unexercised portion of the ordinary warrants that is being offered and
paid to the holders of our ordinary shares in connection with the fundamental transaction, whether that consideration is in the form of
cash, stock or any combination of cash and stock, or whether the holders of our ordinary shares are given the choice to receive alternative
forms of consideration in connection with the fundamental transaction. If holders of our ordinary shares are not offered or paid any consideration
in the fundamental transaction, holders of ordinary shares will be deemed to have received ordinary shares of our successor entity.
Rights
as a Shareholder. Except as otherwise provided in the ordinary warrants or by virtue of such holder’s ownership of our ordinary
shares, the holder of a ordinary warrant does not have the rights or privileges of a holder of our ordinary shares, including any voting
rights, until the holder exercises the ordinary warrant.
Governing Law. The ordinary warrants are governed
by New York law.
Placement Agent Warrants
The following summary of certain terms and provisions of the Placement
Agent warrants is not complete and is subject to, and qualified in its entirety by, the form of Placement Agent warrant, which will be
filed as an exhibit to the registration statement of which this prospectus is a part. Prospective investors should carefully review the
terms and provisions set forth in the form of Placement Agent warrant.
We have agreed to issue to the Placement
Agent, or its designees, warrants to purchase up to 58,252 ordinary shares (which represents 7.0% of the aggregate number of ordinary
shares issued in this offering and issuable upon the exercise of the warrants and pre-funded warrants issued in this offering) with an
exercise price of $ per share (representing 125% of the public offering price per share) and exercisable
beginning on the effective date of the Warrant Shareholder Approval, provided however, if the Pricing Conditions are met, the Placement
Agent warrants will be exercisable upon issuance, and will expire five years from the date of the commencement of sales in this offering.
The Placement Agent warrants issued in this offering will otherwise have substantially the same terms as the ordinary warrants. The Placement
Agent warrants and underlying ordinary shares are registered on the registration statement of which this prospectus is a part.
MATERIAL
U.S. FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a summary of certain material U.S. federal income tax considerations
generally applicable to the ownership and disposition of our ordinary shares and the exercise, disposition and lapse of our warrants.
The ordinary shares and the warrants are referred to collectively herein as our securities. All prospective holders of our securities
should consult their tax advisors with respect to the U.S. federal, state, local and non-U.S. tax consequences of the ownership and disposition
of our securities.
This discussion is not a complete analysis of all potential U.S. federal income tax
consequences relating to the ownership and disposition of our securities. This summary is based upon current provisions of the Code, existing
U.S. Treasury Regulations promulgated thereunder, published administrative pronouncements and rulings of the U.S. Internal Revenue Service
(the “IRS”), and judicial decisions, all as in effect as of the date of this prospectus.
These authorities are subject to change and differing interpretation, possibly with retroactive effect. Any change or differing interpretation
could alter the tax consequences to holders described in this discussion. There can be no assurance that a court or the IRS will not challenge
one or more of the tax consequences described herein, and we have not obtained, nor do we intend to obtain, a ruling with respect to the
U.S. federal income tax consequences to a holder of the ownership or disposition of our securities.
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Tax Consequences of Ownership and Disposition of New Silexion Securities
Distributions on New Silexion ordinary shares
Subject to the PFIC rules discussed below, the gross amount of any distribution on New
Silexion ordinary shares that is made out of New Silexion’s current or accumulated earnings and profits (as determined for U.S. federal
income tax purposes) generally will be taxable to a U.S. Holder as ordinary dividend income on the date such distribution is actually
or constructively received. Any such dividends generally will not be eligible for the dividends received deduction allowed to corporations
in respect of dividends received from U.S. corporations. To the extent that the amount of the distribution exceeds New Silexion’s
current and accumulated earnings and profits (as determined under U.S. federal income tax principles), such excess amount will be
treated first as a non-taxable return of capital to the extent of the U.S. Holder’s tax basis in its New Silexion ordinary
shares, and thereafter as capital gain recognized on a sale or exchange. However, it is not expected that New Silexion will maintain calculations
of its earnings and profits principles. U.S. Holders should therefore assume that any distribution by New Silexion with respect to
New Silexion ordinary shares will be reported as dividend income. U.S. Holders
should consult their own tax advisors with respect to the appropriate U.S. federal income tax treatment of any distribution received
from New Silexion.
Subject to the PFIC rules discussed below, dividends received by non-corporate U.S. Holders
(including individuals) from a “qualified foreign corporation” may be eligible for reduced rates of taxation, provided that
certain holding period requirements and other conditions are satisfied. For these purposes, a non-U.S. corporation will be treated
as a qualified foreign corporation if it is eligible for the benefits of a comprehensive income tax treaty with the United States
that meets certain requirements. A non-U.S. corporation is also treated as a qualified foreign corporation with respect to dividends
it pays on shares that are readily tradable on an established securities market in the United States. U.S. Treasury guidance
indicates that shares listed on Nasdaq (such as the New Silexion ordinary shares) will be considered readily tradable on an established
securities market in the United States. There can be no assurance that New Silexion ordinary shares will be considered readily tradable
on an established securities market in future years. Further, New Silexion will not constitute a qualified foreign corporation for
purposes of these rules if it is a PFIC for the taxable year in which it pays a dividend or for the preceding taxable year.
Subject to certain conditions and limitations, non-refundable withholding taxes
(at a rate not in excess of any applicable income tax treaty rate), if any, on dividends paid by New Silexion may be treated as foreign
taxes eligible for credit against a U.S. Holder’s U.S. federal income tax liability under the U.S. foreign tax credit
rules. However, as a result of recent changes to the U.S. foreign tax credit rules, a withholding tax generally may need to satisfy
certain additional requirements in order to be considered a creditable tax for a U.S. Holder. New Silexion has not determined whether
these requirements have been met with respect to any withholding tax that may apply to dividends paid by New Silexion and, accordingly,
no assurance can be given that any such withholding tax will be creditable. For purposes of calculating the U.S. foreign tax credit,
dividends paid on New Silexion ordinary shares will generally be treated as income from sources outside the United States and will
generally constitute passive category income. The rules governing the U.S. foreign tax credit are complex. U.S. Holders should
consult their tax advisors regarding the availability of the U.S. foreign tax credit under their particular circumstances.
Sale, Taxable Exchange or Other Taxable Disposition of New Silexion Securities
Subject to the PFIC rules discussed below, upon any sale, exchange or other taxable
disposition of any New Silexion security, a U.S. Holder generally will recognize gain or loss in an amount equal to the difference
between (i) the sum of (x) the amount cash and (y) the fair market value of any other property, received in such sale,
taxable exchange or other taxable disposition and (ii) the U.S. Holder’s adjusted tax basis in such New Silexion security.
Any such gain or loss generally will be capital gain or loss and will be long-term capital gain or loss if the U.S. Holder’s
holding period for such New Silexion security exceeds one year. Long-term capital gain realized by a non-corporate U.S. Holder
generally will be taxable at a reduced rate. The deductibility of capital losses is subject to limitations.
This gain or loss generally will be treated as U.S. source
gain or loss. Accordingly, in the event that any non-U.S. tax (including withholding tax) is imposed upon such sale, exchange or
other taxable disposition, a U.S. Holder may not be able to utilize foreign tax credits in respect of such non-U.S. tax. In
addition, there may be other limitations on utilizing foreign tax credits even if a U.S. Holder has foreign source income or gain
in the same category from other sources. The rules governing foreign tax credits are complex and U.S. Holders are urged to consult
their tax advisers regarding the creditability of foreign taxes in their particular circumstances.
Exercise, Lapse or Redemption of a New Silexion Public Warrant
Subject to the PFIC rules discussed below, a U.S. Holder generally will not recognize
gain or loss upon the acquisition of a New Silexion ordinary share on the exercise of a New Silexion public warrant for cash. A U.S. Holder’s
tax basis in a New Silexion ordinary share received upon exercise of the New Silexion public warrant generally will equal the sum of the
U.S. Holder’s tax basis in such New Silexion public warrant and the exercise price. It is unclear whether a U.S. Holder’s
holding period for the New Silexion ordinary share received will commence on the date of exercise of the New Silexion public warrant or
the day following the date of exercise of the New Silexion public warrant; in either case, the holding period will not include the
period during which the U.S. Holder held the New Silexion public warrant. If a New Silexion public warrant is allowed to lapse unexercised,
a U.S. Holder generally will recognize a capital loss equal to such holder’s tax basis in the New Silexion public warrant.
The tax consequences of a cashless exercise of a warrant are not clear under current
law. Subject to the PFIC rules discussed below, a cashless exercise may not be taxable, either because the exercise is not a realization
event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either situation, a U.S. Holder’s
tax basis in New Silexion ordinary shares received generally should equal the U.S. Holder’s tax basis in the New Silexion public
warrants exercised therefor. If the cashless exercise was not a realization event, it is unclear whether a U.S. Holder’s holding
period for the New Silexion ordinary shares received would be treated as commencing on the date of exercise of the New Silexion public
warrants or the day following the date of exercise of the New Silexion public warrants; in either case, the holding period will not
include the period during which the U.S. Holder held the New Silexion public warrants. If the cashless exercise were treated as a
recapitalization, the holding period of the New Silexion ordinary shares received would include the holding period of the New Silexion
public warrants.
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It is also possible that a cashless exercise could be treated in part as a taxable exchange
in which gain or loss would be recognized. In such event, a U.S. Holder could be deemed to have surrendered a number of New Silexion
public warrants equal to the number of New Silexion ordinary shares having a value equal to the exercise price for the total number of
New Silexion public warrants to be exercised. In such case, subject to the PFIC rules discussed below, the U.S. Holder would recognize
capital gain or loss with respect to the New Silexion public warrants deemed surrendered in an amount equal to the difference between
the fair market value of the New Silexion ordinary shares that would have been received in a regular exercise of the New Silexion public
warrants deemed surrendered and the U.S. Holder’s tax basis in the New Silexion public warrants deemed surrendered. In this
case, a U.S. Holder’s aggregate tax basis in the New Silexion ordinary shares received would equal the sum of the U.S. Holder’s
tax basis in the New Silexion public warrants deemed exercised and the aggregate exercise price of such New Silexion public warrants.
It is unclear whether a U.S. Holder’s holding period for the New Silexion ordinary shares would commence on the date of exercise
of the New Silexion public warrants or the day following the date of exercise of the New Silexion public warrants; in either case,
the holding period will not include the period during which the U.S. Holder held the New Silexion public warrants.
Due to the absence of authority on the U.S. federal income tax treatment of a cashless
exercise, including when a U.S. Holder’s holding period would commence with respect to New Silexion ordinary shares received,
there can be no assurance regarding which, if any, of the alternative tax consequences and holding periods described above would be adopted
by the IRS or a court of law. Accordingly, U.S. Holders should consult their tax advisors regarding the tax consequences of a cashless
exercise.
Possible Constructive Distributions
The terms of each New Silexion public warrant provide for an adjustment to the number
of New Silexion ordinary shares for which the New Silexion public warrant may be exercised or to the exercise price of the New Silexion
public warrant in certain events, as discussed in the section of this prospectus entitled “Description
of New Silexion Securities — Warrants.” An adjustment which has the effect of preventing dilution generally
is not taxable. U.S. Holders of New Silexion public warrants would, however, be treated as receiving a constructive distribution
from New Silexion if, for example, the adjustment increases such U.S. Holders’ proportionate interest in New Silexion’s
assets or earnings and profits (e.g., through an increase in the number of New Silexion ordinary shares that would be obtained upon exercise
or through a decrease in the exercise price of the New Silexion public warrants), which adjustment may be made as a result of a distribution
of cash or other property to the holders of New Silexion ordinary shares. Such constructive distribution to a U.S. Holder of New
Silexion public warrants would be treated as if such U.S. Holder had received a cash distribution from New Silexion generally equal
to the fair market value of such increased interest (taxed as described above under “— Distributions
on New Silexion ordinary shares”).
PFIC Rules
In General
The treatment of U.S. Holders of New Silexion securities could be materially different
from that described above if New Silexion is treated as a PFIC for U.S. federal income tax purposes.
In general, a non-U.S. corporation is a PFIC for U.S. federal income tax purposes
for any taxable year in which, after applying certain look-through rules, (i) 50% or more of the value of its assets (generally
determined on the basis of a weighted quarterly average) consists of assets that produce, or are held for the production of, passive income,
or (ii) 75% or more of its gross income consists of passive income. Passive income generally includes dividends, interest, rents
and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of
passive assets. Cash and cash equivalents generally are passive assets. The value of goodwill will generally be treated as an active or
passive asset based on the nature of the income produced in the activity to which the goodwill is attributable. For purposes of the PFIC
rules, a non-U.S. corporation that owns, directly or indirectly, at least 25% by value of the stock of another corporation is treated
as if it held its proportionate share of the assets of the other corporation and directly received its proportionate share of the income
of the other corporation.
The application of the PFIC rules to warrants is uncertain. The Code provides that,
to the extent provided in Treasury Regulations, if any person has an option to acquire shares of a PFIC, the shares will be considered
as owned by that person for purposes of the PFIC rules. Under proposed Treasury Regulations that have a retroactive effective date, an
option to acquire shares of a PFIC is generally treated as ownership of those PFIC shares. The remainder of this discussion assumes that
the PFIC rules will apply to New Silexion public warrants if New Silexion was a PFIC. However, U.S. Holders should consult their
tax advisers regarding the application of the PFIC rules to New Silexion public warrants prior to the finalization of the proposed Treasury
Regulations.
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If non-U.S. corporation is treated as a PFIC during a U.S. Holder’s
holding period, it will, with respect to such U.S. Holder, always be treated as a PFIC, regardless of whether it satisfied either
of the qualification tests in subsequent years, subject to certain exceptions (such as upon making a “deemed sale” election).
The adverse impact of the PFIC rules on a U.S. Holder that holds shares in a PFIC
may generally be mitigated if the U.S. Holder makes a timely qualified electing fund (“QEF”)
election or mark-to-market election for the PFIC’s first taxable year as a PFIC in which the U.S. Holder held (or was
deemed to hold) shares, or a QEF election along with an applicable purging election (collectively, “PFIC
Elections”). Further detail about the PFIC Elections is provided below under “— New
Silexion Securities”.
New Silexion Securities
The annual PFIC income and asset tests in respect of New Silexion will be applied based
on the assets and activities of the combined business. Based on the projected composition of New Silexion’s income and assets, it
cannot be determined whether New Silexion will be classified as a PFIC for its taxable year that includes the date of the Business Combination
or in any future taxable year. Further, changes in the composition of New Silexion’s income or composition of New Silexion’s
assets may cause New Silexion to be or become a PFIC for the current or subsequent taxable years. Whether New Silexion is treated
as a PFIC for U.S. federal income tax purposes is a factual determination that must be made annually at the close of each taxable
year and, thus, is subject to significant uncertainty.
If Moringa is determined to be a PFIC with respect to any U.S. Holder who exchanges
Moringa securities for New Silexion securities in connection with the SPAC Merger, the U.S. Holder did not make any of the PFIC Elections,
and the U.S. Holder is not subject to tax on the receipt of the New Silexion securities under Section 1291(f) of the Code
or otherwise, then, although not free from doubt, New Silexion may also be treated as a PFIC as to the New Silexion ordinary shares received
by such U.S. Holder in the SPAC Merger, even if New Silexion is not a PFIC in its own right. In addition, it is possible that proposed
Treasury Regulations could be finalized in a manner that would treat any New Silexion public warrants that are received in the SPAC Merger
as subject to the PFIC rules.
If New Silexion is or becomes a PFIC during any year in which a U.S. Holder holds
New Silexion securities, there are three separate taxation regimes that could apply to such U.S. Holder under the PFIC rules: (i) the
excess distribution regime (which is the default regime), (ii) the QEF regime, or (iii) the mark-to-market regime. A U.S. Holder
who holds (actually or constructively) stock in a non-U.S. corporation during any year in which such corporation qualifies as a PFIC
is subject to U.S. federal income taxation under one of these three regimes. The effect of the PFIC rules on a U.S. Holder will
depend upon which of these regimes applies to such U.S. Holder. However, dividends paid by a PFIC are not eligible for the lower
rates of taxation applicable to qualified dividend income under any of the foregoing regimes.
Excess Distribution Regime. If
a U.S. Holder does not make or is not eligible to make a QEF election or a mark-to-market election, as described below, the
U.S. Holder will be subject to the default “excess distribution regime” under the PFIC rules with respect to (i) any
gain realized on a sale or other disposition (including a pledge) of New Silexion securities, and (ii) any “excess distribution”
on New Silexion securities (generally, any distributions in excess of 125% of the average of the annual distributions on New Silexion
securities during the preceding three taxable years or the U.S. Holder’s Holding period, for the New Silexion securities
that preceded the taxable year of the distribution whichever is shorter). Generally, under this excess distribution regime
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the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s
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the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized
the gain or received the excess distribution, or to the period in the U.S. Holder’s holding period before the first day
of New Silexion’s first taxable year in which New Silexion is a PFIC, will be taxed as ordinary income; |
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the amount allocated to other taxable years (or portions thereof) of the U.S. Holder
and included in its holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder
without regard to the U.S. Holder’s other items of income and loss for such year; and |
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an additional amount equal to the interest charge generally applicable to underpayments
of tax will be imposed on the U.S. Holder with respect to the tax attributable to each such other taxable year of the U.S. Holder.
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The tax liability for amounts allocated to years prior to the year of disposition
or excess distribution will be payable generally without regard to offsets from deductions, losses and expenses. In addition, gains (but
not losses) realized on the sale of a U.S. Holder’s New Silexion securities cannot be treated as capital gains, even if such
securities are held as capital assets. Further, no portion of any distribution will be treated as qualified dividend income.
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If New Silexion is, or is treated as, a PFIC for any taxable year during which a U.S. Holder
owns New Silexion securities and any entity in which New Silexion owns equity interests is also a PFIC (a “lower-tier PFIC”),
the U.S. Holder will be deemed to own their proportionate amount (by value) of the shares of each lower-tier PFIC and will be
subject to U.S. federal income tax according to the rules described above on (i) certain distributions by a lower-tier PFIC
and (ii) dispositions of shares of lower-tier PFICs, in each case, as if the U.S. Holder held such shares directly, even
though the U.S. Holder will not receive any proceeds of those distributions or dispositions.
QEF Regime. A valid QEF election is
effective for the taxable year for which the election is made and all subsequent taxable years and may not be revoked without the
consent of the IRS. If a U.S. Holder makes a timely QEF election with respect to its direct or indirect interest in a PFIC,
the U.S. Holder will be required to include in income each year its allocable portion of the ordinary earnings and net capital gains
of the PFIC as QEF income inclusions, even if such portion is not distributed to the U.S. Holder. Thus, the U.S. Holder may
be required to report taxable income as a result of QEF income inclusions without corresponding receipts of cash. U.S. Holders of
New Silexion securities should not expect that they will receive cash distributions from New Silexion sufficient to cover their respective
U.S. tax liability with respect to such QEF income inclusions. In addition, U.S. Holders of New Silexion public warrants will
not be able to make a QEF election with respect to their New Silexion public warrants.
The timely QEF election also allows the electing U.S. Holder
to: (i) generally treat any gain recognized on the disposition of its shares of the PFIC as capital gain; (ii) treat its share
of the PFIC’s net capital gain, if any, as long-term capital gain instead of ordinary income; and (iii) either avoid interest
charges resulting from PFIC status, or make an annual election, subject to certain limitations, to defer payment of current taxes on its
undistributed QEF income inclusions, subject to an interest charge on the deferred tax computed by using the statutory rate of interest
applicable to an extension of time for payment of tax. In addition, net losses (if any) of a PFIC will not pass through to its shareholders
and may not be carried back or forward in computing such PFIC’s ordinary earnings and net capital gain in other taxable years.
A U.S. Holder’s tax basis in New Silexion ordinary shares will be increased
to reflect QEF income inclusions and will be decreased to reflect distributions of amounts previously included in income as QEF income
inclusions. No portion of the QEF income inclusions attributable to ordinary income will be treated as qualified dividend income. Amounts
included as QEF income inclusions with respect to direct and indirect PFICs generally will not be taxed again when distributed by such
PFICs.
A U.S. Holder may make a QEF election with respect to its New Silexion ordinary
shares only if New Silexion provides U.S. Holders on an annual basis with certain information, including a “PFIC annual information
statement” as described in the Treasury Regulations. If New Silexion determines that it is a PFIC for any taxable year, it will
endeavor to provide to a U.S. Holder such information as the IRS may require, including a PFIC annual information statement, in order
to enable a U.S. Holder to make and maintain a QEF election. However, there can be no assurance that New Silexion will have timely
knowledge of its status as a PFIC in the future or that New Silexion will timely provide U.S. Holders with the required information
on an annual basis to allow U.S. Holders to make and maintain a QEF election with respect to the New Silexion ordinary shares in
the event New Silexion is treated as a PFIC for any taxable year. The failure to provide such information on an annual basis could prevent
a U.S. Holder from making a QEF election or result in the invalidation or termination of a U.S. Holder’s prior QEF election.
In addition, as mentioned above, U.S. Holders of New Silexion public warrants will not be able to make a QEF election with respect
to their warrants.
If a U.S. Holder makes a QEF election with respect to its New Silexion ordinary
shares in a year after New Silexion’s first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) New
Silexion ordinary shares, then notwithstanding such QEF election, the excess distribution regime discussed above, adjusted to take into
account the QEF income inclusions resulting from the QEF election, will continue to apply with respect to such U.S. Holder’s
New Silexion ordinary shares, unless the U.S. Holder makes a purging election under the PFIC rules. Under one type of purging election,
the U.S. Holder will be deemed to have sold such New Silexion ordinary shares at their fair market value and any gain recognized
on such deemed sale will be treated as an excess distribution, as described above. As a result of such purging election, the U.S. Holder
will have additional basis (to the extent of any gain recognized on the deemed sale) and, solely for purposes of the PFIC rules, a new
holding period in the New Silexion ordinary shares.
In addition, as mentioned above, U.S. Holders of New Silexion public warrants will
not be able to make a QEF election with respect to their warrants. As a result, if a U.S. Holder sells or otherwise disposes of such
New Silexion public warrants (other than upon exercise of such New Silexion public warrants) and New Silexion were a PFIC at any time
during the U.S. Holder’s holding period of such New Silexion public warrants, any gain recognized generally will be treated
as an excess distribution, taxed as described above. If a U.S. Holder that exercises such New Silexion public warrants properly makes
and maintains a QEF election with respect to the newly acquired New Silexion ordinary shares (or has previously made a QEF election with
respect to New Silexion ordinary shares), the QEF election will apply to the newly acquired New Silexion ordinary shares. Notwithstanding
such QEF election, the excess distribution rules discussed above, adjusted to take into account the current income inclusions resulting
from the QEF election, will continue to apply with respect to such newly acquired New Silexion ordinary shares (which, while not entirely
clear, generally will be deemed to have a holding period for purposes of the PFIC rules that includes the period the U.S. Holder
held the New Silexion public warrants), unless the U.S. Holder makes a purging election under the PFIC rules. U.S. Holders are
urged to consult their tax advisors as to the application of the rules governing purging elections to their particular circumstances.
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Mark-to-Market Regime. Alternatively,
a U.S. Holder may make an election to mark marketable shares in a PFIC to market on an annual basis. PFIC shares generally are marketable
if they are “regularly traded” on a national securities exchange that is registered with the SEC, such as Nasdaq. New Silexion
ordinary shares are listed on Nasdaq but there can be no assurance that New Silexion ordinary shares will continue to be so listed or
will be “regularly traded” for purposes of these rules. Pursuant to such an election, a U.S. Holder of New Silexion ordinary
shares would include in each year as ordinary income the excess, if any, of the fair market value of such stock or shares over its adjusted
basis at the end of the taxable year. A U.S. Holder may treat as ordinary loss any excess of the adjusted basis of the New Silexion
ordinary shares over its fair market value at the end of the year, but only to the extent of the net amount previously included in income
as a result of the election in prior years. A U.S. Holder’s adjusted tax basis in the New Silexion ordinary shares will
be increased to reflect any amounts included in income, and decreased to reflect any amounts deducted, as a result of a mark-to-market election.
Any gain recognized on a disposition of New Silexion ordinary shares in a taxable year in which New Silexion is a PFIC will be treated
as ordinary income and any loss will be treated as ordinary loss (but only to the extent of the net amount of income previously included
as a result of a mark-to-market election, and any loss in excess of such prior inclusions generally would be treated as a capital
loss). A mark-to-market election applies for the taxable year in which the election was made, and for each subsequent taxable year,
unless the PFIC shares cease to be marketable or the IRS consents to the revocation of the election. U.S. Holders should also be
aware that the Code and the Treasury Regulations do not allow a mark-to-market election with respect to stock of lower-tier PFICs
that is non-marketable. There is also no provision in the Code, Treasury Regulations or other published authority that specifically provides
that a mark-to-market election with respect to the stock of a publicly traded holding company (such as New Silexion) effectively
exempts stock of any lower-tier PFICs from the negative tax consequences arising from the general PFIC rules. U.S. Holders are
advised to consult their own tax advisor to determine whether the mark-to-market tax election is available to them and the consequences
resulting from such election. In addition, U.S. Holders of New Silexion public warrants will not be able to make a mark-to-market election
with respect to their New Silexion public warrants.
PFIC Reporting Requirements
A U.S. Holder that owns (or is deemed to own) shares in a
PFIC during any taxable year of the U.S. Holder generally is required to file an IRS Form 8621 with such U.S. Holder’s
U.S. federal income tax return and provide such other information as the IRS may require. Failure to file IRS Form 8621 for
each applicable taxable year may result in substantial penalties and result in the U.S. Holder’s taxable years being open
to audit by the IRS until such forms are properly filed.
THE RULES DEALING WITH PFICS AND PFIC ELECTIONS ARE VERY COMPLEX AND ARE AFFECTED BY
VARIOUS FACTORS IN ADDITION TO THOSE DESCRIBED ABOVE. ACCORDINGLY, U.S. HOLDERS OF NEW SILEXION SECURITIES ARE URGED TO CONSULT THEIR
OWN TAX ADVISORS CONCERNING THE APPLICATION OF THE PFIC RULES TO NEW SILEXION SECURITIES UNDER THEIR PARTICULAR CIRCUMSTANCES.
Additional Reporting Requirements
Certain U.S. Holders may be required to file an IRS Form 926 (Return by a
U.S. Transferor of Property to a Foreign Corporation) to report a transfer of property (including cash) to New Silexion. Substantial
penalties may be imposed on a U.S. Holder that fails to comply with this reporting requirement, and the period of limitations on
assessment and collection of U.S. federal income taxes will be extended in the event of a failure to comply. Furthermore, certain
U.S. Holders who are individuals and certain entities will be required to report information with respect to such U.S. Holder’s
investment in “specified foreign financial assets” on IRS Form 8938 (Statement of Specified Foreign Financial Assets),
subject to certain exceptions. Specified foreign financial assets generally include any financial account maintained with a non-U.S. financial
institution and should also include New Silexion ordinary shares and New Silexion public warrants if they are not held in an account maintained
with a U.S. financial institution. Persons who are required to report specified foreign financial assets and fail to do so may be
subject to substantial penalties, and the period of limitations on assessment and collection of U.S. federal income taxes may be
extended in the event of a failure to comply. U.S. Holders are urged to consult their tax advisors regarding the foreign financial
asset and other reporting obligations and their application to an investment in New Silexion ordinary shares and New Silexion public warrants.
Information Reporting and Backup Withholding
Dividend payments with respect to New Silexion ordinary shares and proceeds from the
sale, exchange or redemption of New Silexion securities may be subject to information reporting to the IRS and possible backup withholding.
Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes other
required certifications, or who is otherwise exempt from backup withholding and establishes such exempt status.
Backup withholding is not an additional tax. Amounts withheld as
backup withholding may be credited against a U.S. Holder’s U.S. federal income tax liability, and a U.S. Holder generally
may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for refund
with the IRS and furnishing any required information.
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PLAN OF DISTRIBUTION
We have engaged H.C. Wainwright
& Co, LLC, or the Placement Agent, to act as our exclusive placement agent to solicit offers to purchase the securities offered pursuant
to this prospectus on a reasonable best efforts basis. The engagement agreement does not give rise to any commitment by the Placement
Agent to purchase any of our securities, and the Placement Agent will have no authority to bind us by virtue of the engagement agreement.
The Placement Agent is not purchasing or selling any of the securities offered by us under this prospectus, nor is it required to arrange
for the purchase or sale of any specific number or dollar amount of securities, other than to use its “reasonable best efforts”
to arrange for the sale of such securities by us. Therefore, we may not sell all of the securities being offered. The terms of this offering
were subject to market conditions and negotiations between us, the Placement Agent and prospective investors. This is a best efforts offering
and there is no minimum offering amount required as a condition to the closing of this offering. Because there is no minimum offering
amount required as a condition to closing this offering, we may sell fewer than all of the securities offered hereby, which may significantly
reduce the amount of proceeds received by us. The Placement Agent does not guarantee that it will be able to raise new capital in any
prospective offering. The Placement Agent may engage sub-agents or selected dealers to assist with the offering.
Investors purchasing securities offered hereby will have the option to execute a securities
purchase agreement with us. In addition to rights and remedies available to all purchasers in this offering under federal securities and
state law, the purchasers which enter into a securities purchase agreement will also be able to bring claims of breach of contract against
us. The ability to pursue a claim for breach of contract is material to larger purchasers in this offering as a means to enforce a covenant
to not enter into any equity financings for 60 days from closing of the offering, subject to certain exceptions. The nature of the
representations, warranties and covenants in the securities purchase agreements shall include:
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standard issuer representations and warranties on matters such as organization, qualification, authorization,
no conflict, no governmental filings required, current in SEC filings, no litigation, labor or other compliance issues, environmental,
intellectual property and title matters and compliance with various laws such as the Foreign Corrupt Practices Act; and |
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covenants regarding matters such as registration of warrant shares, no integration with other offerings,
no shareholder rights plans, no material nonpublic information, use of proceeds, indemnification of purchasers, reservation and listing
of ordinary shares, and no subsequent equity sales for 60 days from closing of the offering, subject to certain exceptions.
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The securities will be offered at a fixed
price and are expected to be issued in a single closing. We expect this offering to be completed not later than two business days following
the commencement of this offering, which will be the date that we enter into a securities purchase agreement to sell the securities offered
hereby. We expect to close the offering on or before October 5, 2025. We will deliver all securities to be issued in connection with
this offering delivery versus payment/receipt versus payment upon receipt of investor funds received by us. Accordingly, neither we nor
the Placement Agent have made any arrangements to place investor funds in an escrow account or trust account since the Placement Agent
will not receive investor funds in connection with the sale of the securities offered hereunder.
We expect to deliver the securities being offered pursuant to this prospectus on or
about , 2025.
Fees and Expenses
The following table shows the per share
and accompanying ordinary warrants and per pre-funded warrant and accompanying ordinary warrants and total placement agent fees we will
pay in connection with the sale of the securities in this offering.
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Per Share and Accompanying Ordinary Warrant |
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Per Pre-Funded
Warrant and Accompanying Ordinary Warrant |
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Total |
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Public offering price |
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Placement agent fees |
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Proceeds to us, before expenses |
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We have agreed to pay the Placement Agent
a cash fee equal to 7.0% of the aggregate gross proceeds raised in this offering and a management fee equal to 1.0% of the gross proceeds
raised in this offering. In addition, we have agreed to pay the Placement Agent $25,000 for its non-accountable expenses and up to $100,000
for legal fees and out-of-pocket expenses and for its clearing expenses in the amount of up to $15,950. We estimate the total offering
expenses of this offering that will be payable by us, excluding the Placement Agent fees and expenses, will be approximately $181,116.
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Placement Agent Warrants
In addition, we have agreed to issue to
the Placement Agent, or its designees, warrants to purchase up to 58,252 ordinary shares (which represents 7.0% of the aggregate
number of ordinary shares issued in this offering and issuable upon the exercise of the pre-funded warrants issued in this offering) with
an exercise price of $ per share (representing 125% of the public offering price per share and
accompanying ordinary warrants) and exercisable beginning on the effective date of the Warrant Shareholder Approval, provided however,
if the Pricing Conditions are met, the Placement Agent warrants will be exercisable upon issuance, and will expire five years from
the date of the commencement of sales in this offering. The Placement Agent warrants and underlying ordinary shares are registered on
the registration statement of which this prospectus is a part. The form of the Placement Agent warrant will be included as an exhibit
to this registration statement of which this prospectus forms a part.
Right of First Refusal
We have granted the Placement Agent a right of first refusal for
a period of 12 months following the closing of this offering to act as exclusive financial advisor, sole book-running manager, sole underwriter,
sole placement agent or sole agent for each and every future debt financing or refinancing and public or private equity or debt offering
or acquisition or disposition by us or any of our successors or subsidiaries.
Tail
We have also agreed to pay the Placement Agent a tail fee equal to the cash and warrant
compensation in this offering, if any investor, who was contacted or introduced to us by the Placement Agent during the term of its engagement,
provides us with capital in any public or private offering or other financing or capital raising transaction during the 12-month period
following expiration or termination of our engagement of the Placement Agent.
Lock-up Agreements
We and our subsidiaries have agreed with the Placement Agent to be subject to a lock-up
period of 60 days following the date of closing of the offering pursuant to this prospectus. Each of our officers and directors have agreed
with the Placement Agent to be subject to a lock-up period of 90 days following the date of closing of the offering pursuant to this prospectus.
This means that, during the applicable lock-up period, we and such persons may not offer for sale, contract to sell, sell, distribute,
grant any option, right or warrant to purchase, pledge, hypothecate or otherwise dispose of, directly or indirectly, any of our shares
of ordinary shares or any securities convertible into, or exercisable or exchangeable for, shares of ordinary shares, subject to customary
exceptions. The Placement Agent may waive the terms of these lock-up agreements in its sole discretion and without notice. In addition,
we have agreed to not issue any securities that are subject to a price reset based on the trading prices of our ordinary shares or upon
a specified or contingent event in the future, or enter into any agreement to issue securities at a future determined price for a period
of one year following the closing date of this offering, subject certain exceptions. The Placement Agent may waive this prohibition in
its sole discretion and without notice.
Regulation M
The Placement Agent may be deemed to be an underwriter within the meaning of Section
2(a)(11) of the Securities Act, and any commissions received by it and any profit realized on the resale of the securities sold by it
while acting as principal might be deemed to be underwriting discounts or commissions under the Securities Act. As an underwriter, the
Placement Agent would be required to comply with the requirements of the Securities Act and the Exchange Act, including, without limitation,
Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of our securities
by the Placement Agent acting as principal. Under these rules and regulations, the Placement Agent (i) may not engage in any stabilization
activity in connection with our securities and (ii) may not bid for or purchase any of our securities or attempt to induce any person
to purchase any of our securities, other than as permitted under the Exchange Act, until it has completed its participation in the distribution.
Indemnification
We have agreed to indemnify the Placement Agent against certain liabilities, including
certain liabilities arising under the Securities Act, or to contribute to payments that the Placement Agent may be required to make for
these liabilities.
Determination of Offering Price and Ordinary Warrants Exercise Price
The actual offering price of the securities we are offering has been negotiated between
us and the investors in the offering based on the trading of our ordinary shares and warrants prior to the offering, among other things.
Other factors considered in determining the public offering price of the securities we are offering include our history and our prospects,
the state of the biotechnology industry in which we operate, our recent operating results, including results of our pre-clinical studies
and clinical trials, the general condition of the securities markets at the time of this offering, and such other factors as were deemed
relevant.
115
Electronic Offer, Sale and Distribution of Securities
A prospectus in electronic format may be made available on the websites maintained by
the Placement Agent, if any, participating in this offering and the Placement Agent may distribute prospectuses electronically. Other
than the prospectus in electronic format, the information on these websites is not part of this prospectus or the registration statement
of which this prospectus forms a part, has not been approved or endorsed by us or the Placement Agent, and should not be relied upon by
investors.
Other Relationships
From time to time, the Placement Agent or its affiliates have in the past or may in
the future provide in the future, various advisory, investment and commercial banking and other services to us in the ordinary course
of business, for which they have received and may continue to receive customary fees and commissions. However, except as disclosed in
this prospectus, we have no present arrangements with the Placement Agent for any further services.
Listing
Our ordinary shares and warrants
are currently listed on the Nasdaq Capital Market under the symbols “SLXN” and “SLXNW”, respectively.
LEGAL MATTERS
The legality of the ordinary shares
offered by this prospectus and certain other Cayman Islands legal matters will be passed upon for us by Conyers Dill & Pearman LLP. The
legality of the ordinary warrants, pre-funded warrants and Placement Agent warrants offered by this prospectus and certain legal matters
relating to U.S. law will be passed upon for us by Greenberg Traurig LLP. The Placement Agent is being represented by Ellenoff Grossman
& Schole LLP.
EXPERTS
The financial statements as of December 31, 2024 and 2023, and for the two years ended
December 31, 2024, included in this prospectus have been so included in reliance on the report (which contains an explanatory paragraph
relating to the Company’s ability to continue as a going concern as described in Note 1e to the financial statements) of Kesselman
& Kesselman, a member firm of PricewaterhouseCoopers International Limited, an independent registered public accounting firm, given
on the authority of said firm as experts in auditing and accounting.
WHERE YOU
CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities
Act, with respect to the securities being offered by this prospectus. This prospectus, which constitutes part of the registration statement,
does not contain all of the information in the registration statement and its exhibits. For further information with respect to New Silexion
and the securities offered by this prospectus, we refer you to the registration statement and its exhibits. Statements contained in this
prospectus as to the contents of any contract or any other document referred to are not necessarily complete, and in each instance, we
refer you to the copy of the contract or other document filed as an exhibit to the registration statement. Each of these statements is
qualified in all respects by this reference. You can read our SEC filings, including the registration statement, over the internet at
the SEC’s website at www.sec.gov.
We are subject to the information reporting requirements of the Exchange Act, and we
file reports, proxy statements and other information with the SEC. These reports, proxy statements and other information will be available
for review at the SEC’s website at www.sec.gov. We also maintain a website at https://www.completesolaria.com/, at which you may
access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the
SEC. The information contained in, or that can be accessed through, our website is not part of this prospectus.
116
SILEXION
THERAPEUTICS CORP
UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE
30, 2025
SILEXION
THERAPEUTICS CORP
INTERIM
FINANCIAL STATEMENTS
JUNE
30, 2025
(Unaudited)
TABLE
OF CONTENTS
|
Page | |
|
CONSOLIDATED
FINANCIAL STATEMENTS: |
|
|
Condensed
Consolidated Balance Sheets (unaudited) |
F-3
- F-4 |
|
Condensed
Consolidated Statements of Operations (unaudited) |
F-5 |
|
Condensed
Consolidated Statements of Changes in Redeemable Convertible Preferred Shares and Shareholders’ Equity (Capital Deficiency) (unaudited) |
F-6
- F-7 |
|
Condensed
Consolidated Statements of Cash Flows (unaudited) |
F-8
- F-9 |
|
Notes
to Condensed Consolidated Financial Statements (unaudited) |
F-10
- F-21 |
_____________________
_____________________________________
_____________________
F
- 2
SILEXION THERAPEUTICS CORP
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
|
June 30, |
December 31, |
|||||||
|
2025 |
2024 |
|||||||
|
U.S. dollars in thousands |
||||||||
|
Assets |
||||||||
|
CURRENT ASSETS: |
||||||||
|
Cash and cash equivalents |
$ |
|
$ |
|
||||
|
Restricted cash |
|
|
||||||
|
Prepaid expenses |
|
|
||||||
|
Other current assets |
|
|
||||||
|
TOTAL CURRENT ASSETS |
|
|
||||||
|
NON-CURRENT ASSETS: |
||||||||
|
Restricted cash |
|
|
||||||
|
Long-term deposit |
|
|
||||||
|
Property and equipment, net |
|
|
||||||
|
Operating lease right-of-use asset |
|
|
||||||
|
TOTAL NON-CURRENT ASSETS |
|
|
||||||
|
TOTAL ASSETS |
$ |
|
$ |
|
||||
The accompanying notes are an integral part of the
unaudited condensed consolidated financial statements.
F - 3
SILEXION THERAPEUTICS CORP
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
|
June 30, |
December 31, |
|||||||
|
2025 |
2024 |
|||||||
|
U.S. dollars in thousands |
||||||||
|
Liabilities and shareholders’ equity (capital deficiency)
|
||||||||
|
CURRENT LIABILITIES: |
||||||||
|
Trade payables |
$ |
|
$ |
|
||||
|
Current maturities of operating lease liability |
|
|
||||||
|
Employee related obligations |
|
|
||||||
|
Accrued expenses and other account payable |
|
|
||||||
|
Private warrants to purchase ordinary shares (including $
and $ |
|
|
||||||
|
Underwriters Promissory Note |
|
|
||||||
|
TOTAL CURRENT LIABILITIES |
|
|
||||||
|
NON-CURRENT LIABILITIES: |
||||||||
|
Long-term operating lease liability |
|
|
||||||
|
Related Party Promissory Note |
|
|
||||||
|
TOTAL NON-CURRENT LIABILITIES |
$ |
|
$ |
|
||||
|
TOTAL LIABILITIES |
$ |
|
$ |
|
||||
|
SHAREHOLDERS' EQUITY (CAPITAL DEFICIENCY):
Ordinary shares ($
and December 31, 2024;
June 30, 2025 and December 31, 2024, respectively) |
|
|
||||||
|
Additional paid-in capital |
|
|
||||||
|
Accumulated deficit |
(
|
) |
(
|
) | ||||
|
TOTAL SHAREHOLDERS' EQUITY (CAPITAL DEFICIENCY) |
$ |
|
$ |
(
|
) | |||
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
(CAPITAL DEFICIENCY) |
$ |
|
$ |
|
||||
All share amounts have been retroactively adjusted
to reflect a 1-for-15 reverse share split as discussed in Note 11(b)
* Represents an amount less than $1
** Net
of 28 treasury shares held by the Company as of December 31, 2024
The accompanying notes are an integral part of the
unaudited condensed consolidated financial statements.
F
- 4
SILEXION
THERAPEUTICS CORP
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
Six
months ended
June
30 |
Three
months ended
June
30 |
|||||||||||||||
|
2025
|
2024
|
2025
|
2024
|
|||||||||||||
|
U.S.
dollars in thousands |
U.S.
dollars in thousands |
|||||||||||||||
|
OPERATING
EXPENSES: |
||||||||||||||||
|
Research
and development (including $ |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
General
and administrative (including $ |
|
|
|
|
||||||||||||
|
TOTAL
OPERATING EXPENSES |
|
|
|
|
||||||||||||
|
OPERATING
LOSS |
|
|
|
|
||||||||||||
|
Financial
expenses, net (including $ |
|
|
|
|
||||||||||||
|
LOSS
BEFORE INCOME TAX |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
INCOME
TAX |
|
|
|
|
||||||||||||
|
NET
LOSS |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Attributable
to: |
||||||||||||||||
|
Equity holders
of the Company |
|
|
|
|
||||||||||||
|
Non-controlling
interests |
|
|
|
|
||||||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||
|
LOSS
PER SHARE, BASIC AND DILUTED |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
WEIGHTED
AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING USED IN COMPUTATION OF BASIC AND DILUTED LOSS PER SHARE
|
|
|
|
|
||||||||||||
All
share amounts have been retroactively adjusted to reflect a 1-for-9 and a 1-for-15 reverse share splits as discussed in Note 1(g)
and 11(b)
The
accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
F
- 5
SILEXION
THERAPEUTICS CORP
UNAUDITED
CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY (CAPITAL DEFICIENCY)
(U.S.
dollars in thousands, except per share data)
|
Redeemable
Convertible Preferred Shares |
Ordinary
shares |
Additional paid-in Capital |
Accumulated
deficit |
Total
shareholders’ equity (capital deficiency) |
Total
redeemable convertible preferred shares and contingently redeemable non-controlling interests, net of shareholders’ equity (capital
deficiency) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Series
A preferred shares |
Series
A-1 preferred shares |
Series
A-2 preferred shares |
Series
A-3 preferred shares |
Series
A-4 preferred shares |
Contingently
redeemable non-controlling
interests
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Amount
|
Shares
|
Amount
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT JANUARY 1, 2024 |
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||||||||||||||||||||||||||||||||||||
|
CHANGES
DURING THE SIX MONTHS PERIOD ENDED JUNE 30, 2024 (unaudited): |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Exercise
of options |
|
**
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Share-based
compensation |
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss |
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AS OF JUNE 30, 2024 |
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT JANUARY 1, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
***
|
$ |
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
| |||||||||||||||||||||||||||||||||||||||||||
|
CHANGES
DURING THE SIX MONTHS PERIOD ENDED JUNE 30, 2025 (unaudited): |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of ordinary shares and warrants upon public offering, net of issuance costs and exercise of pre-funded warrants to ordinary shares (see
Note 4(a)) |
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Exercise
of warrants (see Note 4(a)) |
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of ordinary shares and warrants upon warrants inducement, net of issuance costs (see Note 4(b)) |
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Share-based
compensation |
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Conversion
of EarlyBird Promissory Note (see Note 5) |
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss |
(
|
)
|
(
|
)
|
(
|
)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AS OF JUNE 30, 2025 |
-,
|
-,
|
-,
|
-,
|
-,
|
-,
|
-,
|
-,
|
-,
|
-,
|
-,
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||||||||||||||||||||||||||||||||||||||||||
All
share amounts have been retroactively adjusted to reflect a 1-for-9 and a 1-for-15 reverse share splits as discussed in Note 1(g)
and 11(b)
* Represents
an amount less than $1
**
Represents fully vested pre-funded options for the Company’s ordinary shares at an exercise price of $0.339 or 0.339 NIS per
share
***
Net of 28 treasury shares held by the Company as of December 31, 2024
The
accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
F
- 6
SILEXION
THERAPEUTICS CORP
UNAUDITED
CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY (CAPITAL DEFICIENCY)
(U.S.
dollars in thousands, except per share data)
|
Redeemable
Convertible Preferred Shares |
Ordinary
shares |
Additional paid-in Capital |
Accumulated
deficit |
Total
shareholders’ equity (capital deficiency) |
Total
redeemable convertible preferred shares and contingently redeemable non-controlling interests, net of capital deficiency
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Series
A preferred shares |
Series
A-1 preferred shares |
Series
A-2 preferred shares |
Series
A-3 preferred shares |
Series
A-4 preferred shares |
Contingently
redeemable non-controlling
interests
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Amount
|
Shares
|
Amount
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT MARCH 31, 2024 |
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||||||||||||||||||||||||||||||||||||
|
CHANGES
DURING THE THREE MONTHS PERIOD ENDED JUNE 30, 2024 (unaudited): |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Share-based
compensation |
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss |
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AS OF JUNE 30, 2024 |
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT MARCH 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
**
|
$ |
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
CHANGES
DURING THE THREE MONTHS PERIOD ENDED JUNE 30, 2025 (unaudited): |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Share-based
compensation |
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss |
(
|
)
|
(
|
)
|
(
|
)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AS OF JUNE 30, 2025 |
-,
|
-,
|
-,
|
-,
|
-,
|
-,
|
-,
|
-,
|
-,
|
-,
|
-,
|
|
$
|
|
$
|
|
(
|
)
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||
All
share amounts have been retroactively adjusted to reflect a 1-for-9 and a 1-for-15 reverse share splits as discussed in Note 1(g)
and 11(b)
* Represents
an amount less than $1
**
Net of 28 treasury shares held by the Company as of March 31, 2025
The
accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
F
- 7
SILEXION
THERAPEUTICS CORP
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Six
months ended
June
30 |
Three
months ended
June
30 |
|||||||||||||||
|
2025
|
2024
|
2025
|
2024
|
|||||||||||||
|
U.S.
dollars in thousands |
U.S.
dollars in thousands |
|||||||||||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES: |
||||||||||||||||
|
Net
loss |
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
| ||||
|
Adjustments
required to reconcile loss to net cash used in operating activities: |
||||||||||||||||
|
Depreciation
|
|
|
|
|
||||||||||||
|
Share-based
compensation expenses |
|
|
|
|
||||||||||||
|
Non-cash
financial expenses |
|
|
|
|
||||||||||||
|
Changes
in operating assets and liabilities: |
||||||||||||||||
|
Increase
in prepaid expenses |
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
| ||||||||
|
Decrease
(increase) in other current assets |
(
|
)
|
(
|
)
|
(
|
)
|
|
|||||||||
|
Increase
(decrease) in trade payable |
(
|
)
|
(
|
)
|
(
|
)
|
|
|||||||||
|
Net
change in operating lease |
|
|
|
|
||||||||||||
|
Increase
(decrease) in employee related obligations |
(
|
)
|
|
|
(
|
)
| ||||||||||
|
Increase
(decrease) in accrued expenses and other account payable |
(
|
)
|
|
(
|
)
|
|
||||||||||
|
Net
cash used in operating activities |
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
| ||||||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES- |
||||||||||||||||
|
Purchase
of property and equipment |
(
|
)
|
(
|
)
|
(
|
)
|
|
|||||||||
|
Net
cash used in investing activities |
(
|
)
|
(
|
)
|
(
|
)
|
|
|||||||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES: |
||||||||||||||||
|
Exercise
of options |
|
|
|
|
||||||||||||
|
Proceeds
from issuance of ordinary shares upon public offering |
|
|
|
|
||||||||||||
|
Issuance
costs related to public offering |
(
|
)
|
|
(
|
)
|
|
||||||||||
|
Proceeds
from exercise of warrants |
|
|
|
|
||||||||||||
|
Proceeds
from issuance of ordinary shares upon warrants inducement |
|
|
|
|
||||||||||||
|
Issuance
costs related to warrants inducement |
(
|
)
|
|
(
|
)
|
|
||||||||||
|
Payment
of Underwriters Promissory Note |
(
|
)
|
|
|
|
|||||||||||
|
Net
cash provided by (used in) financing activities |
|
|
(
|
)
|
|
|||||||||||
|
INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
|
(
|
)
|
(
|
)
|
(
|
)
| |||||||||
|
EXCHANGE
RATE DIFFERENCES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
|
(
|
)
|
|
(
|
)
| ||||||||||
|
BALANCE
OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD |
|
|
|
|
||||||||||||
|
BALANCE
OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
* Represents
an amount less than $1
F
- 8
SILEXION
THERAPEUTICS CORP
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Six
months ended
June
30 |
Three
months ended
June
30 |
|||||||||||||||
|
2025
|
2024
|
2025
|
2024
|
|||||||||||||
|
U.S.
dollars in thousands |
U.S.
dollars in thousands |
|||||||||||||||
|
Appendix
A–
RECONCILIATION
OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH REPORTED IN THE CONSOLIDATED BALANCE SHEETS: |
||||||||||||||||
|
Cash and cash equivalents
|
|
|
|
|
||||||||||||
|
Restricted cash
|
|
|
|
|
||||||||||||
|
TOTAL
CASH, CASH EQUIVALENTS AND RESTRICTED CASH SHOWN IN STATEMENT OF CASH FLOWS |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Appendix
B - SUPPLEMENTARY INFORMATION: |
||||||||||||||||
|
SUPPLEMENTARY
INFORMATION ON INVESTING AND FINANCING ACTIVITIES NOT INVOLVING CASH FLOWS: |
||||||||||||||||
|
Conversion of Promissory
Note to ordinary shares |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION: |
||||||||||||||||
|
Interest paid
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Interest received
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
The
accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
F
- 9
SILEXION THERAPEUTICS CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(U.S. dollars in thousands)
NOTE
1 - GENERAL:
| a. |
Silexion Therapeutics Corp (“New
Silexion”) (hereinafter - the “Company” or the “Combined Company”) is an entity that was formed for the
purpose of effecting the Transactions (see below), and now serves as a publicly-traded holding company of its subsidiaries — including
Moringa Acquisition Corp (“Moringa” or “the SPAC”), a Cayman Islands exempted company and Silexion Therapeutics
Ltd. (formerly known as Silenseed Ltd.) (“Silexion”), an Israeli limited company— after the closing of the Transactions
(the “Closing”). |
| b. |
From its formation on April 2, 2024
until the consummation of the Transactions on August 15, 2024, the Company had no operations and had been formed for the sole purpose
of entering into the Transactions and serving as the publicly-traded company following the Transactions. Silexion, on the other hand,
as the accounting acquirer in the Transactions and the predecessor entity to the Company from an accounting perspective, had active operations
during earlier periods of time, prior to the Transactions. Consequently, these financial statements reflect the financial information
of Silexion (as the predecessor entity to the Company) until August 15, 2024 and the financial information of New Silexion (as the combined
company following the Transactions) from that date forward. |
| c. |
On April 3, 2024, Silexion entered
into an Amended and Restated Business Combination Agreement (hereinafter, the “A&R BCA”) with the SPAC, New Silexion,
August M.S. Ltd. an Israeli company and wholly-owned subsidiary of New Silexion (“Merger Sub 1”), and Moringa Acquisition
Merger Sub Corp, a Cayman Islands exempted company and wholly-owned subsidiary of New Silexion (“Merger Sub 2”). Under the
A&R BCA, both Silexion and the SPAC were to become wholly-owned subsidiaries of New Silexion, which was to become a publicly-held,
Nasdaq-listed entity (the A&R BCA and related transactions: the “Transactions”). |
| d. |
On August 15, 2024, the parties completed
the Transactions pursuant to which Merger Sub 2 merged with and into the SPAC, with the SPAC continuing as the surviving company of such
merger and a wholly-owned subsidiary of New Silexion (the “SPAC Merger”), and Merger Sub 1 merged with and into Silexion,
with Silexion continuing as the surviving company of such merger and a wholly-owned subsidiary of New Silexion (the “Acquisition
Merger”). |
| e. |
In connection with the closing of
the Transactions, the ordinary shares and warrants of New Silexion are now listed on the Nasdaq Global Market and began trading under
the symbols “SLXN” and “SLXNW”, respectively. |
| f. |
In October 2023, Israel was attacked
by Hamas, a terrorist organization and entered a state of war. Since the commencement of these events, there have been additional active
hostilities, including with Hezbollah in Lebanon, the Houthi movement which controls parts of Yemen, and with Iran. As of the date of
these condensed consolidated financial statements, the war with Hamas is ongoing and continues to evolve. In response to ongoing Iranian
aggression and support of proxy attacks against Israel, on June 12, 2025, Israel conducted a series of preemptive defensive air strikes
in Iran targeting Iran’s nuclear program and military commanders. On June 24, 2025, a ceasefire had been reached and as of such
date there has been no further escalation of hostilities between Israel and Iran; however, there is no assurance that the ceasefire will
be upheld and military activity and hostilities may continue to exist at varying levels of intensity. Any or all of these situations may
potentially escalate in the future to more violent events. |
The
Company’s employees and management personnel are located in Israel, however other core activities including research and development,
clinical, regulatory etc. are located outside of Israel. Currently, the Company’s activities in Israel remain largely unaffected.
During the six months ended June 30, 2025 and as of December 31, 2024, the impact of this war on the Company’s results of operations
and financial condition was immaterial.
F - 10
SILEXION THERAPEUTICS CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
(U.S. dollars in thousands)
NOTE
1 - GENERAL (continued):
| g. |
On November 22, 2024, the Company
announced a prospective |
For
the additional, 1-for-15 reverse share split effected after the end of the reporting period, see Note 11(b).
| h. |
Going concern:
|
Since
its inception, the Company has devoted substantially all its efforts to research and development, clinical trials, and capital raising
activities. The Company is still in its development and clinical stage and has not yet generated revenues.
The
Company (or, for those periods prior to the Transactions, its predecessor, Silexion) has incurred losses of $4,238
and $16,519
for the six-months period ended on June 30, 2025 and for the year ended December 31, 2024, respectively. During the six-month period ended
on June 30, 2025, the Company had negative operating cash flows of $4,960 .
As of June 30, 2025, the Company had cash and cash equivalents of $3,466 .
The
Company expects to continue incurring losses, and negative cash flows from operations. Management is in the process of evaluating various
financing alternatives, including financing via the ELOC Agreement, as the Company will need to finance future research and development
activities, general and administrative expenses and working capital through fund raising. However, there is no assurance that the Company
will be successful in obtaining such funding.
Under
these circumstances, in accordance with the requirements of ASC 205-40, management has concluded that there is substantial doubt about
the Company’s ability to continue as a going concern for at least 12 months from the date these financial statements are issued.
The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES:
| a. |
Unaudited Condensed Financial
Statements |
The
accompanying condensed financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") for interim financial
statements and follow the requirements of the Securities and Exchange Commission (“SEC”) for interim financial reporting.
Accordingly, they do not include all of the information and notes required by U.S. GAAP for annual financial statements. In the opinion
of management, these unaudited condensed consolidated financial statements reflect all adjustments, which include normal and recurring
adjustments, necessary for a fair statement of the Company’s consolidated financial position as of June 30, 2025, and the consolidated
results of operations, statements of changes in redeemable convertible preferred shares and shareholders’ equity (capital
deficiency) and cash flows for the six and three-month period ended June 30, 2025 and 2024.
F - 11
SILEXION THERAPEUTICS CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
(U.S. dollars in thousands)
NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
The
consolidated results for the six and three-month ended June 30, 2025 are not necessarily indicative of the results to be expected for
the year ending December 31, 2025.
These
unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements
and the related notes of the Company as of and for the year ended December 31, 2024, included in the Company’s Annual Report on
Form 10-K filed with the SEC on March 18, 2025. The significant accounting policies adopted and used in the preparation of the financial
statements are consistent with those of the previous financial year.
| b. |
Use of estimates
|
The
preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying notes. As applicable to these financial statements, the most significant
estimates and assumptions relate to fair value of financial instruments, see Note 7. These estimates and assumptions are based on current
facts, future expectations, and various other factors believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent
from other sources. Actual results may differ materially and adversely from these estimates.
| c. |
Restricted cash
|
As
of June 30, 2025 and December 31, 2024, the Company pledged an amount of $53
and $57 ,
respectively in favor of a bank as collateral for guarantees provided to secure the lease payments.
The
Company is required to hold a minimum amount of NIS 86
in its bank account in order to maintain availability of a credit line from its credit card company.
| d. |
Fair value measurement
|
Fair
value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly
transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements,
the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three
broad levels, which are described as follows:
| Level 1: |
Quoted prices (unadjusted) in active markets that
are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
|
| Level 2: |
Observable prices that are based on inputs not
quoted on active markets, but corroborated by market data or active market data of similar or identical assets or liabilities.
|
| Level 3 |
Unobservable inputs are used when little or no
market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. |
In
determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable
inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.
F - 12
SILEXION THERAPEUTICS CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
(U.S. dollars in thousands)
NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
| e. |
Concentration of credit
risks |
Financial
instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, restricted
cash and long-term deposit. The Company deposits cash and cash equivalents mostly with three low risk financial institution. The Company
has not experienced any material credit losses in these accounts and does not believe it is exposed to significant credit risk on these
instruments.
| f. |
Recently
adopted accounting pronouncements : |
In
June 2022, the FASB issued ASU 2022-03 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”.
The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the
equity security and, therefore, is not considered in measuring its fair value. The ASU also clarifies that an entity cannot, as a separate
unit of account, recognize and measure a contractual sale restriction. The ASU also introduces new disclosure requirements for equity
securities subject to contractual sale restrictions. The Company adopted the ASU on January 1, 2025 and it did not have a material impact
on its consolidated financial statement.
There
have been no changes to the recently issued accounting pronouncements not yet adopted that were previously disclosed in the
Annual Report.
F - 13
SILEXION THERAPEUTICS CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
(U.S. dollars in thousands)
NOTE
3 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION:
Statement
of operations:
| a. |
Research and development
expenses:
|
|
Six
months ended
June
30 |
Three
months ended
June
30 |
|||||||||||||||
|
2025
|
2024
|
2025
|
2024
|
|||||||||||||
|
Payroll and related expenses
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Share-based compensation
expenses |
|
|
|
|
||||||||||||
|
Subcontractors and consultants
|
|
|
|
|
||||||||||||
|
Rent and maintenance
|
|
|
|
|
||||||||||||
|
Other
|
|
|
|
|
||||||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||
| b. |
General and administrative
expenses: |
|
Payroll and related expenses
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Share-based compensation
expenses |
|
|
|
|
||||||||||||
|
Professional services
|
|
|
|
|
||||||||||||
|
Depreciation
|
|
|
|
|
||||||||||||
|
Rent and maintenance
|
|
|
|
|
||||||||||||
|
Patent registration
|
|
|
|
|
||||||||||||
|
Travel expenses
|
|
|
|
|
||||||||||||
|
Other
|
|
|
|
|
||||||||||||
|
|
$
|
|
$
|
|
$
|
|
| c. |
Financial expense, net:
|
|
Change in fair value
of financial liabilities measured at fair value |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Interest
income, net |
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
| ||||||||
|
Foreign
currency exchange loss, net |
|
|
|
|
||||||||||||
|
Other
|
|
|
|
|
||||||||||||
|
Total
financial expense (income), net |
$
|
|
$
|
|
$
|
|
$
|
|
NOTE
4 - WARRANTS TO PURCHASE PREFERRED SHARES:
| a. |
Public
Offering of Ordinary Shares, Pre-Funded Warrants, and Ordinary Warrants. |
On
January 15, 2025, and January 17, 2025, the Company offered and sold, in a public offering (the “Offering”) 143,067
ordinary shares and 143,067
ordinary warrants to purchase up to 143,067
ordinary shares, at a purchase price of $20.25
per ordinary share and accompanying warrant, and 103,847
pre-funded warrants to purchase up to 103,847
ordinary shares and 103,847
ordinary warrants to purchase up to 103,847 ordinary
shares, at a purchase price of $20.25
per pre-funded warrant and accompanying ordinary warrant. The aggregate gross proceeds to the Company from the Offering were approximately
$5,000 ,
net of transaction costs of $745 .
The
pre-funded warrants were immediately exercisable at an exercise price of $0.0015
per ordinary share and were not to expire until exercised in full. The ordinary warrants had an exercise price of $20.25
per ordinary share, were immediately exercisable, and could be exercised for five
years from issuance.
F - 14
SILEXION THERAPEUTICS CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
(U.S. dollars in thousands)
NOTE
4 - WARRANTS TO PURCHASE PREFERRED SHARES (continued):
Applying
ASC 815-40, the Company concluded that the pre-funded warrants and ordinary warrants were considered indexed to the Company’s own
stock and met the conditions for equity classification, and thus were presented within equity.
As
compensation for the placement agent’s role in the public offering, the Company issued to it warrants to purchase up to 17,284
ordinary shares. Those placement agent warrants had an exercise price of $25.31
per ordinary share, were exercisable for five years
from the date of the commencement of sales in the Offering, and otherwise reflected substantially the same terms as the ordinary warrants
sold in the Offering.
As
of June 30, 2025, a total of 42,683 investor
warrants had been exercised for 42,683 of
the Company’s ordinary shares, and all 103,847 pre-funded
warrants had been exercised for 103,847
ordinary shares, for total proceeds of $864 ,
not including exercises as a result of the inducement transaction (which is described below).
| b. |
Induced
Warrant Exercise Transaction |
On
January 29, 2025, the Company entered into an inducement offer letter agreement (the “Inducement Offer”) with holders of 148,102
of the Company’s existing ordinary warrants that had been issued in the Offering. Under the Inducement Offer, on January 30, 2025,
those holders exercised those warrants for cash and purchased 148,102
ordinary shares at a cash exercise price of $20.25
per share. As consideration for the holders’ agreement to exercise, the Company issued to them new ordinary warrants to purchase
up to an aggregate of 148,102
ordinary shares at an exercise price of $22.50
per share (the “New Ordinary Warrants”). The exercising holders also paid the Company an additional $1.88
per New Ordinary Warrant issued to them. The Company received aggregate gross proceeds of approximately $3,276
from the exercise of the existing ordinary warrants by the holders, net of placement agent fees and other offering expenses of $462 .
The induced exercise of equity-classified warrants was accounted for as issuance costs of the New Ordinary Warrants.
Upon
exercise for cash of any New Ordinary Warrants, in certain circumstances, the placement agent will receive from the Company a cash fee
of 8.0% of the aggregate gross exercise price. Pursuant to the Inducement Offer transaction, the Company also issued to the placement
agent warrants to purchase up to 10,368
ordinary shares, which have the same terms as the New Ordinary Warrants issued in the transaction, except that the placement agent warrants
have an exercise price equal to $27.66
per share. Upon exercise for cash of any New Ordinary Warrants, in certain circumstances, the Company will issue to the placement agent
warrants that are exercisable for 7.0 %
of the number of ordinary shares issuable upon the exercise of those New Ordinary Warrants. As of June 30, 2025, the payment of cash fees
and issuance of additional warrants to the placement agent upon exercise of New Ordinary Warrants were not probable.
Both
the New Ordinary Warrants and the placement agent warrants were immediately exercisable from the date of their issuance until the 24-month
anniversary of the effective date of the resale registration statement that registered, with the SEC, the resale of the ordinary shares
underlying the New Ordinary Warrants and related placement agent warrants.
NOTE
5 - UNDERWRITERS PROMISSORY NOTE
During
January 2025, the Company has repaid $158
of the principal amount of the Underwriters Promissory Note.
On
March 13, 2025, the Company entered into a letter agreement (the “Note Conversion Inducement Agreement”) with EarlyBird, under
which the then outstanding principal amount and accrued interest of the Convertible Promissory Note issued to EarlyBird of $880
were extinguished for a cash payment (including the accrued interest) of $551
and 18,519 Ordinary
Shares.
F - 15
SILEXION THERAPEUTICS CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
(U.S. dollars in thousands)
NOTE
6 - SHARE-BASED COMPENSATION:
The
Company's share-based compensation expenses amounted to a total of $58
and $64
in the six months periods ended June 30, 2025 and 2024, respectively. As of June 30, 2025, 1,778
shares remain available for grant under the Company’s 2024 Incentive Option Plans.
On
July 14, 2025, the Company’s general meeting approved an increase to the equity incentive pool. As a result, the total number of
equity awards available to be granted under the 2024 Equity Incentive Plan increased by 84,791
to a total of 86,568 .
For further details, see Note 11(a)
Summary
of outstanding and exercisable options:
Below
is a summary of the Company's share-based compensation activity and related information with respect to options granted to employees and
non-employees for the six months periods ended June 30, 2025:
|
Number
of options |
Weighted-average
exercise
price (in
U.S.
dollars) |
Weighted-
average
remaining
contractual
term
(in
years) |
Aggregate
intrinsic
value
|
|||||||||||||
|
Outstanding at January
1, 2025 |
|
|
|
-
|
||||||||||||
|
Granted
|
|
|
|
-
|
||||||||||||
|
Expired
|
(
|
)
|
|
-
|
-
|
|||||||||||
|
Outstanding at June 30,
2025 |
|
|
|
-
|
||||||||||||
|
Exercisable at June 30,
2025 |
|
|
|
-
|
||||||||||||
|
Vested and expected to
vest at June 30, 2025 |
|
|
|
-
|
||||||||||||
In
2024 no options were granted.
On
February 9, 2025, Silexion’s board of directors approved granting 4,680
options to Silexion’s directors.
RSUs
granted to employees and non-employees:
In
the six months ending June 30, 2025, Silexion granted 3,994
RSUs to its directors and service providers, of which, 3,966
RSUs were approved to be granted to Silexion’s board of directors on February 9, 2025.”
The
share-based compensation expense by line item in the accompanying consolidated statements of operations is summarized as follows:
|
Six
months ended
June
30 |
Three
months ended
June
30 |
|||||||||||||||
|
2025
|
2024
|
2025
|
2024
|
|||||||||||||
|
Research and development
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
General and administrative
|
|
|
|
|
||||||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||
F - 16
SILEXION THERAPEUTICS CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
(U.S. dollars in thousands)
NOTE
7 - FAIR VALUE MEASUREMENTS:
Financial
instruments measured at fair value on a recurring basis
The
Company’s assets and liabilities that are measured at fair value as of June 30, 2025, and December 31, 2024, are classified in the
tables below in one of the six categories described in “Note 2 – Fair value measurement”:
|
June
30, 2025 |
||||||||
|
Level
3 |
Total
|
|||||||
|
Financial
Liabilities |
||||||||
|
Private
Warrants to ordinary shares |
$
|
|
$
|
|
||||
|
Promissory
Notes |
$
|
|
$
|
|
||||
|
December
31, 2024 |
||||||||
|
Level
3 |
Total
|
|||||||
|
Financial
Liabilities |
||||||||
|
Private
Warrants to ordinary shares |
$
|
|
$
|
|
||||
|
Promissory
Notes |
$
|
|
$
|
|
||||
The
following is a roll forward of the fair value of liabilities classified under Level 3:
|
Six
months ended
June
30, 2025 |
Three
months ended
June
30, 2025 |
|||||||||||||||
|
Promissory
Notes |
Private
Warrants to
ordinary
shares |
Promissory
Notes |
Private
Warrants to
ordinary
shares |
|||||||||||||
|
Fair value at the beginning
of the period |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Change in fair value
|
|
(
|
)
|
|
(
|
)
| ||||||||||
|
Repayments
|
(
|
)
|
|
|
|
|||||||||||
|
Conversion to equity
|
(
|
)
|
|
|
|
|||||||||||
|
Fair value at the end
of the period |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
* Represents
an amount less than $1
|
Six
months ended
June
30, 2024 |
Three
months ended
June
30, 2024 |
|||||||
|
Warrants
to preferred shares |
||||||||
|
Fair value at the beginning
of the period |
$
|
|
$
|
|
||||
|
Change in fair value
|
|
|
||||||
|
Fair value at the end
of the period |
$
|
|
$
|
|
||||
Promissory
Notes
In
measuring the fair value of the Company’s Promissory Notes, a discount rate of 11.85 %-13.39 %
was used, based on a B- rated US dollar zero-coupon discount curve, plus a credit spread of 6.67 %
- 7.56 %.
The expected timing of conversion or repayment of the notes was determined using the Company’s forecasts.
F - 17
SILEXION THERAPEUTICS CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
(U.S. dollars in thousands)
NOTE
7 - FAIR VALUE MEASUREMENTS (continued):
Warrants
over ordinary shares
A
Black-Scholes-Merton model with Level 3 inputs was used to calculate the Company’s warrants’ fair value. Inherent in a Black-Scholes-Merton
model are assumptions related to expected life (term), expected stock price, volatility, risk-free interest rate and dividend yield. The
Company estimates the volatility of its warrants based on implied volatility from the Company’s traded warrants and from historical
volatility of selected peer companies’ ordinary shares that matches the expected remaining life of the warrants. The risk-free interest
rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of
the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is
based on the historical rate, which the Company anticipates will remain at zero.
The
following table provides quantitative information regarding Level 3 fair value measurement inputs of the warrants:
|
June
30 |
||||||||
|
|
2025
|
2024
|
||||||
|
Volatility
|
|
%
|
|
%
| ||||
|
Term (years) |
|
|
||||||
|
Dividend
yield |
|
%
|
|
%
| ||||
Financial
instruments not measured at fair value
The
carrying amounts of cash and cash equivalents, restricted cash, receivables, trade payables and other liabilities approximate their fair
value due to the short-term maturity of such instruments.
NOTE
8 - NET LOSS PER SHARE:
The
following table sets forth the computation of basic and diluted net loss per share attributable to ordinary shareholders for the periods
presented (USD in thousands, except per share data):
|
Six
months ended
June
30 |
Three
months ended
June
30 |
|||||||||||||||
|
2025
|
2024
|
2025
|
2024
|
|||||||||||||
|
Numerator:
|
||||||||||||||||
|
Net
loss |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Net
loss attributable to ordinary shareholders, basic and diluted: |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Denominator:
|
||||||||||||||||
|
Weighted-average
shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted |
|
|
|
|
||||||||||||
|
Net
loss per share attributable to ordinary shareholders, basic and diluted |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Basic
loss per share is computed on the basis of the net loss for the period divided by the weighted average number of ordinary shares outstanding
during the period, including fully vested pre-funded options for the Company’s ordinary shares at an exercise price of $0.339
or 0.339
NIS per share, as well as pre-funded warrants with an exercise price of $0.0015
per share as the Company considers these shares to be exercised for little to no additional consideration.
As
of June 30, 2025 and June 30, 2024, the basic loss per share calculation included a weighted average number of 7
and 291 ,
respectively, of fully vested pre-funded options. As the inclusion of other potential ordinary shares equivalents in the calculation would
be anti-dilutive for all periods presented, diluted net loss per share is the same as basic net loss per share.
F - 18
SILEXION THERAPEUTICS CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
(U.S. dollars in thousands)
NOTE
8 - NET LOSS PER SHARE (continued):
The
following instruments were not included in the computation of diluted earnings per share because of their anti-dilutive effect:
For
the period ended on June 30, 2025
| - |
Warrants to purchase Ordinary Shares (see also
Note 4). |
| - |
Share-based compensation;
|
| - |
Promissory Notes (see also Note 5).
|
For
the period ended on June 30, 2024:
| - |
Redeemable convertible preferred shares;
|
| - |
Warrants to purchase redeemable convertible preferred
shares; |
| - |
Share-based compensation;
|
NOTE
9 - TRANSACTIONS AND BALANCES WITH RELATED PARTIES:
Transactions
with related parties which are shareholders, executive officers and directors of the Company:
| a. |
Transactions:
|
|
Six
months ended
June
30 |
Three
months ended
June
30 |
|||||||||||||||
|
2025
|
2024
|
2025
|
2024
|
|||||||||||||
|
Share-based
compensation included in research and development expenses |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Share-based
compensation included in general and administrative expenses |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Financial expenses
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
| b. |
Balances:
|
|
June 30, 2025
|
December 31,
2024 |
|||||||
|
Current
liabilities — |
||||||||
|
Private
warrants to purchase ordinary shares |
$
|
|
$
|
|
||||
|
June 30, 2025
|
December 31,
2024 |
|||||||
|
Non-Current
liabilities - |
||||||||
|
Sponsor
Promissory Note |
$
|
|
$
|
|
||||
F - 19
SILEXION THERAPEUTICS CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
(U.S. dollars in thousands)
NOTE
10 - SEGMENT INFORMATION
The
Company operates as a single operating segment in the research and development of innovative treatments for pancreatic cancer based on
siRNAs. The Company’s CODM is its Chief Executive Officer (CEO). The CODM reviews the Company’s performance on a consolidated
basis. As such, the segment’s loss is the Company’s consolidated net loss and the segment’s assets and liabilities are
the Company’s consolidated assets and liabilities.
The
CODM uses the information primarily to evaluate the Company’s performance and allocate resources. This includes reviewing key financial
metrics such as budget versus actual expenditures, tracking progress on research and development milestones, and assessing overall cash
flow and liquidity to ensure the continuity of operations. This approach allows the CODM to monitor the Company's performance and make
strategic adjustments as needed to support its operational and financial goals.
The
CODM reviews the Company’s results on a consolidated basis. The management does not segregate its business for internal reporting. As
such, information on segment loss and significant expenses is similar to the Company’s consolidated statements of operations. The
CODM is also regularly provided with information on significant ordinary-course expenses, including the following expenses.
|
Six months ended June 30
|
Three months ended June 30
|
|||||||||||||||
|
2025
|
2024
|
2025
|
2024
|
|||||||||||||
|
Clinical trials and other
payments to R&D-related service providers |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
R&D payroll and related
expenses, other than share-based compensation |
|
|
|
|
||||||||||||
|
R&D share-based compensation
expenses |
|
|
|
|
||||||||||||
|
G&A payroll and related
expenses, other than share-based compensation |
|
|
|
|
||||||||||||
|
G&A share-based compensation
expenses |
|
|
|
|
||||||||||||
|
G&A Professional
services |
|
|
|
|
||||||||||||
|
Depreciation expenses
|
|
|
|
|
||||||||||||
|
Other segment expenses
(*) |
|
|
|
|
||||||||||||
|
Operating
loss |
|
|
|
|
||||||||||||
|
Interest income
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
| ||||||||
|
Interest expense
|
|
|
|
|
||||||||||||
|
Other financing expense
(income), net |
|
|
|
|
||||||||||||
|
Income taxes
|
|
|
|
|
||||||||||||
|
Net
loss |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Segment assets
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Expenditures for segment
assets |
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||
|
Segment liabilities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
(*)
Other segment expenses include mainly general and administrative-related expenses, such as office lease expenses and maintenance and HR
expenses.
F - 20
SILEXION THERAPEUTICS CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
(U.S. dollars in thousands)
NOTE
11 - SUBSEQUENT EVENTS:
| a. |
Increase in Authorized
Pool Under 2024 Equity Incentive Plan |
On
July 14, 2025, the Company’s shareholders approved an increase in the number of ordinary shares authorized for issuance under the
Company’s 2024 Equity Incentive Plan (the “2024 Plan”) by 84,791
ordinary shares, increasing the total number of ordinary shares reserved for issuance under the Company’s equity pool for the 2024
Plan to 86,568
ordinary shares.
| b. |
Additional
Reverse Share Split |
On
July 28, 2025 (which was initially reflected in the share price prior to the start of trading on July 29, 2025), the Company effected
a 1-for-15
reverse share split of the Company’s issued and outstanding, and authorized and unissued, ordinary shares. The reverse share split
resulted in a corresponding increase in the par value of the Company’s ordinary shares, from $0.0009
per share to $0.0135
per share. Unless otherwise indicated herein, all references made to share or per share amounts in these unaudited consolidated financial
statements (including the notes to the financial statements), have been retroactively adjusted to reflect the reverse share split.
The
reverse share split is expected to enable the Company to restore its compliance with Nasdaq Listing Rule 5550(a)(2), and to assist the
Company in remaining listed on the Nasdaq Capital Market. On July 18, 2025, the Company had received a letter from the staff of the Nasdaq
Listings Qualifications Department notifying the Company that for the 30 consecutive business days preceding the letter, the closing bid
price of the Company’s ordinary shares was below the $1.00
minimum, constituting a bid price deficiency. The staff indicated in that letter that the Nasdaq hearings panel (which on July 7, 2025
had approved the Company’s request to remain listed on Nasdaq, subject to certain conditions) would consider that deficiency in
its decision as to whether to enable the Company to remain listed on the Nasdaq Capital Market. As part of the hearings process, the Company
had disclosed to the hearings panel, and the panel noted in its decision, that the Company intended to effect a reverse share split to
remedy the bid price deficiency. While increasing the Company's share price above the required $1.00
minimum closing bid price (which potentially will enable the Company to restore its compliance if remaining
above $1.00 for at least 10 consecutive trading days) , the reverse share split also did not reduce the number of publicly
held shares of the Company below
500,000 ,
thereby enabling the Company to maintain the minimum quantity needed for continued listing on the Nasdaq Capital Market.
| c. |
Additional
Warrant Inducement Transaction |
On
July 31, 2025, the Company entered into an inducement offer letter agreement (the “July 2025 Inducement Offer”) with holders
of 152,106
of the Company’s existing ordinary warrants, of which (i) 22,468
warrants had been issued in the Offering and had a five-year
exercise term and an exercise price of $20.25
per underlying ordinary share, and (ii) 129,638
warrants had been issued in the Company’s prior warrant inducement transaction on January 30, 2025 and had a 24-month
exercise term and an exercise price of $22.50
per underlying ordinary share.
The
closing under the July 2025 Inducement Offer occurred on August 1, 2025, when those holders exercised those warrants for cash and purchased
152,106
ordinary shares at a reduced cash exercise price of $11.57
per share. The Company received aggregate gross proceeds of approximately $1,800
from the exercise of the existing ordinary warrants by the holders, net of placement agent fees and other offering expenses of $0.3
million.
As
consideration for the holders’ agreement to exercise, the Company issued to them new ordinary warrants to purchase up to an aggregate
of 304,212
ordinary shares at an exercise price of $11.32
per share (the “July 2025 Ordinary Warrants”). The July 2025 Ordinary Warrants will be exercisable beginning upon (and subject
to) the approval by the Company’s shareholders of an increase in the Company’s authorized share capital (which is being presented
for shareholder approval at the upcoming extraordinary general meeting of the Company to be held on August 12, 2025). The July 2025 Ordinary
Warrants will remain exercisable until the 24-month anniversary of the effective date of the resale registration statement under which
the Company is required to register the resale of the ordinary shares underlying those warrants and the placement agent warrants (as referenced
below).
Pursuant
to the July 2025 Inducement Offer transaction, the Company also issued to the placement agent warrants to purchase up to 10,647
ordinary shares, which have the same terms as the July 2025 Ordinary Warrants, except that the placement agent warrants have an exercise
price equal to $14.46
per share. Upon exercise for cash of any July 2025 Ordinary Warrants, in certain circumstances, the placement agent will receive from
the Company a cash fee of 8.0 %
of the aggregate gross exercise price, as well as additional placement agent warrants exercisable for 7.0 %
of the number of ordinary shares issuable upon the exercise of those July 2025 Ordinary Warrants.
F
- 21
SILEXION
THERAPEUTICS CORP
CONSOLIDATED
FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2024
SILEXION
THERAPEUTICS CORP
CONSOLIDATED
FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2024
TABLE
OF CONTENTS
|
Page
| |
|
Report
of Independent Registered Public Accounting Firm (PCAOB name: Kesselman & Kesselman C.P.As and PCAOB ID: 1309)
|
F-2
|
|
CONSOLIDATED
FINANCIAL STATEMENTS: |
|
|
Consolidated
Balance Sheets |
F-3
- F-4 |
|
Consolidated
Statements of Operations |
F-5
|
|
Consolidated
Statements of Changes in Redeemable Convertible Preferred Shares and Capital Deficiency |
F-6
|
|
Consolidated
Statements of Cash Flows |
F-7
- F-8 |
|
Notes
to Consolidated Financial Statements |
F-9
- F-36 |
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the board of directors and shareholders of
SILEXION
THERAPEUTICS CORP
Opinion
on the Financial Statements
We
have audited the accompanying consolidated balance sheets of Silexion Therapeutics Corp and its subsidiaries (the “Company”)
as of December 31, 2024 and 2023, and the related consolidated statements of operations, changes in
redeemable convertible preferred shares and capital deficiency and cash flows for the each of the two years then ended, including the
related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results
of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles
generally accepted in the United States of America.
Substantial
Doubt about the Company’s Ability to Continue as a Going Concern
The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 1j to the consolidated financial statements, the Company has suffered recurring losses from operations and has cash outflows from
operating activities that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard
to these matters are also described in Note 1j. The consolidated financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
Basis
for Opinion
These
consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion
on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We
conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud.
Our
audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due
to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that our audits provide a reasonable basis for our opinion.
|
/s/Kesselman
& Kesselman |
|
|
Certified
Public Accountants (lsr.) |
|
|
A
member firm of PricewaterhouseCoopers International Limited | |
|
Tel-Aviv,
Israel |
|
|
March
18, 2025, except for the effects of the reverse share split effected July 28, 2025 as discussed in note 1h, as to which the date is August
20, 2025
We
have served as the Company's auditor since 2023. | |
|
|
|
Kesselman & Kesselman, 146 Derech Menachem Begin St. Tel-Aviv 6492103, Israel, P.O
Box 7187 Tel-Aviv 6107120, Telephone: +972 -3- 7954555, Fax:+972 -3- 7954556, www.pwc.com/il |
F-2
SILEXION
THERAPEUTICS CORP
CONSOLIDATED
BALANCE SHEETS
(U.S.
dollars in thousands, except share data)
|
December
31 |
||||||||
|
2024
|
2023
|
|||||||
|
Assets
|
||||||||
|
CURRENT
ASSETS: |
||||||||
|
Cash
and cash equivalents |
$
|
|
$
|
|
||||
|
Restricted
cash |
|
|
||||||
|
Prepaid
expenses |
|
|
||||||
|
Other
current assets |
|
|
||||||
|
TOTAL
CURRENT ASSETS |
|
|
||||||
|
NON-CURRENT
ASSETS: |
||||||||
|
Restricted
cash |
|
|
||||||
|
Long-term
deposit |
|
|
||||||
|
Property
and equipment, net |
|
|
||||||
|
Operating
lease right-of-use asset |
|
|
||||||
|
TOTAL
NON-CURRENT ASSETS |
|
|
||||||
|
TOTAL
ASSETS |
$
|
|
$
|
|
||||
The
accompanying notes are an integral part of these consolidated financial statements.
F-3
SILEXION
THERAPEUTICS CORP
CONSOLIDATED
BALANCE SHEETS
(U.S.
dollars in thousands, except share data)
|
December
31 |
||||||||
|
2024
|
2023
|
|||||||
|
Liabilities
and redeemable convertible preferred shares, net of capital deficiency |
||||||||
|
CURRENT
LIABILITIES: |
||||||||
|
Trade
payables |
$
|
|
$
|
|
||||
|
Current
maturities of operating lease liability |
|
|
||||||
|
Warrants
to preferred shares (including $ |
|
|
||||||
|
Employee
related obligations |
|
|
||||||
|
Accrued
expenses and other accounts payable |
|
|
||||||
|
Private
warrants to purchase ordinary shares (including $ |
|
|
||||||
|
Underwriters
Promissory Note |
|
|
||||||
|
TOTAL
CURRENT LIABILITIES |
|
|
||||||
|
NON-CURRENT
LIABILITIES: |
||||||||
|
Long-term
operating lease liability |
|
|
||||||
|
Related
Party Promissory Note |
|
|
||||||
|
TOTAL
NON-CURRENT LIABILITIES |
$
|
|
$
|
|
||||
|
TOTAL
LIABILITIES |
$
|
|
$
|
|
||||
|
COMMITMENTS
AND CONTINGENT LIABILITIES (Note 7) |
||||||||
|
REDEEMABLE
CONVERTIBLE PREFERRED SHARES AND NON-CONTROLLING INTERESTS: |
||||||||
|
Convertible
Series A Preferred Shares (NIS |
||||||||
|
Convertible
Series A-1 Preferred Shares (NIS |
||||||||
|
Convertible
Series A-2 Preferred Shares (NIS |
||||||||
|
Convertible
Series A-3 Preferred Shares (NIS |
||||||||
|
Convertible
Series A-4 Preferred Shares (NIS |
||||||||
|
TOTAL
REDEEMABLE CONVERTIBLE PREFERRED SHARES |
|
|
||||||
|
CONTINGENTLY
REDEEMABLE NON-CONTROLLING INTERESTS |
|
|
||||||
|
TOTAL
REDEEMABLE CONVERTIBLE PREFERRED SHARES AND CONTINGENTLY REDEEMABLE NON-CONTROLLING INTERESTS |
$
|
|
$
|
|
||||
|
CAPITAL
DEFICIENCY: |
||||||||
|
Ordinary
shares ($ |
|
|
||||||
|
Additional
paid-in capital |
|
|
||||||
|
Accumulated
deficit |
(
|
)
|
(
|
)
| ||||
|
TOTAL
CAPITAL DEFICIENCY |
$
|
(
|
)
|
$
|
(
|
)
| ||
|
TOTAL
REDEEMABLE CONVERTIBLE PREFERRED SHARES AND CONTINGENTLY REDEEMABLE NON-CONTROLLING INTERESTS, NET OF CAPITAL DEFICIENCY
|
$
|
(
|
)
|
$
|
|
|||
|
TOTAL
LIABILITIES, REDEEMABLE CONVERTIBLE |
||||||||
|
PREFERRED
SHARES AND NON-CONTROLLING INTEREST, NET OF CAPITAL DEFICIENCY |
$
|
|
$
|
|
||||
*
Represents an amount less than $1
**
Net of 898 treasury shares held by the Chinese Subsidiary as of December 31, 2023
*** All
share amounts as of December 31, 2023 have been retroactively adjusted to reflect a 1-for-9 reverse share split, effected on November
27, 2024, and all share amounts as of December 31, 2024 and 2023 have been retroactively adjusted to reflect a 1-for-15 reverse share
split, effected on July 28, 2025, as discussed in Note 1h
****
Net of 28 treasury shares held by the Company as of December 31, 2024
The
accompanying notes are an integral part of these consolidated financial statements.
F-4
SILEXION
THERAPEUTICS CORP
CONSOLIDATED
STATEMENTS OF OPERATIONS
(U.S.
dollars in thousands, except share data)
|
Year
ended December 31 |
||||||||
|
2024
|
2023
|
|||||||
|
OPERATING
EXPENSES: |
||||||||
|
Research
and development (including $ |
$
|
|
$
|
|
||||
|
General
and administrative (including $ |
|
|
||||||
|
TOTAL
OPERATING EXPENSES |
|
|
||||||
|
OPERATING
LOSS |
|
|
||||||
|
Financial
expenses (income), net (including $( |
|
|
||||||
|
LOSS
BEFORE INCOME TAX |
$
|
|
$
|
|
||||
|
INCOME
TAX |
|
|
||||||
|
NET
LOSS FOR THE YEAR |
$
|
|
$
|
|
||||
|
Attributable
to: |
||||||||
|
Equity
holders of the Company |
|
|
||||||
|
Non-controlling
interests |
|
|
||||||
|
$
|
|
$
|
|
|||||
|
LOSS
PER ORDINARY SHARE, BASIC AND DILUTED* |
$
|
|
$
|
|
||||
|
WEIGHTED
AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING USED IN COMPUTATION OF BASIC AND DILUTED LOSS PER SHARE*: |
|
|
* All
share amounts for the year ended December 31, 2023 have been retroactively adjusted to reflect a 1-for-9 reverse share split, effected
on November 27, 2024, and all share amounts for the years ended December 31, 2024 and 2023 have been retroactively adjusted to reflect
a 1-for-15 reverse share split, effected on July 28, 2025, as discussed in Note 1h
The
accompanying notes are an integral part of these consolidated financial statements.
F-5
SILEXION
THERAPEUTICS CORP
CONSOLIDATED
STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED SHARES AND CAPITAL DEFICIENCY
(U.S.
dollars in thousands, except per share data)
|
Redeemable
Convertible Preferred Shares |
Ordinary
shares |
Additional paid-in Capital |
Accumulated
deficit |
Total
capital deficiency |
Total
redeemable convertible preferred shares and contingently redeemable non-controlling interests, net of capital deficiency
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Series
A preferred shares |
Series
A-1 preferred shares |
Series
A-2 preferred shares |
Series
A-3 preferred shares |
Series
A-4 preferred shares |
Contingently
redeemable non-controlling
interests
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Amount
|
Shares
|
Amount
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT JANUARY 1, 2023 |
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
||||||||||||||||||||||||||||||||||||||||||
|
CHANGES
DURING 2023: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of Preferred A-4 shares, net of issuance cost, see Note 9(1) |
|
$
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Share-based
compensation |
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss |
(
|
) |
|
(
|
)
|
(
|
)
|
(
|
)
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT DECEMBER 31, 2023 |
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
||||||||||||||||||||||||||||||||||||||||||
|
CHANGES
DURING 2024: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Exercise
of pre-funded options |
|
**
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Share-based
compensation |
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of convertible preferred shares upon net exercise of warrants |
|
|
|
$
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss |
(
|
) |
|
(
|
)
|
(
|
)
|
(
|
)
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Conversion
of convertible preferred shares and noncontrolling interests upon the effectiveness of the SPAC Merger (see Note 1(d))
|
(
|
)
|
$
|
(
|
)
|
(
|
)
|
$
|
(
|
)
|
(
|
)
|
$
|
(
|
)
|
(
|
)
|
$
|
(
|
)
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
) |
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
|
Issuance
of ordinary shares upon Transactions (see Note 1(d)) |
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of ordinary shares for ELOC holders, see Note 3(d) |
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT DECEMBER 31, 2024 |
-,
|
-, |
-, |
-, |
-, |
-, |
-, |
-, |
-, |
-, |
-, |
|
****
|
$ |
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
| |||||||||||||||||||||||||||||||||||||||||||||
*
Represents an amount less than $1
**
Represents exercises of fully vested pre-funded options for the Company’s ordinary shares at an exercise price of $0.339 or
0.339 NIS per share
*** All
share amounts as of December 31, 2023 have been retroactively adjusted to reflect a 1-for-9 reverse share split, effected on November
27, 2024, and all share amounts as of December 31, 2024 and 2023 have been retroactively adjusted to reflect a 1-for-15 reverse share
split, effected on July 28, 2025, as discussed in Note 1h
****
Net of 28 treasury shares held by the Company as of December 31, 2024
The
accompanying notes are an integral part of these consolidated financial statements.
F-6
SILEXION
THERAPEUTICS CORP
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(U.S.
dollars in thousands, except share data)
|
Year
ended December 31 |
||||||||
|
2024
|
2023
|
|||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES: |
||||||||
|
Net
loss |
$
|
(
|
)
|
$
|
(
|
)
| ||
|
Adjustments
required to reconcile loss to net cash used in operating activities: |
||||||||
|
Depreciation
|
|
|
||||||
|
Share-based
compensation expenses |
|
|
||||||
|
Non-cash
loss upon entering Transactions |
|
|
||||||
|
Other
non-cash financial expenses (income) |
(
|
)
|
|
|||||
|
Loss
)gain( on disposal of property and equipment |
|
(
|
)
| |||||
|
Loss
from lease termination |
|
|
||||||
|
Changes
in operating assets and liabilities: |
||||||||
|
Increase
in prepaid expenses |
(
|
)
|
(
|
)
| ||||
|
Decrease
(increase) in other current assets |
(
|
)
|
|
|||||
|
Increase
in trade payable |
|
|
||||||
|
Net
change in operating lease |
(
|
)
|
|
|||||
|
Increase
(decrease) in employee related obligations |
|
(
|
)
| |||||
|
Increase
(decrease) in accrued expenses and other accounts payable |
(
|
)
|
|
|||||
|
Net
cash used in operating activities |
(
|
)
|
(
|
)
| ||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES: |
||||||||
|
Proceeds
from short-term deposit |
|
|
||||||
|
Purchase
of property and equipment |
(
|
)
|
(
|
)
| ||||
|
Proceeds
from sale of property and equipment |
|
|
||||||
|
Net
cash provided by (used in (investing activities |
(
|
)
|
|
|||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES: |
||||||||
|
Proceeds
from issuance of preferred shares and warrants, net of issuance costs |
|
|
||||||
|
Proceeds
from exercise of pre-funded options |
|
|
||||||
|
Net
proceeds from issuance of ordinary shares (ELOC) |
|
|
||||||
|
Cash
received from Transactions upon the effectiveness of the SPAC Merger |
|
|
||||||
|
Payment
of Underwriters Promissory Note |
(
|
)
|
|
|||||
|
Net
cash provided by financing activities |
|
|
||||||
|
DECREASE
IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
(
|
)
|
(
|
)
| ||||
|
EXCHANGE
RATE DIFFERENCES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
(
|
)
|
(
|
)
| ||||
|
BALANCE
OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR |
|
|
||||||
|
BALANCE
OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF YEAR |
$
|
|
$
|
|
||||
*
Represents an amount less than $1
The
accompanying notes are an integral part of these consolidated financial statements.
F-7
SILEXION
THERAPEUTICS CORP
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(U.S.
dollars in thousands, except share data)
|
Year
ended December 31 |
||||||||
|
2024
|
2023
|
|||||||
|
Appendix
A – |
||||||||
|
RECONCILIATION
OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH REPORTED IN THE CONSOLIDATED BALANCE SHEETS: |
||||||||
|
Cash
and cash equivalents |
|
|
||||||
|
Restricted
cash |
|
|
||||||
|
TOTAL
CASH, CASH EQUIVALENTS AND RESTRICTED CASH SHOWN IN STATEMENT OF CASH FLOWS |
$
|
|
$
|
|
||||
|
Appendix
B - SUPPLEMENTARY INFORMATION:
|
||||||||
|
SUPPLEMENTARY
INFORMATION ON INVESTING AND FINANCING ACTIVITIES NOT INVOLVING CASH FLOWS: |
||||||||
|
Derecognition
of right-of-use asset recognized and lease liability as a result of operating lease termination |
$
|
(
|
)
|
|
||||
|
Conversion
of preferred shares to ordinary shares |
$
|
|
|
|||||
|
Conversion
of warrants to preferred shares on a cashless basis |
$
|
|
|
|||||
|
Conversion
of non-controlling interests to New Silexion ordinary shares |
$
|
|
|
|||||
|
Shares
issued for ELOC financing liability |
$
|
|
|
|||||
|
Right-of-use
asset recognized with a corresponding lease liability |
$
|
|
|
|||||
|
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION: |
||||||||
|
Interest
paid |
$
|
|
|
|||||
|
Interest
received |
$
|
|
$
|
|
||||
F-8
SILEXION
THERAPEUTICS CORP
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
U.S.
DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
1 - GENERAL:
| a. |
Silexion
Therapeutics Corp (“New Silexion”) (hereinafter - the “Company” or the “Combined Company”) is a recently
formed entity that was formed for the purpose of effecting the Transactions (as defined below). Following the closing of the Transactions
on August 15, 2024 (the “Closing”), New Silexion now serves as a publicly-traded holding company that has two primary
wholly-owned subsidiaries —Moringa Acquisition Corp (“Moringa” or the “SPAC”), a Cayman Islands exempted
company, and Silexion Therapeutics Ltd. (formerly known as Silenseed Ltd.) (“Silexion”), an Israeli limited company.
|
| b. |
Financial
Information Presented: |
From
its formation on April 2, 2024 until the Closing of the Transactions on August 15, 2024, the Company had no operations and had been formed
for the sole purpose of entering into the Transactions and serving as the publicly-traded company following the Transactions. Silexion,
on the other hand, as the accounting acquirer in the Transactions and the predecessor entity to the Company from an accounting perspective,
had active operations during earlier periods of time, prior to the Transactions. Consequently, these financial statements reflect
the financial information of Silexion (as the predecessor entity to the Company) through August 15, 2024 and the financial information
of New Silexion (as the combined company following the Transactions) from August 16, 2024 forward.
| c. |
Subsidiaries:
|
The
Company has three subsidiaries as of December 31, 2024:
| 1. |
Silexion.
Silexion was incorporated in Israel and began its operations on November 30, 2008. Since its incorporation, Silexion has been engaged
in
|
| 2. |
Silenseed
(China) Ltd. On April 28, 2021, Silexion (as the predecessor entity to the Company) signed an agreement with Guangzhou Sino-Israel
Biotech Investment Fund (“GIBF”) to establish a new company in China. On June 15, 2021 a company was established in China,
named Silenseed (China) Ltd. (hereinafter - the “Chinese Subsidiary”). As of December 31, 2024, following transfer of all
interests in the Chinese Subsidiary to the Company as part of the Transactions, the Company owns (directly or indirectly)
|
| 3. |
Moringa.
Prior to the Transactions (commencing on February 17, 2021), Moringa’s class A ordinary shares and warrants were listed for trading
on the Nasdaq Capital Market (Nasdaq: MACA and MACAW). As part of the Transactions, Moringa merged with a wholly-owned subsidiary of the
Company and now serves as an inactive, wholly-owned subsidiary of the Company. Following the Transactions, Moringa is
no longer listed for trading on the Nasdaq Capital Market. |
| 4. |
The
Company, the Chinese Subsidiary, Moringa and Silexion are together referred to hereinafter as the “Group”.
|
| d. |
On
April 3, 2024, Silexion entered into an Amended and Restated Business Combination Agreement (hereinafter, the “A&R BCA”)
with the SPAC, New Silexion, August M.S. Ltd. an Israeli company and wholly-owned subsidiary of New Silexion (“Merger Sub 1”),
and Moringa Acquisition Merger Sub Corp, a Cayman Islands exempted company and wholly-owned subsidiary of New Silexion (“Merger
Sub 2”). Under the A&R BCA, both Silexion and the SPAC were to become wholly-owned subsidiaries of New Silexion, which was to
become a publicly-held, Nasdaq-listed entity (the A&R BCA and related transactions: the “Transactions”).
|
F-9
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
1 - GENERAL (continued):
On
August 15, 2024, the parties completed the Transactions pursuant to which Merger Sub 2 merged with and into the SPAC, with the SPAC continuing
as the surviving company of such merger and a wholly-owned subsidiary of New Silexion (the “SPAC Merger”), and Merger
Sub 1 merged with and into Silexion, with Silexion continuing as the surviving company of such merger and a wholly-owned subsidiary
of New Silexion (the “Acquisition Merger”).
Upon
the effectiveness of the SPAC Merger, each outstanding SPAC Class A ordinary share and the sole outstanding SPAC Class B ordinary
share was converted into an ordinary share of New Silexion on a one-for-one basis. Each outstanding warrant to purchase one SPAC
Class A ordinary share was converted into a warrant to purchase one New Silexion ordinary share, at the same exercise price. Upon
the effectiveness of the Acquisition Merger, each outstanding ordinary share and each outstanding preferred share of Silexion was converted
into 3.9829
ordinary shares of New Silexion, before adjustment for two subsequent reverse share splits (the “Silexion Equity Exchange Ratio”).
See Note 1h for post-reverse share split figures. Each outstanding Silexion warrant and Silexion option to purchase one Silexion share,
and Silexion restricted share unit (RSU) that may be potentially settled for one Silexion share, was to become exercisable for, or became
subject to settlement for (as applicable), such number of New Silexion ordinary shares as were equal to the Silexion Equity Exchange Ratio.
The exercise price per New Silexion ordinary share of each such converted Silexion option and Silexion warrant was to be adjusted based
on dividing the existing per share exercise price by the Silexion Equity Exchange Ratio. The terms of vesting, exercise and/or settlement,
as applicable, of such converted options, warrants and RSUs were to remain the same following such conversion, except that the vesting
of each Silexion option was to accelerate immediately prior to the Acquisition Merger, such that the New Silexion option into which it
was to be converted was to be fully vested, and all Silexion warrants were to be exercised (on a cashless basis) immediately prior to
the Acquisition Merger.
Immediately
prior to the Closing seven directors were elected to New Silexion’s board of directors, of whom five were designated by Silexion
and two were designated by the SPAC’s sponsor (the “Sponsor”).
The
A&R BCA also required, as a closing condition, the transfer of the remaining outstanding shares of the Chinese Subsidiary held by
GIBF to Silexion prior to the closing of the Business Combination in exchange for the issuance to GIBF of shares of Silexion, which were
converted into ordinary shares of New Silexion in accordance with the Silexion Equity Exchange Ratio upon the closing.
| e. |
In
connection with the closing of the Transactions, the ordinary shares and warrants of New Silexion are now listed on the Nasdaq Global
Market and began trading under the symbols “SLXN” and “SLXNW”, respectively. |
| f. |
For
more information on instruments issued as part of the Transactions, see Note 3. |
| g. |
The
Transactions were accounted for as a reverse recapitalization in accordance with US GAAP. Under this method of accounting, Silexion
was treated as the accounting acquirer and the SPAC was treated as the “acquired” company for financial reporting purposes.
Silexion was determined to be the accounting acquirer based on evaluation of the following facts and circumstances:
|
• Silexion’s
shareholders hold approximately 61.55 %
of the outstanding voting interests in New Silexion upon the closing of the Transactions;
• Silexion’s
senior management comprise the senior management of New Silexion;
• the
directors nominated by Silexion constitute a majority of the board of directors of New Silexion (five out of seven of the initial directors);
• Silexion’s
operations comprise the ongoing operations of New Silexion; and
F-10
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
1 - GENERAL (continued):
• Silexion’s
name is the name used by New Silexion (in replacement of Biomotion Sciences).
Under
the reverse recapitalization accounting method, the Transactions were deemed to be the equivalent of a capital transaction in which Silexion
issued shares for the net assets of the SPAC. The net assets of the SPAC were stated at fair value, with no goodwill or other intangible
assets recorded. Operations prior to the Transactions are those of Silexion.
In
accordance with the applicable guidance to reverse recapitalization, the equity structure has been retroactively adjusted in all comparative
periods up to the date of the Closing (the “Closing Date”), to reflect the number of New Silexion’s ordinary shares,
$0.0001
par value per share (before adjustment for subsequent reverse share splits, which reverse share splits are described in Note 1h) issued
to legacy Silexion shareholders in connection with the reverse recapitalization transaction. As such, the shares and corresponding capital
amounts and earnings per share related to legacy Silexion shareholders prior to the reverse recapitalization have been retroactively restated
as shares reflecting the exchange ratio established pursuant to the Transactions. In conjunction with the reverse recapitalization, Silexion’s
ordinary shares underwent a 1-for-3.9829 conversion
(before adjustment for subsequent reverse share splits).
Reconciliation
of the SPAC Merger to the Company's Consolidated Financial Statements
The
following table reconciles the elements of the Transactions to the consolidated statements of cash flows:
|
Recapitalization
|
||||
|
Accrued
expenses assumed |
|
|||
|
Warrants
to ordinary shares assumed |
|
|||
|
Related
Party Promissory Note issued |
|
|||
|
Underwriters
Promissory Note issued |
|
|||
|
Less:
Loss upon entering Transactions |
(
|
)
| ||
|
Effect
of reverse recapitalization, net of transaction costs |
|
|||
| h. |
On
November 22, 2024 and July 16, 2025, the Company announced prospective |
All
references made to ordinary shares, preferred shares and per share amounts (for each of New Silexion, Silexion and Moringa) in these consolidated
financial statements as of any date or for any period preceding the effective date of either or both reverse share splits, unless otherwise
indicated, have been retroactively adjusted to reflect the reverse share split or reverse share splits (as applicable).
| i. |
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. Following the attack, Israel’s security cabinet declared war against Hamas and commenced a military campaign
against Hamas and other terrorist organizations. |
F-11
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
1 - GENERAL (continued):
In
addition, since the commencement of these events, there have been continued hostilities along Israel’s northern border with Lebanon
(with the Hezbollah terror organization), Israel’s southern border with the Gaza Strip (with the Hamas terrorist organization) and
on other fronts from various extremist groups in region, such as the Houthis in Yemen and various rebel militia groups in Syria and Iraq.
Further, on April 13, 2024, and on October 1, 2024, Iran launched a series of drone and missile strikes against Israel. As of December
31, 2024 a ceasefire agreement has been reached between Israel and Lebanon.
The
Company’s headquarters are located in the central region of Israel. As of the issuance date of these consolidated financial statements,
these conflicts have not had a material impact on the Company’s results of operations or financial position, if at all. The Company
cannot currently predict the intensity or duration of Israel’s war, however, as most of the Company’s trials are not executed
in Israel, the Company does not believe that the war will have any material impact on its ongoing operations. The Company continues to
monitor its ongoing activities and will make any needed adjustments to ensure continuity of its business, while supporting the safety
and well-being of its employees.
Any
additional hostilities involving Israel, or the interruption or curtailment of trade between Israel and its trading partners, could adversely
affect the Company’s operations and results of operations and could make it more difficult for the Company to raise capital.
| j. |
Going
concern: |
Since
its inception, the Company (and, prior to the Transactions, its predecessor, Silexion) has devoted substantially all its efforts to research
and development, clinical trials, and capital raising activities. The Company is still in its development and clinical stage and has not
yet generated revenues.
The
Company (or, for those periods prior to the Transactions, its predecessor, Silexion) has incurred losses of $16,519
and $5,108
for the years ended on December 31, 2024 and December 31, 2023, respectively. During the year ended on December
31, 2024, the Company (including Silexion, for periods prior to the Transactions) had negative operating cash flows of $8,396 .
As of December 31, 2024, the Company had cash and cash equivalents of $1,187 .
On
January 15, 2025, the Company raised financing of $5,000
by public offering of ordinary shares, pre-funded warrants, and ordinary warrants. Additionally, a total of $864
was received from the exercise of warrants and pre-funded warrants. On January 29, 2025, the Company raised financing of $3,267
by induced warrant exercise transaction
(see
Note 16).
The
Company expects to continue incurring losses, and negative cash flows from operations. Management is in the process of evaluating various
financing alternatives, as the Company will need to finance future research and development activities, general and administrative expenses
and working capital through fund raising. However, there is no assurance that the Company will be successful in obtaining such funding.
Under
these circumstances, in accordance with the requirements of ASC 205-40, management has concluded that there is substantial doubt about
the Company’s ability to continue as a going concern for at least 12 months from the date these financial statements are issued.
The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
F-12
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES:
| a. |
Basis
of presentation |
The
Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the
United States ("U.S. GAAP").
| b. |
Use
of estimates |
The
preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying notes. As applicable to these financial statements,
the most significant estimates and assumptions relate to fair value of financial instruments and share-based compensation (see
Notes 12 and 11, respectively). These estimates and assumptions are based on current facts, future expectations, and various other
factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ
materially and adversely from these estimates.
| c. |
Functional
currency |
The
Company's operations are currently conducted in Israel and some of the Company's expenses are currently paid in new Israeli shekels ("NIS");
however, the markets for the Company's future products are located outside of Israel. Financing activities are conducted in U.S. dollar
(“dollar” or "$"). The Company's management believes that the US dollar is the currency of the primary economic environment
in which the Company operates. Thus, the functional and reporting currency of the Company is the dollar. The functional currency of Silexion
is the U.S. dollar, inter alia, in light of the composition of expenses and expected volume of intercompany transactions
with the Company.
Transactions
and balances originally denominated in dollars are presented at their original amounts. Balances in non- U.S. dollar currencies are translated
into dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-dollar transactions
and other items in the statements of operations (indicated below), the following exchange rates are used: (i) for transactions —
exchange rates at transaction dates or average exchange rates; and (ii) for other items (derived from non-monetary balance sheet items
such as depreciation and amortization) — historical exchange rates. Currency transaction gains and losses are presented in financial
income or expenses, as appropriate.
| d. |
Principles
of consolidation |
The
accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and
transactions have been eliminated in consolidation.
The
financial statements of the Company and its subsidiaries are prepared as of the same dates and periods. The consolidated financial statements
are prepared using uniform accounting policies by all companies in the Group.
| e. |
Cash
and cash equivalents |
The
Company considers as cash equivalents all short-term, highly liquid investments, which include short-term bank deposits with original
maturities of three months or less from the date of purchase that are not restricted as to withdrawal or use and are readily convertible
to known amounts of cash.
Bank
balances for which use by the Company is subject to third party contractual restrictions are included as part of cash unless the restrictions
result in a bank balance no
F-13
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
longer
meeting the definition of cash. If the contractual restrictions to use the cash extend beyond 12 months after the end of the reporting
period, the related amounts are classified as non-current in Balance sheets.
| f. |
Restricted
cash |
As
of December 31, 2024 and 2023, the Company pledged an amount of $57
and $25 ,
respectively in favor of a bank as collateral for guarantees provided to secure the lease payments.
The
Company is required to hold a minimum amount of NIS 95
in its bank account in order to maintain availability of a credit line from its credit card company.
The
Company includes its restricted cash in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts
shown on the combined statement of cash flows.
| g. |
Property
and equipment: |
Property
and equipment are stated at cost, net of accumulated depreciation.
Depreciation
is calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates:
|
%
|
||||
|
Computers
|
|
|||
|
Office
furniture |
|
|||
|
Leasehold
improvements |
|
|||
*
Leasehold improvements are amortized by the straight-line method over the expected lease term, which is shorter than the estimated useful
life of the improvements.
| h. |
Employee
rights upon retirement |
The
Company is required to make severance payments upon dismissal of an employee or upon termination of employment in certain circumstances.
In
accordance with the current employment terms with all of its employees located in Israel, and pursuant to Section 14 of the Israeli Severance
Pay Law, 1963, the Company makes and has been continuously making, since the beginning of employment of each of its current employees,
regular deposits, at a rate of 8.33 %
of their monthly salary, with certain insurance companies for accounts controlled by each applicable employee in order to secure the employee’s
full severance pay obligation.
Under
these circumstances, the Company is currently relieved from any severance pay liability with respect to each such employee. Neither the
liability in respect of these employees nor the credit for the amounts funded are reflected on the Company’s consolidated balance
sheets, as the amounts funded are not under the control or management of the Company and the severance pay risks have been irrevocably
transferred to the applicable insurance companies.
The
amounts of severance payment expenses were $122
and $74
for the years ended December 31, 2024 and 2023, respectively.
F-14
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
| i. |
Fair
value measurement |
Fair
value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly
transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements,
the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three
broad levels, which are described as follows:
| Level 1: |
Quoted
prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy
gives the highest priority to Level 1 inputs. |
| Level 2: |
Observable
prices that are based on inputs not quoted on active markets, but corroborated by market data or active market data of similar or identical
assets or liabilities. |
| Level 3 |
Unobservable
inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
|
In
determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable
inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.
| j. |
Financial
instruments issued |
When
the Company issued preferred shares, it first considered the provisions of ASC 480, Distinguishing Liabilities from Equity (“ASC
480”) in order to determine whether the preferred share should be classified as a liability. If the instrument is not within the
scope of ASC 480, the Company further analyzed the instrument’s characteristics in order to determine whether it should be classified
within temporary equity (mezzanine) or within permanent equity in accordance with the provisions of ASC 480-10-S99. The Company’s
redeemable convertible preferred shares were not mandatorily or currently redeemable. However, they included clauses that could constitute
as in-substance redemption clauses that were outside of the Company’s control. As such, all shares of redeemable convertible preferred
shares had been presented outside of permanent equity. The Redeemable Convertible Preferred Shares were converted into ordinary shares in
the framework of the recapitalization transaction as described in Note 1(d).
When
the Company issued other freestanding instruments, the Company first analyzed the provisions of ASC 480 in order to determine whether
the instrument should be classified as a liability, with subsequent changes in fair value recognized in the statements of operations in
each period. If the instrument was not within the scope of ASC 480, the Company further analyzed the provisions of ASC 815-40
in order to determine whether the instrument should be classified within equity or classified as an asset or liability, with subsequent
changes in fair value recognized in the statements of operations in each period.
The
Company’s issued financial instruments convertible to preferred shares were in the scope of ASC 480. For further details see Note
8.
F-15
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
| k. |
Contracts
over Ordinary Shares |
When
the Company becomes party to freestanding financial instruments, the Company first analyzes the provisions of ASC 480
in order to determine whether the instrument should be classified as a liability, with subsequent changes in fair value recognized in
the statements of operations in each period. Warrants to purchase ordinary shares are not within the scope of ASC 480, and as such
the Company further analyzes the provisions of ASC 815-40 in order to determine whether the contract should be classified within
equity or classified as a liability, with subsequent changes in fair value recognized in the statements of operations in each period.
Under ASC
815-40, contracts that are not indexed to the Company’s own stock are classified as liabilities recorded at fair value, As such,
the Company classifies private warrants (see Note 3(e)) as liabilities and measures them at their fair value at each reporting
period. This liability is subject to re-measurement at each balance sheet date until the private warrants are exercised or expire, or
upon reassessment of classification. Similarly, the Company classifies the ELOC Agreement entered into (see Note 3(d)) as a derivative
instrument measured at fair value at each reporting period, as settlement provisions under this agreement are not indexed to the Company’s
own stock.
The
Company reassesses the classification of a contract over its own equity under the guidance above at each balance sheet date. If classification
changes as a result of events during the reporting period, the Company reclassifies the contract as of the date of the event that caused
the reclassification. When a contract over own equity is reclassified from a liability to equity, gains or losses recorded to account
for the contract at fair value during the period that the contract was classified as a liability are not reversed, and the contract is
marked to fair value immediately before the reclassification.
| l. |
Promissory
Notes |
Under
the Fair Value Option Subsection of ASC Subtopic 825-10, the Company has an irrevocable option to designate certain financial liabilities
at fair value on an instrument-by-instrument basis, with changes in fair value reported in the statement of operations. The Company designated
the Promissory Notes issued as part of the Transactions under the fair value option. See Note 3(a) and (b). Fair value gains and losses
include interest expenses.
| m. |
Redeemable
Non-controlling Interest |
Non-controlling
interests with embedded redemption features, whose settlement is not at the Company’s discretion, are considered redeemable non-controlling
interests. Redeemable non-controlling interests are considered to be temporary equity and are therefore presented as a mezzanine section
between liabilities and equity on the Company's consolidated balance sheets. Redeemable non-controlling interests are measured at the
greater of the initial carrying amount adjusted for the non-controlling interest’s share of comprehensive income or loss or its
redemption value. Subsequent adjustment of the amount presented in temporary equity is currently not required because the Company's management
estimates that it was not probable that the instrument will become redeemable. Adjustments of redeemable non-controlling interest to its
redemption value are recorded through additional paid-in capital.
As
indicated in Note 1 above, following the Transaction, the redeemable non-controlling interests held by GIBF were converted into ordinary
shares of the Company and are no longer outstanding.
F-16
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
| n. |
Share-based
compensation |
The
Company’s employees and non-employees share-based payment awards are classified as equity awards. The Company accounts for these
awards using the grant-date fair value method. The fair value of share-based payment transactions is recognized as an expense over the
requisite service period using the straight-line method.
The
Company elected to recognize compensation costs for awards conditioned only on continued service that have a graded vesting schedule using
the straight-line method based on the multiple-option award approach. Forfeitures are recognized as they occur.
The
Company accounts for its non-employees’ equity-classified share-based payment in a similar manner.
| o. |
Research
and development expenses |
Research
and development costs are charged to the statements of operations as incurred. Research and development expenses include costs directly
attributable to the conduct of research and development programs, including the cost of payroll and subcontractors, as well as share-based
payments. Advance payments for goods or services that will be used or rendered for future research and development activities
are deferred. Such amounts are recognized as an expense as the related goods are used or the services are rendered.
Grants
received from the Israeli Innovation Authority (“IIA”) for approved research and development projects are recognized at the
time the Company is entitled to such grants, on the basis of the costs incurred and included as a deduction from research and development
expenses, see Note 7. The Company did not receive any grants during 2023 and 2024.
| p. |
Leases
|
The
Company recognizes operating lease payments in the consolidated statements of operations on a straight-line basis over the lease term.
Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent
the obligation to make minimum lease payments arising from the lease. ROU assets are initially measured at amounts representing
the discounted present value of the lease payments over the lease, plus any initial direct costs incurred. The lease liability is initially
measured at lease commencement date based on the discounted present value of minimum lease payments over the lease term. The discount
rate for the lease is the rate in the lease unless that rate cannot readily determined. As the Company's leases do not provide an implicit
rate, the Company uses an estimated incremental borrowing rate (“IBR”) based on the information available at commencement
date in determining the present value of lease payments. The Company’s IBR is estimated to approximate the interest rate for collateralized
borrowing with similar terms and payments and in economic environments where the leased asset is located. During the reporting periods,
the Company has only operating leases.
Payments
under the Company’s lease arrangements are primarily fixed, however, certain lease agreements contain variable payments, which are
expensed as incurred and not included in the operating lease right-of-use assets and liabilities. The Company elected the practical expedient
not to separate lease and non-lease components. The Company has made a policy election not
to capitalize leases with a term of 12 months or less.
F-17
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
| q. |
Loss
per share |
The
Company computes basic loss per share in accordance with ASC Topic 260, Earnings per Share, by dividing the net loss attributable to ordinary
shareholders by the weighted average number of ordinary shares outstanding during the year, and fully vested pre-funded options for the
Company's ordinary shares at an exercise price of $0.339
or 0.339
NIS per share. The Company considers these shares to be exercised for little to no additional consideration.
Diluted
loss per share is computed by considering the potential dilution that could occur upon the exercise of awards granted under share-based
compensation plans and equity-classified instruments using the treasury stock method. Impact of liability-classified instruments on diluted
loss per share is considered using the if-converted method. Diluted loss per share excludes all dilutive potential ordinary shares if
their effect is anti-dilutive.
Prior
to the Transactions, the Company calculated loss per share using the two-class method required for participating securities. This method
entails allocating income available to ordinary shareholders for the period between ordinary shares and participating securities based
on their respective rights to receive dividends as if all income for the period had been distributed. The Company considered its redeemable
convertible preferred shares to be participating securities, as the holders of the redeemable convertible preferred shares were entitled
to dividends that would be distributed to the holders of ordinary shares, on a pro-rata basis assuming conversion of all redeemable convertible
preferred shares into ordinary shares. However, these participating securities did not contractually require the holders to participate
in the Company's losses. Consequently, net loss for the applicable periods presented was not allocated to the Company's participating
securities.
| r. |
Income
taxes: |
| 1) |
Deferred
taxes |
Income
taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities
are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using
the currently enacted tax rates and laws. A valuation allowance is recognized to the extent that it is more likely than not that the deferred
taxes will not be realized in the foreseeable future. Given the Company’s losses, the Company has provided a full valuation allowance
with respect to its deferred tax assets.
| 2) |
Uncertainty
in income tax |
The
Company follows a two-step approach in recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position
for recognition by determining if the available evidence indicates that it is more likely than not that the tax position will be sustained
upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position.
If this threshold is met, the second step is to measure the tax position as the largest amount that has more than a 50% likelihood of
being realized upon ultimate settlement.
| s. |
Concentration
of credit risks |
Financial
instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, restricted
cash and short-term deposits. The Company deposits cash and cash equivalents mostly with four low risk financial institutions. The Company
has not experienced any material credit losses in these accounts and does not believe it is exposed to significant credit risk on these
instruments.
F-18
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
| t. |
Impairment
of long-lived assets |
The
Company tests long-lived assets for impairment whenever events or circumstances indicate the carrying amount may not be recoverable. If
the sum of expected future cash flows (undiscounted and without interest charges) of the assets is less than the carrying amount of such
assets, an impairment loss would be recognized. The assets would be written down to their estimated fair values, calculated based on the
present value of expected future cash flows (discounted cash flows), or some other fair value measure.
For
the years ended December 31, 2024 and 2023, the Company did not recognize an impairment loss for its long-lived assets
| u. |
Comprehensive
Loss |
Comprehensive
loss includes no items other than net loss.
| v. |
Loss
Contingencies |
Certain
conditions may exist as of the date of the financial statements, which may result in a loss to the Company, but which will only be resolved
when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities, and such assessment
inherently involves an exercise of judgment.
Management
applies the guidance in ASC 450-20-25 when assessing losses resulting from contingencies. If the assessment of a contingency indicates
that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability
is recorded as accrued expenses in the Company’s financial statements. If the assessment indicates that a potential material loss
contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability,
together with an estimate of the range of possible loss if determinable and material are disclosed. As of December 31, 2024,
and December 31, 2023, no contingent liabilities have been recognized.
| w. |
New
accounting pronouncements: |
The
Company qualifies as an emerging growth company (“EGC”) as defined under the Jumpstart Our Business Startups Act (the “JOBS
Act”). Using exemptions provided under the JOBS Act for EGCs, the Company has elected to defer compliance with new or revised ASUs
until it is required to comply with such updates, which is generally consistent with the adoption dates of private companies.
Recently
Adopted accounting pronouncements:
| 1) |
In
November 2023, the FASB issued ASU No. 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The
ASU improves reportable segments disclosure requirements, primarily through enhanced disclosures about significant segment expenses.
The ASU also requires that a public entity that has a single reportable segment must provide all the disclosures required by the amendments
and all existing segment disclosures in Topic 280. The Company adopted the ASU on January 1, 2024 - see Note 15.
|
Recently
issued accounting standards not yet adopted:
| 1) |
In
November 2024, the FASB issued ASU No. 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation
Disclosures (Subtopic 220-40). The ASU improves the disclosures about a public business entity’s expenses and provides more detailed
information about the types of expenses in commonly presented expense captions. The amendments require that at each interim and annual
reporting period an entity will, inter alia, disclose amounts of purchases of inventory, employee compensation, depreciation and amortization
included in each relevant expense caption (such as cost of sales, SG&A and research and development). The ASU is effective for fiscal
years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption
is permitted. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures. |
F-19
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
| 2) |
In
December, 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income
taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related
disclosures. The ASU will be effective for fiscal years beginning after December 15, 2025, and allows adoption on a prospective basis,
with a retrospective option. The Company is in the process of assessing the impacts and method of adoption. |
| 3) |
In
June 2022, the FASB issued ASU 2022-03 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”.
The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the
equity security and, therefore, is not considered in measuring its fair value. The ASU also clarifies that an entity cannot, as a separate
unit of account, recognize and measure a contractual sale restriction. The ASU also introduces new disclosure requirements for equity
securities subject to contractual sale restrictions. |
As
an Emerging Growth Company, the ASU is effective for fiscal years beginning after December 15, 2024, and interim periods within those
fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available
for issuance. The Company is currently evaluating the effect that ASU 2022-03 will have on its consolidated financial statements and related
disclosures.
NOTE
3 - FINANCIAL INSTRUMENTS ISSUED AND ASSUMED IN TRANSACTIONS
| a. |
Underwriters Promissory Note |
Prior to
the Closing, Moringa reached agreement with EarlyBird Capital, Inc. (“EarlyBird”), which served as the underwriter for Moringa’s
IPO, on the reduction, to $1,600 ,
in the aggregate, of the fee payable to EarlyBird under the Marketing Agreement entered into by Moringa with EarlyBird at the time of
Moringa’s initial public offering (“IPO”). At the Closing, Moringa paid $350
of cash to EarlyBird from its trust account and New Silexion issued to EarlyBird a convertible promissory note, due December 31, 2025,
in an amount of $1,250
to be paid by New Silexion to EarlyBird in cash or, at the election of EarlyBird upon maturity, via conversion of outstanding amounts
into ordinary shares of New Silexion (the “Underwriters Promissory Note”).
The Underwriters
Promissory Note bears interest at a rate of 6 %
per annum and matures on December 31, 2025. If not repaid on or prior to that maturity date or such earlier date as to which the repayment
obligation may be accelerated under the note, or not converted by EarlyBird upon maturity into ordinary shares of New Silexion in accordance
with the terms thereof, the rate of interest applicable to the unpaid principal amount would be adjusted to 15 %
per annum. New Silexion is required to make mandatory prepayments on the note in amounts equal to 10 %
of the gross proceeds received by New Silexion from any equity financing consummated by it prior to the maturity date.
New Silexion
is entitled to voluntarily prepay, in cash, any additional part of, or all of, the principal and accrued interest, in one or more installments
without penalty, prior to the maturity date.
F-20
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
3 - FINANCIAL INSTRUMENTS ISSUED AND ASSUMED IN TRANSACTIONS (continued):
EarlyBird,
in turn, may elect, at its sole discretion, on the maturity date, to convert all or part of the then outstanding principal and/or accrued
interest under the Underwriters Promissory Note into New Silexion ordinary shares, at a per share conversion price equal to 95 %
of the volume weighted average price of a New Silexion ordinary share for the five trading days immediately prior to (but not including)
the maturity date of the Underwriters Promissory Note .
As of December
31, 2024, the Company has repaid $250
of the principal amount of the Underwriters Promissory Note as required in connection with its equity financing activities under the ELOC
Agreement; see Note 3(d). As of the date these financial statements were authorized for issuance, the Company repaid $808
of the Underwriters Promissory Note plus $15
for EarlyBird’s legal expenses, in respect of the Note Conversion Inducement Agreement, see Note 16(c).
| b. |
Sponsor/Related Party Promissory Note |
Effective
as of the Closing, New Silexion issued to the Sponsor in replacement in their entirety of all previously existing promissory notes issued
by Moringa to the Sponsor from its IPO until the Closing, an amended and restated promissory note (the “Related Party Promissory
Note”, and, together with the Underwriters Promissory Note, the “Promissory Notes”) in an amount of $3,433 .
This reflected the total amount owed by Moringa to the Sponsor through the Closing Date. The maturity date of the Related Party Promissory
Note is the 30-month anniversary of the Closing Date (i.e., February 15, 2027). Amounts outstanding under the Related Party Promissory
Note may be repaid (unless otherwise decided by New Silexion) only by way of conversion into New Silexion ordinary shares (“Note
Shares”). New Silexion and the Sponsor may also convert amounts outstanding under the Related Party Promissory Note at the price
per share at which New Silexion conducts an equity financing following the Closing, subject to a minimum conversion amount of $100 ,
in an amount of Note Shares constituting up to thirty percent (30 %)
of the number of New Silexion ordinary shares issued and sold by New Silexion in such equity financing. The Sponsor may also elect to
convert amounts of principal outstanding under the note into New Silexion ordinary shares at any time following the 24-month anniversary
of the Closing Date, subject to a minimum conversion of $10 ,
at a price per share equal to the volume weighted average price of the New Silexion ordinary shares on the principal market on which they
are traded during the 20
consecutive trading days prior to the conversion date.
As of the
date of these financial statements, neither the Company nor the Sponsor has converted into New Silexion ordinary shares, and the Company
has not prepaid, any principal amounts under the Related Party Promissory Note.
| c. |
PIPE Financing |
In connection
with, and immediately prior to the Closing of the Transactions, Moringa raised $2,000
via a private investment in public entity financing (the “PIPE Financing”), whereby Moringa sold to Greenstar, LP, an affiliate
of the Moringa Sponsor (the “PIPE Investor”), 1,482
newly issued Moringa ordinary shares at a price of $1,350.00
per share, pursuant to a subscription agreement, dated as of August 15, 2024, by and among Moringa, New Silexion and the PIPE Investor
(the “PIPE Agreement”). Those 1,482
shares are automatically converted upon the Closing of the Transactions into an equivalent number of New Silexion ordinary shares (the
“PIPE Shares”).
| d. |
ELOC Financing |
In connection
with the Closing, New Silexion entered into an ordinary share purchase agreement, effective as of the Closing Date (the “ELOC Agreement”),
for an equity line of credit (the “ELOC”) with White Lion Capital, LLC (the “ELOC Investor”), whereby New Silexion
will be able to request to sell to the ELOC Investor, and the ELOC Investor will be required to purchase, via private placement transactions,
up to $15,000
of New Silexion ordinary shares from time to time after the Closing, up until December 31, 2025 (unless the agreement is terminated sooner),
subject to certain limitations and conditions as described therein. The number of New Silexion ordinary shares that New Silexion may require
the ELOC Investor to purchase in any single sales notice will depend on a number of factors, including the type of purchase notice that
New Silexion delivers. Similarly, the purchase price to be paid by the ELOC Investor for any shares that New Silexion requires it to purchase
will depend on the type of sales notice that New Silexion delivers.
F-21
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
3 - FINANCIAL INSTRUMENTS ISSUED AND ASSUMED IN TRANSACTIONS (continued):
Purchase
price is determined with reference to either the lowest daily volume-weighted average price of the Company’s ordinary shares during
a period of three consecutive business days beginning on the notice date, multiplied by 0.97 ,
or by the lowest traded price of the Company’s ordinary shares on the notice date.
Pursuant
to the ELOC Agreement, New Silexion agreed, among other things, that if New Silexion’s sales to the ELOC Investor under the ELOC
exceed 19.99 %
of New Silexion’s total number of ordinary shares outstanding, New Silexion will seek the approval of its shareholders for the issuance
of any New Silexion ordinary shares under the ELOC in excess of that amount, in accordance with the Nasdaq Listing Rules, subject to certain
exceptions based on the price of the New Silexion ordinary shares to be sold in excess of that limit.
In consideration
for the commitments of the ELOC Investor, New Silexion agreed to issue to the ELOC Investor an aggregate of $337.5
of New Silexion ordinary shares (the “ELOC Commitment Shares”). On September 18, 2024 the Company issued 2,707
ordinary shares to the ELOC Investor as the ELOC Commitment Shares. Issuance expenses amounted to $52 .
During
the year ended December 31, 2024, the Company sold 48,208 ordinary
shares under the ELOC at an average price of $63.30 per
share, net of fees of approximately $20 .
The net proceeds from those sales were $3,054 .
For further information see Note 12.
| e. |
SPAC Warrants |
On the
Closing Date, Moringa, New Silexion and Continental Stock Transfer & Trust Company (“CST”) entered into a certain Assignment,
Assumption and Amendment Agreement (the “New Warrant Agreement”). The New Warrant Agreement amended Moringa’s Warrant
Agreement, dated as of February 19, 2021, to provide for the assignment by Moringa of all its rights, title and interest in the warrants
of Moringa to New Silexion.
Upon Closing,
New Silexion assumed 42,592
warrants sold by Moringa in its IPO (“Public Warrants”) and 1,408
warrants sold by Moringa to the Sponsor and EarlyBird concurrently with its IPO (the “Private Warrants”, and together with
the Public Warrants, the “Warrants”). Each such Warrant entitles the holder thereof to purchase one ordinary share of New
Silexion at a price of $1,552.5
per share, subject to adjustment. No fractional shares will be issued upon exercise of the Warrants. Each
Warrant became exercisable 30 days after the Closing and will expire five years after the Closing Date or earlier upon liquidation of
the Company.
The Private
Warrants are identical to the Public Warrants except that, for so long as they are held by the Sponsor, EarlyBird or their respective
affiliates, the Private Warrants: (1) are not redeemable by the Company; (2) could not (subject to certain limited exceptions), be transferred,
assigned or sold by the holders thereof until 30 days after the Closing; (3) may be exercised by the holders thereof on a cashless basis;
and (4) are entitled to registration rights.
The Company recognized a net
liability in respect of the Private Warrants, measured at fair value through profit or loss, from the Transactions (see also Note 2k).
As such, transaction costs related to the Transactions were expensed as incurred. Public Warrants meet the criteria for equity classification
and are recognized as equity.
F-22
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
4 - PROPERTY AND EQUIPMENT, NET:
The
composition of property and equipment, grouped by major classifications, is as follows:
|
December 31
|
||||||||
|
2024
|
2023
|
|||||||
|
Cost:
|
||||||||
|
Computers
|
$
|
|
$
|
|
||||
|
Office
furniture |
|
|
||||||
|
Leasehold
improvements |
|
|
||||||
|
$
|
|
$
|
|
|||||
|
Accumulated
depreciation: |
||||||||
|
Computers
|
|
|
||||||
|
Office
furniture |
|
|
||||||
|
Leasehold
improvements |
|
|
||||||
|
$
|
|
$
|
|
|||||
|
Property
and equipment, net |
$
|
|
$
|
|
||||
Depreciation
expenses were $25
and $45
in the years ended December 31, 2024 and 2023, respectively.
NOTE
5 - LEASES:
| a. |
On August 15, 2024, Silexion vacated its office
spaces and facilities in Israel. On September 8, 2024, an early termination agreement for the operating lease was signed with the landlord,
which included a termination penalty. As a result, Silexion derecognized the right-of-use asset and the lease liability in its financial
statements, recording a loss of $ |
| b. |
On September 26, 2024 Silexion signed a new lease
agreement for an office in Israel starting November 1, 2024 and ending on October 31, 2026 (initial term of two years and extension options
reasonably certain to be exercised ending October 31, 2028). Silexion will pay quarterly fixed payments to the lessor (including payments
for common area maintenance). Lease payments are indexed to the Israeli consumer price index (“CPI”).
|
Silexion
provided the lessor with a bank guarantee as a rental security. The bank, in turn, placed a pledge over restricted cash of $48 .
Operating
lease costs for the years ended December 31, 2023 and 2024 are as follows:
|
Year
Ended December 31, |
||||||||
|
2024
|
2023
|
|||||||
|
Fixed
payments and variable payments that depend on an index or rate: |
||||||||
|
Office
and operational lease expenses |
$
|
|
$
|
|
||||
|
Variable
lease cost (included in the operating lease costs) |
$
|
|
$
|
|
||||
|
Loss
from lease termination |
$
|
|
|
|||||
|
Total
operating lease costs |
$
|
|
$
|
|
||||
F-23
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
5 - LEASES (continued):
Operating
cash flows, for amounts included in the measurement of lease liabilities, are as follows:
|
Year
Ended December 31, |
||||||||
|
2024
|
2023 | |||||||
|
Office
and operational spaces lease expenses |
$
|
|
$
|
|
||||
|
Termination
penalty |
$
|
|
|
|||||
|
Total
|
$
|
|
$
|
|
||||
Supplemental
information related to operating leases is as follows:
|
Year
Ended December 31, |
||||||||
|
2024
|
2023
|
|||||||
|
Operating
lease right-of-use assets |
$
|
|
$
|
|
||||
|
Operating
lease liabilities |
$
|
|
$
|
|
||||
|
Weighted
average remaining lease term (years) |
|
|
||||||
|
Weighted
average discount rate |
|
%
|
|
%
| ||||
As
of December 31, 2024, Silexion has not entered into lease agreements that include options to extend them that are not included in the
measurement of the lease liability.
The
following table outlines maturities of Silexion operating lease liabilities as of December 31, 2024:
|
Operating
lease
liabilities |
||||
|
2025
|
$
|
|
||
|
2026
|
|
|||
|
2027
|
|
|||
|
2028
|
|
|||
|
Total undiscounted lease
payments |
$
|
|
||
|
Less - imputed interest
|
$
|
|
||
|
Present value of lease
liabilities |
$
|
|
||
NOTE
6 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION:
Statement
of operations:
| a. |
Research and development
expenses: |
|
Year
ended December 31, |
||||||||
|
2024
|
2023
|
|||||||
|
Payroll and related expenses
|
$
|
|
$
|
|
||||
|
Share-based compensation
expenses |
|
|
||||||
|
Subcontractors and consultants
|
|
|
||||||
|
Materials
|
|
|
||||||
|
Rent and maintenance
|
|
|
||||||
|
Travel expenses
|
|
|
||||||
|
Other
|
|
|
||||||
|
$
|
|
$
|
|
|||||
F-24
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
6 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (continued):
| b. |
General and administrative
expenses: |
|
Payroll and related expenses
|
$
|
|
$
|
|
||||
|
Share-based compensation
expenses |
|
|
||||||
|
Professional services
|
|
|
||||||
|
Depreciation
|
|
|
||||||
|
Rent and maintenance
|
|
|
||||||
|
Patent registration
|
|
|
||||||
|
Travel expenses
|
|
|
||||||
|
Other
|
|
|
||||||
|
$
|
|
$
|
|
| c. |
Financial expense, net:
|
|
Change in fair value of financial liabilities measured at fair value (including ELOC) |
$
|
(
|
)
|
$
|
|
|||
|
Issuance costs |
|
|
||||||
|
Loss
upon entering Transactions |
|
|
||||||
|
Interest income, net |
(
|
)
|
(
|
)
| ||||
|
Foreign
currency exchange loss, net |
|
|
||||||
|
Other
|
|
|
||||||
|
Total
financial expense, net |
$
|
|
$
|
|
NOTE
7 - COMMITMENTS AND CONTINGENT LIABILITIES:
From
2009 to 2020, Silexion received several approvals from the IIA for participation in research and development activities performed by Silexion
(“Support Grants”) in a total amount of $5.8
million.
The
Company is obligated to pay royalties to the IIA amounting to 3 %-5 %
of the sales of the core products and other related revenues generated from such projects, up to 100 %
of the Support Grants received, linked to the U.S. dollar and bearing interest at the rate of LIBOR. The obligation to pay these royalties
is contingent upon actual sales of the products and, in the absence of such sales, no payment is required. In October 2023, it was published
that the interest rate on the Support Grants will be replaced with the 12 -month
term Secured Overnight Financing Rate (SOFR) published on the first trading day of each calendar year.
As
of January 1, 2024, due to the cancellation of the LIBOR interest rate, the amount of the obligation is bearing 12-month term SOFR interest
rate.
As
of December 31, 2024, the total royalty amount that may be payable by the Company is approximately $5.8
million ($6.5 million
including interest).
NOTE
8 - WARRANTS TO PURCHASE PREFERRED SHARES:
| a) |
Regarding the Series A-4 Preferred Shares of Silexion, Silexion
issued warrants to acquire |
Silexion
classified the warrants for the purchase of its convertible redeemable preferred shares as a liability in its (now, the Company’s)
consolidated balance sheets, as these warrants were freestanding financial instruments for which the underlying shares were contingently
redeemable and, therefore, may have obligated Silexion to transfer assets at some point in the future. The warrant liability was initially
recorded at fair value upon the date of issuance and was subsequently remeasured at fair value at each reporting date. Silexion (and the
Company, as its successor from an accounting perspective) recorded revaluation expenses amounting to $134
and $86
for the years ended 2024 and 2023, respectively, and accounted for such revaluation expenses as part of its financial (expense), net,
in the statements of operations.
For further
information in respect of a warrants issuance to a service provider, see Note 11(1).
F-25
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
9 - REDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY:
Issuance
of shares:
| 1) |
On
May 30, 2023, Silexion entered into an agreement to receive an investment in a total amount of $
|
Additionally,
Silexion issued 161
warrants to purchase Series A-4 Preferred Shares, each with a par value of NIS 1.35 ,
exercisable at a price of $3,343.80
per share.
In
addition, on May 30, 2023, the Chinese Subsidiary made an investment totaling $3
million in Silexion. This investment resulted in the acquisition by the Chinese Subsidiary of 898
Series A-4 Preferred Shares and 898
warrants convertible into Series A-4 Preferred Shares of Silexion. Each warrant was exercisable for one Series A-4 Preferred Share at
an exercise price of $3,343.80
per share. As the acquisition was eliminated in consolidation, it had no impact on the consolidated financial statement.
| 2) |
See
Note 1(d) for shares issued as part of Transactions. |
| 3) |
See
Note 3(d) for ELOC Financing. |
Shareholders
rights:
The
ordinary shares of Silexion conferred upon their holders the right to participate and vote in general shareholders meetings of Silexion
and to share in the distribution of dividends, if any declared by Silexion.
NOTE
10 - INCOME TAXES:
| a. |
Cayman Islands
|
Under
the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, the Cayman Islands
does not impose a withholding tax on payments of dividends to shareholders.
| b. |
Corporate taxation of
Israeli subsidiary |
Silexion
is taxed according to the regular corporate income tax rate in Israel. The corporate tax rate was 23
| c. |
Income taxes of Chinese
Subsidiary |
The
Chinese Subsidiary is taxed under the tax laws of China and the corporate tax rate is 25 %.
| d. |
Tax loss carryforwards
|
As
of December 31, 2024, the expected tax loss carryforwards of Silexion were approximately $25,216 ,
which may be carried forward and offset against taxable income in the future for an indefinite period. The Company has recognized valuation
allowance for the full amount in respect of these tax loss carryforwards since their utilization is not expected in the foreseeable future.
F-26
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
10 - INCOME TAXES (continued):
The
tax loss carryforwards generated in the Cayman Islands have no value, as the Cayman Islands do not impose an income
tax on corporations.
Local
and foreign components of loss from continuing operations, before income taxes consisted of the results of Silexion as the local entity,
and the results of New Silexion, Moringa, and the Chinese Subsidiary as foreign entities.
|
Year ended December 31
|
||||||||
|
2024
|
2023
|
|||||||
|
Domestic
– Israel |
|
|
||||||
|
Foreign
|
||||||||
|
Cayman
Islands |
$
|
|
$
|
|
||||
|
Chinese
Subsidiary |
|
|
||||||
|
Total
|
$
|
|
$
|
|
||||
| e. |
Uncertainty in income
tax |
As
of December 31, 2024 and 2023, the Company’s uncertain tax positions were immaterial.
| f. |
Tax rate reconciliation
|
The
Group consists of a Cayman Islands parent holding company with various international subsidiaries (see Note 1(c)). The applicable statutory
rate in the Cayman Islands is 0 %
for the Company for the year ended December 31, 2024. For purposes of the reconciliation between the provision for income taxes at the
statutory rate and the effective tax rate, an Israeli statutory tax rate of 23
Income
tax expense attributable to income from continuing operations was $10
and $32
for the years ended December 31, 2024 and 2023, respectively, and differed from the amounts computed by applying an Israeli statutory
income tax rate of 23 %
to pretax income from continuing operations, mainly as a result of changes in valuation allowance of $1,392
and $922
respectively, as well as nondeductible expenses.
The
reconciliation of the theoretical tax benefit (expense) under the Israeli statutory tax rate to the Company's effective benefit (expense)
taxes is as follows for the years ended December 31, 2024 and 2023, respectively:
|
Year ended December 31
|
||||||||
|
2024
|
2023
|
|||||||
|
Loss before income taxes
|
$
|
(
|
)
|
$
|
(
|
)
| ||
|
Statutory tax rate
|
|
%
|
|
%
| ||||
|
Computed “expected”
tax income |
(
|
)
|
(
|
)
| ||||
|
Exchange rate differences
|
(
|
)
|
|
|||||
|
Non-deductible share-based
compensation |
|
|
||||||
|
Non-deductible financial
instruments valuation |
|
|
||||||
|
Effect of other non-deductible
differences |
|
|
||||||
|
Change in valuation allowance
|
|
|
||||||
|
Subsidiaries tax rate
differences |
|
(
|
)
| |||||
|
Reported taxes on
income |
$
|
|
$
|
|
||||
F-27
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
10 - INCOME TAXES (continued):
| g. |
Deferred tax
|
Deferred
taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:
|
December
31 |
||||||||
|
2024
|
2023
|
|||||||
|
Deferred tax assets
|
||||||||
|
Operating
loss carryforwards |
$
|
|
$
|
|
||||
|
Research
and development |
|
|
||||||
|
Accrued
expenses |
|
|
||||||
|
Bonus
accrual |
|
|
||||||
|
Lease
liability |
|
|
||||||
|
Other
|
|
|
||||||
|
Total deferred tax assets
|
$
|
|
$
|
|
||||
|
Deferred tax liabilities
|
||||||||
|
Right
of use asset |
(
|
)
|
(
|
)
| ||||
|
Total deferred tax liabilities
|
$
|
(
|
)
|
$
|
(
|
)
| ||
|
Valuation allowance
|
$
|
(
|
)
|
$
|
(
|
)
| ||
|
Deferred
tax assets, net of valuation allowance |
$
|
|
$
|
|
||||
| h. |
Roll forward of valuation
allowance: |
The
following table presents a reconciliation of the beginning and ending valuation allowance:
|
Balance
as of December 31, 2022 |
$
|
(
|
)
| |
|
Additions
|
(
|
)
| ||
|
Balance
as of December 31, 2023 |
$
|
(
|
)
| |
|
Additions
|
(
|
)
| ||
|
Balance
as of December 31, 2024 |
$
|
(
|
)
|
In
assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of
the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of
future taxable income during the periods in which temporary differences are deductible and net operating losses are utilized. Based on
these factors, the Company recorded a full valuation allowance as of December 31, 2024 and 2023.
| i. |
Income tax assessments
|
Silexion
has tax assessments that are considered to be final through tax year 2019.
The
Chinese Subsidiary does not have final tax assessments.
F-28
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE 11 - SHARE-BASED COMPENSATION:
| 1) |
Warrants
to service provider |
In
conjunction with its Series A-4 Preferred Share financing, Silexion issued warrants to acquire 1 Series A-4 Preferred Shares to a service
provider who assisted in raising the funds, which were recorded as part of issue expenses. These warrants carried an exercise price as
those issued to the investors in such round. The warrants were recognized as issuance costs and the portion attributed to
the issuance of Series A-4 Preferred Shares was classified as part of the shareholders’ equity. The portion attributed to the issuance
of the warrants was recognized as financial expenses. These warrants were automatically exercised on a cashless basis upon the Closing
of the Transactions.
| 2) |
Employee
Stock Option Plan |
As
of December 31, 2024, the Board of Directors had approved a pool of 4,264
ordinary shares for grant to Company employees, consultants, directors and other service providers under the Company’s 2024 Equity
Incentive Plan (the “2024 Plan”).
Under
Silexion’s 2013 Share Option Plan and 2023 Equity Incentive Plan (collectively, the “Silexion Plans,” and, together
with the 2024 Plan, the “Plans”), options to purchase ordinary shares of Silexion could have been granted to certain entities
and individuals. Each option granted under the Silexion Plans is now exercisable for ordinary shares of the Company, until 10
years from the date of grant, or earlier upon cessation of employment or engagement of the grantee and certain other occurrences.
Following
adoption of the 2024 Plan in connection with the Closing of the Transactions, future grants to Company employees and directors will only
be made under the 2024 Plan, although outstanding grants under the Silexion Plans will continue to be governed by the terms of those plans.
Grants to employees are made in accordance with the Plans and are carried out within the provisions of Section 102 of the Israel
Income Tax Ordinance, under the capital gains track described in subsection (b)(2) of Section 102. In accordance with such track selected
by the Company and the provisions associated with it, the Company is not entitled to claim a tax deduction for the employee benefits.
Awards
outstanding under the Silexion Plans prior to the Acquisition Merger accelerated immediately upon Closing, such that the New Silexion
options into which Silexion options were converted were fully vested.
The
Group's expenses related to equity grants amounted to a total of $5,862
and $130
in 2024 and 2023, respectively. As of December 31, 2024, 4,264
New Silexion ordinary shares remain available for grant under the 2024 Plan.
F-29
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
11 - SHARE-BASED COMPENSATION (continued):
Summary
of outstanding and exercisable options:
Below
is a summary of the Company's (or for periods prior to the Closing of the Transactions, Silexion’s) stock-based compensation activity
and related information with respect to options granted to employees and non-employees for the year ended December 31, 2024 and 2023:
|
Number of
options
|
Weighted-average
exercise price
(in
U.S. dollars)
|
Weighted- average
remaining
contractual
term
(in
years) |
Aggregate
intrinsic
value
|
|||||||||||||
|
Outstanding
at December 31, 2023 |
|
|
|
|
||||||||||||
|
Granted
|
|
|
-
|
-
|
||||||||||||
|
Exercised
|
(
|
)
|
|
|
|
|||||||||||
|
Forfeited
|
(
|
)
|
|
|
-
|
|||||||||||
|
Expired
|
(
|
)
|
|
-
|
-
|
|||||||||||
|
Outstanding
at December 31, 2024 |
|
|
|
*
|
||||||||||||
|
Exercisable
at December 31, 2024 |
|
|
|
*
|
||||||||||||
|
Vested
and expected to vest at December 31, 2024 |
|
|
|
*
|
||||||||||||
* Represents an amount
less than $1
In
2023 no option were exercised by employees and nonemployees.
RSUs
granted to employees and non-employees:
On
July 4, 2024, Silexion’s board of directors approved granting 5,242
fully vested RSUs to Silexion’s employees and directors, for which Silexion recognized an expense amounting to $5,578
in total.
The
fair value for the RSUs granted in 2024 is based on the following assumptions:
|
Expected
volatility |
|
%
| ||
|
Assumptions
regarding the price of the underlying shares: |
||||
|
Probability
of an IPO scenario (including de-SPAC transaction) |
|
%
| ||
|
Expected
time to IPO (including de-SPAC transaction) (years) |
|
|||
|
Probability
of other liquidation events |
|
%
| ||
|
Expected
time to liquidation (years) |
|
|||
|
Expected
return on Equity |
|
%
|
The
fair value of equity compensation granted during 2024 was $5,578 .
Options
granted to employees and non-employees:
In
the year ended December 31, 2024 and 2023, no options were granted, neither to employees nor to non-employees.
For
the year ended December 31, 2024, there are no nonvested options outstanding.
As
of December 31, 2024, there was no remaining unrecognized compensation cost related to unvested stock options granted under the Silexion
Plans, as all outstanding options were fully accelerated during 2024.
F-30
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
11 - SHARE-BASED COMPENSATION (continued):
The
share-based compensation expense by line item in the accompanying consolidated statements of operations is summarized as follows:
|
Year
ended December 31 |
||||||||
|
2024
|
2023
|
|||||||
|
Research
and development |
$
|
|
$
|
|
||||
|
General
and administrative |
|
|
||||||
|
$
|
|
$
|
|
|||||
NOTE
12 - FAIR VALUE MEASUREMENTS:
Financial
instruments measured at fair value on a recurring basis
The
Company’s assets and liabilities that are measured at fair value as of December 31, 2024, and December 31, 2023, are classified
in the tables below in one of the three categories described in “Note 2 – Fair value measurement” above:
|
December
31, 2024 |
||||||||
|
Level
3 |
Total
|
|||||||
|
Financial
Liabilities |
||||||||
|
Private
Warrants to ordinary shares |
$
|
|
$
|
|
||||
|
Promissory
Notes |
$
|
|
$
|
|
||||
|
December
31, 2023 |
||||||||
|
Level
3 |
Total
|
|||||||
|
Financial
Liabilities |
||||||||
|
Warrants
to preferred shares |
$
|
|
$
|
|
||||
The
following is a roll forward of the fair value of liabilities classified under Level 3:
|
2024
|
||||||||||||
|
Promissory
Notes
|
Warrants to
preferred
shares |
Private
Warrants to
ordinary
shares |
||||||||||
|
Fair value at the beginning
of the year |
$
|
|
$
|
|
$
|
|
||||||
|
Issuance
|
|
|
||||||||||
|
Change in fair value
|
(
|
)
|
|
(
|
)
| |||||||
|
Repayments
|
(
|
)
|
|
|
||||||||
|
Conversion to equity
|
|
(
|
)
|
|
||||||||
|
Fair value at the end
of the year |
$
|
|
$
|
|
$
|
|
||||||
|
2023
|
||||
|
Warrants
to
preferred
shares |
||||
|
Fair value at the beginning
of the year |
$
|
|
||
|
Issuance
|
|
|||
|
Change in fair value
|
|
|||
|
Fair value at the end
of the year |
$
|
|
||
F-31
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
12 - FAIR VALUE MEASUREMENTS (continued):
ELOC
Agreement
As
the ELOC is in substance a purchased call option over the Company’s own shares at a price described in Note 3(d), the fair value
of this agreement was generally approximately zero until the Company sold shares under the ELOC Agreement. Once the Company sold shares
under the agreement, the difference between cash raised (net of transaction costs) and the closing price of the Company’s ordinary
shares as of the date of their issuance was recognized as financing income or expenses. As of December 31, 2024 the ELOC’s fair
value is zero.
Fair
value gain and losses arising from the ELOC Agreement are measured with reference to the spot price of the Company’s shares sold,
less consideration receivable from the ELOC Investor.
Warrant
to purchase preferred shares
The
fair value of Silexion’s warrant to purchase preferred shares as of December 31, 2023 was estimated using a hybrid model in order
to reflect two scenarios: (1) an IPO event (including de-SPAC transaction) involving Silexion and (2) other liquidation events involving
Silexion.
The
IPO scenario (including de-SPAC transaction) involving Silexion was based on management’s estimation regarding the expected value
of the Company’s entire equity at the IPO event (including de-SPAC transaction). Valuation under this scenario was assessed using
the probability-weighted expected return method (PWERM).
The
valuation under the ‘other liquidation events’ scenario was assessed using an option pricing model (OPM) by implementing a
Monte Carlo simulation, which treats the financial instruments in Silexion’s equity as contingent claims whose future payoff depends
on Silexion’s future equity value. Silexion’s entire equity value in 2023 was calculated based, among others, on the financing
round closest to the valuation date.
All
warrants to purchase Silexion preferred shares were automatically exercised on a cashless basis immediately prior to the Closing; see
Note 1(d).
Promissory
Notes
In
measuring the fair value of the Company’s Promissory Notes in 2024, a discount rate of 11.63 %-13.85 %
was used, based on a B- rated US dollar zero-coupon discount curve, plus a credit spread of 6.67 %.
The expected timing of conversion or repayment of the notes was determined using the Company’s forecasts.
Warrants
over ordinary shares
A
Black-Scholes-Merton model with Level 3 inputs was used to calculate the Company’s warrants’ fair value. Inherent in a Black-Scholes-Merton
model are assumptions related to expected life (term), expected stock price, volatility, risk-free interest rate and dividend yield. The
Company estimates the volatility of its warrants based on implied volatility from the Company’s traded warrants and from historical
volatility of selected peer companies’ Class A ordinary shares that matches the expected remaining life of the warrants. The risk-free
interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining
life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend
rate is based on the historical rate, which the Company anticipates will remain at zero.
F-32
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
12 - FAIR VALUE MEASUREMENTS (continued):
The
following table provides quantitative information regarding Level 3 fair value measurement inputs of the warrants:
|
December 31,
|
August 15,
|
|||||||
|
|
2024
|
2024
|
||||||
|
Volatility
|
|
%
|
|
%
| ||||
|
Dividend yield
|
|
%
|
|
%
| ||||
Financial
instruments not measured at fair value
The
carrying amounts of cash and cash equivalents, restricted cash, receivables, trade payables and other liabilities approximate their fair
value due to the short-term maturity of such instruments.
NOTE
13 - NET LOSS PER SHARE:
The
following table sets forth the computation of basic and diluted net loss per share attributable to ordinary shareholders for the periods
presented (USD in thousands, except per share data):
|
Year
ended December 31 |
||||||||
|
2024
|
2023
|
|||||||
|
Numerator:
|
||||||||
|
Net
loss for the year |
$
|
|
$
|
|
||||
|
Net
loss attributable to ordinary shareholders: |
||||||||
|
Basic
and diluted |
$
|
|
$
|
|
||||
|
Denominator:
|
||||||||
|
Weighted-average
shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted |
|
|
||||||
|
Net
loss per share attributable to ordinary shareholders, basic and diluted |
$
|
|
$
|
|
||||
Basic loss
per share is computed on the basis of the net loss for the period divided by the weighted average number of ordinary shares outstanding
during the period, and fully vested pre-funded options for the Company’s (or Silexion’s, as applicable) ordinary shares at
an exercise price of $0.339
or 0.339
NIS per share, as the Company (or Silexion, as applicable) considers these shares to be exercised for little to no additional consideration.
As of December
31, 2024 and 2023, the basic loss per share calculation included a weighted average number of 139
and 977 ,
respectively, fully vested pre-funded options.
The following
instruments were not included in the computation of diluted earnings per share because of their anti-dilutive effect:
| - |
Redeemable convertible preferred shares (see Note 9); |
| - |
Warrants to purchase redeemable convertible preferred shares (see
Note 8); |
| - |
Share-based compensation issuable for substantial consideration
(see Note 11); |
| - |
Warrants to purchase ordinary shares (which were originally SPAC
warrants (see Note 3)); |
| - |
Underwriters Promissory Note and Related Party Promissory Note
(see Note 3); |
| - |
ELOC financing (see Note 3); |
As such, diluted
net loss per share is the same as basic net loss per share.
F-33
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
14 - TRANSACTIONS AND BALANCES WITH RELATED PARTIES:
Transactions
with related parties— shareholders, executive officers and directors of the Company (including Silexion)—are quantified below:
| a. |
Transactions:
|
|
Year
ended December 31 |
||||||||
|
2024
|
2023
|
|||||||
|
Share-based compensation
included in research and development expenses |
$
|
|
$
|
|
||||
|
Share-based compensation
included in general and administrative expenses |
$
|
|
$
|
|
||||
|
Financial expenses
|
$
|
(
|
)
|
$
|
|
|||
| b. |
Balances:
|
|
December
31 |
||||||||
|
2024
|
2023
|
|||||||
|
Non-Current
liabilities |
||||||||
|
Warrants
to preferred shares |
|
$
|
|
|||||
|
Private
warrants to purchase ordinary shares |
$
|
|
|
|||||
|
Sponsor
Promissory Note |
$
|
|
|
|||||
|
$
|
|
$
|
|
|||||
NOTE
15 - SEGMENT INFORMATION
The
Company operates as a single operating segment in the research and development of innovative treatments for pancreatic cancer based on
siRNAs. The Company’s CODM is its Chief Executive Officer (CEO). The CODM reviews the Company’s performance on a consolidated
basis. As such, the segment’s loss is the Company’s consolidated net loss and the segment’s assets are the Company’s
consolidated assets.
The
CODM uses the information primarily to evaluate the Company’s performance and allocate resources. This includes reviewing key financial
metrics such as budget versus actual expenditures, tracking progress on research and development milestones, and assessing overall cash
flow and liquidity to ensure the continuity of operations. This approach allows the CODM to monitor the Company's performance and make
strategic adjustments as needed to support its operational and financial goals.
| a. |
Segment disclosures
|
The
CODM reviews the Company’s results on a consolidated basis. As such, information on segment loss and significant expenses is similar
to the Company’s consolidated statements of operations. The CODM is also regularly provided with information on significant ordinary-course
expenses, including the following expenses. the management does not segregate its business for internal reporting.
F-34
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
15 - SEGMENT INFORMATION (continued):
|
Year
ended December 31 |
||||||||
|
2024
|
2023
|
|||||||
|
Clinical trials and other
services from R&D-related service providers |
$
|
|
$
|
|
||||
|
Payroll and related expenses,
other than share-based compensation |
|
|
||||||
|
Share-based compensation
expenses |
|
|
||||||
|
Depreciation expenses
|
|
|
||||||
|
Other segment expenses
(*) |
|
|
||||||
|
Operating
loss |
|
|
||||||
|
Interest income
|
(
|
)
|
(
|
)
| ||||
|
Interest expense |
||||||||
|
Other financing expense,
net |
|
|
||||||
|
Income taxes
|
|
|
||||||
|
Net
loss |
$
|
|
$
|
|
||||
|
Segment assets
|
$
|
|
$
|
|
||||
|
Expenditures for segment
assets |
(
|
)
|
(
|
)
| ||||
(*)
Other segment expenses include mainly general and administrative-related expenses, such as payments to advisors and consultants, office
lease expenses and maintenance, HR and legal expenses.
| b. |
Entity-Wide disclosures
|
All
of the Company’s long-lived assets are located in Israel.
NOTE
16 - SUBSEQUENT EVENTS
| a. |
Public Offering of Ordinary Shares, Pre-Funded
Warrants, and Ordinary Warrants. |
On January
15, 2025 and January 17, 2025, the Company offered and sold (“Offering”) 143,067
ordinary shares, 103,847
pre-funded warrants to purchase up to 103,847
ordinary shares and 246,914
ordinary warrants to purchase up to 246,914
ordinary shares, at a purchase price of $20.25
per share or $20.25
per pre-funded warrant and accompanying ordinary warrant. The aggregate gross proceeds from the Offering were approximately $5,000 ,
net of transaction costs of approximately $740 .
The pre-funded
warrants are immediately exercisable at an exercise price of $0.0015
per ordinary share and will not expire until exercised in full. The ordinary warrants have an exercise price of $20.25
per ordinary share, are immediately exercisable, and could be exercised for five
years from issuance.
The Company
also issued its placement agent warrants to purchase up to 17,284
ordinary shares. Those placement agent warrants have an exercise price of $25.31
per ordinary share, are exercisable for five years
from the date of the commencement of sales in the Offering, and otherwise reflect substantially the same terms as the ordinary warrants
sold in the Offering.
As of the date
of these financial statements, a total of 42,683
investor warrants were exercised into 42,683
new Silexion ordinary shares, and 103,847
pre-funded warrants were exercised into 103,847
new Silexion ordinary shares, for total proceeds of $864 .
F-35
SILEXION THERAPEUTICS CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
NOTE
16 - SUBSEQUENT EVENTS (continued):
| b. |
Induced Warrant Exercise Transaction |
On January
29, 2025, the Company entered into an inducement offer letter agreement with holders of (“Inducement Offer”) 148,102
of the Company’s existing ordinary warrants that had been issued in the Offering. Under the Inducement Offer, on January 30, 2025,
those holders exercised those warrants for cash and purchased 148,102
ordinary shares at a cash exercise price of $20.25
per share. In consideration, the Company’s issued them new ordinary warrants to purchase up to an aggregate of 148,102
ordinary shares at an exercise price of $22.50
per share (“New Ordinary Warrants”). The exercising holders also paid the Company an additional $1.88
per New Ordinary Warrants issued to them. The Company received aggregate gross proceeds of approximately $3,276
from the exercise of the existing warrants by the holders, net of placement agent fees and other offering expenses of approximately $463 .
In connection
with the issuance of the New Ordinary Warrants, the Company also issued to the placement agent warrants to purchase up to 10,368
ordinary shares, which have the same terms as the New Ordinary Warrants issued in the transactions, except that the placement agent warrants
have an exercise price equal to $27.66
per share. Upon exercise for cash of any New Ordinary Warrants by the holders thereof, in certain circumstances, the placement agent will
receive from the Company (i) a cash fee of 8.0 %
of the aggregate gross exercise price, and (ii) additional placement agent warrants exercisable for 7.0 %
of the ordinary shares issued upon exercise of those New Ordinary Warrants.
Both the New
Ordinary Warrants and the placement agent warrants are immediately exercisable from the date of issuance until the 24 -month
anniversary of the effective date of the resale registration statement.
| c. |
Partial Conversion and Prospective Retirement
of Underwriters Promissory Note |
On March 13,
2025, in accordance with the terms of the Note Conversion Inducement Agreement, the Company made the required payment of the Cash Amount
to EarlyBird, and on March 14, 2025 the Company issued the EBC Shares to EarlyBird. Upon sale of the EBC Shares by EarlyBird and payment
by the Company of any Remaining Amount that will be due to EarlyBird, the Underwriters Promissory Note will be retired.
| d. |
For information regarding the 1-for-15 reverse
share split effected on July 28, 2025, see Note 1(h) |
F-36
Up
to 832,177 Ordinary Shares
Up
to 832,177 Pre-funded Warrants to Purchase up to 832,177 Ordinary Shares
Up
to 832,177 Series A Ordinary Warrants to Purchase up to 832,177 Ordinary Shares
Up
to 832,177 Series B Ordinary Warrants to Purchase up to 832,177 Ordinary Shares
Up
to 58,252 Placement Agent Warrants to Purchase up to 58,252 Ordinary Shares
Up
to 2,554,783 Ordinary Shares Issuable Upon Exercise of the Series A Ordinary Warrants, Series B Ordinary Warrants Pre-funded Warrants
and Placement Agent Warrants
H.C.
Wainwright & Co.
,
2025
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
13. Other Expenses of Issuance and Distribution.
The
following table sets forth all costs and expenses, other than underwriting discounts and commissions, payable by us in connection with
the sale of the securities being registered. All amounts shown are estimates, except for the SEC registration fee and FINRA fee.
|
|
Amount |
|||
|
SEC registration fee |
$ |
2,837 |
||
|
FINRA fee |
$ |
3,279 |
||
|
Accountants’ fees
and expenses |
$ |
45,000 |
||
|
Legal fees and expenses |
$ |
100,000 |
||
|
Printing fees |
$ |
15,000 |
||
|
Miscellaneous expenses |
$ |
15,000 |
||
|
Total expenses (other
than Placement Agent’s fees) |
$ |
181,116 |
||
We
will pay all of the expenses related to the distribution of the securities being offered under this prospectus. Each of the above amounts
(with the exception of the SEC registration fee and FINRA fee) are estimates.
Item
14. Indemnification of Directors and Officers.
Cayman
Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification
of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy,
such as to provide indemnification against willful default, willful neglect, actual fraud or the consequences of committing a crime. our
amended and restated memorandum and articles of association provide for indemnification of its officers and directors to the maximum extent
permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud, willful default
or willful neglect. we have purchased a policy of directors’ and officers’ liability insurance that insures its officers and
directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures it against its obligations
to indemnify its officers and directors.
We believe
that these provisions and the insurance are necessary to attract and retain talented and experienced officers and directors.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us
pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.
we have
entered into indemnity agreements with each of its officers and directors. These agreements require New Silexion to indemnify these individuals
and entity to the fullest extent permitted under applicable Cayman Islands law and to hold harmless, exonerate and advance expenses incurred
as a result of any proceeding against them as to which they could be indemnified.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against
public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense
of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to the court of
appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
The
proposed form of securities purchase agreement that we may enter into with certain investors in this offering (which, if entered into,
will be filed as an exhibit to this registration statement) provides for indemnification by the underwriters of the Company and its officers
and directors, and by the Company of the Placement Agent, for certain liabilities arising under the Securities Act or otherwise in connection
with this offering.
II
- 2
Item
15. Recent Sales of Unregistered Securities.
Since
our formation on April 2, 2024, we have sold securities in transactions not registered under the Securities Act as described below:
Initial
Issuance Upon Formation
Upon
its formation on April 2, 2024, the Company initially sold one ordinary share to its initial shareholder, Maples Corporate Services Limited,
in exchange for corporate services provided by that initial shareholder. That issuance was effected without registration under the Securities
Act in an offshore transaction pursuant to the exemption provided by Regulation S under the Securities Act.
Unregistered
Issuances Upon and Following Closing of Business Combination
Issuance
of EarlyBird Convertible Note and Underlying Ordinary Shares
Prior
to the Closing of the Business Combination, on August 11, 2024, Moringa reached agreement with EarlyBird on the reduction, to $1.6 million,
in the aggregate, of the fee payable to EarlyBird under the Business Combination Marketing Agreement, dated as of February 19, 2021, entered
into by Moringa with EarlyBird at the time of Moringa’s initial public offering. As part of that agreement, New Silexion issued
to EarlyBird the EarlyBird Convertible Note, in an amount of $1.25 million to be paid by New Silexion to EarlyBird in cash and/or via
conversion of outstanding amounts into ordinary shares of New Silexion, which convertible note bore interest at a rate of 6% per annum
and was due on December 31, 2025.
EarlyBird
was able to elect, at its sole discretion, at any time on or prior to the maturity date of the EarlyBird Convertible Note, to convert
all or part of the then outstanding principal and/or accrued interest under the note into New Silexion ordinary shares, at a per share
conversion price equal to 95% of the volume weighted average price of a New Silexion ordinary share for the five trading days immediately
prior to the date of New Silexion’s receipt of a conversion notice, provided, however, that New Silexion was not required to issue,
and EarlyBird was not permitted to elect to convert the principal and/or accrued interest into an aggregate number of New Silexion ordinary
shares that would exceed the maximum number of ordinary shares permitted by Section 5635 of the Nasdaq Listing Rules to be issued without
the approval of New Silexion’s shareholders, unless such approval was to be obtained.
Under
the EarlyBird Convertible Note, New Silexion agreed to promptly file a registration statement with the SEC covering the resale of the
ordinary shares that could have been issued upon conversion of the note and use its best efforts to have such registration statement declared
effective as soon thereafter as possible. In the event such registration statement was not to be declared effective by the SEC within
180 days from the date hereof, then an event of default would have occurred under the note, triggering all amounts under the note to have
become due and payable immediately and automatically.
On
March 13, 2025, we entered into the Note Conversion Inducement Agreement with EarlyBird, pursuant to which, among other things, EarlyBird
partially converted a certain amount of the principal and interest due under the EarlyBird Convertible Note and we issued to EarlyBird
18,519 ordinary shares.
The
issuance of the EarlyBird Convertible Note and the issuance of New Silexion ordinary shares upon conversion of amounts outstanding under
the EarlyBird Convertible Note, were effected in reliance upon the exemption from registration provided under Section 4(a)(2) and/or Rule
506 of Regulation D of the Securities Act in a transaction not requiring registration under the Securities Act.
Issuance
of PIPE Financing Shares
As
described under “Certain Relationships and Related Party Transactions—PIPE Financing” above, in connection with, and
immediately prior to the Closing of, the Business Combination, Moringa raised $2.0 million via the PIPE Financing, whereby Moringa sold
to the PIPE Investor 1,482 newly issued Moringa Class A ordinary shares at a price of $1,350.00 per share, pursuant to the PIPE Agreement.
Upon the Closing of the Business Combination, the Company issued 1,482 New Silexion ordinary shares to the PIPE Investor upon conversion
of those 1,482 Moringa Class A ordinary shares.
The
issuance of those 1,482 PIPE Shares by the Company to the PIPE Investor (a Cayman Islands exempted limited partnership) was effected without
registration under the Securities Act in an offshore transaction pursuant to the exemption provided by Regulation S under the Securities
Act.
II
- 3
Issuances
of Equity Line of Credit Financing Shares to White Lion
As
described above in this registration statement under “White Lion Transaction”, also
in connection with the Closing of the Business Combination, New Silexion entered into the White Lion Purchase Agreement, under which it
will be able to request to sell to White Lion, and White Lion will be required to purchase, under an equity line of credit, up to $15.0
million of New Silexion ordinary shares— the Purchase Notice Shares— from time to time after the Closing, up until December
31, 2025 (unless the agreement is terminated sooner), subject to certain limitations and conditions as described therein. New Silexion
was furthermore required to issue to White Lion ordinary shares constituting the Commitment Shares, having a value equal to $337,500,
as a commitment fee under the White Lion Purchase Agreement The issuance of all ordinary shares to White Lion under the White Lion Purchase
Agreement has been and will be effected in reliance upon the exemption from registration provided under Section 4(a)(2) and/or Rule 506
of Regulation D of the Securities Act in a transaction not requiring registration under the Securities Act.
Through
September 4, 2025, we have issued and sold an aggregate of 50,915 ordinary shares (which includes both the Commitment Shares and some
Purchase Notice Shares) to White Lion under the White Lion Purchase Agreement for aggregate proceeds to us of approximately $3.1 million.
Issuance
of Amended and Restated Sponsor Promissory Note and Underlying Shares to Moringa Sponsor
As described
above in this registration statement under “Certain Relationships and Related Party Transactions— Amended
and Restated Sponsor Promissory Note”, upon the Closing of the Business Combination, New Silexion issued to the Sponsor,
in amendment and restatement, and replacement, in their entirety, of all existing promissory notes issued by Moringa to the Sponsor from
Moringa’s initial public offering until the Closing, the A&R Sponsor Promissory Note in an amount of $3,433,000, which matures
on February 15, 2027. Amounts outstanding under the A&R Sponsor Promissory Note may be repaid only by way of conversion by either
the Company or the Sponsor into ordinary shares, under various circumstances.
The
issuance by the Company to the Sponsor (a Cayman Islands exempted limited partnership) of the A&R Sponsor Promissory Note, and the
prospective issuance by the Company to the Sponsor of underlying Note Shares, was or will be (as applicable), effected without registration
under the Securities Act in an offshore transaction pursuant to the exemption provided by Regulation S under the Securities Act.
Warrant
Inducement Issuance Transactions
As
described above in this registration statement under “January 2025 Warrant Inducement Transaction”
and “July 2025 Warrant Inducement Transaction”, pursuant to the warrant inducement
transaction that we entered into in January 2025 and July 2025, we issued the January 2025 New Warrants, July 2025 New Warrants and the
placement agent warrants issued in the January 2025 Warrant Inducement and July 2025 Warrant Inducement Transaction, and we may further
issue January 2025 New Warrant Shares and July 2025 New Warrant Shares to the Induced Holders and ordinary shares to the Placement Agent
upon exercise of the placement agent warrants issued in the January 2025 Warrant Inducement and July 2025 Warrant Inducement Transaction.
Each of the foregoing securities were, or will be, offered and sold pursuant to an exemption from the registration requirements under
Section 4(a)(2) of the Securities Act. Each of the investors and the Placement Agent for the warrant inducement transactions has represented
that it is an accredited investor as defined in Rule 501 of the Securities Act and has acquired such securities for their own account
and has no arrangements or understandings for any distribution thereof. The offer and sale of the foregoing securities was made without
any form of general solicitation or advertising. The issuance of the January 2025 New Warrants, the July 2025 New Warrants, the placement
agent warrants issued in the January 2025 Warrant Inducement and July 2025 Warrant Inducement Transaction, the January 2025 New Warrant
Shares, the July 2025 New Warrant Shares and the ordinary shares issuable upon the exercise of the the placement agent warrants issued
in the January 2025 Warrant Inducement and July 2025 Warrant Inducement Transaction has not been registered under the Securities Act or
applicable state securities laws. Accordingly, such securities may not be offered or sold in the United States except pursuant to an effective
registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities
laws.
None
of the foregoing transactions described in this “Recent Sales of Unregistered Securities” section involved any underwriters,
underwriting discounts or commissions, or any public offering. The recipients of the securities in each of these transactions represented
their intentions to acquire the securities for investment only and not with a view to or for sale in connection with the distribution
thereof (absent registration under the Securities Act), and appropriate legends were placed on the securities certificates issued in these
transactions. All recipients had adequate access, through their relationships with us, to information about us. The sales of these securities
were made without any general solicitation or advertising.
II
- 4
Item 16.
Exhibits and Financial Statement Schedules
|
Exhibit No. |
|
Description |
|
2.1.1† |
Amended
and Restated Business Combination Agreement, dated as of April 3, 2024, by and among Biomotion Sciences (now known as Silexion Therapeutics
Corp), August M.S. Ltd., Moringa Acquisition Merger Sub Corp, Silexion Therapeutics Ltd. and Moringa Acquisition Corp (incorporated by
reference to Exhibit 2.1 to Moringa Acquisition Corp’s Current Report on Form 8-K, filed with the SEC on April 3, 2024) | |
|
2.1.2 |
Waiver
letter, dated June 18, 2024, under Amended and Restated Business Combination Agreement (incorporated by reference to Exhibit 10.1 to Moringa
Acquisition Corp’s Current Report on Form 8-K filed with the SEC on June 24, 2024) | |
|
2.2 |
Plan
of Merger for merger of Moringa Acquisition Corp and Moringa Acquisition Merger Sub Corp (incorporated by reference to Exhibit 2.2 to
Silexion Therapeutics Corp’s Current Report on Form 8-K filed with the SEC on August 21, 2024) | |
|
3.1.1 |
Amended
and Restated Memorandum and Articles of Association of Silexion Therapeutics Corp (formerly Biomotion Sciences) (incorporated by reference
to Exhibit 3.1 to Silexion Therapeutics Corp’s Current Report on Form 8-K filed with the SEC on August 21, 2024) | |
|
3.1.2 |
Ordinary Resolution
Effecting 1-for-9 Reverse Share Split to Share Capital of Silexion Therapeutics Corp (incorporated by reference to Exhibit 3.1 to Silexion
Therapeutics Corp’s Current Report on Form 8-K filed with the SEC on November 29, 2024) | |
| 3.1.3 |
Ordinary
Resolution Effecting 1-for-15 Reverse Share Split to Share Capital of Silexion Therapeutics Corp (incorporated by reference to Exhibit
3.1 to Silexion Therapeutics Corp’s Current Report on Form 8-K filed with the SEC on July 29, 2025) | |
|
4.1 |
Warrant
Agreement, dated February 19, 2021, by and between Moringa Acquisition Corp and Continental Stock Transfer & Trust Company,
as warrant agent (incorporated by reference to Exhibit 4.1 to Moringa Acquisition Corp’s Current Report on Form 8-K, filed
with the SEC on February 22, 2021) | |
|
4.2 |
Assignment,
Assumption and Amendment Agreement, dated as of August 15, 2024, by and among Moringa Acquisition Corp, Silexion Therapeutics Corp (formerly
known as Biomotion Sciences) and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.1 to Silexion
Therapeutics Corp’s Current Report on Form 8-K filed with the SEC on August 21, 2024) | |
|
4.3 |
Warrant Adjustment
Notice, dated November 29, 2024, in respect of 1-for-9 Reverse Share Split of Silexion Therapeutics Corp (incorporated by reference to
Exhibit 4.1 to Silexion Therapeutics Corp’s Current Report on Form 8-K filed with the SEC on November 29, 2024) | |
| 4.4 |
Warrant
Adjustment Notice, dated July 29, 2025, in respect of 1-for-15 Reverse Share Split of Silexion Therapeutics Corp (incorporated by reference
to Exhibit 4.1 to Silexion Therapeutics Corp’s Current Report on Form 8-K filed with the SEC on July 29, 2025) | |
| 4.5 |
Form
of Ordinary Warrant (incorporated by reference to Exhibit 4.1 to Silexion Therapeutics Corp’s Current Report on Form 8-K filed with
the SEC on January 17, 2025) | |
| 4.6 |
Form
of Placement Agent Warrant (incorporated by reference to Exhibit 4.3 to Silexion Therapeutics Corp’s Current Report on Form 8-K
filed with the SEC on January 17, 2025) | |
| 4.7 |
Form
of New Warrant (incorporated by reference to Exhibit 10.2 to Silexion Therapeutics Corp’s Current Report on Form 8-K filed with
the SEC on January 30, 2025) | |
| 4.8 |
Form
of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to Silexion Therapeutics Corp’s Current Report on Form 8-K
filed with the SEC on January 30, 2025) | |
| 4.9 |
Form
of New Warrant (incorporated by reference to Exhibit 10.2 to Silexion Therapeutics Corp’s Current Report on Form 8-K filed with
the SEC on August 1, 2025) | |
| 4.10 |
Form
of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to Silexion Therapeutics Corp’s Current Report on Form 8-K
filed with the SEC on August 1, 2025) | |
|
4.11* |
Form
of Series A Ordinary Warrant to be sold in the offering | |
|
4.12* |
Form of Series B Ordinary Warrant
to be sold in the offering | |
|
4.13* |
Form
of Pre-Funded Warrant to be sold in the offering | |
|
4.14* |
Form
of Placement Agent Warrant | |
|
5.1* |
Opinion of Conyers Dill & Pearman LLP, Cayman legal counsel to Silexion
Therapeutics Corp. | |
|
5.2* |
Opinion of Greenberg Traurig, LLP, United States legal counsel to Silexion Therapeutics
Corp. | |
|
10.1 |
Subscription
Agreement, dated August 15, 2024, by and among Moringa Acquisition Corp, Silexion Therapeutics Corp (formerly known as Biomotion Sciences)
and Greenstar, L.P. (incorporated by reference to Exhibit 10.2 to Silexion Therapeutics Corp’s Current Report on Form 8-K filed
with the SEC on August 21, 2024) | |
|
10.2.1 |
Ordinary
Share Purchase Agreement, dated August 13, 2024 and effective as of the closing date of the Business Combination, by and between Silexion
Therapeutics Corp (formerly known as Biomotion Sciences) and White Lion Capital, LLC (incorporated by reference to Exhibit 10.3.1 to Silexion
Therapeutics Corp’s Current Report on Form 8-K filed with the SEC on August 21, 2024) | |
|
10.2.2 |
Amendment
No. 1, effective January 14, 2025, to Ordinary Share Purchase Agreement, dated August 13, 2024 and effective as of the closing date of
the Business Combination, by and between Silexion Therapeutics Corp and White Lion Capital, LLC (incorporated by reference to Exhibit
10.3.2 to Silexion Therapeutics Corp’s Registration Statement on Form S-1 (File No. 333-284873), filed with the SEC on February
12, 2025) | |
|
10.2.3 |
Registration
Rights Agreement, dated August 13, 2024 and effective as of the closing date of the Business Combination, by and between Silexion Therapeutics
Corp (formerly known as Biomotion Sciences) and White Lion Capital, LLC (incorporated by reference to Exhibit 10.3.2 to Silexion Therapeutics
Corp’s Current Report on Form 8-K filed with the SEC on August 21, 2024) | |
|
10.3 |
Amended
and Restated Registration Rights and Lock-Up Agreement, dated August 14, 2024 and effective as of the Closing Date, by and among Silexion
Therapeutics Corp (formerly known as Biomotion Sciences), Moringa Acquisition Corp, Moringa Sponsor, L.P., the distributees of Sponsor
Investment Shares that were issuable to Moringa Sponsor, L.P., EarlyBirdCapital, Inc., certain of Silexion Therapeutics Ltd.’s pre-Business
Combination shareholders and Greenstar, L.P. (incorporated by reference to Exhibit 10.4 to Silexion Therapeutics Corp’s Current
Report on Form 8-K filed with the SEC on August 21, 2024) |
II - 5
|
10.4 |
Amended
and Restated Promissory Note, dated August 15, 2024, issued by Silexion Therapeutics Corp (formerly known as Biomotion Sciences) to Moringa
Sponsor, L.P. (incorporated by reference to Exhibit 10.5 to Silexion Therapeutics Corp’s Current Report on Form 8-K filed with the
SEC on August 21, 2024) | |
|
10.5 |
Form
of Director and Officer Indemnification Agreement, dated August 15, 2024, by and between Silexion Therapeutics Corp (formerly known as
Biomotion Sciences) and each of its executive officers and directors (incorporated by reference to Exhibit 10.6 to Silexion Therapeutics
Corp’s Current Report on Form 8-K filed with the SEC on August 21, 2024) | |
|
10.6.1# |
Employment
Agreement, dated April 1, 2022, by and between Silexion Therapeutics Ltd. and Ilan Hadar (incorporated by reference to Exhibit 10.12.1
to Amendment No. 3 to the Company’s Registration Statement on Form S-4 (File No. 333-279281), filed with the SEC on July 12, 2024). | |
|
10.6.2# |
Amendment
No. 1 to Employment Agreement, dated May 2024, by and between Silexion Therapeutics Ltd. and Ilan Hadar (incorporated by reference to
Exhibit 10.12.2 to Amendment No. 3 to the Company’s Registration Statement on Form S-4 (File No. 333-279281), filed with the SEC
on July 12, 2024) | |
|
10.7# |
Silexion
Therapeutics Corp 2024 Equity Incentive Plan (incorporated by reference to Exhibit 10.12 to Silexion Therapeutics Corp’s Current
Report on Form 8-K filed with the SEC on August 21, 2024) | |
|
10.8# |
Silexion
Therapeutics Ltd. 2023 Equity Incentive Plan (incorporated by reference to Exhibit 10.13 to Silexion Therapeutics Corp’s Registration
Statement on Form S-1 (File No. 333-282017), filed with the SEC on September 10, 2024) | |
|
10.9# |
Silexion
Therapeutics Ltd. 2013 Share Option Plan (incorporated by reference to Exhibit 10.14 to Silexion Therapeutics Corp’s Registration
Statement on Form S-1 (File No. 333-282017), filed with the SEC on September 10, 2024) | |
|
10.10 |
Form of Inducement
Letter (incorporated by reference to Exhibit 10.1 to Silexion Therapeutics Corp’s Current Report on Form 8-K filed with the SEC
on January 30, 2025) | |
| 10.11 |
Form
of Inducement Letter (incorporated by reference to Exhibit 10.1 to Silexion Therapeutics Corp’s Current Report on Form 8-K filed
with the SEC on August 1, 2025) | |
|
10.12* |
Form of Securities Purchase Agreement | |
|
10.13* |
Engagement
Agreement dated September 8, 2024, between Silexion Therapeutics Corp and H.C. Wainwright & Co., LLC | |
|
21.1 |
List
of Subsidiaries (incorporated by reference to Exhibit 21.1 to Silexion Therapeutics Corp’s Current Report on Form 8-K filed with
the SEC on August 21, 2024) | |
|
23.1* |
Consent of Kesselman & Kesselman, a member firm of PricewaterhouseCoopers
International Limited, independent registered public accounting firm | |
|
23.2* |
Consent of Conyers Dill & Pearman LLP (included in Exhibit 5.1) | |
|
23.3* |
Consent of Greenberg Traurig, LLP (included in Exhibit 5.2) | |
|
24.1* |
Power of attorney (included on the signature page to this registration statement) | |
|
107* |
Filing fee table |
|
* |
Filed
herewith. |
|
|
|
|
† |
Certain of the exhibits
and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The registrant agrees to furnish a copy
of all omitted exhibits and schedules to the SEC upon its request. |
|
# |
Indicates
management contract or compensatory plan, contract or arrangement. |
II
- 6
Item 17.
Undertakings
The
undersigned Registrant hereby undertakes:
(a)
To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i)
To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(ii)
To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement; and
(iii)
To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement.
(b)
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment that contains
a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination
of the offering.
(d)
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule
424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than
prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it
is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of
the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede
or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made
in any such document immediately prior to such date of first use.
(e)
That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution
of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant
to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities
are offered or sold to such purchaser by means of any of the following communications,
(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule
424;
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by
the undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant
or its securities provided by or on behalf of the undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by them is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
II
- 7
SIGNATURES
Pursuant
to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Ramat Gan, Israel, on September 5, 2025.
|
SILEXION
THERAPEUTICS CORP |
| ||
|
|
|
| |
|
By: |
/s/
Ilan Hadar |
| |
|
|
Name: |
Ilan Hadar |
|
|
|
Title: |
Chairman and Chief Executive
Officer |
|
POWER
OF ATTORNEY
KNOW
ALL BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Ilan Hadar and Mirit Horenshtein
Hadar, and each of them, as his true and lawful agents, proxies and attorneys-in-fact, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all capacities, to (i) act on, sign and file with the Securities and
Exchange Commission any and all amendments (including post-effective amendments) to this registration statement together with all schedules
and exhibits thereto and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii) act on, sign and file such certificates, instruments, agreements and other documents
as may be necessary or appropriate in connection therewith, (iii) act on and file any supplement to any prospectus included in this registration
statement or any such amendment or any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933,
as amended, and (iv) take any and all actions which may be necessary or appropriate to be done, as fully for all intents and purposes
as he might or could do in person, hereby approving, ratifying and confirming all that such agent, proxy and attorney-in-fact or any of
his substitutes may lawfully do or cause to be done by virtue thereof.
Pursuant
to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities
and on the dates indicated.
|
Signature |
|
Title |
|
Date |
|
|
|
|
|
|
|
/s/
Ilan Hadar |
|
Chairman
and Chief Executive Officer |
|
September 5, 2025 |
|
Ilan
Hadar |
|
(Principal
Executive Officer) |
|
|
|
|
|
|
|
|
|
/s/
Mirit Horenshtein Hadar |
|
Chief
Financial Officer and Secretary |
|
September
5, 2025 |
|
Mirit
Horenshtein Hadar |
|
(Principal
Financial and Accounting Officer) |
|
|
|
|
|
|
|
|
|
/s/
Dror J. Abramov |
|
Director |
|
September
5, 2025 |
|
Dror
J. Abramov |
|
|
|
|
|
|
|
|
|
|
|
/s/
Ruth Alon |
|
Director |
|
September
5, 2025 |
|
Ruth
Alon |
|
|
|
|
|
|
|
|
|
|
|
|
|
Director |
|
September
5, 2025 |
|
Ilan
Levin |
|
|
|
|
|
|
|
|
|
|
|
/s/
Avner Lushi |
|
Director |
|
September
5, 2025 |
|
Avner
Lushi |
|
|
|
|
|
|
|
|
|
|
|
/s/
Shlomo Noy |
|
Director |
|
September
5, 2025 |
|
Shlomo
Noy |
|
|
|
|
|
|
|
|
|
|
|
/s/
Amnon Peled |
|
Director |
|
September
5, 2025 |
|
Amnon
Peled |
|
|
|
|
II
- 8
AUTHORIZED
REPRESENTATIVE
Pursuant
to the requirements of the Securities Act of 1933, as amended, the undersigned, the duly authorized representative of the Registrant in
the United States, has signed registration statement in Newark, Delaware, on September 5, 2025.
|
|
PUGLISI &
ASSOCIATES | |
|
|
| |
|
|
By: |
/s/
Donald J. Puglisi |
|
|
Name: |
Donald
J. Puglisi |
|
|
Title: |
Authorized
Representative |
II
- 9
FAQ
What is Silexion (SLXN) developing?
Silexion is developing RNAi therapeutics targeting KRAS-driven cancers, notably first-generation siG12D-LODER and second-generation SIL204 aimed at KRAS G12D/V mutations.
What are the key clinical results disclosed?
Phase 2 siG12D-LODER showed a numerical median overall survival increase from 13.4 to 22.7 months in the KRAS G12D/V subgroup (hazard ratio 0.59) though the cohort sizes were small and not statistically significant.
How much cash does the company have and how long will it last?
Cash and cash equivalents were $3.5 million as of June 30, 2025 and management estimates this funds operations into the fourth quarter of 2025 without additional financing.
Does the filing express going concern issues?
Yes. The filing and auditor commentary state there is substantial doubt about the company's ability to continue as a going concern absent additional capital.
What dilution and financing risks are disclosed?
Material dilution sources include outstanding warrants (hundreds of thousands of shares), an A&R Sponsor Promissory Note convertible into ~50,860 shares (at an assumed price), an equity line (White Lion) up to $11.9 million, and other warrant pools disclosed in the prospectus.
What are planned next development steps for SIL204?
Plan to initiate toxicology studies in 2025 and submit regulatory filings in Q1 2026 to start a Phase 2/3 trial in the first half of 2026, targeting ~388 subjects with adaptive design.
Silexion Therapeutics Corp
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Biotechnology
Biological Products, (no Disgnostic Substances)
Israel
RAMAT GAN