Exhibit 99.2
NeuroSense Therapeutics Ltd.
Condensed Interim Unaudited Statements of Financial Position
U.S. dollars in thousands
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | ||||||||
| Short term deposits | ||||||||
| Other receivables | ||||||||
| Restricted deposit | ||||||||
| Total current assets | ||||||||
| Non-current assets: | ||||||||
| Property, plant and equipment, net | ||||||||
| Right of use assets | ||||||||
| Non-current restricted deposit | ||||||||
| Total non-current assets | ||||||||
| Total assets | ||||||||
| Liabilities and Equity | ||||||||
| Current liabilities: | ||||||||
| Trade payables | ||||||||
| Other payables | ||||||||
| Total current liabilities | ||||||||
| Non Current liabilities: | ||||||||
| Long term lease liability | ||||||||
| Liability in respect of warrants and pre-funded warrants | ||||||||
| Total liabilities | ||||||||
| Shareholders’ equity: | ||||||||
| Ordinary shares | ||||||||
| Share premium and capital reserve | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Shareholders’ equity (deficit) | ( | ) | ||||||
| Total liabilities and shareholders’ equity (deficit) | ||||||||
Date of approval of the interim financial statements: August 15, 2023
| Mark Leuchtenberger | Alon Ben-Noon | Or Eisenberg | ||
| Chairman of the Board of Directors | Chief Executive Officer | Chief Executive Officer |
The accompanying notes are an integral part of the condensed interim financial statements.
NeuroSense Therapeutics Ltd.
Condensed Interim Unaudited Statements of Income and Comprehensive Loss
U.S. dollars in thousands except share and per share data
| Six months | Six months | For the year | |||||||||||||
| ended | ended | ended | |||||||||||||
| June 30, | June 30, | December 31, | |||||||||||||
| Note | 2023 | 2022 | 2022 | ||||||||||||
| Research and development expenses | 7 | ( | ) | ( | ) | ( | ) | ||||||||
| General and administrative expenses | 8 | ( | ) | ( | ) | ( | ) | ||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | |||||||||
| Financing expenses | ( | ) | ( | ) | ( | ) | |||||||||
| Financing income | |||||||||||||||
| Financing income (expenses), net | 9 | ( | ) | ||||||||||||
| Net loss and comprehensive loss | ( | ) | ( | ) | ( | ) | |||||||||
| ( | ) | ( | ) | ( | ) | ||||||||||
The accompanying notes are an integral part of the condensed interim financial statements.
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NeuroSense Therapeutics Ltd.
Condensed Interim Unaudited Statements of Changes in Equity
U.S. dollars in thousands
| Ordinary | Share Premium And Capital |
Accumulated | Total Equity |
|||||||||||||
| Shares | Reserve | Deficit | (Deficit) | |||||||||||||
| Six months ended June 30, 2023: | ||||||||||||||||
| Balance as at January 1, 2023 | ( |
) | ||||||||||||||
| Share-based compensation | ||||||||||||||||
| Exercise of options | ||||||||||||||||
| Net loss and comprehensive loss | ( |
) | ( |
) | ||||||||||||
| Balance as at June 30, 2023 | ( |
) | ( |
) | ||||||||||||
| Six months ended June 30, 2022: | ||||||||||||||||
| Balance as at January 1, 2022 | ( |
) | ||||||||||||||
| Share-based compensation | ||||||||||||||||
| Net loss and comprehensive loss | ( |
) | ( |
) | ||||||||||||
| Cancelation of options | ( |
) | ( |
) | ||||||||||||
| Exercise of warrants | ||||||||||||||||
| Balance as at June 30, 2022 | ( |
) | ||||||||||||||
| For the year ended December 31, 2022: | ||||||||||||||||
| Balance as at January 1, 2022 | ( |
) | ||||||||||||||
| Share-based compensation | ||||||||||||||||
| Net loss and comprehensive loss | ( |
) | ( |
) | ||||||||||||
| Cancelation of options | ( |
) | ( |
) | ||||||||||||
| Exercise of warrants | ||||||||||||||||
| Balance as at December 31, 2022 | ( |
) | ||||||||||||||
The accompanying notes are an integral part of the condensed interim financial statements.
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NeuroSense Therapeutics Ltd.
Condensed Interim Unaudited Statements of Cash Flows
U.S. dollars in thousands
| Six months | Six months | For the year | ||||||||||
| ended | ended | ended | ||||||||||
| June 30, | June 30, | December 31, | ||||||||||
| 2023 | 2022 | 2022 | ||||||||||
| Cash flows from operating activities | ||||||||||||
| Net loss for the period | ( | ) | ( | ) | ( | ) | ||||||
| Adjustments: | ||||||||||||
| Depreciation and Amortization | ||||||||||||
| Share-based compensation | ||||||||||||
| Revaluation of liability in respect to warrants and pre-funded warrants | ( | ) | ( | ) | ( | ) | ||||||
| Day 1 loss from issuance of financial instruments | ||||||||||||
| Finance expenses (income), net | ( | ) | ||||||||||
| Changes in assets and liabilities: | ||||||||||||
| Decrease (increase) in other receivables | ( | ) | ( | ) | ||||||||
| Increase in trade payables | ||||||||||||
| Increase in other payables | ||||||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ( | ) | ||||||
| Cash flows from investing activities | ||||||||||||
| Interest received | ||||||||||||
| Change in short term deposit | ( | ) | ( | ) | ||||||||
| Investment in restricted deposit | ( | ) | ( | ) | ( | ) | ||||||
| Purchase of property, plant and equipment | ( | ) | ( | ) | ( | ) | ||||||
| Net cash provided by (used in) investing activities | ( | ) | ( | ) | ||||||||
| Cash flows from financing activities | ||||||||||||
| Payment in respect of cancellation of options | ( | ) | ( | ) | ||||||||
| Exercise of warrants and options | ||||||||||||
| Issuance of shares, warrants and pre-funded warrants, net | ||||||||||||
| Repayment of lease liability | ( | ) | ( | ) | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||||||
| Effects of exchange rate changes on cash and cash equivalents | ( | ) | ( | ) | ||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ( | ) | ||||||||
| Cash and cash equivalents at beginning of the period | ||||||||||||
| Cash and cash equivalents at end of the period | ||||||||||||
| Non-cash activity | ||||||||||||
| Exercise of warrants | ||||||||||||
| Recognition of right of use assets | ||||||||||||
| Share based payment modification | ||||||||||||
The accompanying notes are an integral part of the condensed interim financial statements.
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NeuroSense Therapeutics Ltd.
Notes to the Condensed Interim Financial Statements as at June 30, 2023
Note 1 - General and Basis for Presentation
Note 1 — General
| A. | NeuroSense Therapeutics Ltd. (“NeuroSense” or the “Company”) was incorporated in Israel on February 13, 2017. NeuroSense is a clinical-stage pharmaceutical company focused on discovering and developing treatments for patients suffering from debilitating neurodegenerative diseases. The Company’s lead product candidate, PrimeC, is a novel oral formulation of a fixed dose combination composed of a specific ratio and doses of two FDA-approved drugs. |
In addition to PrimeC, the Company has initiated research and development efforts in Alzheimer’s disease and Parkinson’s disease, with a similar strategy of combined products.
The Company’s ordinary shares and warrants began trading on the Nasdaq Capital Market on December 9, 2021 under the ticker symbols “NRSN” and “NRSNW,” respectively.
| B. | The Company currently has no products approved for sale, and the Company’s operations have been funded primarily by its shareholders. To date, the Company has generated no sales or revenues, has incurred losses and expects to incur significant additional losses due to the continuing focus on the research, development, clinical activities of its product candidates, preclinical programs, business development, organizational structure and to advance the programs within the Company’s pipeline. Consequently, its operations are subject to all the risks inherent in the establishment of a pre-revenue business enterprise as well as those risks associated with a company engaged in the research and development of pharmaceutical compounds. |
Based on current expected level of operating expenditures, the Company’s cash resources as at June 30, 2023 shall not be sufficient to fund the Company’s operations for a period of at least 12 months from the approval of these interim consolidated financial statements, assuming that the Company will continue its development plan in accordance with the original pipeline and without delaying or slowing down the progress of its plans. The Company will require additional cash to fund the execution of its mid-term and long-term development program. The Company anticipates raising additional funds through public or private sales of debt or equity securities, collaborative arrangements, or some combination thereof. Whilst management is progressing with its plans to secure external financing, these still require approval by third parties, and accordingly, there is no assurance that any such arrangement will be entered into or that financing will be available when needed in order to allow it to continue its operations, or if available, on terms favorable or acceptable to it.
In the event financing is not obtained, the Company may pursue cost cutting measures or may be required to delay, reduce the scope of, or eliminate any of its development programs or clinical trials, these events could have a material adverse effect on its business. These factors raise significant doubt about the Company ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
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NeuroSense Therapeutics Ltd.
Notes to the Condensed Interim Financial Statements as at June 30, 2023
Note 2 — Basis of Preparation
| A. | Statement of compliance |
These condensed interim financial statements have been prepared in accordance with International Accounting Standards (“IAS”) 34 “Interim Financial Reporting”. The condensed interim financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the Company’s financial statements for the year ended December 31, 2022 (“annual financial statements”).
These condensed interim financial statements were authorized for issuance by the Company’s Board of Directors on August 15, 2023.
| B. | Use of estimates and judgments |
The preparation of interim financial statements in accordance to IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial statements, the significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the annual financial statements except for the described below:
Fair value measurement of liability in respect of Warrants
Warrants that provide the holders with an option for cashless exercise are considered a derivative liability and are classified as financial liabilities at fair value through profit or loss. Accordingly, these warrants are measured at fair value and the changes in fair value in each reporting period are recognized in profit or loss.. The fair values of these instruments are determined by using the Black-Scholes model.
For information on details regarding fair value measurement at Level 2 see Note 4.
Note 3 — Significant Accounting Policies
The accounting policies applied by the Company in these condensed interim financial statements are the same as those applied by the Company in its annual financial statements.
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NeuroSense Therapeutics Ltd.
Notes to the Condensed Interim Financial Statements as at June 30, 2023
Note 4 — Financial instruments
On June 22, 2023, the Company entered
into a Securities Purchase Agreement (the “Purchase Agreement”) pursuant to which the Company agreed to issue and sell, in
a registered direct offering: (i) an aggregate of
In certain cases, the Warrants and
Pre-Funded warrants above may be exercised on a cashless basis. Therefore, the Pre-Funded Warrants accounted for as financial liability
and the Warrants are accounted for as derivative instruments and accordingly also classified as a liability. Both liabilities are measured
at fair value through profit or loss. In accordance with IFRS 9, the consideration received from the issuance of different financial instruments
in a single transaction is attributed initially to financial liabilities that are measured at each period at fair value through profit
or loss, and then to financial liabilities that are measured only upon initial recognition at fair value and the remaining amount is recognized
as equity component. At the closing, the fair value of the Warrants and Pre-Funded warrants was greater that the gross proceeds received.
Therefore, the Company recognized an immediate loss of $
| Description | Fair value | Level 1 | Level 2 | Level 3 | ||||||||||||
| Liability in respect of Pre-Funded Warrants (*) | $ | $ | $ | |||||||||||||
| Liability in respect of Warrants (**) | $ | $ | $ | |||||||||||||
| Liability in respect of Warrants (***) | $ | $ | $ | |||||||||||||
| (*) |
| (**) |
| June 30, 2023 | ||||
| Financial liabilities: | ||||
| Expected volatility (%) | ||||
| Share price (in $) | ||||
| Risk-free interest rate (%) | ||||
| Expected life (years) | ||||
| (***) |
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NeuroSense Therapeutics Ltd.
Notes to the Condensed Interim Financial Statements as at June 30, 2023
Note 5 — Shareholders’ Equity
Share capital
| 1. | On April 14, 2023, the Company entered into a sales agreement with Alliance Global Partners, pursuant to which the Company may offer and sell, from time to time, to or through the Alliance Global Partners as agent or principal, ordinary shares an at-the-market offering, having an aggregate offering price of up to $ |
| 2. | On June 23, 2023, one of the Company’s employees exercised
|
| Ordinary shares | ||||
| Six months ended June 30, 2023 | ||||
| Issued and paid-in share capital as at January 1 | ||||
| ATM | ||||
| RSU vesting | ||||
| Exercise of options to shares | ||||
| Fund raising | ||||
| Total | ||||
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NeuroSense Therapeutics Ltd.
Notes to the Condensed Interim Financial Statements as at June 30, 2023
Note 6 — Share Based Payment
On March 20, 2023, the Company’s board of directors, approved the following awards:
| ● | Grant of |
| ● | A bonus for certain employees in the form of |
| ● | In addition to the grants in accordance with the 2022 bonus
plan mentioned above, additional amount of |
| ● | In addition to the grants in accordance with the 2022 bonus
plan mentioned above, a grant of additional amount |
| ● | In addition to the grants in accordance with the 2022 bonus
plan mentioned above, a raise of additional |
| ● | The grant of |
On May 30, 2023, the Company granted
| Six months | ||||
| ended | ||||
| June 30, | ||||
| 2023 | ||||
| Expected volatility | ||||
| Exercise price | ||||
| Share price | ||||
| Risk-free interest rate | ||||
| Dividend yield | ||||
| Expected life (years) | ||||
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NeuroSense Therapeutics Ltd.
Notes to the Condensed Interim Financial Statements as at June 30, 2023
Note 6 — Share Based Payment (Cont.)
| Six months | Six months | For the year | ||||||||||
| ended | ended | ended | ||||||||||
| June 30, | June 30, | December 31, | ||||||||||
| 2023 | 2022 | 2022 | ||||||||||
| Share-based compensation expense – Research and development | ||||||||||||
| Share-based compensation expense – General and administrative | ||||||||||||
Note 7 — Research and development expenses.
| Six months | Six months | For the year | ||||||||||
| ended | ended | ended | ||||||||||
| June 30, | June 30, | December 31, | ||||||||||
| 2023 | 2022 | 2022 | ||||||||||
| Subcontractors and consultants | ||||||||||||
| Share-based compensation | ||||||||||||
| Salaries and social benefits | ||||||||||||
Note 8 —
| Six months | Six months | For the year | ||||||||||
| ended | ended | ended | ||||||||||
| June 30, | June 30, | December 31, | ||||||||||
| 2023 | 2022 | 2022 | ||||||||||
| Professional services | ||||||||||||
| Share-based compensation | ||||||||||||
| Salaries and social benefits | ||||||||||||
| Insurance | ||||||||||||
| Traveling abroad | ||||||||||||
| Others | ||||||||||||
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NeuroSense Therapeutics Ltd.
Notes to the Condensed Interim Financial Statements as at June 30, 2023
Note
9 —
| Six months | Six months | For the year | ||||||||||
| ended | ended | ended | ||||||||||
| June 30, | June 30, | December 31, | ||||||||||
| 2023 | 2022 | 2022 | ||||||||||
| Fair value revaluation of warrants and pre-funded warrants | ||||||||||||
| Day 1 loss from issuance of financial instruments | ( | ) | ||||||||||
| Bank management fees and commissions | ||||||||||||
| Exchange rate differences | ( | ) | ( | ) | ||||||||
| Interest on lease liabilities | ( | ) | ( | ) | ( | ) | ||||||
| Issuance expenses | ( | ) | ||||||||||
| ( | ) | |||||||||||
Note 10 — Subsequent events
On August 15, 2023 the Company’s
board of directors approved
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