Exhibit 99.1
NASUS PHARMA LTD.
CONDENSED FINANCIAL STATEMENTS
AS OF JUNE 30, 2025
UNAUDITED
U.S DOLLARS IN THOUSANDS
INDEX
| F-1 |
NASUS PHARMA LTD. AND ITS SUBSIDIARY
UNAUDITED INTERIM CONDENSED BALANCE SHEETS
| (Amounts in U.S. dollars in thousands, except share and per share amounts) | June 30, 2025 | December 31, 2024 | ||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Prepaid expenses and
other current assets (of which $ and $ | ||||||||
| Total current assets | ||||||||
| Deferred offering cost | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Shareholders’ Deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expense and other
current liabilities (of which $ | ||||||||
| Convertible securities (of
which $ | ||||||||
| Current liabilities related to discontinued operations | ||||||||
| Total current liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies (see Note 6) | ||||||||
| Shareholders’ deficit | ||||||||
| Ordinary Shares(*)(**), par value NIS per share; shares authorized as of June 30, 2025 and December 31, 2024, respectively; shares issued as of June 30, 2025 and December 31, 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Shareholders’ Deficit | ( | ) | ( | ) | ||||
| Total Liabilities and Shareholders’ Deficit | $ | $ | ||||||
| * | |
| ** |
The accompanying notes are an integral part of these financial statements.
| F-2 |
NASUS PHARMA LTD. AND ITS SUBSIDIARY
UNAUDITED INTERIM CONDENSED STATEMENTS OF OPERATIONS
| Six Months Ended June 30 | ||||||||
| (Amounts in U.S. dollars in thousands, except share and per share amounts) | 2025 | 2024 | ||||||
| Operating expenses: | ||||||||
| Research and
development (of which $ | $ | $ | ||||||
| General
and administrative (of which $ | ||||||||
| Total operating expenses | ||||||||
| Operating loss from continuing operations | ( | ) | ( | ) | ||||
| Interest expense (of which
$ and $ | ( | ) | ||||||
| Change in fair value of convertible securities | ( | ) | ( | ) | ||||
| Other expense, net | ( | ) | ( | ) | ||||
| Loss from continuing operations | ( | ) | ( | ) | ||||
| Net income (loss) from discontinued operations | ( | ) | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Per share data: | ||||||||
| Loss per share attributable to shareholders: | ||||||||
| Basic | $ | ( | ) | $ | ( | ) | ||
| Diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted average Ordinary Shares outstanding – basic(*) | ||||||||
| Weighted average Ordinary Shares outstanding – diluted(*) | ||||||||
The accompanying notes are an integral part of these financial statements.
| * |
| F-3 |
NASUS PHARMA LTD. AND ITS SUBSIDIARY
UNAUDITED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
(Amounts in U.S. dollars in thousands, except share and per share amounts)
| Additional | Total | |||||||||||||||||||
| Ordinary Shares* (**) | Paid- in | Accumulated | Shareholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Share-based compensation | - | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of June 30, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Additional | ||||||||||||||||||||
| Ordinary Shares* (**) | Paid- in | Accumulated | Shareholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Share-based compensation | - | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| * | |
| ** |
The accompanying notes are an integral part of these financial statements.
| F-4 |
NASUS PHARMA LTD. AND ITS SUBSIDIARY
UNAUDITED INTERIM STATEMENTS OF CASH FLOWS
| Six Months Ended | ||||||||
| (Amounts in U.S. dollars in thousands) | 2025 | 2024 | ||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Less: Net loss (income) from discontinued operations | ( | ) | ||||||
| Loss from continuing operations | ( | ) | ( | ) | ||||
| Adjustments to reconcile loss from continuing operations to net cash used in operating activities: | ||||||||
| Share-based compensation | ||||||||
| Change in fair value of convertible securities | ||||||||
| Effect of exchange rates | ( | ) | ||||||
| Accrued interest on short-term debt from shareholders | ||||||||
| Change in operating assets and liabilities: | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Accounts payable | ( | ) | ||||||
| Accrued expense and other current liabilities | ||||||||
| Cash used in operating activities from continuing operations | ( | ) | ( | ) | ||||
| Net cash used in operating activities from discontinued operations | ( | ) | ||||||
| Net cash used in operating activities | $ | ( | ) | $ | ( | ) | ||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of convertible securities (of which $ | ||||||||
| Payments in connection with deferred offering costs | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | $ | $ | ||||||
| Cash used in financing activities from discontinued operations | ||||||||
| Cash provided by financing activities | $ | |||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ) | ||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash, cash equivalents and restricted cash at beginning of period | ||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | $ | ||||||
| Supplemental disclosure of non-cash financing activities: | ||||||||
| Offering cost included in accrued expense and other current liabilities | $ | |||||||
The accompanying notes are an integral part of these financial statements.
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the balance sheets to the total of the same such amounts shown on the statements of cash flows.
| June 30, 2025 | June 30, 2024 | |||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Cash, cash equivalents and restricted cash at end of year | $ | $ | ||||||
| F-5 |
NASUS PHARMA LTD. AND ITS SUBSIDIARY
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Amounts in U.S. dollars in thousands, except share and per share amounts)
| NOTE 1: | ORGANIZATION AND NATURE OF THE BUSINESS |
| a. | Description of the Business |
Nasus Pharma Ltd. (the “Company”) was incorporated in May 2019 under the laws of the State of Israel. The Company is a clinical stage specialty pharmaceutical company focused primarily on the development of intranasal drugs to treat emergency medical conditions. The Company is developing a powder-based intranasal technology with a specialized product portfolio to address acute medical conditions and public health threats. The Company’s lead product candidate is NS002, an intranasal powder Epinephrine nasal spray for the treatment of type 1 severe allergies and anaphylaxis. The Company has also been developing NS001, an intranasal naloxone powder nasal spray for the treatment of opioid overdose. Following the successful completion of its Phase 3 clinical trial, the Company has paused development activities for NS001 and is evaluating potential partnering opportunities and strategic alternatives for the program.
| b. | Liquidity and Going Concern |
The financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
Since inception, the Company has devoted substantially all of its efforts to business planning, research and development, conducting clinical trials and securing capital resources. The Company remains in the development and clinical stage and has not generated revenue from its product candidates to date. As a result, the magnitude of future operating losses and the timing of achieving profitability remain uncertain.
During
the six months ended June 30, 2025, the Company incurred a net loss of $
The
Company has funded its operations to date primarily through equity financing and the issuance of convertible securities in the form of
simple agreement of future equity (“SAFE”) (see Note 4 and Note 12). Additionally, in August 2025, the Company successfully
completed an initial public offering (“IPO”), and in September 2025, closed on a partial exercise of the over-allotment option
by the underwriters of its IPO, raising an aggregate of $
Management expects that the Company will continue to generate losses from the clinical development and regulatory activities of its product candidates, which would result in negative cash flow from operating activity. This has led management to conclude that there is substantial doubt about the Company’s ability to continue as a going concern. The Company’s financial statements do not reflect any adjustments that might result from the outcome of this uncertainty.
| c. | Stock split |
Subsequent
to the balance sheet date, the shareholders of the Company approved to effect a forward share split at a ratio of
| d. | Initial Public Offering and Related Transactions |
Subsequent
to the balance sheet date, the Company completed a sale of shares of its Ordinary Shares in its IPO. In connection with the IPO, the
Company issued and sold Ordinary Shares, including Ordinary Shares associated with the partial exercise of the underwriters’
over-allotment option to purchase additional Ordinary Shares, at a price of $ per share, resulting in net proceeds to the Company
of approximately $
| F-6 |
NASUS PHARMA LTD. AND ITS SUBSIDIARY
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Amounts in U.S. dollars in thousands, except share and per share amounts)
| NOTE 2: | SIGNIFICANT ACCOUNTING POLICIES |
Basis of presentation - The accompanying interim condensed financial statements of the Company are unaudited. These interim condensed financial statements have been prepared in accordance with U.S. GAAP and the applicable rules and regulations of the SEC for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
The December 31, 2024 condensed balance sheet was derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
The accompanying unaudited interim condensed financial statements have been prepared on the same basis as the audited financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly the Company’s financial position, results of operations, and cash flows for the interim periods. The interim results for the six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025, or for any other future annual or interim period.
The unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and accompanying notes of the Company for the year ended December 31, 2024. The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2024, are applied consistently in these interim condensed financial statements.
Use of estimates - The preparation of condensed financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant items subject to such estimates and assumptions include identifying the existence of embedded derivatives, share-based compensation and the determination of the fair value of the Company’s Ordinary Shares, share options and the fair value of convertible securities.
Recently Adopted Accounting Standards
As an emerging growth company, the JOBS Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflects this election.
| F-7 |
NASUS PHARMA LTD. AND ITS SUBSIDIARY
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Amounts in U.S. dollars in thousands, except share and per share amounts)
In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. The new guidance was adopted for the Company on January 1, 2023 and the adoption did not have a material impact on the Company’s financial statements.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures. This ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This ASU is effective for our annual fiscal year 2024, and interim periods starting in fiscal year 2025. A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements.
The new guidance was adopted by the Company for fiscal year 2024 annual financial statements and this standard was applied retrospectively for the prior period presented in the financial statements. See Note 7 – Segment Reporting for further information.
Recently Issued Accounting Standards Not Yet Adopted
In November 2024, the FASB issued Accounting Standards Update (ASU) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses. This update aims to enhance the transparency of financial reporting by requiring public business entities (PBEs) to provide disaggregated disclosure of certain income statement expense captions into specified categories in disclosures within the footnotes to the financial statements. The ASU is effective for annual fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. Adoption of this ASU should be applied on a prospective basis, although retrospective application is permitted. The Company is currently evaluating the impact of adopting this ASU on its financial statements and disclosures.
| NOTE 3: | SHORT-TERM DEBT FROM SHAREHOLDERS |
In
July 2022, the Company received a loan in the amount of $
In
February 2023, the Company received a loan in an aggregate amount of $
| NOTE 4: | CONVERTIBLE SECURITIES |
| a. | The Company has raised funds through the issuance of SAFEs. |
A SAFE requires conversion into shares of the Company upon the occurrence of certain events, or at the maturity date of the SAFE. The number of shares to be issued upon conversion of the SAFE are not fixed and will be dependent upon the nature of the event that occurred that resulted in its conversion, the fair value of shares as of the event’s date, and other factors as defined in the related agreement.
SAFEs are classified as a liability and the Company elected the fair value option in accordance with ASC 825, Financial Instruments (“ASC 825”). Accordingly, the liability is adjusted to fair value at each balance sheet date, with the change in fair value being recorded as change in fair value of convertible securities within the statements of operations. The Company reclassifies the SAFE amount from liability to equity once it converts into Ordinary Shares.
| F-8 |
NASUS PHARMA LTD. AND ITS SUBSIDIARY
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Amounts in U.S. dollars in thousands, except share and per share amounts)
| b. | On
February 17, 2022, the shareholders approved the issuance of SAFEs (the “2022 SAFEs”)
to certain shareholders and third parties up to a maximum aggregate amount of $ |
The
2022 SAFE investors are entitled to the rights and privileges set forth in the agreement, which include the issuance of the most senior
shares outstanding upon conversion of the 2022 SAFEs in the event of an equity financing or liquidity event occurs prior to the termination
of the 2022 SAFEs as defined in the related agreement. The investors receive a 40% discount on the share price in any of such event.
If a dissolution event occurs prior to the termination of the 2022 SAFE, each SAFE investor is entitled to receive, prior to consummation
of the dissolution event, a portion of the related proceeds equal to its investment amount, or in case the applicable proceeds upon dissolution
are insufficient to permit a full payment of the amounts invested under the 2022 SAFEs, a prorated amount in par with the other SAFE
investors. In the event that the 2022 SAFEs mature after 15 months from its issuance, all amounts invested under the 2022 SAFEs are converted
into the Company’s outstanding most senior shares based on a $
In June and July 2023, the 2022 SAFEs matured and, accordingly, should have been converted into of the Company’s most senior outstanding shares. As of December 31, 2023, the shares had not been issued, and therefore, the 2022 SAFEs remained outstanding. On August 28, 2024, the 2022 SAFEs were converted into Class A-3A Ordinary Shares. See Note 12(i)
| c. | On
March 15, 2023, the shareholders approved the issuance of additional SAFEs to certain shareholders
and third parties up to the maximum aggregate amount of $ |
The
2023 SAFEs investors are entitled to the rights and privileges set forth in the agreement, which include the issuance of the most senior
shares outstanding upon conversion of the 2023 SAFEs in the event of an equity financing or liquidity event occurs prior to the termination
of the 2023 SAFEs as defined in the related agreement. The investors receive a 40% discount on the share price in any of such event.
If a dissolution event occurs prior to the termination of the 2023 SAFEs, each SAFE investor is entitled to receive, prior to consummation
of the dissolution event, a portion of the related proceeds equal to its investment amount, or in case the applicable proceeds upon dissolution
are insufficient to permit a full payment of the amounts invested under the 2023 SAFEs, a prorated amount in par with the other SAFE
investors. In the event the 2023 SAFEs mature after 15 months without a conversion prior to 15 months from its issuance, all amounts
invested under the 2023 SAFEs are converted into the Company’s outstanding most senior shares based on a $
In June, July and August 2024, the 2023 SAFEs have matured. On August 28, 2024, the 2023 SAFEs were converted into Class A-3B Ordinary Shares. See Note 12(i).
| d. | On April 9, 2024, the Board of Directors approved the issuance of additional SAFEs to certain shareholders and third parties up to the maximum aggregate amount of $
On March 24, 2025, the Company also entered into an additional SAFE as part of the 2024 SAFEs with an investor who committed in the amount of $ |
The 2024 SAFEs investors are entitled to the rights and privileges set forth in the agreement, which include the issuance of the most senior shares outstanding upon conversion of the 2024 SAFEs in the event that an initial public offering, merger, acquisition, qualified equity financing or other liquidity event occurs prior to the termination of the 2024 SAFEs as defined in the related agreement. The investors receive a 35% discount on the share price in any of such event. If a dissolution event occurs prior to the termination of the 2024 SAFEs, each SAFE investor is entitled to receive, prior to consummation of the dissolution event, a portion of the related proceeds equal to its investment amount, or in case the applicable proceeds upon dissolution are insufficient to permit a full payment of the amounts invested under the 2024 SAFEs, a prorated amount in par with the other SAFE investors. If such events had not occurred within 18 months of the execution of the 2024 SAFEs, all amounts invested under the 2024 SAFEs are converted into the Company’s outstanding most senior shares based on the previous round of equity financing consummated discounted in 35% and divided by number of outstanding shares including any outstanding share options. The 2024 SAFEs expire and terminate immediately upon the earliest to occur of (1) the issuance of shares upon its conversion due to a qualified equity financing or liquidity event as aforesaid, or upon maturity; or (2) the payment, or setting aside for payment, of amounts due to the occurrence of a dissolution event.
| e. | The Company measured the 2022 SAFEs, the 2023 SAFEs and 2024 SAFEs upon receiving the cash and on each period end at its fair value in accordance with ASC 825-10 with the changes in fair value reported in the condensed statements of operations. |
The SAFEs were valued at the end of the year using a probability-weighted expected return model, which incorporated significant unobservable inputs.
The Company’s IPO in August 2025 triggered the conversion of the 2024 SAFEs into Ordinary Shares. In December 2025, the 2024 SAFEs were converted into Ordinary Shares (see Note 12).
| F-9 |
NASUS PHARMA LTD. AND ITS SUBSIDIARY
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Amounts in U.S. dollars in thousands, except share and per share amounts)
The Company used the following significant inputs in measuring the SAFEs:
| June 30, 2025 | December 31, 2024 | |||||||
| Fair value of Ordinary Share* | $ | $ | ||||||
| Weighted average cost of capital | % | % | ||||||
| Risk free rate | % | % | ||||||
| Time to maturity | ||||||||
| * |
| NOTE 5: | FAIR VALUE MEASUREMENTS |
The following table provide the liabilities carried at fair value measured on a recurring basis:
| Fair Value Measured as of June 30, 2025 | ||||||||||||||||
| Financial liabilities at fair value: | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Convertible securities | $ | $ | $ | $ | ||||||||||||
| Total financial liabilities at fair value | $ | $ | $ | $ | ||||||||||||
| Fair Value Measured as of December 31, 2024 | ||||||||||||||||
| Financial liabilities at fair value: | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Convertible securities | $ | $ | $ | $ | ||||||||||||
| Total financial liabilities at fair value | $ | $ | $ | $ | ||||||||||||
The changes in the fair value of the Company’s Level 3 financial liabilities, which are measured on a recurring basis are as follows:
| Convertible securities | ||||
| January 1, 2024 | $ | |||
| Proceeds from issuance of SAFEs | ||||
| Change in fair value of convertible securities | ||||
| June 30, 2024 | $ | |||
| January 1, 2025 | ||||
| Proceeds from issuance of SAFEs | ||||
| Change in fair value of convertible securities | ||||
| June 30, 2025 | $ | |||
There were no transfers between fair value measurement levels during the six-months ended June 30, 2025 and year ended December 31, 2024.
The estimated fair value of the Company’s cash and cash equivalents, restricted cash, other current assets, accounts payable, accrued expense and other current liabilities and short-term debt from shareholders approximates their carrying values as these financial instruments are highly liquid or short-term in nature.
| F-10 |
NASUS PHARMA LTD. AND ITS SUBSIDIARY
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Amounts in U.S. dollars in thousands, except share and per share amounts)
| NOTE 6:- | CONTINGENT LIABILITIES AND COMMITMENTS |
Litigation
| a. | From time to time, the Company may be involved in various claims and legal proceedings. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. The Company discloses pending claims and legal proceedings litigation if the Company believes a possibility exists that the claims and legal proceedings litigation will have a material effect on its financial results. Legal costs are accounted for as they are incurred. | |
| b. | In
May 2022, the Company received a letter from a supplier associated with the Taffix (defined
below) business, which demanded that the Company pay professional fees billed to the Company
in connection with services provided by the supplier. In August 2022, the supplier commenced
legal proceedings in the magistrate court of Tel Aviv, in an amount of $ |
Commitments
| a. | In
May 2019, the Company entered into a license agreement (“License Agreement”)
with Formulex Pharma Innovations Ltd. (“Formulex”). Formulex is an Israeli corporation,
owned by the Company’s shareholders, Mr. Ehud Gilboa, Dr. Dalia Megiddo and Dr. Ronnie
Herschman. Pursuant to the License Agreement, Formulex granted the Company a license for
the development, manufacture and commercialization of Formulex’s patent for dry powder
compositions for intranasal delivery and rights in the know-how of its intranasal and inhaled
formulations, combination products, and particle engineering, together, the Licensed Products.
Also pursuant to the License Agreement, the Company pay Formulex royalties of the Licensed
Products in the amount of |
In
June 2019, the Company entered into a service agreement with Formulex, as subsequently amended in March 2020 (“Previous Formulex Service Agreement”), to facilitate the
flow of information and know how, as well as help develop the Company products. The Company pays $
In
August 2024, the Company signed an additional agreement with Formulex to provide services which support the Company in providing services
to the governmental body (see Note 6(b)). As of June 30 2025, an amount of $
| b. | In
July 2024, the Company entered in a non-recurring research arrangement with a government
body to perform research and development activities in connection with a new formulation,
that is intended to be used through intranasal delivery. As of June 30, 2025, the research
and development activity related to that arrangement have commenced, and an amount of $ | |
| c. | In September 2019, the Company entered into a master service agreement and schedules of work (the “Aptar Agreement”) with Aptar Group Inc. (“Aptar”) under which Aptar granted the Company technology access to co-development and support for the development and submissions to regulatory bodies of intranasal to deliver NS001 and NS002 using Aptar’s technology. |
| F-11 |
NASUS PHARMA LTD. AND ITS SUBSIDIARY
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Amounts in U.S. dollars in thousands, except share and per share amounts)
In
connection with NS001, the Company is required to pay Aptar up to $
In
connection with NS002, the Company is required to pay Aptar up to $
The
Company is also obligated to pay Aptar for each final product that achieves certain sales-based milestone events and tiered royalties
on net sales of each final product by the Company or its affiliates or sublicensees at rates ranging from a low single-digit percentage,
depending on the total annual worldwide net sales of each such final product up to seven years after first commercial sale. The Aptar
Agreement has an early termination fee in case the Company terminate NS001 or NS002 programs for whatever reason, other than a breach
of the agreement by Aptar, of $
In
April 2021, the Company entered into an agreement with Aptar’s subdivision, NextBreath, which is subject to terms and conditions
of the Aptar Agreement, to perform laboratory and development services in connection with NS001. For the services received under the
agreement by April 2022, there is an amount of $
On
June 15, 2022, Aptar sent the Company a Notice of Default Letter, which followed by Notice of Termination Letter sent on October 5, 2022,
in which Aptar claimed for alleged breach of the contractual obligations of the Aptar Agreement made by Nasus and stated the outstanding
amounts of $
| NOTE 7:- | SEGEMENT REPORTING |
Segment
information is prepared on the same basis that the Company’s chief operating decision maker (“CODM”), the Chief Executive
Officer, manages the business, makes business decisions and assesses performance. The Company has
The CODM assesses performance for this segment and decides how to allocate resources based on net loss. The measure of segment assets is reported on the balance sheet as cash and cash equivalents. The Chief Executive Officer performs the assessment of segment performance by using the reported measure of segment profit or loss to monitor actual results.
The table below summarizes the significant expense categories regularly reviewed by the CODM for the six-months ended June 30, 2025 and 2024.
| Six Months Ended June 30 | ||||||||
| 2025 | 2024 | |||||||
| Significant segment expenses: | ||||||||
| Payroll and payroll related (*) | ||||||||
| Subcontractors and consultants (*) | ||||||||
| Professional services (*) | ||||||||
| Other | ||||||||
| Other segment items: | ||||||||
| Share-based compensation | ||||||||
| Loss (income) from change in fair value of convertible securities | ||||||||
| Interest expense | ||||||||
| Other expense, net | ||||||||
| Deferred issuance costs | ( | ) | ( | ) | ||||
| Net loss (income) from discontinued operations | ( | ) | ||||||
| Net loss | $ | $ | ||||||
| (*) |
| F-12 |
NASUS PHARMA LTD. AND ITS SUBSIDIARY
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Amounts in U.S. dollars in thousands, except share and per share amounts)
| NOTE 8:- | NET LOSS PER SHARE ATTRIBUTABLE TO SHAREHOLDER |
Basic net loss per share is computed using the weighted average number of shares of Ordinary Shares outstanding for the period. Diluted net loss per share reflects the effect of the assumed exercise of any share options, and the conversion of any convertible securities, in each case only in the periods in which such effect would have been dilutive.
For the six months and year ended June 30, 2025 and June 30, 2024, net loss per share amounts were the same for Ordinary Shares, Class A Ordinary Shares, Class A-1 Ordinary Shares, Class A-2 Ordinary Shares, Class A-3 Ordinary Shares, Class A-3A Ordinary Shares and Class A-3B Ordinary Shares because the holders of each class are entitled to equal per share dividends.
| Six
Months Ended June 30 | ||||||||
| 2025 | 2024 | |||||||
| Numerator: | ||||||||
| Loss from continuing operations | ( | ) | ( | ) | ||||
| Net loss (income) from discontinued operations | ( | ) | ||||||
| Net loss attributable to holders of Ordinary Shares | $ | ( | ) | $ | ( | ) | ||
| Effect of dilutive securities: | ||||||||
| Change in fair value of convertible securities related to dilutive | ||||||||
| Loss from continuing operations | ( | ) | ( | ) | ||||
| Net loss (income) from discontinued operations | ( | ) | ||||||
| Net loss attributable to holders of Ordinary Shares and assumed conversions | $ | ( | ) | $ | ( | ) | ||
| Denominator*: | ||||||||
| Weighted-average number of Ordinary Shares used to compute net loss per share, basic | ||||||||
| Weighted-average number of Ordinary Shares used to compute net loss per share, diluted | ||||||||
| Net income (loss) per share, basic: | ||||||||
| Continuing operations | ( | ) | ( | ) | ||||
| Discontinued operations | ( | ) | ||||||
| Net loss per share, basic | $ | ( | ) | $ | ( | ) | ||
| Net income (loss) per share, diluted: | ||||||||
| Continuing operations | ( | ) | ( | ) | ||||
| Discontinued operations | ( | ) | ||||||
| Net loss per share, diluted | $ | ( | ) | $ | ( | ) | ||
| * |
| Six Months Ended June 30 | ||||||||
| 2025 | 2024 | |||||||
| Share options | ||||||||
| 2022 SAFE* | ||||||||
| 2023 SAFE** | ||||||||
| 2024 SAFE*** | ||||||||
| * |
| ** |
| *** |
| F-13 |
NASUS PHARMA LTD. AND ITS SUBSIDIARY
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Amounts in U.S. dollars in thousands, except share and per share amounts)
| NOTE 9:- | OTHER SIGNIFICANT EVENTS DURING THE PERIOD |
| a. | In January 2025, | |
| In January 2025, the Company granted the CEO and Oren Elmaliach, its Director of Finance, share options and share options, respectively, to purchase Class Ordinary Shares at an exercise price of $. | ||
| In
March 2025, | ||
| b. | On March 17, 2025, the shareholders approved the following changes to the Company’s share capital, which took place on August 12, 2025, or the effective date of the registration statement on Form F-1 in connection with the IPO: |
| 1. | All shares of Class A Ordinary Shares, Class A-1 Ordinary Shares, Class A-2 Ordinary Shares, Class A-3 Ordinary Shares, Class A-3A Ordinary Shares and Class A-3B Ordinary Shares were converted into Class Ordinary Shares on a ratio of 1-for-1; | |
| 2. | The par value of its Class Ordinary Shares was changed so that the Class Ordinary Shares have no par value; and | |
| 3. | The Company’s increased the authorized Class Ordinary Shares by thousand shares. Following the increase, the Company’s authorized capital shares consisted of shares of Class Ordinary Shares, no par value. |
| NOTE 10:- | RELATED PARTIES |
| a. | Mr. Ehud Gilboa and Dr. Dalia Meggido are shareholders and each hold approximately % as of June 30, 2025 of the Company’s issued and outstanding Ordinary Shares. Mr. Gilboa is the Chairman of the Board of Directors and Dr. Meggido is a member of the Board of Directors, Chief Development Officer and Chief Medical Officer of the Company, and former Chief Executive Officer of the Company (until January 6, 2025). | |
| b. | Dr. Ronnie Hershman is a member of the Board of Directors and beneficially holds approximately % of the Company’s outstanding Ordinary Shares as of June 30, 2025. | |
| c. |
| F-14 |
NASUS PHARMA LTD. AND ITS SUBSIDIARY
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Amounts in U.S. dollars in thousands, except share and per share amounts)
| d. | Mr.
Gilboa subleases office space for a monthly fee of NIS | |
| e. | Mr.
Gilboa, Dr. Megiddo and Dr. Ronnie Hershman have all participated in SAFEs issued by the Company (see Note 4). Mr. Gilboa, Dr.
Megiddo, Formulex and Dr. Hershman invested $ | |
| f. | Mr.
Gilboa, Dr. Megiddo and Dr. Ronnie Hershman invested $ | |
| g. | Mr. Gilboa, Dr. Megiddo and Dr. Hirshman are major shareholders of Formulex, which granted services and additional services and license to the Company (see Note 6). | |
| h. | In March 2025, the shareholders and the Board of Directors approved compensation adjustments upon completion of the IPO to Mr. Udi Gilboa, as follows: | |
| i. | In March 2025, the Board of Directors and the Company’s shareholders approved compensation adjustments upon completion of the IPO to Dr. Dalia Megiddo, as follows: | |
| j. | The following related party balances are included in the balance sheets: |
| June 30, 2025 | December 31, 2024 | |||||||
| CURRENT ASSETS | ||||||||
| Prepaid expenses and other current assets | $ | $ | ||||||
| CURRENT LIABILITIES: | ||||||||
| Convertible securities | $ | $ | ||||||
| Accrued expense and other current liabilities | $ | $ | ||||||
| k. | The following related party transactions are included in the statements of operations: |
| Six Months Ended June 30 | ||||||||
| 2025 | 2024 | |||||||
| Research and development | $ | $ | ||||||
| General and administrative | $ | $ | ||||||
| Interest expense | $ | $ | ||||||
| NOTE 11:- | DISCONTINUED OPERATIONS |
During 2020, the Company’s research and development team in Israel developed a nasal powder that creates a hostile microenvironment in the nose where many airborne viruses can’t survive, which was marketed as Taffix (“Taffix”). At the end of 2021, the Company started the wind-down of Taffix by selling off all the manufacturing equipment, ceasing marketing efforts, seeking alternatives, fulling final orders but not accepting new orders, disposal of inventory and terminating of engagements with employee contractors and manufacturers. As of December 2022, the Company was no longer engaged in the development, production, marketing or sales of Taffix.
| F-15 |
NASUS PHARMA LTD. AND ITS SUBSIDIARY
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Amounts in U.S. dollars in thousands, except share and per share amounts)
In accordance with applicable accounting guidance, the results of Taffix are presented as net income (loss) from discontinued operations in the statements of operations. Further, the Company reclassified the liabilities of Taffix current liabilities related to discontinued operations on the balance sheets as of June 30, 2025 and December 31, 2024. The statements of cash flows are presented on a basis for both continuing operations and discontinued operations.
The following table presents key components of “Net income (loss) from discontinued operations”:
| Six Months Ended June 30 | ||||||||
| 2025 | 2024 | |||||||
| Other income (expense), net | ||||||||
| Net income (loss) from discontinued operations | $ | $ | ||||||
The following table presents liabilities that are classified as discontinued operations on the balance sheets:
| June 30,2025 | December 31, 2024 | |||||||
| Liabilities | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expense and other current liabilities | ||||||||
| Advances from customers | ||||||||
| Current liabilities related to discontinued operations | $ | $ | ||||||
| NOTE 12: | SUBSEQUENT EVENTS |
The Company evaluated subsequent events from the date of the balance sheet of June 30, 2025 through December 25, 2025, the date the financial statements were available to be issued, and has determined that, there have been no subsequent events that require recognition or disclosure in the financial statements as follows :
| a. | On
October 6, 2025, the Company and Aptar entered into a Termination and Settlement Agreement
to terminate the agreements described in Note 6 and to resolve and settle outstanding disputes
between the parties. The Company agreed to pay $ | |
| b. | On
October 3, 2025 | |
| c. | Further
to the litigation described above in Note 6, on July 17, 2025, the Company agreed to settle
with supplier associated with the Taffix in return for all claims made the company agreed
to pay an aggregate amount of NIS | |
| d. | Further
to service agreement with Formulex described in Note 6, on September 8, 2025, the Company
signed a services agreement with Formulex where the Company would pay a fixed fee of $ | |
| e. | On August 7, 2025, the Company
engaged Capital Point Ltd. to provide certain investor relations and public relations services, and business development related
services in connection with all of the Company’s product candidates. The Company will receive such services
for a two-year period, for an aggregate amount of $ |
| F-16 |
NASUS PHARMA LTD. AND ITS SUBSIDIARY
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Amounts in U.S. dollars in thousands, except share and per share amounts)
| f. | The CEO is also entitled for other benefits such as reimbursement of expenses and certain bonus payments, including a one-time bonus payment of NIS ($) upon and subject to consummation of the IPO. | |
| g. | The Company completed its IPO in August 2025 and the Company’s ordinary shares started trading on the NYSE American under the symbol (“NSRX”). See also Note 1(d). | |
| h. | In
connection with the IPO, three executive officers of the Company received bonuses based on
the terms of their employment contracts as described in Notes 9(a), 10(h) and 10(i). Mr.
Gilboa received NIS | |
| i. | In connection with the IPO, all Class A Ordinary Shares, Class A-1 Ordinary Shares, Class A-2 Ordinary Shares, Class A-3 Ordinary Shares, Class A-3A Ordinary Shares and Class A-3B Ordinary Shares have been converted to Ordinary Shares, no par value per share, at a 1:1 ratio. In addition, all outstanding SAFEs entered into and paid prior to the IPO have been automatically converted into Ordinary Shares, no par value per share, upon the effectiveness of the registration statement for the IPO. | |
| j. | On
November 17, 2025, the Company’s Board of Directors approved the grant of
share options to
Eyal Rubin, who was subsequently appointed as the Company’s Chief Financial Officer.
The grant to Mr. Rubin is subject to shareholder approval. The share options have an exercise
price of $ | |
| k. | On
December 11, 2025, the Company’s Board of Directors approved the grant of an aggregate
amount of
share options to
three members of the Board of Directors, subject to shareholder approval. The share options
have an exercise price of $
On the same date, the Company’s Board of Directors approved the grant of share options to employees and advisors of the Company. | |
| l. | On
December 21, 2025, the Company terminated one 2024 SAFE agreement in the amount of $ |
| F-17 |