Company: NCEL
Filing Date: 2025-05-16
Form Type: 20-F
Source: 0001213900-25-044868
Chunk: 257

Company: NewcelX Ltd.
Filing Date: 2025-05-16
Form: 20-F
Item: Item 4
Chunk 257
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 financial
statements requires us to make judgments and estimates that affect the reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities at the date of the financial statements, as well as the expenses incurred during the reporting periods.
Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these judgments and estimates under different assumptions or conditions and any such
differences may be material. We believe that the accounting policies discussed below are critical to understanding our historical and
future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Revenue Recognition

Under
ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the
consideration which the entity expects to receive in exchange for those goods or services. To determine the appropriate amount of revenue
to be recognized for arrangements determined to be within the scope of ASC 606, we perform the following five steps: (i) identification
of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations
including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint
on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when
(or as) we satisfy each performance obligation. We only apply the five-step model to contracts when it is probable that the entity will
collect consideration it is entitled to in exchange for the goods or services it transfers to the customer.

In
February 2019, we entered into the EF License Agreement to develop and commercialize our product candidate, Nolazol, in Latin American
countries with Eurofarma. The EF License Agreement covered the grant of non-transferable licenses, without the right to sublicense, to
Eurofarma to develop and commercialize Nolazol in Latin America. The EF License Agreement also specified our obligation to advance development
activities with respect to Nolazol in the United States.

Under
the EF License Agreement, we received a non-refundable, upfront payment, of $2.5 million in 2019 and were eligible to receive non-refundable
milestone payments of up to $16,000,000,