Company: NCEL
Filing Date: 2025-06-09
Form Type: F-4/A
Source: 0001213900-25-052354
Chunk: 699

Company: NewcelX Ltd.
Filing Date: 2025-06-09
Form: F-4/A
Chunk 699
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M) assumes that the average investor holds the market portfolio and therefore he is exposed to market risks and hence measurement of risk for an individual asset is relative risk compared to the market portfolio. According to this model, the rate of return on equity is derived from the risk -freeinterest rate plus a market risk premium multiplied by the risk level of the company which is relative to the standard deviation of the market portfolio (ß). Ke = Rf + ß * (Rm -Rf) Where: RF = risk free interest rate ß = The correlation level between the return on investment and the return on the market portfolio Rm -Rf= Risk premium on risky assets above the risk -freeinterest rate The Beta of the asset will be derived usually from the calculation of the actual beta of the share of the company, which is estimated, from a sample of similar listed companies, or from a database. First, the beta -shareleveraged will be derived from peer group, and then re -leveragingwill be carried out to reach the appropriate beta for the estimated company. Sometimes it is common to include additional premiums for the cost of capital in respect of business risks which are not “perceived” by the CAPM, such as the premium for small companies (small -sizepremium) and other risk premiums.

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Annex E-20

Valuation Methodology in Kadimastem’s valuation Kadimastem’s valuation was performed under the income approach, using the Risk -Adjusted Net Present Value (rNPV)method. This method enhances standard DCF analysis by adjusting cash flow projections for the probability of success, i.e., adjusting for the probability of successfully advancing through clinical trials and regulatory approval. As a result, this method is also referred to as the expected net present value (eNPV) method. Among the various early -stagebiotech valuation methods, the rNPV method is the most appropriate. This method is suited for valuing: •Preclinical and clinical stage biotech assets •Novel pharma and biotech drugs undergoing development •Other life sciences assets that undergo phased development The mechanics of rNPV involve: •Estimating clinical trial and approval probabilities •Adjusting cash flow projections for risk using these probabilities •Discounting risk -adjustedcash flows to present value •Summing risk -adjustedcash flows to derive rNPV This captures the risks inherent in biotech drug development. rNPV provides a more accurate asset valuation than basic DCF as it enables conducting ph