Company: NCEL
Filing Date: 2025-05-16
Form Type: 20-F
Source: 0001213900-25-044868
Chunk: 295

Company: NewcelX Ltd.
Filing Date: 2025-05-16
Form: 20-F
Item: Item 5
Chunk 295
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 fund our projected operating requirements for a period of one year from the issuance of the financial statements included elsewhere in this annual report. This raises substantial doubt about our ability to continue as a going concern.

In November 2024, we announced the Merger Agreement with Kadimastem, a clinical-stage cell therapy company specializing in “off-the-shelf” allogeneic cell products for neurodegenerative diseases and diabetes. The Merger aims to create a Nasdaq-traded biotechnology company with a robust portfolio of advanced therapies. Both companies’ boards of directors have unanimously approved the transaction, with Kadimastem’s shareholders voting in favor and NLS major shareholders holding approximately 40% of NLSs’ common shares having signed support letters for the NLS shareholders’ meeting anticipated by us to be convened soon. We currently anticipate closing the Merger in the second quarter of 2025, pending effectiveness of NLSs’ pending registration statement filed with the SEC, Nasdaq approval, NLSs’ shareholders’ approval and other customary closing conditions.

Components of Operating Results

Licensing Agreement

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 million, based on the achievement of milestones related to regulatory filings, regulatory approvals and the commercialization of Nolazol, as well as tiered royalty payments. As of December 31, 2023, we had long-term deferred revenues of $2.5 million, which was going to be recognized when the development services of Nolazol were completed, and the product candidate received applicable regulatory approval in Latin America that would allow Eurofarma to commence commercialization of Nolazol in accordance with the EF License Agreement.

On August 28, 2024, we agreed with Eurofarma to terminate the EF License Agreement effective September 30, 2024. Neither party has any claims against the other in relation to the