Raphael Pharmaceutical Inc.
For the period ended Dec 31, 2024. Filed Mar 31, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 31, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-28.
0001213900-24-027234
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0001213900-25-026214
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 61 previous paragraphs and 72 current paragraphs.
38 unchanged; 20 reworded; 14 added; 3 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 15 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
We have recently completed a Study, for our lead product candidate for the treatment of RA in the U.S. Encouraged by the promising results of the Study, we will continue to investigate our product for the treatment of autoimmune diseases.
Current report
In addition, we are aiming to develop a novel treatment for asthma. At Rambam, we have successfully conducted studies using human-derived immune cells and mouse models to advance our understanding of both COVID-19 and RA products. Due to the similarity of COVID-19 and asthma symptoms, such studies also advance our understanding of asthma and its treatment. Since the volume of COVID-19 testing has been decreasing, we decided to leverage our knowledge and understanding of COVID-19 to study asthma as well.
Current report
In April 2024 we began the Study in the U.S., leveraging insights from the pre-clinical experiments we have conducted at the Rambam. This Study aimed to evaluate the Company’s Cannabinoid based formula, or Raphael’s Formula, in patients with active RA. The single-group Study was managed by MindMate, Inc./ dba Citruslabs, or Citruslabs, and conducted in Santa Monica, California, U.S., under IRB approval, in compliance with the FDA regulations and in accordance with applicable industry standards and regulations.
Current report
On December 23, 2024, upon a successful completion of the Study, we received the Study results with overall findings that emphasize the clinical potential of Raphael’s Formula and suggest that it may have beneficial effects on symptom management and overall well-being for individuals with RA. For more information about the Study results see “Item 1. Business - Research and Clinical Development Strategy”.
Current report
Over the last few years, pharmaceutical drug products that include parts of the cannabis plant have begun to receive regulatory approvals for use in patients suffering from certain disorders, as highlighted below.
Current report
In light of the past regulatory approvals for other pharmaceutical drug products and, more specifically, the potential beneficial effects of CBD and other parts of the cannabis plant, we believe that a drug discovery platform based on CBD may offer new and differentiated treatment options for patients. Prior regulatory approvals of other companies’ pharmaceutical drug products do not serve as an indication as to the ability or likelihood that we receive regulatory approval to commercialize any of our product candidates.
Current report
After four successful years of pre-clinical research at the laboratories of Rambam, which paved the way for the Study in RA patients, we are now advancing our efforts to further develop our product candidates.
Current report
Following the completion of the Study, we intend to submit an IND application to the FDA and MOH. See “Item 1. Business - Research and Clinical Development Strategy - Clinical Development Plan” for additional information on the ongoing pre-clinical trial and our planned clinical trial for our RA product candidate.
Current report
In addition, with respect to our COVID-19 product candidate, our clinical research partners have been focused on the effect of cannabinoids and cannabis extracts on immune cells which induce acute inflammation. This study will begin in the pre-clinical level in immune cell models and, subject to positive results that exhibit downregulation of pro-inflammatory cytokines by cannabis extract, the study was completed successfully. Following the completion of the pre-clinical study, a mice model was conducted to analyze for acute inflammation, which resembles the immunopathology of COVID-19. The mice model was successfully completed and we have registered for a clinical trial in patients with the MOH.
Current report
As a pharmaceutical research and clinical development company we do not own or operate, and currently do not intend on creating an in-house team to manufacture and commercialize our pharmaceutical drug products, if any, that receive regulatory approval allowing for commercialization. We currently rely, and expect to continue to rely, on third parties for the manufacturing of our product candidates for preclinical and clinical testing, as well as for commercial manufacturing of any pharmaceutical drug products for which we may receive regulatory approval. Subject to the receipt of such regulatory approvals, we intend on cooperating with manufacturers and other third parties to manufacture and commercialize approved pharmaceutical drug products.
Current report
Our general and administrative expenses totaled $733 thousand for the year ended December 31, 2024, representing a decrease of $30 thousand, or 3.9%, compared to $763 thousand for the year ended December 31, 2023. The decrease was primarily attributable to lower professional services fees.
Current report
Service Agreement with our Chief Technology Officer
Current report
Our Chief Technology Officer, Dr. Igal Louria Hayon, provides services to our Company pursuant to a service agreement, by and between the Company and Dr. Igal Louria Hayon. Pursuant to the terms thereof Dr. Hayon provides consulting services the Company to engage with an array of science consultants and to coordinate collaborations with hospitals on medical cannabis research. Pursuant to such agreement, we agreed to pay our Chief Technology Officer 15% of the Company’s net royalty’s income from worldwide sales of any of the Company’s cannabis-based medical indications treating COVID-19. Pursuant to Dr. Hayon’s service agreement, in the event we will apply for any clinical trial of cannabis-based treatment or will begin any other new cannabis related research, the Corporation will grant Dr. Hayon warrants to purchase up to 350,000 shares of Common Stock at an exercise price of $0.01. On May 1, 2024, the milestone was met and the Company granted to Dr. Igal Louria Hayon warrants to purchase up to 350,000 shares of Common Stock of the Company at an exercise price of $0.01. The warrants expire on April 30, 2026. On March 3, 2025, we entered into a new service agreement with our Chief Technology Officer, substantially on the same terms as the agreement described above, effective as of January 1, 2025 Pursuant to such service agreement, we agreed to pay our Chief Technology Officer a monthly fee of $24,000 and to reimburse him with certain expenses related to his scientific work.
Current report
The Company may terminate the service agreement prior to the expiration of its term upon 120 days advance notice and the payment to Dr. Hayon of a termination fee equal to the monthly fees payable through the expiration of its term.
Removed paragraphs (3)
Previous report
We are currently in the pre-clinical development stage for of our lead product candidate, our RA product candidate for the treatment of RA. In addition, we are aiming to develop a pharmaceutical drug product for the treatment of hyperinflammatory syndrom inflammation related to COVID-19. At Rambam Hospital we have successfully completed preclinical studies on human-derived immune cells and mouse models for both the COVID-19 and RA products.
Previous report
Based on the data obtained from our pre-clinical studies at Rambam Hospital, we are currently in the process of developing a revolutionary and patentable formula designed to treat inflammation. These studies have provided promising results, revealing a remarkable synergistic anti-inflammatory effect of the formula on immune cells sourced from donors, as well as in mice models for lung inflammation and RA.
Previous report
Our general and administrative expenses totaled $703 thousand for the year ended December 31, 2023, representing a decrease of $1,436 thousand, or 67.1%, compared to $2,139 thousand for the year ended December 31, 2023. The decrease was primarily attributable to decrease in our share-based payment compensation for our officers, directors and consultants.
Reworded paragraphs (20)
Previous wording
You should read the following discussion and analysis of our financial condition and results of operations together with our audited annual consolidated financial statements as of December 31, 2023 and December 31, 2022 and accompanying notes appearing elsewhere in this Annual Report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under “Risk Factors” and elsewhere in this Annual Report. All amounts are in U.S. dollars and rounded.
Current wording
You should read the following discussion and analysis of our financial condition and results of operations together with our audited annual consolidated financial statements as of December 31, 2024 and December 31, 2023 and accompanying notes appearing elsewhere in this Annual Report. This discussion and analysis contain forward-looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under “Risk Factors” and elsewhere in this Annual Report. All amounts are in U.S. dollars and rounded.
Previous wording
On February 9, 2022, we filed an application for a clinical trial with the Medical Cannabis Unit of the MOH. On February 16, 2022 we submitted an application with the Helsinki Committee at Rambam Hospital for a clinical trial in COVID-19 patients.
Current wording
On February 9, 2022, we filed an application for a clinical trial with the Medical Cannabis Unit of the MOH. On February 16, 2022 we submitted an application with the Helsinki Committee at Rambam for a clinical trial in COVID-19 patients.
Previous wording
On March 27, 2023, the MOH, accepted our proposal for a clinical trial aimed at preventing the deterioration of hospitalized COVID-19 patients. We are currently in the process of finalizing the strategy for the trial site and ensuring it will have the requisite number of COVID-19 patients needed for our trial. We plan to submit a human trial application to conduct a proof-of-concept experiment for our RA product in the second quarter of 2024.
Current wording
On March 27, 2023, the MOH, accepted our proposal for a clinical trial aimed at preventing the deterioration of hospitalized COVID-19 patients.
Previous wording
Our vision is to emerge as a pioneering company at the forefront of formulating pharmaceutical drugs that harness the potential of purified cannabinoids and full-spectrum CBD oil. Our primary mission is to cater to the unmet medical requirements of patients grappling with various disorders, with a particular focus on conditions linked to inflammation, such as chronic lung inflammation, RA and COVID-19.
Current wording
Our vision is to emerge as a pioneering company at the forefront of formulating pharmaceutical drugs that harness the potential of purified cannabinoids and full-spectrum CBD oil. Our primary mission is to cater to the unmet medical requirements of patients grappling with various disorders, with a particular focus on conditions linked to inflammation, such as autoimmune diseases, asthma, RA and COVID-19.
Previous wording
For this purpose, in October 2022, we entered into an agreement with the Medical Cannabis Research Center at Rambam Health Care Campus, and Rambam MedTech for the development of a new, patentable formulation that combines purified cannabinoids to treat rheumatoid diseases.
Current wording
For this purpose, in October 2022, we entered into an agreement with the Medical Cannabis Research Center at Rambam=for the development of a new, patentable formulation that combines purified cannabinoids to treat rheumatoid diseases.
Previous wording
Our research and development expenses totaled $569 thousand for the year ended December 31, 2023, representing a decrease of $609 thousand, or 51.7%, compared to $1,178 thousand for the year ended December 31, 2022. The decrease was primarily attributable to the decrease in share-based compensation to our consultants and service providers of $600..
Current wording
Our research and development expenses totaled $776 thousand for the year ended December 31, 2024, representing an increase of $207 thousand, or 36.3%, compared to $569 thousand for the year ended December 31, 2023. The increase was primarily attributable to one time share based compensation to one of our executives, which was offset by a lower investment in development activity as a result of lower fund raising during the year.
Previous wording
As a result of the foregoing, our operating loss totaled $1,272 thousand for the year ended December 31, 2023, representing a decrease of $2,045 thousand, or 61.6%, compared to $3,317 thousand for the year ended December 31, 2022.
Current wording
As a result of the foregoing, our operating loss totaled $1,509 thousand for the year ended December 31, 2024, representing an increase of $177 thousand, or 13.3%, compared to $1,332 thousand for the year ended December 31, 2023.
Previous wording
We recognized financing expense, net of $12 thousand for the year ended December 31, 2023, representing a decrease of $29 thousand, or 70.7%, compared to finance expense, net of $41 thousand for the year ended December 31, 2022. The decrease was primarily attributable to exchange rate differences between the U.S. dollar and the New Israeli Shekel.
Current wording
We recognized financing expense, net of $10 thousand for the year ended December 31, 2024, representing a decrease of $2 thousand, or 16.6%, compared to finance expense, net of $12 thousand for the year ended December 31, 2023. The decrease was considered immaterial.
Previous wording
As a result of the foregoing, our loss totaled $1,284 thousand for the year ended December 31, 2023, representing a decrease of $2,074 thousand, or 61.7%, compared to $3,358 thousand for the year ended December 31, 2022.
Current wording
As a result of the foregoing, our loss totaled $ 1,519 thousand for the year ended December 31, 2024, representing a increase of $175 thousand, or 13%, compared to $1,344 thousand for the year ended December 31, 2023.
Previous wording
Our consolidated financial statements are prepared in accordance with US GAAP. There are no critical accounting estimates for the years ended December 31, 2023 and 2022.
Current wording
Our consolidated financial statements are prepared in accordance with US GAAP. There are no critical accounting estimates for the years ended December 31, 2024 and 2023. Please see Note 2(a) of our Consolidated Financial Statements for the summary of significant accounting policies.
Previous wording
The Company has funded its operations to date primarily through equity financing and the issuance of a loan. Additional funding will be required to complete the Company’s research and development and clinical trials, to attain regulatory approvals, to begin the commercialization efforts of the Company’s product and to achieve a level of sales adequate to support the Company’s cost structure. As of December 31, 2023, we had approximately $230 thousand in cash and cash equivalents, and have invested most of our available cash funds in ongoing cash accounts.
Current wording
The Company has funded its operations to date primarily through equity financing and the issuance of a loan. Additional funding will be required to complete the Company’s research and development and clinical trials, to attain regulatory approvals, to begin the commercialization efforts of the Company’s product and to achieve a level of sales adequate to support the Company’s cost structure. As of December 31, 2024, we had approximately $19 thousand in cash and cash equivalents, and have invested most of our available cash funds in ongoing cash accounts.
Previous wording
Net cash used in operating activities was $1,203 thousand for the year ended December 31, 2023, compared with net cash used in operating activities of $759 thousand for the year ended December 31, 2022. The $444 thousand increase in the net cash used in operating activities during 2023, compared to 2022, was mainly from higher general and administrative activity during 2023 compared with 2022.
Current wording
Net cash used in operating activities was $532 thousand for the year ended December 31, 2024, compared with net cash used in operating activities of $1,203 thousand for the year ended December 31, 2023. The $671 thousand decrease in the net cash used in operating activities during 2024, compared to 2023, was mainly from lower investment in development activity.
Previous wording
Net cash used in investing activities for the year ended December 31, 2023 was $0 compared to $2 thousand for the year ended December 31, 2022. The decrease in net cash provided by investing activities during 2023 compared to 2022 was immaterial.
Current wording
Net cash used in investing activities for the year ended December 31, 2024 was $0 compared to $0 thousand for the year ended December 31, 2023.
Previous wording
Net cash provided by financing activities for the year ended December 31, 2023 was $1,145 thousand compared to $896 thousand for the year ended December 31, 2022. The increase of $249 thousand in net cash provided by financing activities during 2023 compared to 2022 was mainly due to higher proceeds in 2023 from issuance of common stock and warrants compared with 2022.
Current wording
Net cash provided by financing activities for the year ended December 31, 2024 was $321 thousand compared to $1,145 thousand for the year ended December 31, 2023. The decrease of $824 thousand in net cash provided by financing activities during 2024 compared to 2023 was mainly due to lower financing activity in 2024.
Previous wording
As of December 31, 2023, our cash and cash equivalents were $230 thousand. We believe that our existing cash and cash equivalents will be sufficient to fund our projected cash requirements through the first quarter of 2024. Therefore, we will require significant additional financing in the near future to fund our operations. We currently anticipate that we will require approximately $800 thousand for research and development activities over the course of the next 12 months. We also anticipate that we will require approximately $600 thousand for capital expenditures over such 12-month period, which consists primarily of expenditures for clinical trials and general Company operating costs.
Current wording
As of December 31, 2024, our cash and cash equivalents were $19 thousand. We believe that our existing cash and cash equivalents will be sufficient to fund our projected cash requirements through the second quarter of 2025. Therefore, we will require significant additional financing in the near future to fund our operations. We currently anticipate that we will require approximately $500 thousand for research and development activities over the course of the next 12 months. We also anticipate that we will require approximately $700 thousand for capital expenditures over such 12-month period, which consists primarily of expenditures for clinical trials and general Company operating costs.
Previous wording
On July 17, 2019, we entered into a sponsored research agreement, or the Research Agreement, with Rambam MT, pursuant to which the Company agreed to fund a research project, to be performed by Rambam MD, with a research plan aimed at identifying the effects of different cannabis strains on the function of immune cells. On October 28, 2020, the Company and Rambam MT agreed to expand the research plan to study the anti-inflammatory activities of cannabis extracts in an RA mouse model. On February 15, 2021, the Company and Rambam MT agreed to further expand the research plan to study the effect of cannabis extracts on the immunopathology of the COVID-19 disease. The Sponsored Researched Agreement is for an initial term of 48 months. On October 23, 2022, the Company and Rambam MT entered into a supplement to the Research Agreement, or the Supplement Agreement, pursuant to which the Company exercised an option to extend the Research Agreement by additional two years until December 31, 2024.
Current wording
On July 17, 2019, we entered into a sponsored Research Agreement with Rambam, pursuant to which the Company agreed to fund a research project, to be performed by Rambam, with a research plan aimed at identifying the effects of different cannabis strains on the function of immune cells. On October 28, 2020, the Company and Rambam agreed to expand the research plan to study the anti-inflammatory activities of cannabis extracts in an RA mouse model. On February 15, 2021, the Company and Rambam agreed to further expand the research plan to study the effect of cannabis extracts on the immunopathology of the COVID-19 disease. The sponsored Researched Agreement is for an initial term of 48 months. On October 23, 2022, the Company and Rambam entered into a supplement to the Research Agreement, or the Supplement Agreement, pursuant to which the Company exercised an option to extend the Research Agreement by additional two years until December 31, 2024, which we plan to extend in 2025.
Previous wording
Pursuant to the Research Agreement, we agreed to pay Rambam $1.4 million in four equal payments, due on the first day of August on each successive year from 2019 through 2022. Pursuant to the Supplement Agreement, we agreed to pay Rambam MT $960,000 plus VAT in four biannual payments from May 2023 through December 2024. Furthermore, in accordance with the terms of the Research Agreement, we and Rambam MT will have joint ownership of any IP created as a result of research programs covered by such agreement. In connection with the Research Agreement, Rambam MT agreed not to work, study or develop any technologies with other entities that compete with our work with Rambam MT for our COVID-19 product candidate or RA product candidate for a term of three and seven years, respectively, from the end of the parties’ collaboration with respect to the COVID-19 product candidate and seven years from the end of the term of the Research Agreement with respect to the RA product candidate.
Current wording
Pursuant to the Research Agreement, we agreed to pay Rambam $1.4 million in four equal payments, due on the first day of August on each successive year from 2019 through 2022. Pursuant to the Supplement Agreement, we agreed to pay Rambam $960,000 plus VAT in four biannual payments from May 2023 through December 2024. Such amount was later amended to $470,000 plus VAT. Furthermore, in accordance with the terms of the Research Agreement, we and Rambam will have joint ownership of any IP created as a result of research programs covered by such agreement. In connection with the Research Agreement, Rambam agreed not to work, study or develop any technologies with other entities that compete with our work with Rambam for our COVID-19 product candidate or RA product candidate for a term of three and seven years, respectively, from the end of the parties’ collaboration with respect to the COVID-19 product candidate and seven years from the end of the term of the Research Agreement with respect to the RA product candidate.
Previous wording
Subject to commercial sales of any product candidate using the intellectual property created as a part of the research covered by such agreement, Raphael Israel is required to pay Rambam MT a royalty in an amount equal to 6% of all net sales, subject to certain deductions, such as taxes paid by any purchaser, transportation and shipping costs, and other customary deductions.
Current wording
Subject to commercial sales of any product candidate using the IP created as a part of the research covered by such agreement, Raphael Israel is required to pay Rambam a royalty in an amount equal to 6% of all net sales, subject to certain deductions, such as taxes paid by any purchaser, transportation and shipping costs, and other customary deductions.
Previous wording
On December 25, 2023, the Company received an extension to pay the remaining $350,000 pursuant to the Research Agreement until the end of June 2024. As of December 31, 2023, the Company has made all four of the four equal payments due pursuant to the Research Agreement, for a total amount of $1.4 million and $120,000 for the Supplement Agreement.
Current wording
On December 25, 2023, the Company received an extension to pay the remaining $350,000 pursuant to the Research Agreement until the end of June 2024. As of the date of this Annual Report, the Company has made all four of the four equal payments due pursuant to the Research Agreement, for a total amount of $1.4 million and $295,000 for the Supplement Agreement (out of the remaining $470,000).
Previous wording
In October 2020, Raphael Israel entered into an engagement agreement with Wolc, pursuant to which, subject to its completing the Share Exchange with Easy Energy, Raphael Israel will be provided with up to 15 liters of CBD oil, from a strain of cannabis during a term of 18 months, to be provided in two to three deliveries of between one to seven liters of CBD oil. In accordance with Raphael Israel’s agreement with Wolc, Raphael Israel has agreed to issue to certain persons affiliated with Wolc 3% of Raphael’s issued and outstanding share capital as of the date of the Share Exchange, to be provided in three equal issuances; provided, however, that such persons may elect to receive a cash payment of $100,000 instead of any one issuance of Raphael’s shares. In addition to the issuance of shares, Raphael Israel has also agreed to pay Wolc a royalty fee equal to 15% of the net royalties generated from sales of Raphael Israel’s pharmaceutical drug products that are developed at Rambam hospital in Israel.
Current wording
In October 2020, Raphael Israel entered into an engagement agreement with Wolc, pursuant to which, subject to its completing the Share Exchange with Easy Energy, Raphael Israel will be provided with up to 15 liters of CBD oil, from a strain of cannabis during a term of 18 months, to be provided in two to three deliveries of between one to seven liters of CBD oil. In accordance with Raphael Israel’s agreement with Wolc, Raphael Israel has agreed to issue to certain persons affiliated with Wolc 3% of Raphael’s issued and outstanding share capital as of the date of the Share Exchange, to be provided in three equal issuances; provided, however, that such persons may elect to receive a cash payment of $100,000 instead of any one issuance of Raphael’s shares. In addition to the issuance of shares, Raphael Israel has also agreed to pay Wolc a royalty fee equal to 15% of the net royalties generated from sales of Raphael Israel’s pharmaceutical drug products that are developed at Rambam l in Israel.