Raphael Pharmaceutical Inc.

Previous wording

This Quarterly Report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws, which includes information relating to future events, future financial performance, financial projections, strategies, expectations, competitive environment and regulation. Words such as “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and may not be accurate indications of when such performance or results will be achieved. Forward-looking statements are based on information we have when those statements are made or our management’s good faith belief as of that time with respect to future events and are subject to significant risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:

Current wording

This Quarterly Report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws, which includes information relating to future events, future financial performance, strategies, expectations, competitive environment and regulation. Words such as “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and may not be accurate indications of when such performance or results will be achieved. Forward-looking statements are based on information we have when those statements are made or our management’s good faith belief as of that time with respect to future events and are subject to significant risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:

Previous wording

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 wording

On December 23, 2024, upon 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”.

Previous wording

Revenues. We had no revenues during the three months ended March 31, 2025, and March 31, 2024.

Current wording

We had no revenues during the three months ended June 30, 2025, and June 30, 2024.

Previous wording

Financial expense (income), net. We recognized financial expense, net, of $4,000 for the three months ended March 31, 2025, representing an increase of $1,000, or 33%, compared to financial expenses, net of $3,000 for the three months ended March 31, 2024. The Company considers the decrease to be immaterial.

Current wording

*Financial income, net.*We recognized financial expense, net, of $6,000 for the three months ended June 30, 2025, representing an increase of $7,000, or 700%, compared to financial income, net of $1,000 for the three months ended June 30, 2024. The increase was primarily due to a risk premium expense of a loan from a related party and exchange differences.

Previous wording

Research and Development Expenses. Our research and development expenses totaled $72,000 for the three months ended March 31, 2025, representing a decrease of $307,000, or 81%, compared to $379,000 for the three months ended March 31, 2024. The decrease was primarily attributable to expenses related to the Company’s research and development activities with Rambam.

Current wording

Research and Development Expenses. Our research and development expenses totaled $213,000 for the six months ended June 30, 2025, representing a decrease of $190,000, or 47%, compared to $403,000 for the six months ended June 30, 2024. The decrease was primarily attributable to decrease in expenses and expenses related to the research agreement with Rambam (as defined below).

Previous wording

General and Administrative Expenses. Our general and administrative expenses totaled $353,000 for the three months ended March 31, 2025, representing an increase of $185,000, or 110%, compared to $168,000 for the three months ended March 31, 2024. The increase was primarily attributable to stock-based compensation to a director.

Current wording

General and Administrative Expenses. Our general and administrative expenses totaled $527,000 for the six months ended June 30, 2025, representing an increase of $134,000, or 35%, compared to $393,000 for the six months ended June 30, 2024. The increase was primarily due to increase in professional services.

Previous wording

Operating Loss. Our operating loss totaled $425,000 for the three months ended March 31, 2025, representing a decrease of $122,000, or 22%, compared to $547,000 for the three months ended March 31, 2024. The decrease was primarily due to a decrease in our research and development expenses, offset by the increase in general and administrative costs.

Current wording

Operating Loss. Our operating loss totaled $740,000 for the six months ended June 30, 2025, representing a decrease of $56,000, or 7%, compared to $796,000 for the six months ended June 30, 2024. The decrease was due to the decrease in our research and development expenses offset by the increase in our general and administrative expenses.

Previous wording

Net Loss. Our net loss totaled $429,000 for the three months ended March 31, 2025, representing a decrease of $121,000, or 22%, compared to $550,000 for the three months ended March 31, 2024. The decrease was primarily due to a decrease in our research and development expenses, offset by the increase in general and administrative costs.

Current wording

Net Loss. As a result of the foregoing, our net loss totaled $751,000 for the six months ended June 30, 2025, representing an decrease of $47,000, or 6%, compared to $798,000 for the six months ended June 30, 2024. The increase was primarily due to the decrease in our research and development expenses offset by the increase in our general and administrative expenses.

Previous wording

Since inception, we have funded our operations primarily through our founder’s capital and capital received from Easy Energy, Inc. As of March 31, 2025, we had $50,000 in cash and cash equivalents and have invested most of our available cash funds in ongoing cash accounts.

Current wording

Since inception, we have funded our operations primarily through our founder’s capital and capital received from Easy Energy, Inc. As of June 30, 2025, we had $20,000 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 $209,000 for the three months period ended March 31, 2025, compared with net cash used in operating activities of $172,000 for the corresponding period in 2024. The $37,000 increase in the net cash used in operating activities during the three months period ended March 31, 2025, compared to the same period in 2024, was primarily due to a decrease in changes in other payables.

Current wording

Net cash used in operating activities was $239,000 for the six months period ended June 30, 2025, compared with net cash used in operating activities of $390,000 for the corresponding period in 2024. The $151,000 decrease in the net cash used in operating activities during the six months period ended June 30, 2025, compared to the same period in 2024, was primarily due to an increase in share-based compensation for the period in the amount of $144,000.

Previous wording

There was no net cash used in investing activities for the three months period ended March 31, 2025, compared to $1,000 net cash used in investing activities for the corresponding period in 2024. The Company considers the change to be immaterial.

Current wording

There was no net cash used in investing activities for the six months period ended June 30, 2025 and for the same period in 2024.

Previous wording

Net cash provided by financing activities for the three months period ended March 31, 2025 was $240,000 compared to $230,000 for the same period in 2024. The increase in net cash provided by financing activities during the three months period ended March 31, 2025 compared to the corresponding period in 2024 was mainly due to issuance of shares during the period ended March 31, 2025.

Current wording

Net cash provided by financing activities for the six months period ended June 30, 2025 was $240,000 compared to $280,000 for the same period in 2024. The decrease in net cash provided by financing activities during the six months period ended June 30, 2025 compared to the corresponding period in 2024 was mainly due to a decrease in funds received from issuance of shares and warrants.

Previous 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.

Current wording

On July 17, 2019, we entered into a sponsored research agreement, or the 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.

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 $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.

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, out of which we paid $120,000. Furthermore, in accordance with the terms of the Research Agreement, we and Rambam will have joint ownership of any intellectual property (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

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 Quarterly 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).

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, however, since the remaining amount was not paid on time, an additional amount of $57,000 was added to the remaining balance. On July 28, 2025, the Company received an extension to pay the remaining balance until the end of April 2026. As of the date of this Quarterly 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 $577,000). The outstanding balance is $282,000.

Previous wording

We have financed our operations to date primarily through proceeds from founder’s capital and issuance of shares and warrants. We have incurred losses and generated negative cash flows from operations since inception. To date we have not generated revenue, and we do not expect to generate significant revenues from the sale of our products in the near future. We do not believe that our current cash on hand will be sufficient to fund our projected operating requirements. This raises substantial doubt about our ability to continue as a going concern. At this time, there is no guarantee that we will be able to obtain an adequate level of financial resources required for the short and long-term support of our operations or that we will be able to obtain additional financing as needed, or meet the conditions of such financing, or that the costs of such financing may not be prohibitive. These conditions raise substantial doubt about our ability to continue as a going concern for a period within one year from the date of the financial statements included elsewhere in this Quarterly Report.

Current wording

We do not believe that our current cash on hand will be sufficient to fund our projected operating requirements. This raises substantial doubt about our ability to continue as a going concern. At this time, there is no guarantee that we will be able to obtain an adequate level of financial resources required for the short and long-term support of our operations or that we will be able to obtain additional financing as needed, or meet the conditions of such financing, or that the costs of such financing may not be prohibitive. These conditions raise substantial doubt about our ability to continue as a going concern for a period within one year from the date of the financial statements included elsewhere in this Quarterly Report.

Previous wording

As of March 31, 2025, our cash and cash equivalents were $50,000. We believe that our existing cash and cash equivalents will not be sufficient to fund our projected cash requirements through the third 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.

Current wording

As of June 30, 2025, our cash and cash equivalents were $20,000. We believe that our existing cash and cash equivalents will not be sufficient to fund our projected cash requirements through the third 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 $700,000 for research and development activities over the course of the next 12 months. We also anticipate that we will require approximately $500,000 for capital expenditures over such 12-month period, which consists primarily of expenditures for clinical trials and general Company operating costs.