BCLI 10-K & 10-Q changes, risk factors and insider trading

Management’s plan includes raising funds from outside potential investors, including under the ATM Program.investors. However, there is no assurance such funding will be available to the Company or that it will be obtained on terms favorable to the Company or will provide the Company with sufficient funds to meet its objectives. Should we raise additional funds through the issuance of equity, equity-related or debt securities, these securities may have rights, preferences or privileges (including registrations rights) senior to those of the rights of our Common Stock and our stockholders will experience additional dilution.

The stock market in general,general and the Nasdaq Global Market and biotechnology companies in particular, havehas experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Securities class action litigation has often been instituted against companies following periods of volatility in the market price of a company’s securities. For example, in November 2023, a purported stockholder filed a lawsuit against us and certain of our officers captioned Sporn v. Brainstorm Cell Therapeutics, Inc. et al. in the U.S. District Court for the Southern District of New York, and in February 2024, March 2024, and April 2024, four derivative actions were filed in the same court, consolidated and captioned In Re Brainstorm Cell Therapeutics, Inc. Derivative Litigation (see “Item 3. Legal Proceedings” for a more detailed description of these matters). We could also be subject to other types of litigation, which may involve claims of breach of fiduciary duties by our directors or officers for misuse/mismanagement of company assets/resources or conflicts of interest. Any such litigation, if instituted, could result in substantial costs and a diversion of management’s attention and resources, which would harm our business, operating results, or financial condition.

The therapeutic treatment development and regulatory approval process is expensive, uncertain and time-consuming. As part of the regulatory process, we conduct clinical trials, for our NurOwn® stem cell therapy to demonstrate safety and efficacy in humans to meet the requirements of the FDA and regulatory authorities in other countries. We have completed our Phase 3 ALS trial and announced on February 2021 that the FDA concluded from their initial review that the current level of clinical data does not provide the threshold of substantial evidence that FDA is seeking to support a BLA. On November 10, 2022, we announced that we had received ana RTF letter from the FDA regarding our BLA. The FDA indicated that we could request a Type A meeting to discuss the content of the RTF letter, and the Type A meeting was held on January 11, 2023. We notified the FDA on February 6, 2023 of our decision to request the FDA to file the NurOwn® BLA for ALS over Protest. We submitted an amendment to our BLA on March 7, 2023, in which we responded to the majority of the items included in the RTF letter. Written notification was received on March 22, 2023 from the FDA project manager associated with the BLA confirming the FDA’s decision to grant an ADCOM for the NurOwn® BLA for ALS. On September 27, 2023, we announced that the Advisory Committee voted, with 17 voting no, one voting yes, and one abstention, that NurOwn® did not demonstrate substantial evidence of effectiveness for treatment of mild to moderate ALS. On October 18, 2023, we announced that the FDA invited the Company to request an expedited face-to-face meeting to discuss the path forward for NurOwn® as a treatment for ALS. BrainStorm remains committed to the ALS Community and is actively exploring the next steps in support of NurOwn®, including publication of emerging clinical data and development of a protocol for an additional clinical study. On October 18, 2023 Brainstorm announced that the BLA for NurOwn® would be withdrawn. The BLA was withdrawn on November 3, 2023. The decision to withdraw the BLA was coordinated with the FDA and is viewed by the FDA as a withdrawal without prejudice. On November 20, 2023, we announced that the FDA granted the company a meeting to discuss the regulatory path forward for NurOwn® in ALS. The meeting took place on December 6, 2023. On December 7, 2023, we announced the completion of a productive meeting with the FDA to discuss NurOwn®. The primary objective of the meeting was to discuss plans for a SPA with the FDA on the overall protocol design for a planned Phase 3b registrational trial for NurOwn®. As an outcome of the meeting, BrainStorm will submit relevant documentation as outlined by the FDA to support the SPA. The ultimate goal of the SPA is to secure the FDA’s agreement that critical elements of the overall protocol design (e.g., entry criteria, endpoints, planned analyses) are adequate and acceptable for a study intended to support a future marketing application. On February 23, 2024, we announced that we submitted the SPA request to the FDA for the planned Phase 3b clinical trial of NurOwn® for the treatment of ALS. On April 9, 2024, the Company announced that it received written agreement from the FDA, under a SPA, on the design for a Phase 3b trial of NurOwn (R) in ALS. The SPA agreement with the FDA validates the clinical trial protocol and statistical analysis of the planned Phase 3b trial of NurOwn, demonstrating the Company’s adequacy in addressing objectives that support a future BLA in ALS. On June 26, 2024, the Company announced that it has reached alignment with FDA on the Chemistry, Manufacturing, and Controls (CMC) aspects of Brainstorm’s Phase 3b clinical trial for NurOwn (R), its investigational therapy for ALS.

The novel nature of our autologous stem cell therapy creates significant challenges with regard to product development and optimization, manufacturing, government regulations, and market acceptance. For example, although cell therapy has been available in oncology, the FDA’s experience with mesenchymal stem cell therapies is limited. None have been approved by the FDA for commercial sale in the US, and the pathway to regulatory approval for our stem cell therapies may accordingly be more complex and lengthier.lengthy. As a result, the development and commercialization pathway for our therapies may be subject to increased uncertainty, as compared to the pathway for new conventional drugs.

Adoption of our NurOwn® stem cell therapy for the treatment of patients with ALS, PMS, AD or other neurodegenerative diseases, even if approved, may be slow or limited. If our NurOwn® stem cell therapy does not achieve broad acceptance as a treatment option for ALS, PMS, AD or other neurodegenerative diseases, our business would be negatively impactingimpact our revenue forecast.

None of our stem cell therapies have received regulatory approval for commercial sale .sale.

On August 15, 2022, we announced our decision to submit a BLA to the FDA for NurOwn® for the treatment of ALS. The BLA was filed on September 9, 2022. On November 10, 2022, we announced that we had received ana RTF letter from the FDA regarding our BLA for NurOwn® for the treatment of ALS. The FDA informed us that the BLA is not sufficiently complete to enable a substantive review and that the FDA would therefore not file the BLA. The RTF letter contained a list of topics the FDA provided to BrainStorm as rationale for the BLA file being not sufficiently complete to enable a substantive review. According to the FDA, these reasons included one item related to the trial not meeting the standard for substantial evidence of effectiveness and CMC related items. The FDA indicated that we may request a Type A meeting to discuss the content of the RTF letter. On December 12, 2022, we announced the submission of a Type A meeting request with the FDA to discuss the contents of the RTF letter previously issued by the FDA regarding our BLA for NurOwn® for the treatment of ALS. On December 27, 2022, we announced that the FDA granted a Type A meeting to discuss the contents of the RTF letter previously issued regarding our BLA for NurOwn® for the treatment of ALS. The Type A Meeting was held on January 11, 2023.

Currently, federal agencies in the U.S. are operating under athe continuingFY2026 resolutionConsolidated thatAppropriations Act which is set to expire on September 30, 2025.2026. Without the appropriation of additional funding to federal agencies, our business operations related to our product development activities for the U.S. market could be impacted. The ability of the FDA to review and approve new products, NIH’s and other agencies’ ability to conduct and partner with industry on important research, and CMS’s ability to operate efficiently can be affected by a variety of factors, including government budget and funding levels, the ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory and policy changes. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable. Disruptions at these agencies, including, for example, as a result of the freeze on federal funding announced in January 2025 and other restrictions, such as personnel reductions at agencies such as the FDA, may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary government agencies or may slow or stall planned or ongoing research, which would adversely affect our business.

We rely upon the patent applications filed by Ramot, the technology licensing company of Tel Aviv University, and the license granted to us by Ramot, all in accordance with the Second Ramot Agreement dated as of July 26, 2007. We further agreed under the Second Ramot Agreement that Ramot, in consultation with us, is responsible for obtaining patent protection for technology owned by Ramot and licensed to us. No assurance can be given that the scope of any patent protection granted will exclude competitors or provide us with competitive advantages, that any of the patents that may be issued to us will be held valid if subsequently challenged, or that other parties will not claim rights to or ownership of our patents or other proprietary rights that we hold license to. Furthermore, there can be no assurance that others have not developed or will not develop similar products, duplicate any of our technology or products or design around any patents that have been or may be issued to us or any future licensors. Since patent applications in the United States and in Europe are not disclosed until applications are published, there can be no assurance that others did not first file applications for products covered by our pending patent applications, nor can we be certain that we will not infringe any patents that may be issued to others. Also, we have abandoned our rights to certain patents of Ramot in certain countries in connection with the Letter Agreement by and between us and Ramot dated December 24, 2009, which may limit our ability to fully market our proposed products. All granted patents related to NurOwn® (MSC-NTF cells) manufacturing process are fully assigned to or owned by BrainStorm Cell Therapeutics Ltd.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common shares.stock.

Our European patents and patent applications couldare besubject challengedto challenge in the recently created Unified Patent Court (UPC) for the European Union, that is expected to be fully ratified in 2023.Union. We may decide to opt out our European patents and patent applications from the UPC. However, if certain formalities and requirements are not met, our European patents and patent applications could be challenged for non-compliance and brought under the jurisdiction of the UPC. We cannot be certain that our European patents and patent applications will avoid falling under the jurisdiction of the UPC, if we decide to opt out of the UPC. Under the UPC, a granted European patent would be valid and enforceable in numerous European countries. A successful invalidity challenge to a European patent under the UPC would result in loss of patent protection in those European countries. Accordingly, a single proceeding under the UPC could result in the partial or complete loss of patent protection in numerous European countries, rather than in each validated European country separately as such patents always have been adjudicated. Such a loss of patent protection could have a material adverse impact on our business and our ability to commercialize our technology and product candidates and, resultantly, on our business, financial condition, prospects and results of operations.

This decrease is due to: (i) a decrease of $2,450,000$401,000 in connection withfor costs related to theclinical Phaseactivities 3 Clinical Trialssuppliers; (ii) a decrease of $2,028,000$196,000 in connection with materials and clean room facilities; (iii) a decrease of $1,476,000$38,000 for costs related to payroll expenses and costs related to stock-based compensation expenses and (iv) a decrease of $141,000$132,000 in connection with patens, depreciation and travel costs. This decrease was partially offset by an increase of $291,000 in stock-based compensation expenses, patens, rent and other costs.

General and administrative expenses for the years ended December 31, 20242025 and 20232024 were $7,042,000$5,778,000 and $10,693,000,$7,042,000, respectively. The decrease of $3,651,000$1,264,000 in general and administrative expenses is mainly due to: (i) a decrease of $2,841,000$852,000 in in payroll expenses and (ii) a decrease of $844,000$1,020,000 in the travel costs, consultants, rent costs, depreciationdepreciation, stock costs and costs of our investor relations and public relations activities. This decrease was partially offset by an increase of $34,000$608,000 in stock-based compensation expenses and stock costs.expenses.

Financial expense for the year ended December 31, 20242025 was $77,000$533,000 as compared to financial expenses of $447,000$77,000 for the year ended December 31, 20232024 as a result of interest paid for loans and due to conversion exchange rates that was offset by financial expenses of $169 related to issuance costs of warrants that were classified as a liability in 2023.rates.

To meet its capital needs, the Company is considering multiple alternatives, including, but not limited to, additional public and private sales of its Common Stock and warrants, the exercise of warrants, the issuance of convertible promissory notes, sales of Common Stock via its August 9, 2021 ATM programnotes and other funding transactions. While the Company has been successful in raising financing recently and in the past, there can be no assurance that it will be able to do so in the future on a timely basis on terms acceptable to the Company, or at all. The Company’s common stock has been delisted from the Nasdaq and now trades on the OTCQB Venture Market. Accordingly, the August 9, 2021 ATM may no longer be available for use by the Company.

Net cash provided by financing activities for the year ended December 31, 20242025 was $7,967,000$6,880,000 from sales of common stock under the August 9, 2021 ATM programs andprograms, proceeds from issuanceshort-term ofloans sharesand forwarrants private placement.exercise.

On August 9, 2021, the Company entered into an Amended and Restated Distribution Agreement (the “New Distribution Agreement”) with the Agents pursuant to which the Company may sell from time to time, through the Agents, shares of Common Stock, having an aggregate offering price of up to $100,000,000 (the “August 9, 2021, ATM”). Sales under the August 9, 2021, ATM are to be made by any method permitted by law that is deemed to be an “at the market” offering as defined in Rule 415 promulgated under the Securities Act, including, without limitation, sales made directly on the Nasdaq Capital Market, on any other existing trading market for the Shares, through a market maker or as otherwise agreed by the Company and the Agents. In connection with the New Distribution Agreement, the Company terminated the previous Distribution Agreement and the September 25, 2020, ATM. During the twelvenine months ended DecemberSeptember 31,30, 2024,2025, the Company has sold 1,250,8762,567,940 shares of Common Stock for gross proceeds of approximately $4,485,936$4,472 under the August 9, 2021, ATM.

On August 9, 2021, the Company entered into the New Distribution Agreement with the Agents pursuant to which the Company may sell from time to time, through the Agents, shares of Common Stock, having an aggregate offering price of up to $100,000,000 (the “August 9, 2021, ATM”). Sales under the August 9, 2021, ATM are to be made by any method permitted by law that is deemed to be an “at the market” offering as defined in Rule 415 promulgated under the Exchange Act, including, without limitation, sales made directly on the Nasdaq Capital Market, on any other existing trading market for the Shares, through a market maker or as otherwise agreed by the Company and the Agents. In connection with the New Distribution Agreement, the Company terminated the previous Distribution Agreement and the September 25, 2020, ATM. During the twelvenine months ended DecemberSeptember 31,30, 2024,2025, the Company has sold 1,250,8762,567,940 shares of Common Stock for gross proceeds of approximately $4,485,936$4,472 under the August 9, 2021, ATM.

Our management identified a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement in our annual or interim financial statements will not be prevented or detected and corrected on a timely basis. Our management has concluded that, because of this material weakness, our internal control over financial reporting was not effective as of MarchJune 31,30, 2026. These operational deficiencies related to the Company’s reviews and approvals of the execution of certain short term loan agreements. As a result of the material weakness, the Company’s management, under the supervision of the Audit Committee and with the participation of the Company’s Chief Executive Officer and interim Chief Financial Officer, concluded that the Company’s internal control over financial reporting was not effective as of MarchJune 31,30, 2026.

Although we are working to remedy the ineffectiveness of the Company’s internal control over financial reporting, there can be no assurance as to when the remediation plan will be fully developed and implemented. Until our remediation plan is fully implemented, our management will continue to devote significant time, attention and financial resources to these efforts. If we do not complete our remediation in a timely fashion, or at all, or if our remediation plan is inadequate, there will continue to be an increased risk that our future consolidated financial statements could contain errors that will be undetected. Further and continued determinations that there are one or more material weaknesses in the effectiveness of the Company’s internal control over financial reporting could also reduce our ability to obtain financing or could increase the cost of any financing we obtain and require additional expenditures of both money and our management’s time to comply with applicable requirements. For more information relating to the Company’s internal control over financial reporting, the material weakness that existed as of MarchJune 31,30, 2026 and the remediation activities undertaken by us, see Part I, Item 4, “Controls and Procedures” of this Quarterly Report on Form 10-Q.

On August 15, 2022, we announced our decision to submit a Biologics License Application (“BLA”) to the U.S. Food and Drug Administration (“FDA”) for NurOwn® for the treatment of ALS. On September 9, 2022, we filed a BLA to the FDA for NurOwn® for the treatment of ALS. On November 10, 2022, we announced that we had received a refusal to file (“RTF”) letter from the FDA regarding our BLA. The FDA indicated that we may request a Type A meeting to discuss the content of the RTF letter. On December 12, 2022, we announced the submission of a Type A meeting request with the FDA to discuss the contents of the RTF letter previously issued by the FDA regarding the BLA for NurOwn® for the treatment of ALS. On December 27, 2022, we announced that the FDA granted a Type A meeting to discuss the contents of the RTF letter previously issued regarding our BLA for NurOwn® for the treatment of ALS. The Type A Meeting was held on January 11, 2023. The perspective shared by the FDA review team reflected what was in the previously issued RTF letter. Conversations with the FDA on the best pathway to resolve the outstanding questions that remained continued, following the Type A meeting. During these discussions, Brainstorm was presented with multiple options to return the BLA to regulatory review, which included the regulatory procedure to File over Protest. Additionally, within these discussions, the FDA committed to review amendments that were filed to address items raised in the RTF letter. These discussions resulted in Brainstorm requesting the FDA to File over Protest, as this was the regulatory procedure that would allow us to reach an FDA Advisory Committee (“ADCOM”) in the shortest amount of time. Brainstorm notified the FDA on February 6, 2023 of our decision to request the FDA to File over Protest the NurOwn® BLA for ALS. We received confirmation from the FDA that the BLA was re-filed on February 7, 2023. We received the FDA Type A meeting minutes on February 9, 2023. We submitted an amendment to our BLA on March 7, 2023, in which we responded to the majority of the items included in the RTF letter. Written feedback was received on March 22, 2023, from the FDA project manager associated with the BLA confirming the FDA’s decision to grant an ADCOM for the NurOwn® BLA for ALS. On March 27, 2023, we announced that the FDA will hold an ADCOM to discuss the company’s BLA for NurOwn® for the treatment of ALS. On June 6, 2023, we announced that the advisory committee meeting has beenwas scheduled for September 27, 2023. On September 22, 2023, we submitted an amendment to our BLA to revise the indication to NurOwn® for the treatment of mild to moderate ALS. On September 27, 2023, we announced that the Advisory Committee voted, with 17 voting no, one voting yes, and one abstention, that NurOwn® did not demonstrate substantial evidence of effectiveness for treatment of mild to moderate ALS. On October 18, 2023, we announced that FDA invited the Company to request an expedited face-to-face meeting to discuss the path forward for NurOwn® as a treatment for ALS. Brainstorm remains committed to the ALS Community and is actively exploring the next steps in support of NurOwn®, including publication of emerging clinical data and development of a protocol for an additional clinical study. On October 18, 2023 Brainstorm announced that the BLA for NurOwn® would be withdrawn. The BLA was withdrawn on November 3, 2023. The decision to withdraw the BLA was coordinated with FDA and is viewed by FDA as a withdrawal without prejudice. On November 20, 2023, we announced that the FDA granted the company a meeting to discuss the regulatory path forward for NurOwn® in ALS. The meeting took place on December 6, 2023. On December 7, 2023, we announced the completion of a productive meeting with the FDA to discuss NurOwn®. The primary objective of the meeting was to discuss plans for a Special Protocol Assessment (“SPA”) with FDA on the overall protocol design for a planned Phase 3b registrational trial for NurOwn®. The ultimate goal of the SPA is to secure the FDA’s agreement that critical elements of the overall protocol design (e.g., entry criteria, endpoints, planned analyses) are adequate and acceptable for a study intended to support a future marketing application. On February 23, 2024, we announced that we submitted the SPA request to the FDA for the planned Phase 3b clinical trial of NurOwn® for the treatment of ALS. On April 9, 2024, the Company announced that it received written agreement from the FDA, under a SPA, on the design for a Phase 3b trial of NurOwn® in ALS. The SPA agreement with the FDA validates the clinical trial protocol and statistical analysis of the planned Phase 3b trial of NurOwn, demonstrating the Company’s adequacy in addressing objectives that support a future BLA in ALS. On June 26, 2024, the Company announced that it has reached alignment with FDA on the Chemistry, Manufacturing, and Controls (“CMC”) aspects of Brainstorm’s Phase 3b clinical trial for NurOwn (R), its investigational therapy for ALS. This Type C meeting builds upon the positive momentum established in April 2024, when the FDA granted BrainStorm a SPA agreement for its NurOwn Phase 3b trial. Our wholly owned Israeli subsidiary, Brainstorm Cell Therapeutics Ltd. (“Israeli Subsidiary”), holds exclusive rights to commercialize NurOwn® technology through a licensing agreement with Ramot, the technology transfer company of Tel Aviv University, Israel.

As of November 1, 2023, the Company optimized its manufacturing capabilities, particularly in the production of NurOwn®, by strategically leveraging partnerships and optimizing operational resources. The Company currently leases a GMP-certified cleanroom manufacturing center located at Sourasky Hospital, which serves as a critical hub for the production and distribution of NurOwn®. This facility significantly enhances the Company’s capacity to manufacture and distribute NurOwn® within both the European Union (EU) and local Israeli markets.

The Company,Company had previously worked collaboratively with theTel Aviv Sourasky Hospital,Medical Center to treat ALS patients with NurOwn®, under the Israel Hospital Exemption (“HE”) regulatory pathway for Advanced Therapy Medicinal Products (“ATMP”), which was adopted by the Israeli MoH from the EMA regulation. Between the first quarter of 2019 and the fourth quarter of 2020, the Company enrolled and treated 12 ALS patients with NurOwn®, under the HE pathway. The Company received $3.4 million in gross proceeds in connection with the treatment of the aforementioned patients, which did not cover the costs of the trial. The remaining cost associated with the HE pathway were paid by Brainstorm.

For the period from inception (September 22, 2000) until MarchJune 31,30, 2026, we did not generate any revenues from operations. In addition, we incurred operating costs and expenses of approximately $2,046,000$3,613,000 during the quarterthree months ended MarchJune 31,30, 2026.2026, compared to $2,573,000 during the three months ended June 30, 2025. We incurred operating costs and expenses of approximately $5,659,000 during the six months ended June 30, 2026, compared to $5,662,000 during the six months ended June 30, 2025.

Our business model calls for significant investments in research and development. Our research and development expenditures, net in the quarterthree months ended MarchJune 31,30, 2026 were $762,000,$963,000, a decrease of $542,000$157,000 compared to $1,304,000$1,120,000 for the quarterthree months ended MarchJune 31,30, 2025.

This decrease is due to: (i) a decrease of $279,000$39,000 for costs related to payroll expenses and stock-based compensation expenses, and (ii) a decrease of $311,000$386,000 in connection with clinical activities suppliers, materials, depreciation, patentsrent and other costs. This decrease was partially offset by (i) an increase of $48,000$268,000 for costs related to patents, travel costs.costs and stock-based compensation expenses.

General and administrative expenses for the quartersthree months ended MarchJune 31,30, 2026 and June 30, 2025 were $1,284,000$2,650,000 and $1,785,000,$1,453,000, respectively. The decrease of $501,000increase in general and administrative expenses of $1,197,000 is mainlyprimarily due to: (i) a decrease of $501,000 for costs related to payroll expenses andincreased stock-based compensation expenses, and (ii) a decrease of $112,000 in rent costs, costs of our investor relations and public relations activities consultants and stock costs.expenses. This decreaseincrease was partially offset by ana increase of $112,000decrease in consultantsand expenses.stock management costs, in payroll, PR activities, rent costs, depreciation and consultants’ costs.

Financial expense for the quarterthree months ended MarchJune 31,30, 2026 was $81,000 as$242,000 compared to financial incomeexpense of $46,000$330,000 for the quarterthree months ended MarchJune 31,30, 2025. The change was primarily attributable to fluctuations in foreign currency exchange rates and increased interest expense associated with the Company’s outstanding loan obligations.

Net loss for the quarterthree months ended Marchon 31,June 30, 2026 was $2,127,000, as$3,855,000, compared to a net loss of $2,864,000$2,903,000 for the quarterthree months ended MarchJune 31,30, 2025. Net loss per share for the quarterthree months ended MarchJune 31,30, 2026 and March 31, 2025 was $0.19$0.35 and $0.45,$0.34, respectively.

The weighted average number of shares of Common Stock used in computing basic and diluted net loss per share for the quarterthree months ended MarchJune 31,30, 2026 was 11,034,77511,034,775, compared to 6,342,0028,620,400 for the quarterthree months ended MarchJune 31,30, 2025.

Since inception, the Company has financed its operations primarily through public and private sales of its Common Stock and warrants, the exercise of outstanding warrants, the issuance of convertible promissory notes, sales via the ATM programs and through various grants. At MarchJune 31,30, 2026 cash, cash equivalents and restricted cash amounted to $206,000. Subsequent to March 31, 2026, in May 2026, the Company received aggregate gross proceeds of $200,000 from the closing of two separate private placement transactions described under “Recent Financing Activities” below, which proceeds further supplemented the Company’s cash position.$209,000.

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2026 was $1,320,000.$2,215,000. Cash used for operating activities was primarily attributed to cost of clinical trials, rent of clean room and materials for clinical trials, payroll costs, rent, outside legal fee expenses and public relations expenses.

Net cash provided by financing activities for the threesix months ended MarchJune 31,30, 2026 was $1,250,000$2,148,000 from sales of common stock under the private placement and proceeds from short-term loans.

In February 2026, the Company entered into twothe separateFebruary Securities2026 Purchase Agreements (the “Agreements”) for the issuance of securities in private placement transactions, seeking to raise aggregate gross proceeds of up to $2,000,000. Under the terms of both February 2026 Purchase Agreements, investors are purchasingpurchased units consisting of Common Stock at a purchase price of $0.60 per share, or February 2026 Pre-Funded Warrants at a purchase price of $0.59995 per warrant (with an exercise price of $0.00005 per share) to comply with beneficial ownership limitations. In connection with these placements, the Company is also issuingissued February 2026 Common Warrants exercisable for a number of shares equal to 120% of the purchased units at an exercise price of $1.00 per share, subject to standard anti-dilution adjustments. By May 14, 2026, the Company had raised $1.125 million under these agreements.

In May 2026, the Company entered into two separate Securities Purchase Agreements (collectively, the “May 2026 SPAs”) with two accredited investors for the issuance of securities in private placement transactions, resulting in aggregate gross proceeds to the Company of $200,000. Under the terms of the May 2026 SPAs, the investors purchased an aggregate of 210,526 shares of Common Stock at a purchase price of $0.95 per share. In connection with these placements, the Company also issued May 2026 Common Warrants exercisable for an aggregate of 252,630252,631 shares of Common Stock, representing 120% of the Sharesshares purchased, at an exercise price of $1.45 per share, exercisable immediately and expiring five (5) years from the date of issuance, subject to standard anti-dilution adjustments. The Company intends to use the net proceeds from the May 2026 SPAs for working capital and general corporate purposes.

We expect that we will continue to generate losses from the clinical development and regulatory activities, which will result in a negative cash flow from operating activity. IfHaving we are grantedreceived an SPA with the FDA, additional capital raiseraises will be needed to conduct a Phase 3b trial in ALS, to commercialize NurOwn® for ALS, and for future trials that may be needed for other indications. The actual amount of cash that the Company will need to operate is subject to many factors, including, but not limited to, the timing, design and conduct of clinical trials for our product candidates, along with cost to commercialize these product candidates.

While our significant accounting policies are described in more detail in the notes to our auditedunaudited consolidated financial statements appearing elsewhere in this Quarter Report on Form 10-Q we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.