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

As of December 31, 2024,2025, our cash and cash equivalents were approximately $0.02$0.05 million and we had a negative working capital of $0.7$1.435 million and an accumulated deficit deficit of $8.89$10.2 million. Based upon our currently expected level of operating expenditures, we expect that our existing cash and cash equivalents equivalents will only be sufficient to fund operations through the secondend of third quarter of 2025.2026. In addition, our operating plans may change as a result of many factors that may currently be unknown to us, and we may need to seek additional funds sooner than planned. Our future funding requirements will depend on many factors, including but not limited to:

Reduced funding for the FDA and other government agencies and/or potentially shifting priorities under the newTrump administrationAdministration could hinder the FDA’s and/or those other government agencies’ ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner, or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

We currently hold no issued patents on our products, and our business employs proprietary technology (know-how) and information may be difficult to protect and/or infringe on the intellectual intellectual property rights of third parties.

Raphael hascurrently holds no issued patents and therefore, as a result of the Share Exchange, we did not acquire any patents. As such, we currently rely on trade secrets, proprietary proprietary know-how, and technology methods that we seek to protect, in part, by confidentiality agreements. We cannot assure you that these agreements will not be breached, that we will have adequate remedies for any breach, or that our trade secrets and proprietary know-how will not otherwise become known or be independently discovered by others. WeIn currentlyNovember do2025, notwe, holdjointly patents fromwith the USPTO.Medical Cannabis Research and Innovation Center and Rambam, filed a provisional patent application with the USPTO; however, there is no certainty as to the timing of any provisional applications resulting in issued patents, if at all.

On October 7, 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel. Following the attack, Israel’s security cabinet declared war against Hamas and the Israeli military began to call-up reservists for active duty. AtWhile a ceasefire has since been reached with respect to the sameconflict in time,the Gaza Strip, tensions and becausehostilities ofin the warregion declarationcontinue. againstIn Hamas, March 2026, hostilities in the clashregion betweenfurther Israelescalated, with increased military activity involving Iran and Hezbollah in LebanonLebanon, hasincluding escalatedthe tolaunch anof armedmissiles conflictand other attacks toward Israel, resulting in a multi-front conflict, and there isremains a possibility that itsuch willhostilities turncould expand into a greaterbroader regional conflict in the future.conflict.

As of the date of this Annual Report, there has been no material impact on the Company’s operations. According to the recent guidelines of the Israeli government, the Company’s offices are open and functioning as usual. However, ifthe government is currently imposing restrictions, including limited commercial flight availability, restrictions on movement and workplace activities, including requirements to remain in proximity to protected spaces. The conflict in the warregion willmay escalate and expand further to the Northern border with Lebanon,further, and the Israeli government willmay impose additional restrictions on movement and travel, travel,which may affect and disrupt our management and employees’ ability to effectively perform their daily tasks might be temporarily disrupted, whichand may result in delays in some of our operations.

The requirements associated with being a reporting company will require significant company resources and management attention.

WeIn haveDecember recently2024 we 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.

For this purpose, in October 2022, we entered into an agreement with the Medical Cannabis Research and Innovation Center at Rambam= for the development of a new, patentable formulation formulation that combines purified cannabinoids to treat rheumatoid diseases.

Our general and administrative expenses totaled $614 thousand for the year ended December 31, 2025, representing a decrease of $119 thousand, or 16.23%, compared to $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, 2023.2024. The decrease was primarily attributable to lowerdecrease in professional servicesservice fees.

Net cash used in operating activities was $532$210 thousand for the year ended December 31, 2024,2025, compared with net cash used in operating activities of $1,203$532 thousand for the year ended December 31, 2023.2024. The $671$322 thousand decrease in the net cash used in operating activities during 2024,2025, compared to 2023,2024, was mainly fromdue to a lower investment in development activity.

Net cash used in investing activities for the year ended December 31, 20242025 was $0 compared to $0 thousand for the year ended December 31, 2023.2024.

Net cash provided by financing activities for the year ended December 31, 20242025 was $321$236 thousand compared to $1,145$321 thousand for the year ended December 31, 2023.2024. The decreaseincrease of $824$115 thousand in net cash provided by financing activities during 20242025 compared to 20232024 was mainlyprimarily dueattributable to lowerproceeds from financing activitya inloan 2024.from a related party.

As of December 31, 2024,2025, our cash and cash equivalents were $19 thousand.$45. We believe that our existing cash and cash equivalents will be sufficient to fund our projected cash cash requirements through the secondthird quarter of 2025.2026. Therefore, we will require significant additional financing in the near future to fund fund our operations. We currently anticipate that we will require approximately $500$1 thousandmillion for research and development activities over the course of the next 12 months. We also anticipate that we will require approximately $700$1 thousandmillion for capital expenditures over such 12-month period, which consists primarily of expenditures for clinical trials and general Company operating costs.

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 2025.2024.

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.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 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.

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 2024.2024, 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 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$57,000). The outstanding balance is approximately $298,000 (based on the NIS-USD exchange rate on December 31, 2025).

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 expirewere onexercised Aprilin 30,November 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.2025.

We do not believe that our off-balance sheet arrangements and commitments have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that isare material to investors.

On May 14, 2021, Raphael Pharmaceutical Ltd., an Israeli company, and Easy Energy, Inc., a Nevada corporation, completed a share exchange agreement, or the Share Exchange, pursuant to which the shareholders of Raphael Pharmaceutical Ltd. became the holders of 90% of the issued and outstanding share capital of Easy Energy, Inc., while Easy Energy, Inc.’s shareholders hold, following the share exchange, 10% of Easy Energy, Inc. On May 19, 2021, as agreed by the parties to the Share Exchange, Easy Energy, Inc. changed its name to Raphael Pharmaceutical Inc. Unless otherwise mentioned or unless the context requires otherwise, when used in this Quarterly Report, the terms “Raphael,” “Company,” “we,” “us,” and “our” refer to Raphael Pharmaceutical Inc. and its subsidiary, Raphael Pharmaceutical Ltd., or Raphael Israel. References to Easy Energy are to Easy Energy, Inc. Unless otherwise mentioned or unless the context requires otherwise, the information provided in this Quarterly Report on Form 10-Q relates to Raphael Israel.

This Quarterly Report on Form 10-Q 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 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:

We are a pharmaceutical drugresearch research and development company focused on the discovery and clinical development of life-improving drug therapies based on cannabinoids,purified cannabinoids. includingOur cannabidiol,lead rheumatoid arthritis, or CBD,RA, oil.formulation Unlessand indicatedour otherwise,RaphaWell weproduct planare based on using98% purified cannabigerol, or CBG, formulated with sesame oil derived from CBD strains with low levels of Tetrahydrocannabinol, or THC. All references toas the use of CBD in our product candidates refer to CBD strains with less than 0.3% of THC.carrier.

In addition, we are aiming to develop a novel treatment for asthma. At Rambam Health Care Campus, Rambam Med-Tech Ltd., or 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.

In April 2024 we began the Study in the U.S., leveraging insights from the pre-clinical experiments we have conducted at the Rambam. ThisThe Study aimedevaluated to evaluate the Company’s purified Cannabinoid basedCBG-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 Institutional Review Board, or IRB, approval,approval and in complianceaccordance with applicable FDA regulations and in accordance with applicable industry standards andgoverning regulations.the Study. An IRB is an appropriately constituted group that has been formally designated to review and monitor biomedical research involving human subjects.

In August 2025, we announced the completion of product development and the launch of our proprietary natural formula under the “RaphaWell” brand for RA support in the U.S. This followsfollowed the successful completion of a clinical trialstudy conducted under IRB approval and is in full compliance with FDA regulations,approval, including participants with severe RA. The finalized “RaphaWell” productformulation consists of 98% purified CBG with sesame oil as the carrier and is intended to be sold as a standalonestandalone, clinically tested dietary supplement targeting the growing wellness market. The “RaphaWell” formulaformulation is 100%plant-derived natural, plant-based, and was associated with no reported side effects during the Study,Study. addressing a significant unmet need in RA symptom management. Raphael’s “RaphaWell” formula has undergone clinical testing,testing whichin tothe ourStudy belief,described provedabove; itsthese credibilitystudy andresults efficacy.do not constitute FDA approval of RaphaWell as a drug.

In November 2025, we, jointly with the Medical Cannabis Research and Innovation Center and Rambam, filed a provisional patent application with the USPTO titled “Raphael Pharmaceutical, Inc. / Rambam MedTech Formula for Treating Neutrophil-Dominant Autoimmune Diseases (including RA)” (Application No. 63/911,729). The application coversis directed to the use of oura formulation centered on highly purified cannabinoid-basedCBG technologyand platformsesame oil in the treatment ofconnection with neutrophil-dominant autoimmune diseases, including our lead productRA candidate for RA,program, as well as psoriatic arthritis, inflammatory bowel disease, systemic systemic lupus erythematosus with neutrophil involvement, and gout.

Our vision is to emerge as a pioneering company at the forefront of formulatingdeveloping pharmaceutical drugsand wellness formulations that harness the potential of purified cannabinoids CBG and full-spectrum CBDrelated oil.cannabinoid science. Our primary mission is to cater to theaddress unmet medicalneeds requirements of patients grapplingassociated with variousinflammatory disorders,conditions, with a particular focus on conditions linked to inflammation, such as autoimmune diseases, asthma, RAdiseases and COVID-19.RA.

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 on immune cells whichthat induce acute inflammation. This studywork willbegan begin inat the pre-clinical level in immune cell models and, subjectfollowing to positive results that exhibitfindings showing downregulation of pro-inflammatory cytokines by cannabis extract, the studycytokines, was completed successfully. Following the completion of the pre-clinical study, a mice mouse model was conducted to analyze for acute inflammation,inflammation which resemblesresembling the immunopathology of COVID-19. The micemouse model was successfully completed completed, and we have registered for a clinical trial in patients with the MOH.As MOH. As a pharmaceutical research and clinical development companycompany, we do not own or operate, and currently do not intend onto creatingcreate, 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 onto cooperating cooperate with manufacturers and other third parties to manufacture and commercialize approved pharmaceutical drug products.

Our financial statements are prepared in accordance with U.S. GAAP. There are no critical accounting estimates for the years ended December 31, 2025, and 2024. Also, please see Note 2 of Part I, Item 1 of this Quarterly Report on Form 10-Q for the summary of significant accounting policies.

Three months ended MarchJune 31,30, 2026, compared compared to the three months ended MarchJune 31,30, 2025

Revenues. We had no revenuerevenues during the three months ended MarchJune 31,30, 2026, and MarchJune 31,30, 2025.

Research and Development Expenses. Our research and development expenses totaled $37,000$40,000 for the three months ended MarchJune 31,30, 2026, representing a decrease of $35,000,$101,000, or 49%,72%, compared to $72,000$141,000 for the three months ended MarchJune 31,30, 2025. The decrease was primarily attributable to a decrease in ourCTO chiefservice Technologyexpenses Officer'sand compensation.expenses due to the research agreement with Rambam.

General and Administrative Expenses. Our general and administrative expenses totaled $186,000$159,000 for the three months ended MarchJune 31,30, 2026, representing a decrease of $167,000,$15,000, or 47%,9%, compared to $353,000$174,000 for the three months ended MarchJune 31,30, 2025. The decrease was primarily due to a decrease in shareprofessional basedservices compensationin paidthe tosecond a director.quarter.

Operating Loss. Our operating loss totaled $223,000$199,000 for the three months ended MarchJune 31,30, 2026, representing a decrease of $202,000,$116,000, or 48%,37%, compared to $425,000$315,000 for the three months ended MarchJune 31,30, 2025. The decrease was primarily due to athe decrease in our research and development expenses,expenses and a decrease in our general and administrative costs.expenses.

Financial expense,Expense, net. We recognized financial expense, net, of $6,000$24,000 for the three months ended MarchJune 31,30, 2026, representing an increase of $2,000,$17,000, or 243%, 50%, compared to financial expense, netnet, of $4,000$7,000 for the three months ended MarchJune 31,30, 2025. The Companyincrease considerswas theprimarily increasedue to bea risk premium immaterial.expense on a loan from a related party and exchange-rate differences.

Net Loss. As a result of of the foregoing, our net loss totaled $229,000$223,000 for the three months ended MarchJune 31,30, 2026, representing a decrease of $200,000,$99,000, or 47%,31%, compared compared to $429,000$322,000 for the three months ended MarchJune 31,30, 2025. The decrease was primarily due to a decreasedecreases in our research and development expenses expenses and a decrease in our general and administrative costs.expenses, partially offset by higher financial expense.

Since inception, we have funded our operations primarily through our founder’s capital and capital received from Easy Energy, Inc. As of MarchJune 31,30, 2026, we had $1,000 $1,000 in cash and cash equivalents,equivalents and have invested most of our available cash funds in ongoing cash accounts.

Net cash used in operating activities was $44,000 for the three-monthssix months period ended MarchJune 31,30, 2026, compared with net cash used in operating activities of $209,000$239,000 for the corresponding period in 2025. The $195,000 decrease in the net cash used in operating activities during the three-monthssix months period ended March 31,June 30, 2026, compared to the same period in 2025, was primarily due to a decrease in our net loss,loss offsetfor bythe eliminatingperiod sharein basedthe compensationamount of and$299,000, an increase in account payables.payables and accrued expenses in the amount of $60,000, an increase in account payables of related parties in the amount of $28,000 and offset by a decrease in Share-based payment in exchange for services in the amount of $205,000.

There was no net cash used in investing activities for the threesix months period ended MarchJune 31,30, 2026 and for the same period in 2025.

There was no netNet cash used inprovided by financing activities for the threesix months period ended MarchJune 31,30, 2026 was $0 compared to $240,000 for the same period in 2025. The decrease in net cash provided by financing activities during the threesix months period ended MarchJune 31,30, 20262026, compared to the corresponding period in 20252025, was wasmainly due to a decrease in funds received from issuance of common stockshares and warrants.

During the Period ended MarchJune 31,30, 2025,2026, we accrued an aggregate amount of NIS 9.620.1 thousand. As of MarchJune 31,30, 2026, the remaining balance is NIS 116.7127.2 thousand ($42.7 ($37 thousand, based on the NIS-USD exchange rate on MarchJune 31,30, 2026).

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). As of the date of this Quarterly Report, the outstanding balance is approximately $300,000$319,000 and VAT (based on the NIS-USD exchange rate on MarchJune 31,30, 2026).

As of MarchJune 31,30, 2026, our cash cash and cash equivalents were $1,000. We believe that our existing cash and cash equivalents will not be sufficient to fund our projected cash requirements through the third quarter of 2026. Therefore, we will require significant additional financing in the near future to fund our operations. We currently anticipate that we will require approximately $1 million for research and development activities over the course of the next 12 months. We also anticipate that we will require approximately $1 million for capital expenditures over such 12-month period, which consists primarily of expenditures foradditional clinical trialsdevelopment, commercialization preparation and general Company operating costs.costs over such 12-month period.