NLS Pharmaceutics Ltd. and Kadimastem Ltd. Announce the Initial Closing of $500,000 of the Previously Announced $1 Million Fundraising by NLS Following its Extraordinary General Meeting at a Share Price of $3.10, Representing 48% Above the Market Share Price as of Jan 6, 2025

Rhea-AI Summary

NLS Pharmaceutics (NLSP) announced the initial closing of $500,000 from a previously announced $1 million financing agreement with an accredited investor. The shares were priced at $3.10, representing a 48% premium above the market closing price as of January 6, 2025. This financing, combined with a previous $3.2 million investment from October 2024, supports the proposed merger with Kadimastem

The financing agreement, dated December 4, 2024, involves no warrants and received approval at NLS's extraordinary general meeting on January 7, 2025. NLS has filed an F-4 Registration Statement with the SEC detailing the proposed merger with Kadimastem, which aims to create a combined Nasdaq-traded biotechnology company focusing on advanced clinical-stage product candidates.

Positive

• Secured financing at $3.10 per share, a 48% premium to market price
• Successfully closed initial $500,000 of $1M financing with no warrant dilution
• Previous $3.2M investment secured in October 2024
• Progress towards merger with Kadimastem to create larger Nasdaq-listed entity

Negative

• Only partial closing of planned $1M financing achieved ($500,000)
• Merger completion still pending regulatory and shareholder approvals

Insights

Financial Analyst

The $500,000 initial closing at a premium price of $3.10 per share (48% above market) demonstrates strong investor confidence in the NLS-Kadimastem merger proposition. This structured financing approach, following the earlier $3.2M investment, strategically strengthens NLS's balance sheet ahead of the merger. The absence of warrants in this deal is particularly noteworthy, as it prevents future dilution and suggests investors' belief in the inherent value proposition. The premium pricing signals positive market sentiment regarding the combined entity's potential in advanced clinical-stage therapeutics. The merger aims to create a diversified portfolio spanning CNS disorders and cell therapy, potentially reducing investment risk through multiple revenue streams. However, investors should note that the relatively small market cap and financing amount indicate this remains a highly speculative investment requiring careful risk assessment.

Biotech Research Analyst

The strategic merger between NLS Pharmaceutics and Kadimastem represents a significant portfolio diversification play, combining NLS's CNS disorder expertise with Kadimastem's cell therapy platform. The combined entity would possess a broader therapeutic reach, spanning both traditional drug development and cutting-edge cell therapy approaches. Kadimastem's "off-the-shelf" allogeneic cell products for neurodegenerative diseases and diabetes present particularly compelling market opportunities, especially given the growing demand for scalable cell therapy solutions. The premium-priced investment suggests sophisticated investors see substantial value in this therapeutic combination. However, the execution risk remains high, as both companies are still in clinical stages. The successful integration of two different therapeutic approaches will be important for realizing the merger's potential value.

ZURICH and NESS ZIONA, Israel, Jan. 8, 2025 /PRNewswire/ -- NLS Pharmaceutics Ltd. ("NLS") (Nasdaq: NLSP), a Swiss clinical-stage biopharmaceutical company focused on the discovery and development of innovative therapies for rare and complex central nervous system disorders, and Kadimastem Ltd. ("Kadimastem") (TASE: KDST), a clinical-stage cell therapy company developing and manufacturing "off-the-shelf" allogeneic cell products for the treatment of neurodegenerative diseases and potential cure of diabetes, announce the successful completion of the initial closing of $500,000 of the previously announced $1 million financing between NLS and an accredited investor under a securities purchase agreement dated December 4, 2024, with the approval of certain items in NLS's extraordinary general meeting on January 7, 2025. As previously detailed in NLS's Report on Form 6-K submitted to the Securities and Exchange Commission on December 4, 2024, this agreement involved no warrants and was executed at a share price of $3.10, representing 48% above the NLS market closing share price as of Jan 6, 2025, the last trading day prior to the date of the NLS's extraordinary general meeting.

This financing, along with the previously announced $3.2 million investment in NLS dated October 2024, is an important step in facilitating the previously announced proposed merger with Kadimastem, which aims to create a combined Nasdaq-traded biotechnology company with product candidates in advanced stages of clinical development.

Additionally, as previously announced, NLS recently filed an F-4 Registration Statement with the U.S. Securities and Exchange Commission (SEC), outlining the details of a proposed merger with Kadimastem. The company intends to convene an extraordinary general meeting to secure the necessary approvals for the merger as part of the closing process.

"With the successful completion of the initial portion of the fundraising, we are further bolstering our capacity to complete the merger with Kadimastem, which we believe will enhance our strategic position in the biotechnology sector," stated Alex Zwyer, Chief Executive Officer of NLS. "We are enthusiastic about the opportunities ahead and remain committed to delivering value to our shareholders and making a significant impact in patient care."

Ronen Twito, Executive Chairman and Chief Executive Officer of Kadimastem, stated, "The successful completion of this financing of NLS marks a significant advancement in our journey toward merging with NLS Pharmaceutics. This funding not only demonstrates confidence in our strategic direction but also positions us to create a powerful new entity in the biotechnology sector. We are excited about the enhanced opportunities this merger will unlock for our shareholders and our commitment to advancing innovative therapies in cell therapy and neuroscience."

About NLS Pharmaceutics Ltd.

NLS is a global development-stage biopharmaceutical company, working with a network of world-class partners and internationally recognized scientists, focused on the discovery and development of innovative therapies for patients with rare and complex central nervous system disorders who have unmet medical needs. Headquartered in Switzerland and founded in 2015, NLS is led by an experienced management team with a track record of developing and commercializing product candidates. For more information, please visit www.nlspharma.com.

About Kadimastem

Kadimastem is a clinical stage cell therapy company, developing "off-the-shelf", allogeneic, proprietary cell products based on its technology platform for the expansion and differentiation of Human Embryonic Stem Cells (hESCs) into functional cells. AstroRx®, the company's lead product, is an astrocyte cell therapy in clinical development for the treatment for ALS and in pre-clinical studies for other neurodegenerative indications.

IsletRx is the company's treatment for diabetes. IsletRx is comprised of functional pancreatic islet cells producing and releasing insulin and glucagon, intended to treat and potentially cure patients with insulin-dependent diabetes. Kadimastem was founded by Professor Michel Revel, Chief Scientific Officer of Kadimastem and Professor Emeritus of Molecular Genetics at the Weizmann Institute of Science. Professor Revel received the Israel Prize for the invention and development of Rebif®, a multiple sclerosis blockbuster drug sold worldwide. Kadimastem is traded on the Tel Aviv Stock Exchange (TASE: KDST).

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Safe Harbor Statement

This press release contains expressed or implied forward-looking statements pursuant to U.S. Federal securities laws. For example, NLS and Kadimastem are using forward-looking statements when they discuss the expected closing of the transaction and the potential benefits of the transaction to NLS and Kadimastem and their respective shareholders, as well as the expected strategic position of the combined company following the merger, if completed. These forward-looking statements and their implications are based on the current expectations of the management of NLS and Kadimastem and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements:  risks related to the companies' ability to complete the merger on the proposed terms and schedule, including risks and uncertainties related to the satisfaction of the closing conditions related to the merger agreement and risks and uncertainties related to the failure to timely, or at all, obtain shareholder approvals for the transaction; unexpected costs, charges or expenses resulting from the transaction and potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed merger; changes in technology and market requirements; either or both companies may encounter delays or obstacles in launching and/or successfully completing their clinical trials; the companies' products may not be approved by regulatory agencies; their technologies may not be validated as they progress and their methods may not be accepted by the scientific community; either of both of the companies may be unable to retain or attract key employees whose knowledge is essential to the development of their products; unforeseen scientific difficulties may develop with the products being advanced by the companies; their products may wind up being more expensive than anticipated; results in the laboratory may not translate to equally good results in real clinical settings; results of preclinical studies may not correlate with the results of human clinical trials; the companies' patents may not be sufficient; their products may harm recipients; changes in legislation may adversely impact either or both of the companies; inability to timely develop and introduce new technologies, products and applications; and loss of market share and pressure on pricing resulting from competition, which could cause the actual results or performance of candidate products to differ materially from those contemplated in such forward-looking statements.  Except as otherwise required by law, neither Kadimastem nor NLS undertakes any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. More detailed information about the risks and uncertainties affecting NLS is contained under the heading "Risk Factors" in NLS's annual report on Form 20-F for the year ended December 31, 2023, filed with the Securities and Exchange Commission ("SEC"), which is available on the SEC's website, www.sec.gov, and in subsequent filings made by NLS with the SEC, including under the heading "Risk Factors" in NLS's registration statement on Form F-4, filed with the SEC on December 27, 2024.

No Offer or Solicitation

This communication is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made, except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Additional Information about the Transaction and Where to Find It

In connection with the proposed transaction, NLS has filed a Registration Statement on Form F-4, including a proxy statement/prospectus, with the SEC. NLS may also file other relevant documents with the SEC regarding the proposed transaction. This document is not a substitute for the proxy statement/prospectus or any other document that NLS may file with the SEC. The proxy statement (if and when available) will be mailed or delivered to shareholders of NLS and Kadimastem. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain free copies of the proxy statement/prospectus (if and when available) and other documents containing important information about NLS and Kadimastem and the proposed transaction, once such documents are filed with the SEC through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by the Company will be available free of charge on NLS's website at www.nlspharma.com.

Participants in the Solicitation

NLS, Kadimastem, and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from NLS and Kadimastem shareholders in respect of the proposed transaction. Information about the directors and executive officers of NLS, including a description of their direct or indirect interests, by security holdings or otherwise, is set forth in NLS's Annual Report on Form 20-F for the fiscal year ended December 31, 2023, which was filed with the SEC on May 15, 2024. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC regarding the proposed merger when such materials become available. Investors should read the proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from NLS Pharmaceutics using the sources indicated above.

NLS Contacts:

InvestorRelations@nls-pharma.com
www.nlspharma.com

Kadimastem Contacts:

Sarah Bazak, Investors relations
s.bazak@kadimastem.com
www.kadimastem.com

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SOURCE Kadimastem Ltd.; NLS Pharmaceutics Ltd.

FAQ

What is the premium price of NLSP's latest financing round compared to market price?

The financing was priced at $3.10 per share, representing a 48% premium above NLSP's market closing share price as of January 6, 2025.

How much has NLSP raised in total between October 2024 and January 2025?

NLSP has raised $3.7 million in total, consisting of a $3.2 million investment in October 2024 and the initial $500,000 closing in January 2025.

What is the status of NLSP's merger with Kadimastem?

NLSP has filed an F-4 Registration Statement with the SEC and plans to hold an extraordinary general meeting for merger approvals as part of the closing process.

Are there any warrants included in NLSP's January 2025 financing?

No, the financing agreement dated December 4, 2024, involves no warrants.