Silexion Therapeutics Corp.

11/12/2025 | Press release | Distributed by Public on 11/12/2025 08:01

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Introductory Note
The following discussion and analysis of our financial condition and results of operations (this "MD&A") should be read in conjunction with the financial statements and the related notes included elsewhere in this quarterly report. Some of the information contained in this discussion and analysis or set forth in this quarterly report, including information with respect to our plans, objectives, expectations, projections, and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in "Part II. Other Information- Item 1.A. Risk Factors" of this quarterly report, our actual results could differ materially from the results described in or implied by these forward-looking statements. See also the section entitled "Special Note Regarding Forward-Looking Statements" above in this quarterly report.
Unless the context otherwise requires, references to the "Company," "we," "us" and "our" in this MD&A generally refer to: (i) for all periods preceding, and through the Closing of, the Business Combination, Silexion; and (ii) for all periods following the Closing, New Silexion.
Overview
Operations and Financing Activities
We are a Cayman Islands exempted company that was originally formed for the purpose of effectuating the Business Combination and that now serves as a publicly traded holding company for each of Silexion (through which our operations are carried out) and Moringa (which has no operations). Our ordinary shares and warrants were initially listed on the Nasdaq Global Market and were subsequently transferred to the Nasdaq Capital Market, and are quoted for trading under the symbols "SLXN" and "SLXNW", respectively.
We conduct our operations primarily through our principal subsidiary, Silexion, a clinical-stage biotechnology company engaged in the discovery and development of proprietary treatments for cancers driven by mutations in the Kirsten rat sarcoma viral oncogene homolog ("KRAS"). The KRAS gene, when mutated, plays a central role in many cancer types, such as pancreatic, colorectal and lung, and is therefore considered to be an oncogene. This oncogene instructs cells to make the corresponding KRAS protein which has a controlling function in cell growth signaling in the cancer cells. While multiple pharmaceutical companies are pursuing strategies to inhibit the KRAS and thereby limit its downstream signaling, our approach is differentiated by targeting the root cause of oncogenic signaling: we silence the KRAS oncogene itself, preventing the production of the oncogenic protein.
Our proprietary technology is designed to prompt tumor cells to degrade the messenger RNA (mRNA) that bridges the oncogene and the cellular protein synthesis machinery, utilizing small interfering RNA (siRNA) constructs that are chemically modified to enhance stability and cellular uptake while maintaining biological activity that interferes with the mRNA function. Our lead product candidate, SIL204, is a second-generation siRNA engineered to suppress the production' of mutated KRAS proteins. In pancreatic cancer, approximately 92% of patients have this mutated oncogene.
To address both localized and systemic disease, as well as the tumor's dense desmoplastic stroma, which limits the effectiveness of current treatments, our novel delivery approach, which we refer to as an Integrated Treatment Regimen, involves administering SIL204 both directly into the tumor and systemically via subcutaneous injection, in combination with standard-of-care chemotherapy. In a previous Phase 2 clinical trial with our first-generation siRNA, the combination of siRNA and standard-of-care chemotherapy demonstrated an overall survival benefit compared to standard-of-care chemotherapy alone. Building on preclinical advancements and regimen optimization, we believe SIL204 has the potential to further improve clinical outcomes. During the quarter, we continued to advance operational readiness, including the onboarding of external vendors, with the initiation of clinical studies contingent upon obtaining regulatory clearance.
Prior to the Business Combination, Silexion financed its operations primarily with the net proceeds from private offerings of its ordinary shares and convertible preferred shares, convertible financing agreements and Simple Agreement for Future Equity (SAFE) financings, and royalty-bearing grants from the Israeli Innovation Authority (the "IIA"). Those grants totaled $5.8 million through September 30, 2025.
Upon the Closing of the Business Combination, we raised $2.0 million via a private investment in public entity (PIPE) financing, in which Moringa sold to Greenstar, LP, an affiliate of the Moringa sponsor, 1,482 newly issued Moringa ordinary shares at a price of $1,350.00 per share. Those shares were converted into an equivalent number of New Silexion ordinary shares at the Closing. In connection with the Closing, we also entered into the ELOC Agreement with White Lion, which provided us with an ELOC for up to $15.0 million. We utilized the ELOC for financings from time to time during the early periods following the Closing of the Business Combination, having raised an aggregate of $3.1 million from the ELOC through September 30, 2025, all of which was raised prior to December 31, 2024.
During 2025, we have successfully transitioned to alternative financing transactions, having raised capital via (i) public offerings of ordinary shares and/or pre-funded warrants, together with ordinary warrants, as well as (ii) ordinary warrant exercise transactions at the time of, or during periods that followed, those public offerings. We completed public offerings in January 2025 and September 2025, in which we raised gross proceeds of approximately $5.0 million and $6.0 million, respectively, before deducting placement agent fees and other offering expenses. In connection with the closing of the January 2025 public offering, investors exercised an aggregate of 42,683 ordinary warrants issued in the offering, which provided us with additional gross proceeds of $0.9 million. In connection with the closing of the September 2025 public offering, investors exercised an aggregate of 445,000 Series B ordinary warrants issued in the offering, which provided us with additional gross proceeds of $1.78 million. As a follow-up to the first such public offering, later in January 2025 and again at the start of August 2025, we completed transactions for the induced exercise of ordinary warrants, which raised gross proceeds of approximately $3.3 million and $1.8 million, respectively, before deducting placement agent fees and other offering expenses. H.C. Wainwright served as the exclusive placement agent for each of the foregoing public offering and warrant exercise transactions. Each of the foregoing financing transactions is described in further detail below in this MD&A under "Liquidity and Capital Resources."
In September 2025, we furthermore entered into the ATM Agreement with H.C. Wainwright, as sales agent or principal, under which we may raise up to $13,170,000 on an ongoing basis via sales of our ordinary shares into the open market via an at-the-market financing mechanism (an "ATM"), which we plan to use to finance our ongoing operations going forward. No sales of ordinary shares occurred under the ATM during the third quarter of 2025, or up to the date of this quarterly report, due to customary standstill restrictions on subsequent offerings imposed upon us in connection with our September 2025 public offering.
Since our inception, we have incurred significant operating losses. Our net losses were $7.5 million and $3.3 million for the nine months and three months ended September 30, 2025, respectively, and $16.5 million for the year ended December 31, 2024 (in the case of 2024, those losses consisted of Silexion's net losses for all periods through the Business Combination, and the combined company's net losses for all periods afterwards). As of September 30, 2025, we had an accumulated deficit of $50.8 million (reflecting Silexion's accumulated deficit for all periods through August 15, 2024 and the combined company's accumulated deficit from August 16, 2024 through September 30, 2025). We have not recognized any revenue to date.
We expect to continue to incur significant expenses and operating losses for the foreseeable future. The net losses we incur may fluctuate significantly from quarter to quarter. Our expenses will depend on many factors, including the timing and extent of spending to further develop SIL204 and initiate pre-clinical and clinical trials, support research and development efforts, investments in potential additional pipeline products, and increased overall compensation as we continue to hire additional personnel. Our expenses will increase if and as we:
•
apply for Orphan Drug Designation in both the U.S. and EU for our SIL204 product;
•
conduct toxicological studies with respect to SIL204 (which studies have been ongoing);
•
initiate a clinical trial powered for statistical significance with respect to SIL204;
•
seek marketing approvals for SIL204 in various territories;
•
maintain, expand and protect our intellectual property portfolio;
•
hire additional operational, clinical, quality control and scientific personnel;
•
add additional product candidates to our pipeline;
•
add operational, financial and management information systems and personnel, including personnel to support our product development, any future commercialization efforts and our status as a public company; and
•
invest in research and development and regulatory approval efforts in order to utilize our technology as a platform focused on the silencing of the KRAS oncogene using RNA-interference therapeutics.
Continued Nasdaq Listing
As described above in this "Overview" under "Operations and Financing Activities" and as detailed further in "Liquidity and Capital Resources" of this Part I, Item 2 below, our financial condition is dependent upon, and supported by, our ability to fund our operations in an ongoing manner, including via equity financings. Our Nasdaq listing supports that ability, as many potential desirable investors or financing sources would be unwilling to consider an investment in our company on reasonable terms or at all if our ordinary shares and warrants were to be delisted from Nasdaq, which would likely reduce the liquidity of our securities and increase volatility in our trading price.
Remedy of Nasdaq Listing Deficiencies, Including Via Hearings Process
As previously reported, on May 22, 2025, we received a delisting notice from the Nasdaq Listing Qualifications Department in respect of two listing deficiencies that we had been unable to remedy during the six-month cure period since we had initially been notified of those deficiencies, on November 19, 2024. The deficiencies related to our failure to maintain (i) a minimum Market Value of Listed Securities of $50 million and (ii) a minimum Market Value of Publicly Held Shares of $15 million, in each case for continued listing on the Nasdaq Global Market. We appealed the delisting notice to a Nasdaq hearings panel, and a hearing was held before the panel on June 26, 2025. On July 7, 2025, we received a favorable decision from the hearings panel, granting our request to remain listed on Nasdaq, subject to certain conditions. Pursuant to the favorable outcome, the listings of our ordinary shares and warrants were transferred from the Nasdaq Global Market to the Nasdaq Capital Market.
Under the terms of the decision reached by the hearings panel, the continued listing of our securities on the Nasdaq Capital Market was conditioned on our fulfillment of the terms of the compliance plan that we had presented to the panel in connection with the June 26, 2025 hearing. That plan was designed to enable us to achieve at least $2.5 million of shareholders' equity (the "shareholders' equity requirement") and thereby comply with the Equity Standard for listing on the Nasdaq Capital Market on a continued basis. The terms of the compliance plan consisted, in primary part, of the following:
•
on or before September 19, 2025, we were required to demonstrate in a report filed under the Exchange Act our restoration of compliance with, and our expected long-term compliance with, the shareholders' equity requirement, as to be demonstrated in a balance sheet not older than 60 days to be included in such a filing; and
•
if we were to fail to maintain compliance with any Nasdaq listing rule on or before November 18, 2025, we would have been required to submit, and the Nasdaq hearings panel was to review (as part of its maintenance of jurisdiction over our listing status until November 18, 2025), a compliance plan for the subject deficiency to determine whether the panel would be willing to grant an exception to us to cure that deficiency.
We provided the above-referenced demonstration of our restoration of compliance with the shareholders' equity requirement in our current report on Form 8-K that we filed with the SEC on September 15, 2025, in which we described that we had completed a series of financing transactions, which had collectively increased our shareholders' equity on a pro forma basis as of July 31, 2025 by $10.3 million, to approximately $9.41 million as of September 15, 2025.
In addition to becoming subject to, and remedying, a Nasdaq shareholders' equity listing deficiency, we also became subject to, and subsequently remedied, a Nasdaq minimum bid price deficiency. On July 18, 2025, we received a letter from Nasdaq notifying us that for the 30 consecutive business days preceding the letter, the closing bid price of our ordinary shares was below the minimum $1.00 per share bid price required for continued listing on Nasdaq. The letter indicated that the Nasdaq panel would consider the bid price deficiency in its decision as to whether to enable us to remain listed on the Nasdaq Capital Market. Following shareholder approval at our reconvened annual general meeting on July 14, 2025, we effected a 1-for-15 reverse share split that on July 29, 2025, which raised the price of our ordinary shares above $1.00, and we have maintained a closing price above $1.00 since that time, thereby remedying the minimum bid price deficiency.
As a result of our remedy of each of the shareholders' equity and minimum bid price deficiencies, on September 23, 2025, we received a letter from Nasdaq confirming that we have demonstrated compliance with the requirements related to each such prior deficiency. As described in that letter, we are subject to a mandatory panel monitor until September 23, 2026. If, within that one-year monitoring period, the Nasdaq staff finds our company again out of compliance with the shareholders' equity requirement, we would not be permitted to provide the staff with a plan of compliance with respect to that deficiency and the staff would not be permitted to grant additional time to us to regain compliance with respect to that deficiency, nor would we be afforded an applicable cure or compliance period. Instead, the staff would issue a "Delist Determination Letter" and we would have an opportunity to request a new hearing with the initial panel from our June 2025 hearing or a newly convened hearings panel if the initial panel is unavailable.
While we have successfully addressed all immediate compliance concerns, we must continue to maintain compliance with all Nasdaq Capital Market listing standards. There can be no assurance that we will maintain compliance with the shareholders' equity requirement and all other standards for listing on the Nasdaq Capital Market on an ongoing basis.
Authorized Share Capital Increase
At an extraordinary general meeting originally held on August 12, 2025 and reconvened on August 19, 2025, our shareholders approved an increase in our authorized share capital from $20,000 divided into 1,481,482 ordinary shares of a par value of $0.0135 each, to $121,500 divided into 9,000,000 ordinary shares of a par value of $0.0135 each, providing us with additional capacity to issue equity securities. This increase in our authorized share capital has enabled, and will enable, us to raise required capital via various financing activities and to restore and maintain compliance with the Nasdaq shareholders' equity requirement, including our completion of the September 2025 public offering and potential future sales of ordinary shares under the ATM Agreement.
Components of our Results of Operations
Operating Expenses
Research and Development Expenses
Research and development expenses include costs directly attributable to the conduct of research and development programs, and consist primarily of the cost of payroll and related expenses, payroll taxes and other employee benefits including share-based compensation related to employees, subcontractors costs, preclinical and clinical trials costs and consulting fees.
We expect to continue to invest in research and development to develop SIL204, including hiring additional employees and continuing the research and development of that product candidate. As a result, we expect that our research and development expenses will continue to increase in the future.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel costs, including share-based compensation related to directors and employees, patent application fees, office space rental costs, and maintenance expenses, external professional service costs, including legal, accounting, audit, insurance, human resource services, travel expenses and other consulting fees.
Our general and administrative expenses have increased, and we expect that they will continue to increase in the future, as we fund our continued research and development activities, primarily due to increased headcount to support anticipated growth in the business and due to incremental costs associated with operating as a public company, including costs to comply with the rules and regulations applicable to public companies, such as costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC and stock exchange listing standards, public relations, insurance and professional services.
Financial expenses, net
Finance expenses consist primarily of changes in fair value of financial liabilities measured at fair value, interest expenses (income), and exchange rate differences expenses.
Results of Operations
We are providing within this section a discussion and analysis of our historical statement of operations data in accordance with accounting principles generally accepted in the United States of America, or GAAP. Our financial statements included elsewhere in this quarterly report, as well as the financial data and related discussion and analysis contained in this MD&A, relate to our financial condition and results of operations as of, and for the three-month and nine-month periods ended, September 30, 2025, as compared to the corresponding information for Silexion (through the Closing of the Business Combination) and/or the combined company (following the Closing) as of, and for the three-month and nine-month periods ended, September 30, 2024.
Comparison of nine-month periods ended September 30, 2025 and 2024
The following table summarizes our results of operations for the nine-month periods ended September 30, 2025 and 2024:
Nine-month period ended
September 30,
2025
2024
(U.S. dollars, in thousands)
Operating expenses:
Research and development
$
3,765
$
4,944
General and administrative
3,461
5,727
Total operating expenses
7,226
10,671
Operating loss
7,226
10,671
Financial expenses, net
271
4,092
Loss before income tax
7,497
14,763
Income tax
3
9
Net loss
$
7,500
$
14,772
Research and Development Expenses
The following table summarizes our research and development expenses for the nine-month periods ended September 30, 2025 and 2024:
Nine-month period ended
September 30,
2025
2024
(U.S. dollars, in thousands)
Payroll and related expenses
$
1,312
$
928
Share-based compensation expenses
-
2,424
Subcontractors and consultants
2,236
1,425
Rent and maintenance
149
106
Other
68
61
Total research and development expenses
$
3,765
$
4,944
Research and development expenses decreased by approximately $1.1 million, or 22.4%, to $3.8 million for the nine-month period ended September 30, 2025, compared to $4.9 million for the nine-month period ended September 30, 2024. The decrease resulted mainly from a decrease in non-cash share-based compensation expenses in an amount of $2.4, related to employee grants issued around the time of the Business Combination in August 2024. This decrease was partly offset by an increase in subcontractors and consultants expenses in an amount of $0.8 million related to Application Programming Interface manufacturing activities and formulation development as our development program progressed to the next phase whereas the comparative nine-month period from 2024 included development activities related to our API. In addition, an increase in payroll and payroll-related expenses of $0.4 million due to additional headcount and increases in salaries following the Closing of the Business Combination in August 2024.
General and Administrative Expenses
The following table summarizes our general and administrative expenses for the nine-month periods ended September 30, 2025 and 2024:
Nine-month period ended
September 30,
2025
2024
(U.S. dollars, in thousands)
Payroll and related expenses
$
1,126
$
856
Share-based compensation expenses
96
3,438
Professional service
1,658
1,053
Depreciation
11
37
Rent and maintenance
132
90
Patent registration
51
25
Travel expenses
143
72
Other
244
156
Total general and administrative expenses
$
3,461
$
5,727
General and administrative expenses decreased by approximately $2.2 million, or 38.6%, to $3.5 million for the nine-month period ended September 30, 2025, compared to $5.7 million for the nine-month period ended September 30, 2024. The decrease resulted mainly from a decrease in non-cash share-based compensation expenses in an amount of $3.3, related to employee grants issued around the time of the Business Combination in August 2024. This decrease was partly offset by an increase in professional services costs in an amount of $0.6 million primarily related to investor relations and press release expenses, director compensation, legal and other expenses associated with the costs of a public company subsequent to the Closing of the Business Combination and an increase of $0.3 million in payroll and payroll-related expenses due to headcount growth and an increase in salaries following the Closing of the Business Combination in August 2024 (which were reflected to a greater extent in the nine months ended September 30, 2025 than in the shorter period from the Closing through September 30, 2024).
Financial expenses, net
Financial expenses, net decreased by approximately $3.8 million, or 92.7%, to $0.3 million for the nine-month period ended September 30, 2025 compared to $4.1 million for the nine-month period ended September 30, 2024. The decrease was mainly due to a decrease in amount of $4.8 million in one-time loss upon entering Transactions expenses following the Closing of the Business Combination in August 2024, offset in part by an increase in revaluation income of financial instruments (mainly promissory notes) in an amount of $1.2 million.
Net loss
Net loss decreased by approximately $7.3 million, or 49.3%, to $7.5 million for the nine-month period ended September 30, 2025, compared to $14.8 million for the nine-month period ended September 30, 2024. The decrease was mainly due to a decrease in our research and development expenses, general and administrative expenses, and financial expenses including significant decrease of non-cash items related to share-based compensation, transaction costs and costs related to becoming a public company in August 2024.
Comparison of three-month periods ended September 30, 2025 and 2024
The following table summarizes our results of operations for the three-month periods ended September 30, 2025 and 2024:
Three-month period ended
September 30,
2025
2024
(U.S. dollars, in thousands)
Operating expenses:
Research and development
$
2,157
$
3,217
General and administrative
1,135
4,819
Total operating expenses
3,292
8,036
Operating loss
3,292
8,036
Financial expenses, net
(30
)
3,822
Loss before income tax
3,262
11,858
Income tax
-
2
Net loss for the quarter
$
3,262
$
11,860
Research and Development Expenses
The following table summarizes our research and development expenses for the three-month periods ended September 30, 2025 and 2024:
Three-month period ended
September 30,
2025
2024
(U.S. dollars, in thousands)
Payroll and related expenses
$
458
$
453
Share-based compensation expenses
-
2,385
Subcontractors and consultants
1,638
297
Rent and maintenance
54
57
Other
7
25
Total research and development expenses
$
2,157
$
3,217
Research and development expenses decreased by approximately $1.0 million, or 31.3%, to $2.2 million for the three-month period ended September 30, 2025, compared to $3.2 million for the three-month period ended September 30, 2024. The decrease resulted mainly from a decrease in non-cash share-based compensation expenses in an amount of $2.4, related to employee grants issued around the time of the Business Combination in August 2024. This decrease was partly offset by an increase in subcontractors and consultants expenses in an amount of $1.3 million related to Application Programming Interface manufacturing activities and formulation development as our development program progressed to the next phase whereas the comparative three-month period from 2024 included development activities related to our API.
General and Administrative Expenses
The following table summarizes our general and administrative expenses for the three-month periods ended September 30, 2025 and 2024:
Three-month period ended
September 30,
2025
2024
(U.S. dollars, in thousands)
Payroll and related expenses
$
387
$
575
Share-based compensation expenses
38
3,413
Professional service
547
605
Depreciation
3
22
Rent and maintenance
47
18
Patent registration
-
-
Travel expenses
52
56
Other
61
130
Total general and administrative expenses
$
1,135
$
4,819
General and administrative expenses decreased by approximately $3.7 million, or 77.1%, to $1.1 million for the three-month period ended September 30, 2025, compared to $4.8 million for the three-month period ended September 30, 2024. The decrease resulted mainly from a decrease in non-cash share-based compensation expenses in an amount of $3.4 million, related to employee grants issued around the time of the Business Combination in August 2024.
Financial expenses, net
Financial expenses, net decreased by approximately $3.8 million, or 100.0%, to $0 million for the three-month period ended September 30, 2025 compared to $3.8 million for the three-month period ended September 30, 2024. The decrease was mainly due to a decrease in amount of $4.8 million in one-time loss upon entering Transactions expenses following the Closing of the Business Combination in August 2024, offset in part by a decrease in revaluation income of financial instruments (mainly promissory notes) in an amount of $1.0 million.
Net loss
Net loss decreased by approximately $8.6 million, or 72.3%, to $3.3 million for the three-month period ended September 30, 2025, compared to $11.9 million for the three-month period ended September 30, 2024. The decrease was mainly due to a decrease in our research and development expenses, general and administrative expenses, and financial expenses including significant non-cash items related to share-based compensation, transaction costs and costs related to becoming a public company in August 2024.
Liquidity and Capital Resources
Overview
Our capital requirements depend on many factors, including the timing and extent of spending to further develop SIL204 and conduct pre-clinical and clinical trials, support research and development efforts, investments in potential additional pipeline products, and increased overall compensation as we continue to hire additional personnel. For the nine-month and three-month periods ended September 30, 2025, we had net losses of $7.5 million and $3.3 million, respectively. As of September 30, 2025, our cash and cash equivalents totaled $9.2 million.
To date, our principal sources of liquidity have evolved together with our progression as a company. As a private company, we raised proceeds from private offerings of our ordinary shares and convertible preferred shares, grants from the Israeli Innovation Authority, issuance of convertible financing agreements (CFA), and SAFE financings. Upon the Closing of the Business Combination, we raised funds from a PIPE in which Greenstar, LP, an affiliate of the Moringa sponsor, purchased Moringa ordinary shares that converted automatically into New Silexion ordinary shares. Following the Closing, as a public company with ordinary shares and warrants registered under the Exchange Act and trading on Nasdaq, we have obtained financings in various manners, including the following, which are described in greater detail below:
•
registered public offerings of ordinary shares and pre-funded warrants, along with ordinary warrants, in January 2025 and September 2025, and (as described below under "Public Offerings via H.C. Wainwright");
•
warrant exercise inducement transactions, which were completed in January 2025 and August 2025 (as described below under "Induced Warrant Exercise Transactions");
•
additional warrant exercises, such as in connection with the January 2025 and September 2025 public offerings, when investors exercised following the closing of those offerings an aggregate of 42,683 ordinary warrants and 445,000 Series B ordinary warrants issued in those respective offerings; and
•
ongoing financings via the ELOC Agreement (all of which were completed during the year ended December 31, 2024).
We furthermore anticipate further ongoing financings via the ATM that we have established through the ATM Agreement with H.C. Wainwright, which provides for the potential sale of up to $13.17 million of our ordinary shares under our Shelf Registration Statement.
Based on our current business plan, we believe our current cash and cash equivalents, and anticipated cash flow from operations, will not be sufficient to meet our anticipated cash requirements for the next 12 months from the date of this quarterly report. We will need to raise additional capital to finance our operations, expand our business and pipeline, or for other reasons.
Note 1(h) to our unaudited consolidated financial statements for the three-month and nine-month periods ended September 30, 2025 included in this quarterly report and Note 1(j) to our audited consolidated financial statements for the year ended December 31, 2024 included in the 2024 Annual Report describe the substantial doubt about our ability to continue as a going concern as of those respective dates. Additionally, in its report accompanying our audited consolidated financial statements included in the 2024 Annual Report, our independent registered public accounting firm included an explanatory paragraph stating that our recurring losses from operations and our cash outflows from operating activities raise substantial doubt as to our ability to continue as a going concern. That means that our management and independent registered public accounting firm have expressed substantial doubt about our ability to continue our operations without an additional infusion of capital from external sources. Our unaudited consolidated financial statements included herein have been prepared on a going concern basis and do not include any adjustments that may be necessary should we be unable to continue as a going concern. If we are unable to finance our operations, our business would be in jeopardy and we might not be able to continue operations and might have to liquidate our assets. In that case, investors might receive less than the value at which those assets are carried on our consolidated balance sheets as of September 30, 2025, and it is likely that investors would lose all or a part of their investment.
We have lease obligations and other contractual obligations and commitments as part of our ordinary course of business. See "Note 5: Operating Leases" and "Note 7: Commitments and Contingent Liabilities"to our audited consolidated financial statements for the year ended December 31, 2024 (contained in the 2024 Annual Report) for information about our lease obligations.
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements involving commitments or obligations, including contingent obligations, arising from arrangements with unconsolidated entities or persons that have or are reasonably likely to have a material current or future effect on our financial condition, results of operations, liquidity, cash requirements or capital resources.
Public Offerings via H.C. Wainwright
On January 15, 2025 and January 17, 2025, and again on September 11, 2025 and September 12, 2025, we priced and closed, respectively, registered public offerings in which we offered and sold, on a best efforts basis, with H.C. Wainwright as the sole placement agent (the "January 2025 Offering" and "September 2025 Offering, collectively, the "HCW Offerings"):
•
in the January 2025 Offering, (i) 143,067 ordinary shares, (ii) 103,847 pre-funded warrants to purchase up to 103,847 ordinary shares and (iii) 246,914 ordinary warrants to purchase up to 246,914 ordinary shares, at purchase prices of $20.25 per ordinary share and accompanying ordinary warrant, and $20.2485 per pre-funded warrant and accompanying ordinary warrant; and
•
in the September 2025 Offering, (i) 1,392,250 ordinary shares, (ii) 107,750 pre-funded warrants to purchase up to 107,750 ordinary shares, (iii) 1,500,000 Series A ordinary warrants, each to purchase one ordinary share, and (iv) 1,500,000 Series B ordinary warrants, each to purchase one ordinary share (the Series A ordinary warrants and Series B ordinary warrants are collectively referred to as "ordinary warrants"), at a purchase price of $4.00 per share and accompanying two ordinary warrants, and $3.9999 per pre-funded warrant and accompanying two ordinary warrants.
Aggregate gross proceeds from the January 2025 Offering and September 2025 Offering (without taking into account any proceeds from any future exercises of warrants) were approximately $5.0 million and $6.0 million, respectively.
The pre-funded warrants from the HCW Offerings were immediately exercisable at exercise prices of $0.0015 and $0.0001 for the January 2025 Offering and September 2025 Offering, respectively, per ordinary share, and did not expire until exercised in full. The ordinary warrants from the January 2025 Offering and September 2025 Offering have exercise prices of $20.25 and $4.00, respectively, per underlying ordinary share, and were immediately exercisable. The ordinary warrants from the January 2025 Offering and Series A ordinary warrants from the September 2025 Offering could be exercised for five years from issuance, while the Series B ordinary warrants from the September 2025 Offering could be exercised for a period of 12 months from issuance.
Holders of the pre-funded and ordinary warrants do not have the right to exercise any portion of the warrants if the holder (together with parties whose beneficial ownership of ordinary shares would be aggregated with the holder's) would beneficially own ordinary shares in excess of 4.99% (or, at the election of the holder, 9.99%) of the outstanding ordinary shares following exercise.
Certain investors in the HCW Offerings entered into definitive securities purchase agreements with us, under which we agreed to abide by certain customary standstill restrictions for periods of 60 days following the closing of those offerings. In addition, subject to limited exceptions, the agreements provided that for a period of one year following the closing of the respective HCW Offerings, we will not effect or enter into an agreement to effect a "variable rate transaction", as defined in the agreements.
In accordance with our engagement agreement with H.C. Wainwright , we paid to H.C. Wainwright aggregate cash placement agent fees equal to 7.0% of the gross proceeds received by us in the HCW Offerings, as well as management fees equal to 1.0% of the gross proceeds raised in the HCW Offerings. We also reimbursed H.C. Wainwright for certain of its expenses in connection with the offerings. Pursuant to the engagement agreement, we also issued to H.C. Wainwright (or its designees) 17,284 and 105,000 placement agent warrants to purchase up to 17,284 and 105,000 ordinary shares, respectively, in the two HCW Offerings, representing 7.0% of the sum of the shares and pre-funded warrants sold in the offerings. Those placement agent warrants have exercise prices of $25.3125 and $5.00, respectively, per ordinary share (representing 125% of the public offering price per ordinary share and accompanying ordinary warrant(s) in the respective offerings), are exercisable for five years from the date of the commencement of sales in the HCW Offerings, and otherwise reflect substantially the same terms as the ordinary warrants sold in the HCW Offerings.
The net proceeds to us from the HCW Offerings were approximately $4.26 million and $5.2 million before deducting estimated offering expenses payable by us. We are using the proceeds from the HCW Offerings to advance our pre-clinical and clinical studies, and for general corporate purposes.
Induced Warrant Exercise Transactions
On January 29, 2025 and July 31, 2025, we entered into inducement offer letter agreements with holders of 148,102 and 152,106, respectively, of our existing ordinary warrants. Those warrants had been issued either in the January 2025 Offering or, in the case of the July 2025 inducement offer letter agreement, pursuant to the January 2025 warrant exercise inducement transaction. Under the warrant inducement offer letter agreements, on January 30, 2025, and August 1, 2025, the holders exercised those warrants for cash and purchased 148,102 and 152,106 ordinary shares, respectively, at cash exercise prices of $20.25 and $11.57 per share, respectively, and in consideration of our issuance to them of new ordinary warrants to purchase up to an aggregate of 148,102 and 304,212 ordinary shares, respectively, at exercise prices of $22.50 and $11.32, respectively, per share. In the January 2025 warrant exercise inducement transaction, the exercising holders also paid us an additional $1.88 per new ordinary warrant issued to them. We received aggregate gross proceeds of approximately $3.3 million and $1.8 million from the exercise of the existing warrants by the holders in January 2025 and August 2025, respectively, before deducting placement agent fees and other offering expenses payable by us.
We engaged H.C. Wainwright to act as our exclusive placement agent in connection with the transactions contemplated by the inducement letters and paid H.C. Wainwright cash fees equal to 7.0% of the aggregate gross proceeds received from the holders' exercise of their existing ordinary warrants, as well as management fees equal to 1.0% of the gross proceeds from the exercise of those warrants. We also issued to H.C. Wainwright or its designees placement agent warrants to purchase up to 10,368 and 10,647 ordinary shares, respectively (representing 7.0% of the existing ordinary warrants that were exercised in the respective transactions), which have the same terms as the new warrants issued in the transactions, except that the placement agent warrants have exercise prices equal to $27.66 per share and $14.46 per share, respectively (125% of (i) the sum of the exercise price of the existing warrants exercised, and the additional $1.88 paid per new ordinary warrant, in the January 2025 transaction, and (ii) the $11.57 exercise price of the existing warrants exercised, in the August 2025 transaction).
Similar to the new ordinary warrants issued to investors in these transactions, the placement agent warrants became exercisable either immediately from the date of issuance (in the case of the January 2025 induced warrant exercise transaction), or upon approval by our shareholders of an increase in our authorized share capital, which occurred on August 19, 2025 at our reconvened extraordinary general meeting (in the case of the August 2025 induced warrant exercise transaction). All new warrants and placement agent warrants issued in both transactions remain exercisable until the 24-month anniversary of the effective date of the resale registration statements filed to cover the resale of shares underlying the new warrants and placement agent warrants. We also paid certain fees and expenses in connection with the induced warrant exercise transactions.
Upon exercise for cash of any new warrants issued to investors in the transactions, in certain circumstances, we will (i) pay to H.C. Wainwright a cash fee of 7.0% of the aggregate gross exercise price, and a cash management fee of 1.0% of the aggregate gross exercise price, and (ii) issue to H.C. Wainwright warrants representing 7.0% of the ordinary shares issued to the investors upon such cash exercise of the new warrants.
We are using the net proceeds from these transactions for general corporate purposes and R&D activities.
Other Warrant Exercises
In addition to induced warrant exercise transactions, we have also raised funds via additional exercises of ordinary warrants. On January 30, 2025, in connection with the closing of the January 2025 Offering, investors exercised an aggregate of 42,683 ordinary warrants issued in that offering and we issued 42,683 underlying ordinary shares. The gross proceeds to our company from those warrant exercises was $0.9 million. On September 12, 2025, in connection with the closing of the September 2025 Offering, investors exercised an aggregate of 445,000 Series B ordinary warrants issued in that offering and we issued 445,000 underlying ordinary shares. The gross proceeds to our company from those warrant exercises was $1.78 million.
At-The-Market Offering Agreement
Prospectively, we expect to raise additional capital on an ongoing basis under our ATM. On September 26, 2025, we entered into the ATM Agreement with H.C. Wainwright, as sales agent or principal, providing for the offer and sale from time to time of up to $13,170,000 of our ordinary shares under the ATM, which ATM offering was registered under our Shelf Registration Statement. No sales have been made under the ATM Agreement during the third quarter of 2025 or through the date of this quarterly report, due to customary standstill restrictions on subsequent offerings imposed upon us in connection with our September 2025 public offering.
ELOC Financing
In connection with the Closing of the Business Combination, we entered into the ELOC Agreement, dated August 13, 2024, and effective as of the Closing, with White Lion Capital, LLC (the "ELOC Investor"), which agreement was amended as of January 14, 2025. Under the ELOC Agreement, we have the right to request to sell to the ELOC Investor, and the ELOC Investor is required to purchase, via private placement transactions, up to $15.0 million of our ordinary shares from time to time after the Closing, up until December 31, 2025 (unless the agreement is terminated sooner), subject to certain limitations and conditions as described therein.
The number of ordinary shares that we may require the ELOC Investor to purchase in any single sales notice depends on a number of factors, including the type of purchase notice that we deliver. Similarly, the purchase price to be paid by the ELOC Investor for any shares that we require it to purchase depends on the type of sales notice that we deliver, and is derived from the market price of our ordinary shares for a certain period of time following our purchase request or as of the date of our purchase request. We also granted registration rights to the ELOC Investor pursuant to an accompanying registration rights agreement, also dated August 15, 2024, by and between New Silexion and the ELOC Investor (the "ELOC Registration Rights Agreement"), for which we have filed a related registration statement on Form S-1 (SEC file number 333-282017).
In consideration for the commitments of the ELOC Investor, we agreed to issue to the ELOC Investor an aggregate of $337,500 of our ordinary shares based on the closing price of the ordinary shares on the day that is the earlier of (i) the business day prior to effectiveness of the registration statement registering the resale of the shares issuable under the ELOC ordinary share purchase agreement and (ii) the business day prior to the 180th day following the date of Closing of the Business Combination. Based on the closing price of the ordinary shares on September 16, 2024, we issued to the ELOC Investor, on September 18, 2024, 2,707 ordinary shares in respect of the ELOC Investor's commitments under the ELOC Agreement.
Through the date hereof, we have issued and sold an aggregate of 50,915 ordinary shares (which includes the foregoing 2,707 ordinary shares issued as a commitment fee) to the ELOC Investor under the ELOC Agreement for aggregate proceeds to us of approximately $3.1 million, all of which sales occurred prior to December 31, 2024.
In light of our ability to sell ordinary shares under the ATM Agreement, we do not expect to raise further funds under the ELOC Agreement prior to its expiration on December 31, 2025.
Settlement of Amounts Due Under Marketing Agreement with EarlyBird
Prior to the Closing of the Business Combination, Moringa reached agreement with EBC on the reduction, to $1.6 million, in the aggregate, of the fee payable to EBC under the Marketing Agreement. Pursuant to the final invoice provided by EBC under the Marketing Agreement, at the Closing, Moringa paid $350,000 of cash to EBC from Moringa's trust account (in which remaining proceeds from Moringa's IPO had been maintained), and we issued to EBC a convertible note (the "EarlyBird Convertible Note"), which was a convertible promissory note, due December 31, 2025, in an amount of $1.25 million to be paid by us to EBC in cash and/or via conversion of outstanding amounts into ordinary shares. The EarlyBird Convertible Note bore interest at a rate of 6% per annum and by its terms was to mature on December 31, 2025. Through January 31, 2025, we made aggregate payments of $407,556 to EBC in respect of some of the amounts due from us under the EarlyBird Convertible Note as a result of amounts raised by us under the ELOC and the January 2025 Offering.
On March 13, 2025, we entered into a letter agreement with EBC, pursuant to which we paid to EBC an additional amount of $400,000 (plus $15,000 for EBC's legal expenses) (the "Settlement Prepayment Amount") and EBC agreed to the partial conversion and retirement of all remaining amounts due under the EarlyBird Convertible Note. Under that letter agreement, EBC agreed that the $880,202 principal and interest amount outstanding under the note as of the date of the letter agreement (the "Outstanding Amount") would be retired in consideration of: (i) our payment in cash of the Settlement Prepayment Amount; (ii) EBC's conversion of a certain amount of the principal and interest due under the EarlyBird Convertible Note (the "Conversion Amount") via the issuance by us to EBC of 18,519 ordinary shares (the "EBC Settlement Shares"), which Conversion Amount would equal the net proceeds to be received by EBC from the sale of the EBC Settlement Shares; and (iii) the payment in cash by us to EBC of any remaining amount due under the EarlyBird Convertible Note after deducting the Settlement Prepayment Amount and the Conversion Amount from the Outstanding Amount (the "Remaining Amount"). The resale by EBC of the EBC Settlement Shares was registered under our effective registration statement on Form S-1 (SEC file number 333-282556) as required by the EarlyBird Convertible Note.
On March 17, 2025, EBC sold all 18,519 EBC Settlement Shares under the foregoing Form S-1 registration statement for a Conversion Amount of $344,204, and on March 18, 2025, we paid the Remaining Amount of $135,998 that was due to EBC, resulting in the retirement of the EarlyBird Convertible Note on March 18, 2025.
Issuance of, and Conversions Under, A&R Sponsor Promissory Note
Effective as of the Closing, we issued to the sponsor, and the sponsor accepted, in amendment and restatement, and replacement, in their entirety, of all existing promissory notes issued by Moringa to the sponsor from Moringa's initial public offering until the Closing (and as to which the obligations of Moringa were assigned to New Silexion upon the Closing), the A&R Sponsor Promissory Note in an amount of $3,433,000, which reflected the total amount owed by Moringa to the sponsor through the Closing Date. The maturity date of the A&R Sponsor Promissory Note is the 30-month anniversary of the Closing Date (i.e., February 15, 2027).
Amounts outstanding under the A&R Sponsor Promissory Note may be repaid (unless otherwise decided by us) only by way of conversion into ordinary shares ("Note Shares") in accordance with the terms set forth in the form of A&R Sponsor Promissory Note. New Silexion and the sponsor may also convert amounts outstanding under the A&R Sponsor Promissory Note at the price per share at which we conduct equity financings following the Closing, subject to a minimum conversion amount of $100,000, in an amount of Note Shares constituting up to thirty percent (30%) of the number of ordinary shares issued and sold by us in such equity financing. The sponsor may also elect to convert amounts of principal outstanding under the note into ordinary shares at any time following the 24-month anniversary of the date of the Closing, subject to a minimum conversion of $10,000, at a price per share equal to the volume weighted average price of the ordinary shares on the principal market on which they are traded during the 20 consecutive trading days prior to the conversion date.
On September 15, 2025, in connection with the September 2025 Offering, we converted $1.8 million of principal outstanding under the A&R Sponsor Promissory Note into 450,000 ordinary shares that we issued to the Moringa sponsor. As of September 30, 2025, the remaining principal amount outstanding under the A&R Sponsor Promissory Note was $1,633,000.
The Moringa Sponsor (which is controlled by our director, Ilan Levin) has notified us that it disputes the conversion into Ordinary Shares under the terms of the convertible note and has demanded repayment of the note in full. We believe that the conversion was carried out in strict compliance with the substantive and procedural requirements of the note, and reject any claim to the contrary.
Government Grants
Our research and development efforts have been financed, in part, through royalty-bearing grants from the Israeli Innovation Authority, or the IIA. As of September 30, 2025, we had received IIA royalty-bearing grants totaling approximately $5.8 million.
We are committed to pay royalties to the IIA at a rate of approximately 3.0% to 5.0% of the sales of all of our product candidates and other related revenues generated from such projects, that were developed, in whole or in part, using the IIA royalty-bearing grants we received under IIA programs up to the total amount of royalty-bearing grants received, linked to the U.S. dollar and bearing annual interest at rates prescribed by the IIA's rules and guidelines.
We may in the future apply to receive additional grants from the IIA. However, we cannot predict whether we will be entitled to any future grants, or the amounts of any such grants.
Under the Israeli Innovation Law, research and development programs that meet specified criteria and are approved by a committee of the IIA are eligible for grants. A company that receives a royalty-bearing grant from the IIA is typically required to pay royalties to the IIA on income generated from products incorporating IIA-funded know-how (including income derived from services associated with such products and from IIA-funded know-how), up to 100% of the U.S. dollar-linked royalty-bearing grant amount plus interest.
The obligation to pay royalties is contingent on actual income generated from such products and services. In the absence of such income, no payment of royalties is required.
As of September 30, 2025, the total royalty amount that may be payable by our company is approximately $5.8 million ($6.7 million, including interest).
Cash Flows
Cash flows for the nine-month periods ended September 30, 2025 and 2024
The following table summarizes our cash flows for the periods indicated:
Nine-month period ended
September 30,
2025
2024
(U.S. dollars, in thousands)
Cash and cash equivalents and restricted cash at beginning of the period
$
1,270
$
4,645
Net cash used in operating activities
(7,803
)
(5,470
)
Net cash used in investing activities
(7
)
(22
)
Net cash provided by financing activities
15,861
2,920
Net increase (decrease) in cash and cash equivalents and restricted cash
$
8,051
$
(2,572
)
Translation adjustments on cash and cash equivalents and restricted cash
3
(50
)
Cash and cash equivalents and restricted cash at end of the period
$
9,324
$
2,023
Cash Used in Operating Activities
Net cash used in operating activities increased by approximately $2.3 million, or 41.8%, to $7.8 million for the nine-month period ended September 30, 2025, compared to $5.5 million for the nine-month period ended September 30, 2024. This increase was mainly due to an increase of $2.3 million in payments related to R&D subcontractors and consultants, payroll and payroll-related expenses and professional services costs.
Cash Provided by Financing Activities
Net cash provided by financing activities increased by $13.0 million, or 448.3%, to approximately $15.9 million for the nine-month period ended September 30, 2025, compared to $2.9 million for the nine-month period ended September 30, 2024. This increase was mainly due to an increase in cash received from (i) the HCW January and September 2025 Public Offerings, in an aggregate amount of $11.0 million, net of $1.4 million of cash issuance costs related to those offerings, (ii) the exercise of warrants (January and September 2025), in an aggregate amount of $2.6 million, and (iii) the January 2025 and August 2025 warrant exercise inducement transactions, in an aggregate amount of $5.0 million, net of $0.7 million cash issuance costs related to those warrant exercise inducement transactions (each, as described above under "Liquidity and Capital Resources"), offset in part by (i) a decrease of $0.7 million related to payments under the EarlyBird Convertible Note in the nine-month period ended September 30, 2025, and (ii) a decrease in proceeds from issuance of ordinary shares under the ELOC in an amount of $0.6 million in 2024, and (iii) a decrease of $2.3 million in cash received from transactions upon the closing of the Business Combination in August 2024.
Cash flows for the three-month periods ended September 30, 2025 and 2024
The following table summarizes our cash flows for the periods indicated:
Three-month period ended
September 30,
2025
2024
(U.S. dollars, in thousands)
Cash and cash equivalents and restricted cash at beginning of the period
$
3,544
$
1,747
Net cash used in operating activities
(2,843
)
(2,653
)
Net cash used in investing activities
-
(16
)
Net cash provided by financing activities
8,624
2,920
Net increase in cash and cash equivalents and restricted cash
$
5,781
$
251
Translation adjustments on cash and cash equivalents and restricted cash
(1
)
25
Cash and cash equivalents and restricted cash at end of the period
$
9,324
$
2,023
Cash Used in Operating Activities
Net cash used in operating activities increased by approximately $0.1 million, or 3.7%, to $2.8 million for the three-month period ended September 30, 2025, compared to $2.7 million for the three-month period ended September 30, 2024. This increase was mainly due to an increase of $1.0 million in payments to our R&D subcontractors and consultants.
Cash Provided by Financing Activities
Net cash provided by financing activities increased by approximately $5.7 million, or 196.6%, to $8.6 million for the three-month period ended September 30, 2025, compared to $2.9 million for the three-month period ended September 30, 2024. This increase was mainly due an increase in cash received from (i) the HCW September 2025 Public Offering, in an aggregate amount of $6.0 million, net of $0.7 million of cash issuance costs related to this offering, (ii) the exercise of warrants, in an aggregate amount of $1.8 million, and (iii) the August 2025 warrant exercise inducement transaction, in an aggregate amount of $1.8 million, net of $0.2 million cash issuance costs related to those warrant exercise inducement transaction (each, as described above under "Liquidity and Capital Resources"), offset in part by (i) a decrease in proceeds from issuance of ordinary shares under the ELOC in an amount of $0.6 million in 2024, and (ii) a decrease of $2.3 million in cash received from transactions upon the closing of the Business Combination in August 2024.
Funding Requirements
We expect to devote substantial financial resources to our ongoing and planned activities, particularly further development of SIL204 and as we conduct our planned pre-clinical and clinical trials.
Identifying potential product candidates and conducting pre-clinical testing and clinical trials is a time-consuming, expensive, and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. For additional information please refer to the "Risk Factors" section of the 2024 Annual Report, including "Risks Related to Our Financial Condition and Capital Requirements- We have never generated any revenue from product sales and may never be profitable" and"Risks Related to the Research and Development of Silexion's Product Candidates- We are heavily dependent on the success of our product candidates...".
We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance our pre-clinical studies and clinical trials. In addition, if we obtain marketing approval for SIL204 in any indication or for any other product candidate we are developing or may develop in the future, we expect to incur significant commercialization expenses related to product manufacturing, sales, marketing, and distribution. Furthermore, following the closing of the Business Combination, we have been incurring, and expect to continue to incur, additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding.
Our future capital requirements will depend on many factors, including:
•
Materials cost;
•
Regulatory pathway; and
•
Human clinical trial costs.
As of September 30, 2025, we had cash and cash equivalents of $9.2 million. Based on our current cash balance, as well as our history of operating losses and negative cash flows from operations, combined with our anticipated use of cash to, among other things, (i) fund the preclinical and clinical development of our products, (ii) identify and develop new product candidates, and (iii) seek approval for SIL204 and any other product candidates we may develop, our management has concluded that we do not have sufficient cash to fund our operations for 12 months from the date of our unaudited consolidated financial statements as of, and for the three-month and nine-month periods ended, September 30, 2025 included in this quarterly report without additional financing, and as a result, there is substantial doubt about our ability to continue as a going concern.
In making this determination, applicable accounting standards prohibited us from considering the potential mitigating effect of plans that have not been fully implemented as of the date of our unaudited consolidated financial statements as of, and for the fiscal three-month and nine-month periods ended, September 30, 2025, including, without limitation, our plans to raise additional capital. Our financial information throughout this quarterly report, and our financial statements for the fiscal three-month and nine-month periods ended September 30, 2025 contained herein, have been prepared on a basis that assumes that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. This financial information and our unaudited consolidated financial statements for the three-month and nine-month periods ended September 30, 2025 do not include any adjustments that might result from the outcome of this uncertainty.
We currently estimate that our existing cash and cash equivalents are sufficient to fund business operations until the end of the second quarter of 2026.
We have based that estimate and expectation on assumptions that may prove to be wrong, and our operating plan may change as a result of many factors currently unknown to us. We could not, as of the date of this filing, determine the exact level of funds that will be available to us upon potential equity financings. Our expected use of funds represents our intentions based upon our current plans and business condition, which could change in the future as our plans and business condition evolve and the level of funding available to us becomes clear. In addition, changing circumstances could cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more than currently expected because of circumstances beyond our control. As a result, we could deplete our capital resources sooner than we currently expect. In addition, because the successful development of SIL204 and any studies or other product candidates that we pursue is highly uncertain, at this time we cannot definitively state or know the nature, timing and costs of the efforts that will be necessary to complete the development of any product candidate.
Until such time, if ever, as we can generate substantial revenues from product sales, we expect to finance our cash needs through a combination of public and private equity offerings, including registered public offerings similar to the HCW Offerings completed in January 2025 and September 2025, warrant exercise inducement transactions similar to those completed in late January 2025 and early August 2025, ordinary-course sales of ordinary shares into the market pursuant to the ATM Agreement, strategic alliances, collaborations, and marketing, distribution, or licensing arrangements. However, adequate additional financing may not be available to us on acceptable terms, or at all, and the availability of such financing may be impacted by the economic climate and market conditions.
Reliance on public offerings, warrant exercise inducement transactions, the ATM, or other similar types of equity financing as a source of ongoing funding for our operations could involve significant issuances of ordinary shares by us that could cause the following impacts (among others):
•
significant dilution to the equity interests of our current shareholders;
•
a deemed change of control of our company due to the issuance of a substantial number of ordinary shares, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in a change in the officers and directors of our company relative to our current officers and directors, to the extent any shareholders build up significant beneficial ownership from ordinary shares issued pursuant to public offerings, warrant exercises or the ATM;
•
delaying or preventing a change of control of our company by diluting the share ownership or voting rights of a person seeking to obtain control; and
•
an adverse effect on prevailing market prices for our ordinary shares or warrants.
Critical Accounting Policies and Estimates
For a description of our significant accounting policies, see Note 2 to our consolidated financial statements for the year ended December 31, 2024 included in the 2024 Annual Report and Note 2 to our unaudited condensed consolidated financial statements for the three-month and nine-month periods ended September 30, 2025 included in this quarterly report
The preparation of our unaudited condensed consolidated financial statements for the three-month and nine-month periods ended September 30, 2025 and our consolidated financial statements for the year ended December 31, 2024 in conformity with U.S. GAAP required our management to make estimates and assumptions in certain circumstances that affect the amounts reported in the accompanying unaudited condensed consolidated financial statements for the three-month and nine-month periods ended September 30, 2025 and consolidated financial statements for the year ended December 31, 2024, and in related footnotes. Actual results may differ from these estimates. We base our judgments on our experience and on various assumptions that we believe to be reasonable under the circumstances.
Of our policies, the following are considered critical to an understanding of our unaudited condensed consolidated financial statements for the three-month and nine-month periods ended September 30, 2025 and consolidated financial statements for the year ended December 31, 2024, as they require the application of subjective and complex judgment, involving critical accounting estimates and assumptions impacting our unaudited condensed consolidated financial statements for the three-month and nine-month periods ended September 30, 2025 and consolidated financial statements for the year ended December 31, 2024.
The critical accounting estimates relate to the following:
Valuation of Promissory Notes
As part of the Business Combination, we issued to the Moringa sponsor, as well as EarlyBird, promissory notes, which we irrevocably designated to be measured at fair value. The EarlyBird Convertible Note was retired on March 18, 2025. The fair value of the A&R Sponsor Promissory Note is measured using a discount rate based on a B rated US dollar zero-coupon discount curve, plus a credit spread of 7.56%. The discount rate was determined with reference to benchmark interest rates of secured loans reported by venture capitals, which were then used to extract our entity-specific credit spread. Since the A&R Sponsor Promissory Note is not senior secured, one notch downgrade was applied. The expected timing of conversion or redemption of the note has been determined using our management's forecast.
Recent Accounting Pronouncements
See Note 2 on page F-75 to our financial statements for the year ended December 31, 2024 included in the 2024 Annual Report and Note 2(f) of the quarterly financial statements included in this quarterly report for a description of recent accounting pronouncements applicable to our financial statements for the three-month and nine-month periods ended September 30, 2025 and the year ended December 31, 2024.
Smaller Reporting Company Status
We are a "smaller reporting company," meaning that the market value of our ordinary shares held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We will continue to be a smaller reporting company if either (i) the market value of our shares held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our shares held by non-affiliates is less than $700 million. As a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements and we have reduced disclosure obligations regarding executive compensation.
Emerging Growth Company Status
Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable.
We are an "emerging growth company" as defined in Section 2(a) of the Securities Act, and have elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the market value of ordinary shares that are held by non-affiliates exceeds $700 million as of the end of that year's second fiscal quarter, (ii) the last day of the fiscal year in which we have total annual gross revenue of $1.235 billion or more during such fiscal year (as indexed for inflation), (iii) the date on which we have issued more than $1.0 billion in non-convertible debt in the prior three-year, or (iv) December 31, 2029. We expect to continue to take advantage of the benefits of the extended transition period, although it may decide to early adopt such new or revised accounting standards to the extent permitted by such standards. This may make it difficult or impossible to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used.
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