Overview

Raphael Pharmaceutical Inc. is a pharmaceutical drug research and development company focused on the discovery and clinical development of life-improving drug therapies based on cannabinoids, including cannabidiol (CBD) oil. The company has recently completed a proof-of-concept clinical study for its lead product candidate for the treatment of rheumatoid arthritis (RA) in the United States, with promising results. Raphael is also aiming to develop a novel treatment for asthma.

Key Points:

• Raphael has conducted pre-clinical research at Rambam Health Care Campus in Israel, which has advanced its understanding of COVID-19 and RA products. This research has also provided insights into the potential treatment of asthma.

• The company has filed applications for clinical trials with the Medical Cannabis Unit of the Ministry of Health of Israel for a cannabis-based drug to alleviate the deterioration of COVID-19 patients.

• Raphael’s vision is to emerge as a pioneering company in formulating pharmaceutical drugs that harness the potential of purified cannabinoids and full-spectrum CBD oil, with a focus on conditions linked to inflammation.

• The company plans to leverage its expertise and experienced team to complete the clinical trials needed to receive regulatory approvals for its product candidates, initially targeting approvals from the FDA and the Medical Cannabis Unit of the Ministry of Health of Israel.

• Raphael does not currently own or operate manufacturing facilities, and instead plans to cooperate with third-party manufacturers and distributors to commercialize any approved pharmaceutical drug products.

Financial Performance

Revenues and Expenses:

• Raphael had no revenues during the three months ended March 31, 2025 and March 31, 2024.

• Research and development expenses decreased by 81% to $72,000 in Q1 2025, primarily due to lower expenses related to the company’s research and development activities with Rambam.

• General and administrative expenses increased by 110% to $353,000 in Q1 2025, mainly due to stock-based compensation to a director.

• Operating loss decreased by 22% to $425,000 in Q1 2025, driven by the decrease in research and development expenses, partially offset by the increase in general and administrative costs.

• Net loss decreased by 22% to $429,000 in Q1 2025, following the same trend as the operating loss.

Liquidity and Capital Resources:

• As of March 31, 2025, Raphael had $50,000 in cash and cash equivalents.

• Net cash used in operating activities increased by $37,000 to $209,000 in Q1 2025, primarily due to a decrease in changes in other payables.

• Net cash provided by financing activities increased by $10,000 to $240,000 in Q1 2025, mainly due to the issuance of shares during the period.

• Raphael has financed its operations primarily through founder’s capital and capital received from Easy Energy, Inc. The company believes its current cash on hand will not be sufficient to fund its projected operating requirements, raising substantial doubt about its ability to continue as a going concern.

Outlook

• Raphael anticipates requiring approximately $500,000 for research and development activities and $700,000 for capital expenditures over the next 12 months.

• The company will require significant additional financing in the near future to fund its operations, as its existing cash and cash equivalents are not expected to be sufficient to fund its projected cash requirements through the third quarter of 2025.

• Raphael may need to delay, reduce the scope of, or eliminate research or development plans for, or commercialization efforts with respect to, one or more applications of its products if it is unable to obtain additional funding on acceptable terms.

In summary, Raphael Pharmaceutical is a pharmaceutical research and development company focused on cannabinoid-based therapies, with a lead product candidate for the treatment of rheumatoid arthritis and a pipeline that includes a potential asthma treatment. The company has made progress in its research and clinical development, but faces liquidity challenges that raise substantial doubt about its ability to continue as a going concern without securing additional financing.