Raphael Pharma's Deficit Widens Amidst Continued R&D Stage

TL;DR

**RAPH is burning cash with no revenue, making it a high-risk bet on future funding and product development.**

AI Summary

Raphael Pharmaceutical Inc. (RAPH) reported an accumulated deficit of $9,640 thousand as of June 30, 2025, an increase from $8,889 thousand at December 31, 2024, indicating continued operating losses. The company's net loss for the six months ended June 30, 2025, was $751 thousand, compared to $798 thousand for the same period in 2024, showing a slight improvement in net loss. Research and development expenses decreased significantly to $213 thousand for the six months ended June 30, 2025, from $403 thousand in the prior year period. General and administrative expenses increased to $527 thousand for the six months ended June 30, 2025, from $393 thousand in the prior year. Cash and cash equivalents increased slightly to $20 thousand as of June 30, 2025, from $19 thousand at December 31, 2024. The company raised $240 thousand from the issuance of common stock and warrants during the six months ended June 30, 2025, and issued 350,000 shares and 450,000 warrants to two directors for services. A significant risk is the company's going concern status, as it has not yet generated revenues and requires additional funding to complete R&D and clinical trials.

Why It Matters

Raphael Pharmaceutical's persistent accumulated deficit of $9,640 thousand and reliance on equity financing for operations signal high risk for investors. The company's 'going concern' warning indicates a potential inability to meet obligations without further capital, which could lead to significant dilution for existing shareholders or even cessation of operations. For employees, this uncertainty could impact job security and future prospects. Customers, or rather future patients, face delays in potential product availability if funding issues hinder clinical trials. In the competitive pharmaceutical landscape, RAPH's struggle to advance beyond the development stage puts it at a severe disadvantage against better-funded rivals.

Risk Assessment

Risk Level: high — Raphael Pharmaceutical Inc. has an accumulated deficit of $9,640 thousand as of June 30, 2025, and has not yet generated revenues, indicating a significant financial instability. Management explicitly states 'substantial doubt about the Company's ability to continue as a going concern exists in the event that additional funding does not occur,' citing the need for capital to complete R&D and clinical trials.

Analyst Insight

Investors should avoid Raphael Pharmaceutical Inc. given its 'going concern' warning, lack of revenue, and significant accumulated deficit. The company's future is highly dependent on speculative capital raises, making it an extremely high-risk investment with a high probability of further dilution or failure.

Financial Highlights

debt To Equity

N/A

revenue

N/A

operating Margin

N/A

total Assets

$30K

total Debt

N/A

net Income

-$751K

eps

-$0.04

gross Margin

N/A

cash Position

$20K

revenue Growth

N/A

Key Numbers

• $9.64M — Accumulated Deficit (Increased from $8.89M at Dec 31, 2024, highlighting ongoing losses.)
• $751K — Net Loss (6 months) (Slightly improved from $798K in the prior year period, but still substantial.)
• $213K — R&D Expenses (6 months) (Decreased significantly from $403K in 2024, potentially impacting product development pace.)
• $527K — G&A Expenses (6 months) (Increased from $393K in 2024, indicating rising administrative costs.)
• $20K — Cash & Equivalents (Minimal cash balance as of June 30, 2025, up from $19K at Dec 31, 2024, but insufficient for long-term operations.)
• $240K — Financing Cash Flow (6 months) (Primary source of funding, indicating reliance on equity raises.)
• 19.63M — Shares Outstanding (Increased from 18.70M at Dec 31, 2024, due to stock and warrant issuances, causing dilution.)
• $1.05M — Total Current Liabilities (Increased from $769K at Dec 31, 2024, worsening the liquidity position.)

Key Players & Entities

• Raphael Pharmaceutical Inc. (company) — registrant
• Ajay Kumar Dhadha (person) — Chairman of the Board
• Zvi Laufer (person) — Board member
• SEC (regulator) — Securities and Exchange Commission
• $9,640 thousand (dollar_amount) — accumulated deficit as of June 30, 2025
• $751 thousand (dollar_amount) — net loss for the six months ended June 30, 2025
• $213 thousand (dollar_amount) — research and development expenses for the six months ended June 30, 2025
• $240 thousand (dollar_amount) — cash provided by financing activities for the six months ended June 30, 2025
• 19,626,418 (dollar_amount) — shares of common stock outstanding as of August 12, 2025
• Nevada (company) — State of incorporation

FAQ

Risk Factors

• Going Concern and Need for Additional Funding [high — financial]: The company has an accumulated deficit of $9,640 thousand as of June 30, 2025, and has not yet generated revenues. It requires substantial additional funding to complete its research and development and clinical trials, posing a significant risk to its continued operations.
• Dependence on Research and Development [high — operational]: The company's future success is heavily dependent on its ability to successfully develop and commercialize its product candidates. A significant decrease in R&D expenses to $213 thousand for the six months ended June 30, 2025, from $403 thousand in the prior year, could impact the pace of product development.
• Deteriorating Liquidity Position [high — financial]: Cash and cash equivalents stood at a minimal $20 thousand as of June 30, 2025. Total current liabilities increased to $1,078 thousand from $769 thousand at December 31, 2024, indicating a worsening liquidity situation and increased reliance on external financing.
• Increasing General and Administrative Expenses [medium — financial]: General and administrative expenses rose to $527 thousand for the six months ended June 30, 2025, from $393 thousand in the prior year. This increase, without corresponding revenue generation, further strains the company's financial resources.
• Dilution from Stock and Warrant Issuances [medium — financial]: The company issued 19,626,418 shares as of June 30, 2025, up from 18,701,418 at December 31, 2024, due to stock and warrant issuances. This includes 350,000 shares and 450,000 warrants issued to directors for services, leading to significant shareholder dilution.

Industry Context

The pharmaceutical industry is characterized by high R&D costs, long development cycles, and significant regulatory hurdles. Companies like Raphael Pharmaceutical Inc. operate in a highly competitive landscape, requiring substantial capital to bring new drugs to market. The current environment emphasizes innovation, with a focus on novel therapies and personalized medicine.

Regulatory Implications

As a pharmaceutical company, Raphael Pharmaceutical Inc. is subject to stringent regulations from bodies like the FDA. Failure to meet regulatory standards for drug development, clinical trials, and manufacturing can lead to significant delays, increased costs, and potential market exclusion, impacting its ability to generate revenue.

What Investors Should Do

1. Monitor Funding Rounds Closely
2. Evaluate R&D Progress and Spending
3. Assess Burn Rate and Cash Runway
4. Understand Dilution Impact

Key Dates

• 2025-06-30: Quarterly Report Filing (10-Q) — Provides updated financial performance and condition for the period ending June 30, 2025, highlighting ongoing losses and financing activities.
• 2025-01-01: Start of Six-Month Period — Beginning of the period for which financial results (net loss of $751K, R&D of $213K, G&A of $527K) are reported.
• 2024-12-31: Previous Fiscal Year End — Baseline for comparison of financial metrics, showing an accumulated deficit of $8,889K and cash of $19K.

Glossary

Accumulated Deficit

The total cumulative net losses of a company since its inception, minus any accumulated profits. It represents a negative retained earnings balance. (Indicates Raphael Pharmaceutical Inc. has not been profitable and has incurred losses exceeding its capital contributions.)

Going Concern

An accounting assumption that a company will continue to operate for the foreseeable future. If there are substantial doubts about this, it must be disclosed. (Raphael Pharmaceutical Inc. faces significant going concern risks due to its lack of revenue and need for substantial funding.)

Common Stock

A class of stock that typically carries voting rights and represents ownership in a corporation. (RAPH has issued common stock and warrants, leading to an increase in shares outstanding and potential dilution for existing shareholders.)

Warrants

A type of derivative that gives the holder the right, but not the obligation, to purchase a company's stock at a specified price within a certain timeframe. (RAPH issued warrants, alongside common stock, as part of its financing activities, contributing to potential future dilution.)

Additional Paid-in Capital

The amount of money a company receives from selling stock above its par value. (Shows the capital raised by RAPH through stock issuance beyond the nominal par value.)

Year-Over-Year Comparison

Compared to the prior year period, Raphael Pharmaceutical Inc. has seen a slight improvement in its net loss for the six months ended June 30, 2025 ($751K vs. $798K). However, this comes with a significant reduction in R&D expenses ($213K vs. $403K) and a notable increase in general and administrative costs ($527K vs. $393K). The company's cash position remains critically low at $20K, and its accumulated deficit has grown to $9.64M, underscoring its continued reliance on external financing and the persistent going concern risk.

Key Financial Figures

• $0.01 — hares of the registrant's common stock, $0.01 par value, outstanding as of August 12,

Filing Documents

• ea0252567-10q_raphael.htm (10-Q) — 304KB
• ea025256701ex10-1_raphael.htm (EX-10.1) — 23KB
• ea025256701ex31-1_raphael.htm (EX-31.1) — 10KB
• ea025256701ex31-2_raphael.htm (EX-31.2) — 10KB
• ea025256701ex32-1_raphael.htm (EX-32.1) — 3KB
• ea025256701ex32-2_raphael.htm (EX-32.2) — 3KB
• 0001213900-25-075662.txt ( ) — 1718KB
• raph-20250630.xsd (EX-101.SCH) — 15KB
• raph-20250630_cal.xml (EX-101.CAL) — 15KB
• raph-20250630_def.xml (EX-101.DEF) — 76KB
• raph-20250630_lab.xml (EX-101.LAB) — 149KB
• raph-20250630_pre.xml (EX-101.PRE) — 92KB
• ea0252567-10q_raphael_htm.xml (XML) — 113KB

Financial Statements

Financial Statements 1 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 2 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 9 Item 4.

Controls and Procedures

Controls and Procedures 10 PART II Item 1.

Legal Proceedings

Legal Proceedings 11 Item 1A.

Risk Factors

Risk Factors 11 Item 6. Exhibits 11 i

Financial Statements

Item 1. Financial Statements RAPHAEL PHARMACEUTICAL INC. AND ITS SUBSIDIARY CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS AS OF JUNE 30, 2025 UNAUDITED U.S. DOLLARS IN THOUSANDS INDEX Page Condensed Consolidated Interim Balance Sheets F-1 Condensed Consolidated Interim Statements of Comprehensive Loss F-2 Condensed Consolidated Interim Statements of Changes in Stockholders' Equity F-3 Condensed Consolidated Interim Statements of Cash Flows F-4 Notes to Condensed Consolidated Interim Financial Statements F-5 - F-8 - - - - - - - - - - - 1 RAPHAEL PHARMACEUTICAL INC. AND SUBSIDIARY CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS U.S dollars in thousands (except for share and per share data) As of June 30, As of December 31, 2025 2024 (Unaudited) (Audited) Assets Current assets: Cash and cash equivalents $ 20 $ 19 Other current assets 8 6 Total current assets 28 25 Fixed assets, net 2 2 Total assets $ 30 $ 27 Liabilities and stockholders' equity Current liabilities: Short-term credit from a related party 41 41 Other account payables and accrued expenses 473 500 Payable to related party 564 228 Total current liabilities 1,078 769 Stockholders' equity (deficit): Common stock, $ 0.01 par value: Authorized: 21,020,560 shares at June 30, 2025, and December 31, 2024; Issued and outstanding: 19,626,418 and 18,701,418 at June 30, 2025 and December 31, 2024, respectively; 196 187 Additional paid-in capital 8,396 7,960 Accumulated deficit ( 9,640 ) ( 8,889 ) Total stockholders' equity (deficit) ( 1,048 ) ( 742 ) Total liabilities and stockholders' equity (deficit) $ 30 $ 27 The accompanying notes are an integral part of the condensed consolidated interim financial statements. F-1 RAPHAEL PHARMACEUTICAL INC. AND SUBSIDIARY CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS U.S dollars in thousands (except for share and per share data)

Management's Discussion and Analysis

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, or the Quarterly Report. 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 relates to Raphael Israel.

Forward-Looking Statements

Forward-Looking Statements This Quarterly Report 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 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: the regulatory pathways that we may elect to utilize in seeking U.S. Food and Drug Administration, or FDA, European Medicines Agency, or EMA, and other regulatory approvals, if any; obtaining (and the cost thereof) FDA and EMA approval of, or other regulatory action in Europe or the United States and elsewhere with respect to our product candidates; the commercial launch and future sales of our product candidates and our advancement of product candidates for other indications in our pipeline; the potential cost of our rheumatoid arthritis product candidate, or RA and RA product candidate, respectively, for patients; our expectations regarding the timing of commencing clinical trials; our expectations regarding the s

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View this 10-Q filing on SEC EDGAR