Cover
Cover - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Apr. 01, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | ||||
Document Type | 10-K | |||
Amendment Flag | false | |||
Document Annual Report | true | |||
Document Transition Report | false | |||
Document Period End Date | Dec. 31, 2023 | |||
Document Fiscal Period Focus | FY | |||
Document Fiscal Year Focus | 2023 | |||
Current Fiscal Year End Date | --12-31 | |||
Entity File Number | 001-14332 | |||
Entity Registrant Name | NOVELSTEM INTERNATIONAL CORP. | |||
Entity Central Index Key | 0000912544 | |||
Entity Tax Identification Number | 65-0385686 | |||
Entity Incorporation, State or Country Code | FL | |||
Entity Address, Address Line One | 2255 Glades Road | |||
Entity Address, Address Line Two | Suite 221A | |||
Entity Address, City or Town | Boca Raton | |||
Entity Address, State or Province | FL | |||
Entity Address, Postal Zip Code | 33431 | |||
City Area Code | (410) | |||
Local Phone Number | 598-9024 | |||
Entity Well-known Seasoned Issuer | No | |||
Entity Voluntary Filers | No | |||
Entity Current Reporting Status | Yes | |||
Entity Interactive Data Current | Yes | |||
Entity Filer Category | Non-accelerated Filer | |||
Entity Small Business | true | |||
Entity Emerging Growth Company | true | |||
Elected Not To Use the Extended Transition Period | false | |||
Entity Shell Company | false | |||
Entity Public Float | $ 3,282,000 | |||
Entity Common Stock, Shares Outstanding | 46,881,475 | |||
Documents Incorporated By Reference | None | |||
ICFR Auditor Attestation Flag | false | |||
Document Financial Statement Error Correction [Flag] | false | |||
Auditor Firm ID | 6651 | 677 | ||
Auditor Name | Kreit & Chiu CPA LLP | Cherry Bekaert LLP | ||
Auditor Location | New York | Fort Lauderdale, Florida |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | |
Current assets | |||
Cash | $ 53,063 | $ 6,346 | |
Accounts receivable, administrative fees | 12,000 | ||
Prepaid expenses | 33,540 | 40,561 | |
Total current assets | 86,603 | 58,907 | |
Non-current assets | |||
Investment in Netco | 133,709 | 137,011 | |
Note receivable, NewStem | 250,000 | ||
Investment in NewStem | 1,784,234 | 2,090,286 | |
Total assets | 2,254,546 | 2,286,204 | |
Current liabilities | |||
Accounts payable | 54,257 | 21,203 | |
Note payable | 250,000 | ||
Accrued expenses | 42,223 | 43,673 | |
Total current liabilities | 346,480 | 64,876 | |
Non-current liabilities | |||
Long-term notes payable, including accrued interest | 3,324,599 | 288,450 | |
Convertible financial instrument | |||
Derivative liability, guarantee | 535,000 | ||
Total long-term liabilities | 3,859,599 | 288,450 | |
Total liabilities | 4,206,079 | 353,326 | |
Commitments and contingent liabilities | |||
Shareholders’ equity | |||
Ordinary shares | 468,815 | 468,815 | |
Additional paid-in capital | 290,907,217 | 290,604,327 | |
Accumulated deficit | (293,127,811) | (288,940,510) | |
Treasury stock, at cost, 3,435,197 shares at December 31, 2023 and 2022 | (199,754) | (199,754) | |
Total shareholders’ equity | (1,951,533) | 1,932,878 | |
Total liabilities and shareholders’ equity | 2,254,546 | 2,286,204 | |
NewStem Ltd [Member] | |||
Current assets | |||
Cash and cash equivalents | 324,000 | 878,000 | |
Other current assets | 29,000 | 33,000 | |
Total current assets | 353,000 | 911,000 | |
Non-current assets | |||
Property and equipment, net | 9,000 | 23,000 | |
Total assets | 362,000 | 934,000 | |
Current liabilities | |||
Accounts payable | 34,000 | 97,000 | |
Related party | 250,000 | ||
Total current liabilities | 284,000 | 97,000 | |
Non-current liabilities | |||
Convertible financial instrument | 121,000 | ||
Total liabilities | 284,000 | 218,000 | |
Commitments and contingent liabilities | |||
Shareholders’ equity | |||
Ordinary shares | [1] | ||
Additional paid-in capital | 9,167,000 | 8,686,000 | |
Accumulated deficit | (9,089,000) | (7,970,000) | |
Total shareholders’ equity | 78,000 | 716,000 | |
Total liabilities and shareholders’ equity | $ 362,000 | $ 934,000 | |
[1]Represents an amount less than $1 thousand. |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 50,316,672 | 50,316,672 |
Common stock, shares outstanding | 46,881,475 | 46,881,475 |
Treasury stock, shares | 3,435,197 | 3,435,197 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Administrative fee income | $ 12,000 | $ 12,000 |
Operating expenses: | ||
Research and development expenses | ||
Less – grants and participations received | ||
Research and development expenses, net | ||
General and administrative expenses, net | 665,277 | 744,434 |
Litigation expenses (contra expenses) (Note 7) | 2,872,522 | (310,000) |
Total operating expenses | 3,537,799 | 434,434 |
Operating loss | (3,525,799) | (422,434) |
Other expenses: | ||
Loss on derivative instrument | 260,000 | |
Interest expense | 99,023 | 11,018 |
Total other expenses | 359,023 | 11,018 |
Loss for the year | (3,884,822) | (433,452) |
Provision for income tax | ||
Net loss before equity in net loss of equity method investees | (3,884,822) | (433,452) |
Equity in net loss of equity method investees | (338,618) | (719,802) |
Gain on dilution of equity method investment | 36,139 | 387,524 |
Net loss | $ (4,187,301) | $ (765,730) |
Basic and diluted net loss per share: | ||
Net loss per share - basic | $ (0.09) | $ (0.02) |
Net loss per share - diluted | $ (0.09) | $ (0.02) |
Weighted average number of shares outstanding – basic | 46,881,475 | 46,881,475 |
Weighted average number of shares outstanding – diluted | 46,881,475 | 46,881,475 |
NewStem Ltd [Member] | ||
Revenues | $ 95,000 | |
Cost of revenues | 11,000 | |
Gross profit | 84,000 | |
Operating expenses: | ||
Research and development expenses | 965,000 | 2,299,000 |
Less – grants and participations received | (200,000) | |
Research and development expenses, net | 965,000 | 2,099,000 |
General and administrative expenses, net | 240,000 | 245,000 |
Operating loss | 1,121,000 | 2,344,000 |
Other expenses: | ||
Financial income, net | (2,000) | (3,000) |
Loss for the year | 1,119,000 | 2,341,000 |
Net loss | $ (1,119,000) | $ (2,341,000) |
Statements of Shareholders' Equ
Statements of Shareholders' Equity (Deficit) - USD ($) | Common Stock [Member] | Common Stock [Member] NewStem Ltd [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] NewStem Ltd [Member] | Retained Earnings [Member] | Retained Earnings [Member] NewStem Ltd [Member] | Treasury Stock, Common [Member] | Total | NewStem Ltd [Member] | Total [Member] NewStem Ltd [Member] | |
Balance at Dec. 31, 2021 | $ 468,815 | [1] | $ 290,321,665 | $ 6,734,000 | $ (288,174,780) | $ (5,629,000) | $ (199,754) | $ 2,415,946 | $ 1,105,000 | ||
Balance, shares at Dec. 31, 2021 | 46,881,475 | 158,696 | 3,435,197 | ||||||||
Loss for the year | (765,730) | (2,341,000) | (765,730) | $ (2,341,000) | (2,341,000) | ||||||
Stock issued | |||||||||||
Stock issued, shares | |||||||||||
Stock based compensation | 282,662 | 502,000 | 282,662 | 502,000 | |||||||
Issuance of ordinary shares, net | [1] | 1,450,000 | 1,450,000 | ||||||||
Issuance of ordinary shares, net, shares | 4,798 | ||||||||||
Balance at Dec. 31, 2022 | $ 468,815 | [1] | 290,604,327 | 8,686,000 | (288,940,510) | (7,970,000) | $ (199,754) | 1,932,878 | 716,000 | 716,000 | |
Balance, shares at Dec. 31, 2022 | 46,881,475 | 163,494 | 3,435,197 | ||||||||
Loss for the year | (4,187,301) | (1,119,000) | (4,187,301) | (1,119,000) | (1,119,000) | ||||||
Stock based compensation | 302,890 | 356,000 | 302,890 | 356,000 | |||||||
Conversion of convertible financial instrument | 125,000 | 125,000 | |||||||||
Conversion of convertible financial instrument, shares | 412 | ||||||||||
Balance at Dec. 31, 2023 | $ 468,815 | [1] | $ 290,907,217 | $ 9,167,000 | $ (293,127,811) | $ (9,089,000) | $ (199,754) | $ (1,951,533) | $ 78,000 | $ 78,000 | |
Balance, shares at Dec. 31, 2023 | 46,881,475 | 163,906 | 3,435,197 | ||||||||
[1]Represents an amount less than $1 thousand. |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities | ||
Loss for the year | $ (4,187,301) | $ (765,730) |
Adjustments required to reconcile loss to net cash used in operating activities: | ||
Depreciation | ||
Revaluation of convertible financial instrument | ||
Equity in net loss of equity method investees | 338,618 | 719,802 |
Gain on dilution of equity method investment | (36,139) | (387,524) |
Distribution from NetCo | 6,875 | 12,591 |
Accretion of discount on note payable | 61,815 | |
Loss on derivative instrument | 260,000 | |
Legal fees and litigation funding fees funded by litigation funding agreement | 2,819,196 | |
Accrued interest added to long-term note payable | 35,138 | 8,450 |
Stock based compensation | 302,890 | 282,662 |
Change in operating assets and liabilities: | ||
Decrease in other current assets | ||
Decrease in other liabilities | ||
Accounts receivable, administrative fees | 12,000 | (12,000) |
Prepaid expenses | 7,021 | (12,245) |
Decrease in accounts payable | 33,054 | (28,574) |
Accrued expenses | (1,450) | 248 |
Net cash used in operating activities | (348,283) | (182,320) |
Cash flows from investing activities: | ||
Loans made | (250,000) | |
Net cash used in investing activities | (250,000) | |
Cash flows from financing activities | ||
Proceeds from (repayment of) note payable, current | 250,000 | (100,000) |
Proceeds from long-term note payable | 395,000 | 280,000 |
Funds received from a related party | ||
Issuance of ordinary shares, net | ||
Net cash provided by financing activities | 645,000 | 180,000 |
Net increase (decrease) in cash and cash equivalents | 46,717 | (2,320) |
Cash and cash equivalents at the beginning of the year | 6,346 | 8,666 |
Cash and cash equivalents at the end of the year | 53,063 | 6,346 |
Cash paid during the year for: | ||
Interest | 1,248 | 8,320 |
NewStem Ltd [Member] | ||
Cash flows from operating activities | ||
Loss for the year | (1,119,000) | (2,341,000) |
Adjustments required to reconcile loss to net cash used in operating activities: | ||
Depreciation | 14,000 | 18,000 |
Revaluation of convertible financial instrument | 4,000 | (13,000) |
Stock based compensation | 356,000 | 1,273,000 |
Change in operating assets and liabilities: | ||
Decrease in other current assets | 4,000 | 20,000 |
Decrease in other liabilities | (100,000) | |
Decrease in accounts payable | (63,000) | (30,000) |
Net cash used in operating activities | (804,000) | (1,173,000) |
Cash flows from financing activities | ||
Funds received from a related party | 250,000 | |
Issuance of ordinary shares, net | 1,450,000 | |
Net cash provided by financing activities | 250,000 | 1,450,000 |
Net increase (decrease) in cash and cash equivalents | (554,000) | 277,000 |
Cash and cash equivalents at the beginning of the year | 878,000 | 601,000 |
Cash and cash equivalents at the end of the year | 324,000 | 878,000 |
Non-cash financing activities | ||
Conversion of convertible financial instrument | $ 125,000 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2023 | |
NATURE OF OPERATIONS | NOTE 1— NATURE OF OPERATIONS Description of Business NovelStem International Corp. (“NovelStem” or the “Company”) is a holding company whose principal assets are an approximate 31 50 NewStem focuses on the development and commercialization of diagnostic technology that can predict patients’ anti-cancer drug resistance, allowing for targeted cancer treatments and the potential to reduce resistance to chemotherapy. NetCo is a legacy media business interest which owns “Net Force”, a book publishing franchise. Going Concern, Liquidity and Management’s Plans Since inception, the Company has accumulated a deficit of approximately $ 293,000,000 6,447,000 The Company will need to obtain additional funds to continue its operations. Management’s plans with regard to these matters include additional financing and fundraising until its equity investment in NewStem is profitable. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient cash from financing on terms acceptable to the Company, or that NewStem will be able to continue as a going concern and become profitable (see Note 3). The Company has in place a finance agreement with two individuals who are shareholders and directors to borrow $ 650,000 300,000 In view of the matters described above, the Company’s ability to meet financing requirements is dependent upon the ability to complete additional fundraising or obtain additional financing, and/or monetize its investment in NetCo, along with NewStem continuing as a going concern. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. |
NewStem Ltd [Member] | |
NATURE OF OPERATIONS | Note 1 - General NOTE 1— NATURE OF OPERATIONS A. NewStem Ltd. (“the Company”) was incorporated in September 2016 under the laws of the State of Israel and commenced its business operations in July 2018. B. The Company is a development stage company utilizing its pioneering intellectual property related to haploid human embryonic stem cells for the development of personalized diagnostics and therapeutics for genetic and epigenetic diseases. C. Going Concern Since inception, the Company has accumulated losses of US$ 9,089 1,119 324 804 The Company will need to obtain additional funds to continue its operations over the next 12 months. Management’s plans with regard to these matters include continued development, marketing and licensing of its products, as well as seeking additional financing arrangements. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient cash from sales, licensing or financing on terms acceptable to the Company (see also Note 1D). The Company’s management has adopted a cost reduction plan in order to adjust future operation expenses to its cash balance. On October 23, 2023, the board of directors of the Company unanimously resolved, due to the financial status of the Company, to hold a hearing for most of the Company’s employees to be followed by a dismissal notice, which occurred on December 31, 2023. The above-mentioned events incur significant difficulties to continue to operate the Company’s business and there is a substantial doubt about its ability to continue as a going concern during the look-forward period. The financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern. D. “Iron Swords” war Following the brutal attacks on Israel, the mobilization of army reserves, and the Government declaring a state of war (“Iron Swords” war) in October 2023, there was a decrease in Israel’s economic and business activity. The security situation has led, inter alia, to a disruption in the chain of supply and production, a decrease in the volume of national transportation, a shortage in manpower as well as a decrease in the value of financial assets and a rise in the exchange rate of foreign currencies in relation to the shekel. As a result of the movement and work restrictions, the Company began operating on a limited scale, and most of the employees were instructed to work from home. In addition, the situation has brought further difficulties in management’s efforts to seek additional financing arrangements. E. Definitions In these financial statements – 1. The Company – NewStem Ltd. 2. Related Party – Within its meaning in ASC 850, “Related Party Transactions”. NewStem Ltd. Notes to the Financial Statements for the year ended December 31, 2023 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Financial Accounting Standards Board (“FASB”) has established the FASB Accounting Standards Codification (“ASC”) as the single source of authoritative GAAP. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. NOVELSTEM INTERNATIONAL CORP. Notes to Financial Statements Cash and Cash Equivalents Cash and cash equivalents include certain investments in highly liquid debt instruments with original maturities of three months or less at the date of purchase. The Company had no cash equivalents as of either year end. Equity Investments Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an Investee depends on an evaluation of several factors, including, among others, representation on the Investee company’s board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the Investee company. When the Company’s carrying value in an equity method Investee company is reduced to zero, no further losses are recorded in the Company’s financial statements unless the Company guarantied obligations of the Investee company or has committed additional funding. When the Investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized. The Company reviews equity investments for impairment on an annual basis, or earlier if events or changes in circumstances indicate that the carrying amounts might not be recoverable. The Company holds a minority investment in an entity, NewStem, which is accounted for pursuant to the equity method of accounting. Additionally, the Company is a 50 Derivative Financial Instruments The Company has in place a financial instrument, in the form of a note payable, with an identified embedded derivative in the form of a guarantee. The identified embedded derivative has been bifurcated and accounted for separately. Such derivative financial instruments are measured at fair value at each financial statement reporting date. If the fair value of a financial liability (the derivative) exceeds the proceeds received for the issuance of a hybrid instrument in an arms length transaction with no rights or privileges that require separate accounting recognition as an asset identified, then the embedded derivative is recorded at fair value with the excess of fair value over proceeds recognized as a loss in earnings. During the year ended December 31, 2023, the Company recognized a loss on derivative financial instruments of $ 260,000 Treasury Stock Shares of common stock repurchased are recorded at cost as treasury stock. NOVELSTEM INTERNATIONAL CORP. Notes to Financial Statements Stock-Based Compensation The Company accounts for stock-based awards in accordance with applicable accounting principles, which requires compensation expense related to share-based transactions to be measured and recognized in the financial statements based on a determination of the fair value of the stock options. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. For all stock options, the Company recognizes expense on an accelerated basis over the requisite service period (generally the vesting period of the equity grant). The Company’s option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility, expected term, and forfeiture rate. Any changes in these highly subjective assumptions significantly impact stock-based compensation expense. Options awarded to purchase shares of common stock issued to non-employees in exchange for services are accounted for as variable awards in accordance with applicable accounting principles. Such options are valued using the Black-Scholes option pricing model. In the event of the termination of an employee, third party service provider, officer or Director’s service on the Board of the Company for any reason other than for cause, all of the options which are then vested may be exercised within 18 months of such termination, provided that, in no event shall this extension period continue beyond the expiration of the term of the option(s). In addition, any such extension shall be applicable only to the extent that such option or options are vested and exercisable according to the terms of the Plan and this Agreement. Any unvested options are immediately terminated on the effective date of the termination. In the event of termination of an employee, third party service provider, officer or Director’s service for cause, all options are forfeited and deemed cancelled and no longer exercisable on the date of termination. See Note 5 for the assumptions used to calculate the fair value of stock-based compensation. Upon the exercise of options, it is the Company’s policy to issue new shares rather than utilizing treasury shares. Income Taxes Deferred income taxes are determined using the asset and liability method in accordance with Accounting Standards Codification (“ASC”) Topic 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income taxes are measured using enacted tax rates expected to apply to taxable income in years in which such temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred income taxes is recognized in the statement of operations of the period that includes the enactment date. In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will not be realized. NOVELSTEM INTERNATIONAL CORP. Notes to Financial Statements Basic and Diluted Net Loss Per Share Basic net income per share is computed by dividing the net income by the weighted average number of shares outstanding during the year, excluding treasury stock. Diluted net income per share is computed by dividing the net income by the weighted average number of shares outstanding plus the dilutive potential of common shares which would result from the exercise of stock options and warrants. The dilutive effects of stock options and warrants are excluded from the computation of diluted net income per share if the effect of doing so would be antidilutive. The following data represents the amounts used in computing earnings per share and the effect on net income (loss) and the weighted average number of shares of dilutive potential common stock: SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES OF DILUTIVE Year Ended December 31, 2023 2022 Net loss available to common shareholders $ (4,187,301 ) $ (765,730 ) Weighted average shares outstanding: -Basic 46,881,475 46,881,475 Add: Warrants - - Add: Stock options - - -Diluted 46,881,475 46,881,475 Basic and diluted net loss per share $ (0.09 ) $ (0.02 ) |
NewStem Ltd [Member] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 2 - Significant Accounting Policies NOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies applied on a consistent basis are as follows: A. Basis of Presentation The financial statements are prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”). B. Functional currency The currency of the primary economic environment in which the Company conducts its operations is the U.S. dollar. The Company raises funds in US dollars and manages its budget in US dollars. Initial revenues recorded in 2023 were generated in US dollars, and future revenues are also expected to be generated in US dollars. Accordingly, the Company uses the U.S. dollar as its functional and reporting currency. C. Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions regarding transactions or matters the final effect of which on the financial statements cannot be accurately determined at the time of their preparation. Even though the estimates and assumptions are based on management’s best judgment, the final effect of such transactions or matters may be different from the estimates and assumptions made in their respect. As applicable to these financial statements, the most significant estimates and assumptions relate to stock-based compensation. D. Cash and cash equivalents Cash and cash equivalents include short-term bank deposits with an original maturity not exceeding three months, that is not restricted for use. E. Property and equipment Property and equipment are stated at cost. Depreciation is computed by using the straight-line method, over the assets’ estimated useful life. The annual depreciation rate for Software and Computers is 33 Estimates of the depreciation method, useful life and residual value are reviewed at least at the end of each reporting year and adjusted as necessary. Long-lived assets held and used by the Company, are reviewed for impairment whenever events or changes in circumstance indicate that the carrying amount of the assets may not be recoverable. No NewStem Ltd. Notes to the Financial Statements for the year ended December 31, 2023 Note 2 - Significant Accounting Policies (cont’d) F. Concentrations of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. Cash and cash equivalents are invested in a major bank in Israel. Management believes that the financial institution that holds the Company’s investments is financially sound and, accordingly, a minimal credit risk exists with respect to these investments. The Company has no off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements. G. Severance pays Pursuant to Section 14 of the Severance Compensation Law, 1963 (“Section 14”), the Company’s employees, covered by this section, are entitled only to monthly deposits, at a rate of 8.33% of their monthly salary, made in their name with insurance companies and/or pension funds. Payments in accordance with Section 14 release the Company from any liability for future severance payments in respect of those employees. Deposits under Section 14 are not recorded as an asset in the Company’s balance sheet. All of the Company’s employees are included under Section 14. H. Research and development costs Research and development expenses consist mainly of labor costs. Costs are expensed as incurred. A grant received is offset from research and development expenses. See also Note 2M. I. Income taxes Deferred income taxes are determined using the asset and liability method in accordance with Accounting Standards Codification (“ASC”) Topic 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income taxes are measured using enacted tax rates expected to apply to taxable income in years in which such temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred income taxes is recognized in the statement of operations of the period that includes the enactment date. In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will not be realized. NewStem Ltd. Notes to the Financial Statements for the year ended December 31, 2023 Note 2 - Significant Accounting Policies (cont’d) J. Fair value of financial instruments The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: The carrying amounts of cash and cash equivalents, trade receivables, other accounts receivable, trade payables and other liabilities approximate their fair value due to the short-term maturity of such instruments. The Company adopted ASC 820 Fair Value Measurements (“ASC 820”) which clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Other inputs that are directly or indirectly observable in the marketplace. Level 3 - Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. K. Collaborative arrangement The Company may enter into collaborative agreement with a third party. According to such agreement, the Company further develops its intellectual property to meet the needs of the third party and is entitled to royalties from any future sales that include its IP. The Company also receives reimbursement for the R&D costs it incurred as part of such agreement. Such agreements are considered to be within the scope of ASC 808 Collaborative Arrangements (“ASC 808”), as the parties are active participants and exposed to the risks and rewards of the collaborative activity. Performing R&D services for reimbursement is considered to be a collaborative activity under the scope of ASC 808. The Company records reimbursement payments received from the collaboration partner as reductions to R&D expense. L. Stock-based compensation The Company accounts for its stock options grants under the fair value recognition provisions of ASC Topic 718. The Company currently uses the straight-line amortization method for recognizing share option compensation costs. The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that is vested at that date. The Company has elected to account for forfeitures as they occur; any compensation cost previously recognized for an award that is forfeited because of a failure to satisfy the service condition is reversed in the period of the forfeiture. The Company records prepaid stock-based payment as an asset in cases where a fully vested equity award was granted but the services have not been fully received, as required by ASC 718-10 Stock compensation NewStem Ltd. Notes to the Financial Statements for the year ended December 31, 2023 Note 2 - Significant Accounting Policies (cont’d) M. Grants received The Company receives from time-to-time grants from various sources to fund certain research and development activities. To date, the grants’ terms have stated that if such research and development activities are not successful, the Company would not be obligated to refund any payment previously received. Given such terms, since the financial risk associated with the research and development remains with the grantor, the Company does not recognize a liability associated with such funding. Grants that do not include a specific deliverable in the terms are offset from research and development expenses. N. Leases The Company is a lessee in two agreements. 1. Laboratory The Company leases a certain portion of a laboratory space for its use from a related party. The leased space of the laboratory is not considered to be an identified asset as the agreement does not explicitly specify a distinct space for the Company’s use, nor implicitly specify a distinct space as it does not represent a substantial portion of the laboratory’s capacity. Furthermore, other parties may also use the laboratory and have access to the laboratory. Therefore, the lease is not under the scope of ASC-842. (see also Note 9D). 2. Vehicle lease The lease agreement is for a period of 12 O. Revenue recognition The Company views granting of licenses and sublicenses as outputs of its ordinary business activities, and recipients of such licenses as customers. Thus, the Company considered such licenses agreements to be in the scope of ASC 606 Revenue from Contracts with Customers (“ASC 606”) NewStem Ltd. Notes to the Financial Statements for the year ended December 31, 2023 |
EQUITY METHOD INVESTMENTS
EQUITY METHOD INVESTMENTS | 12 Months Ended |
Dec. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY METHOD INVESTMENTS | NOTE 3— EQUITY METHOD INVESTMENTS Investment in NewStem In 2018, the Company entered into a Share Purchase Agreement with NewStem and other related parties to provide aggregate funding of up to $ 4,000,000 50,000 33% 25,000 2,000,000 20% 12,500 1,000,000 30.51% 30.58% The Company accounts for its investment in NewStem under the equity method. At December 31, 2023 and 2022, the carrying value of the investment in NewStem exceeded its portion of the underlying net assets of NewStem by approximately $ 1,800,000 1,900,000 During the years ended December 31, 2023 and 2022, the Company reimbursed NewStem for audit and audit related costs of approximately $ 58,000 105,000 As disclosed in Note 8, the Company is in negotiations to acquire the remainder of NewStem in exchange for shares of Company stock. In anticipation of this transaction, the Company advanced $ 250,000 250,000 The Company assesses its investment in NewStem for impairment on an annual basis or more frequently if indicators of impairment exist. NOVELSTEM INTERNATIONAL CORP. Notes to Financial Statements NewStem is in the development stage and has incurred losses since its inception and has generated only minimal revenues related to a licensing agreement. NewStem will need to obtain additional funds to continue its operations. NewStem management’s plans with regard to these matters include continued development, marketing and licensing of its products, as well as seeking additional financing arrangements. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient cash from sales, licensing or financing on terms acceptable to the Company. NewStem obtained additional funding of approximately $ 1,450,000 The aforementioned events indicate significant difficulties to continue as a concern. Additionally, Israel declared a state of war in October 2023 which resulted in a decrease in Israel’s economic and business activity. The security situation in Israel led to a disruption in the chain of supply and production, a decrease in the volume of national transportation, and a shortage in manpower as well as a decrease in the value of financial assets. As a result of the movement and work restrictions, NewStem began operating on a limited scale. Additionally, the situation has brought further difficulties in management’s efforts to seek additional financing. The following table represents the Company’s investment in NewStem: SCHEDULE OF INVESTMENTS 2023 2022 Year Ended December 31, 2023 2022 Investment in NewStem, beginning $ 2,090,286 $ 2,435,155 Allocation of net loss from NewStem (342,191 ) (732,393 ) Gain on dilution of equity method investment 36,139 387,524 Investment in NewStem, ending $ 1,784,234 $ 2,090,286 The results of operations and financial position of the Company’s investment in NewStem are summarized below: SCHEDULE OF OPERATIONS AND FINANCIAL POSITION INVESTMENT 2023 2022 Year Ended December 31, 2023 2022 Condensed income statement information: License fees $ 95,000 $ - Gross profit $ 84,000 $ - Net loss $ (1,119,000 ) $ (2,341,000 ) Company’s allocation of net loss from NewStem $ (342,191 ) $ (732,393 ) 2023 2022 As of December 31, 2023 2022 Condensed balance sheet information: Current assets $ 353,000 $ 911,000 Non-current assets $ 9,000 $ 23,000 Current liabilities $ 284,000 $ 97,000 Non-current liabilities $ - $ 121,000 NOVELSTEM INTERNATIONAL CORP. Notes to Financial Statements Investment in NetCo NovelStem owns a 50% The following table represents the Company’s investment in NetCo: SCHEDULE OF INVESTMENTS 2023 2022 Year Ended December 31, 2023 2022 Investment in NetCo, beginning $ 137,011 $ 137,011 Allocation of net income from Netco 3,573 12,591 Distribution from NetCo (6,875 ) (12,591 ) Investment in NetCo, ending $ 133,709 $ 137,011 The results of operations and financial position of the Company’s investment in NetCo are summarized below: SCHEDULE OF OPERATIONS AND FINANCIAL POSITION INVESTMENT 2023 2022 Year Ended December 31, 2023 2022 Condensed income statement information: Net sales $ 25,789 $ 25,182 Gross profit $ 19,422 $ 25,182 Net income $ 7,146 $ 25,182 Company’s allocation of net income from NetCo $ 3,573 $ 12,591 2023 2022 As of December 31, 2023 2022 Condensed balance sheet information: Current assets $ 1,820 $ 13,473 Non-current assets $ 272,799 $ 272,799 Current liabilities $ 325 $ 12,250 Non-current liabilities $ - $ - NOVELSTEM INTERNATIONAL CORP. Notes to Financial Statements |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 4— NOTES PAYABLE In December 2023, the Company entered into two short term notes payable with unrelated parties, Hewlett Fund and AIGH Investment Partners, LLC. The notes are for $ 125,000 250,000 12% December 21, 2024 The note agreements include a provision whereby, in the event of a capital raise transaction by the Company, the note holders would be entitled to participate in the transaction in an amount equal to 133% of the amounts owed on the note agreements at the closing of the transaction 822 Long-term notes payable are summarized as follows: SCHEDULE OF LONG TERM NOTES PAYABLE As of December 31, 2023 2022 Notes payable related parties: Notes payable director and Executive Chairman $ 400,000 $ 280,000 Accrued interest added to note balance 43,588 8,450 Total notes payable director and Executive Chairman 443,588 288,450 Note payable shareholder, principal amount 275,000 - Less unamortized discount (213,185 ) - Total note payable shareholder 61,815 - Note payable, litigation funding agreement: Note payable Omni Bridgeway (Fund 4) Invt. 3 L.P. 2,819,196 - Total notes payable 3,324,599 288,450 Less current portion - - Long-term notes payable $ 3,324,599 $ 288,450 On April 12, 2021, the Company entered into a promissory note (the “Note”) with a related party (individual) for $ 100,000 8% April 12, 2022 1,198 6,752 In May 2022, the Company entered into note agreements with two individuals who are related parties to borrow up to $ 600,000 650,000 8% 10% September 1, 2025 400,000 280,000 On May 5, 2023, the Company entered into a long term note payable with a shareholder for $ 300,000 150,000 150,000 0% May 5, 2025 535,000 61,815 Note Payable, Litigation Funding Agreement On February 11, 2022, the Company entered into a nonrecourse litigation funding agreement (the “Agreement”) with Omni Bridgeway (Fund 4) Invt. 3 L.P. (“Omni”) related to an arbitration proceeding disclosed in Note 7. The Agreement provides for Omni to fund all costs related to the arbitration up to $ 1,000,000 310,000 NOVELSTEM INTERNATIONAL CORP. Notes to Financial Statements During July 2023, the arbitration was settled with a favorable outcome for the Company. As a result of the ruling disclosed in Note 7, the liability became probable and reasonably estimable, and the Company has recorded the full liability due to Omni as of December 31, 2023. This liability consists of expenses funded by Omni of $ 933,065 310,000 1,886,131 2,819,196 5% |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
EQUITY | NOTE 5— EQUITY (a) General At December 31, 2023 and 2022 the Company had issued 50,316,672 46,881,475 0.01 3,435,197 .01 (b) Summary Employee Option Information The Company’s stock option plans provide for the grant to officers, directors, third party contractors and other future key employees of options to purchase shares of common stock. The purchase price may be paid in cash or at the end of the option term, if the option is “in-the-money”, it is automatically exercised “net”. In a net exercise of an option, the Company does not require a payment of the exercise price of the option from the optionee but reduces the number of shares of common stock issued upon the exercise of the option by the smallest number of whole shares that has an aggregate fair market value equal to or in excess of the aggregate exercise price for the option shares covered by the option exercised. Each option is exercisable to one share of the Company’s common stock. Most options expire within six years from the date of the grant and generally vest on the first anniversary date of their issuance. Pursuant to the Equity Incentive Plan approved by the Company’s board of directors on November 12, 2018, an aggregate of 5,760,000 The Company utilized the Black-Scholes option-pricing model to estimate fair value, utilizing the following assumptions for the respective years (all in weighted averages): SCHEDULE OF FAIR VALUE OF OPTION USING VALUATION ASSUMPTIONS Year Ended December 31, 2023 2022 Risk-free interest rate 3.4 % 1.5 % Expected term, in years 3.91 3.82 Expected volatility 118.3 % 183.7 % Expected dividend yield 0 % 0 % Determined weighted average grant date fair value per option $ 0.17 $ 0.27 The expected term of the options represents an estimate of the length of time until the expected date of exercising the options. Options granted have a maximum life of 6 0% NOVELSTEM INTERNATIONAL CORP. Notes to Financial Statements (c) Summary Option Information A summary of the Company’s option plans as of December 31, 2023 and 2022, as well as changes during each of the years then ended, is presented below: SCHEDULE OF STOCK OPTION ACTIVITIES Year Ended December 31, 2023 2022 Number Weighted Number Weighted of Average of Average Options Exercise Options Exercise (in shares) Price (in shares) Price Outstanding at beginning of year 5,400,000 0.14 4,300,000 0.10 Granted 360,000 0.20 1,100,000 0.29 Outstanding at end of year 5,760,000 0.14 5,400,000 0.14 Exercisable at end of year 5,400,000 0.14 4,800,000 0.12 Stock-based compensation expense was approximately $ 303,000 283,000 The total compensation cost related to non-vested awards not yet recognized was approximately $ 13,000 13,000 500,000 (d) Warrants The Company has issued warrants at exercise prices equal to or greater than market value of the Company’s common stock at the date of issuance. A summary of warrant activity follows: SUMMARY OF WARRANTS ACTIVITY Year Ended December 31, 2023 2022 Number of Weighted Number Weighted shares Average of Average underlying Exercise Options Exercise warrants Price (in shares) Price Outstanding at beginning of year 3,000,000 0.12 3,000,000 0.12 Granted - - - - Exercised - - - - Forfeited or expired - - - - Outstanding at end of year 3,000,000 0.12 3,000,000 0.12 The warrant agreements were amended on May 12, 2023 to extend the expiration date to June 28, 2025 one and a half years 243,000 NOVELSTEM INTERNATIONAL CORP. Notes to Financial Statements |
NewStem Ltd [Member] | |
EQUITY | Note 7 - Share Capital NOTE 5— EQUITY Schedule of Share Capital Composition Composition: As of December 31, 2023 Authorized Issued and fully paid Number of shares Ordinary shares NIS 0.01 par value ( Ordinary Shares ) 1,000,000 163,906 Ordinary shares NIS 0.01 ( Ordinary Shares ) 1,000,000 163,906 As of December 31, 2022 Issued and Authorized fully paid Number of shares Ordinary shares 1,000,000 163,494 A In 2016, the Company issued to its founders 100,000 B. In June 2018, the Company entered into an investment agreement for the issuance of 50,000 33 4,000 25,000 2,000 2,000 12,500 1,000 In 2020, the Company met all milestones set in the investment agreement. As such, the 3rd and last investment tranche of $ 1,000 12,500 C. In September 2021, the Company signed an agreement with a third-party in which such third party committed to provide the Company certain services in exchange to 5 8,696 1,952 NewStem Ltd. Notes to the Financial Statements for the year ended December 31, 2023 Note 7 - Share Capital (cont’d) D. On April 30, 2022, the Company signed a share purchase agreement with two investors for the purchase of 2,647 0.01 800 2,151 0.01 650 According to those agreements, if the Company provides favorable terms to other investors in this round, then it shall adjust the existing agreements and provide substantially equivalent rights to all the Investors. E. Stock option plan: In 2018 the Company adopted a stock option plan for its employees, service providers and officers, pursuant to which, and to a resolution of the Company’s board of directors dated October 31, 2018, the Company reserved for issuance 6,250 In June 2021, the Company increased its reserved stock option plan to 13,654 The contractual life of the share option is 10 Share options to employees, service providers and officers granted under the stock option plan shall be vesting in installments, gradually over a period of 4 Below is a summary of employee option activity under the Company’s equity incentive plan during the current year: Summary of Employee Option Activity Year ended December 31, 2023 Weighted Weighted average average remaining Number of exercise price contractual options US$ term (years) Outstanding at the beginning of the year 13,145 146.63 Forfeited (6 ) 80 Outstanding at the end of the year 13,139 146.66 1.80 Exercisable at the end of the year 12,598 144.38 1.58 The following table sets forth the total stock-based compensation expense resulting from stock options included in the statements of operations. Schedule of Stock-based Compensation Expense 2023 2022 Year ended December 31 2023 2022 US$ thousands US$ thousands Research and development 212 321 General and administrative 144 181 Total stock-based compensation expense 356 502 NewStem Ltd. Notes to the Financial Statements for the year ended December 31, 2023 Note 7 - Share Capital (cont’d) F. Convertible Financial Instruments In November 2021, the Company signed a Simple Agreement for Future Equity (“SAFE”) with an investor in the amount of 100 134 (a) In the event of a financing round of at least 1 million GBP, the SAFE will be automatically converted at the end of the round into ordinary shares at the price determined in such round. (b) In the event that the financing round is below 1 million GBP, the SAFE may be converted into ordinary shares at the price determined in such round, at the discretion of the investor. (c) If no financing round occurs, the SAFE amount shall automatically be converted into ordinary shares at the earlier of: (a) an M&A transaction – using the price per share determined in such transaction, or (b) 36 months after the date of the agreement, at the fair market value of an ordinary share at that time. The SAFE was treated for accounting purposes as a liability, since this arrangement is settled in a variable amount of shares and the investor is not exposed to the changes in the fair value of the shares during the period from the transfer of funds until conversion. The convertible financial instrument was presented at fair value. The convertible financial instrument is considered a Level 3 fair value measurement. In November 2023, upon closing of the round (see also Note 7D), the SAFE was converted to 412 The changes in the liability measured at fair value for which the Company has used Level 3 inputs to determine fair value are as follows: Schedule of Change in Liability Measured at Fair Value 2023 2022 US$ thousands US$ thousands Balance as of January 1, 121 134 Change in fair value 4 (13 ) Conversion of a convertible financial instrument (125 ) - Balance as of December 31, - 121 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | NOTE 6— INCOME TAXES For the years ended December 31, 2023 and 2022, the Company incurred net operating losses and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At December 31, 2023 and 2022, the Company had approximately $ 54,000,000 61,000,000 9,900,000 6,400,000 The Company’s federal and state net operating losses began expiring in 2021. Approximately $ 8,000,000 4,000,000 55,000,000 25,000,000 5,331,000 The Company’s income tax provision differs from the expense that would result from applying statutory rates to income before taxes. A reconciliation of the provision (benefit) for income taxes with amounts determined by applying the statutory U.S. federal income tax rate to income before income taxes is as follows: SCHEDULE OF INCOME BEFORE INCOME TAX 2023 2022 Year Ended December 31, 2023 2022 Computed tax at the federal statutory rate of 21% $ (879,333 ) $ (160,803 ) State income taxes, net of federal income tax benefit (181,938 ) (33,271 ) Foreign rate differential (48,968 ) (171,089 ) Change in federal valuation allowance 1,110,239 365,163 Total provision for income tax $ - $ - Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets as of December 31, 2023 and 2022 consist of the following: SCHEDULE OF DEFERRED TAX ASSETS 2023 2022 As of December 31, 2023 2022 Outside tax basis difference in equity investments $ 1,700,000 $ 1,700,000 Federal and state net operating loss carryforwards available after consideration of IRC Section 382 limitations 2,540,308 1,686,708 General business credit 41,551 41,551 Related party interest and accretion of note discount 25,691 - Loss on derivative instrument 68,900 Stock compensation 252,275 174,009 Total deferred tax assets 4,630,725 3,602,268 Federal and state net operating loss carryforwards subject to IRC Section 382 limitations 13,644,005 15,465,570 Less valuation allowance for net operating loss limitations (13,644,005 ) (15,465,570 ) Valuation allowance (4,130,103 ) (2,971,573 ) Subtotal deferred tax assets 500,622 630,695 Deferred tax liability, equity method basis difference (500,622 ) (630,695 ) Net deferred tax assets $ - $ - Management has evaluated all tax positions that could have a significant effect on the combined financial statements and determined the Companies had no significant uncertain income tax positions at December 31, 2023 and 2022. NOVELSTEM INTERNATIONAL CORP. Notes to Financial Statements |
NewStem Ltd [Member] | |
INCOME TAXES | Note 11 - Taxes on Income NOTE 6— INCOME TAXES A. The Company is incorporated in Israel and is subject to Israeli taxation. B. The Israeli corporate income tax rate was 23 The main reconciling items from the statutory tax rate of the Company to the effective tax rate ( 0 C. Net operating loss carried forward As of December 31, 2023, the Company has net operating tax losses carried forward indefinitely of approximately US$ 4.4 3.8 D. Deferred income taxes The tax effects of temporary differences that give rise to significant components of the Company’s deferred tax assets and liabilities are as follows: Schedule of Deferred Tax Assets 2023 2022 December 31, 2023 2022 US$ thousands US$ thousands Deferred tax assets: Net operating losses 1,024 885 Research and development credit carried forward 188 229 Other 12 26 Total deferred tax assets 1,224 1,140 Less valuation allowance (1,224 ) (1,140 ) Net deferred tax assets - - The net change in the total valuation allowance was an increase of US $ 84 187 The Company has provided a full valuation allowance in respect of deferred tax assets resulting from the tax loss carried forward. Management currently believes that, since the Company has a history of losses, it is more likely than not that the deferred tax assets related to the loss carried forward and other temporary differences will not be realized in the foreseeable future. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | NOTE 7— COMMITMENTS AND CONTINGENCIES The Company was the claimant in an arbitration proceeding against their 50% The Arbitrator ruled in NovelStem’s favor on the issue of contract interpretation of the Netco Partners JV Agreement. The Arbitrator also found that the Company’s joint venture partner failed to use “reasonable, good faith efforts” to license and exploit the Net Force concept, in breach of its contractual obligations under the Netco Partners’ Joint Venture Agreement. The Arbitrator confirmed NovelStem’s contractual right to use Tom Clancy’s name as a possessory credit in the Net Force title (Tom Clancy’s Net Force). As a result of this ruling, the costs related to the litigation funding agreement disclosed in Note 4 were recognized. Total costs related to the litigation and the related litigation funding agreement of $ 2,819,196 |
NewStem Ltd [Member] | |
COMMITMENTS AND CONTINGENCIES | Note 9 - Commitments and Contingent Liabilities NOTE 7— COMMITMENTS AND CONTINGENCIES A. Royalties As part of the Company’s research and development efforts, the Company received licenses to use intellectual property developed by Yissum Research and Development Company of the Hebrew University of Jerusalem (“Yissum”) and New York Stem Cell Foundation (“NYSCF”). During 2017, Yissum and NYSCF granted the Company an exclusive license to make commercial use of that intellectual property, in order to develop, manufacture, market, distribute or sell products, subject to certain terms and events. In consideration for the grant of the license, the Company shall pay Yissum and NYSCF royalties at a rate of up to 3 12 11 B. Research Agreement During 2021 and 2022, the Company received payments of US$ 200 The research agreement determines that the Company will use its intellectual property to further develop know-how that will allow the third party to use such developed know-how for its commercial purposes. The third party shall pay the Company royalties of up to 3.5 NewStem Ltd. Notes to the Financial Statements for the year ended December 31, 2023 Note 9 - Commitments and Contingent Liabilities (cont’d) C. Master Innovation Hub Agreement On October 31, 2022, the Company entered into an agreement with a third party, according to the agreement the Company will develop an IP using the third party’s research data in exchange for 1.5 10 a. The FDA approval of the Product. b. A Change in Control of the Company provided that the collaboration is completed as described in the Development Plan. c. The execution of a Memorandum of Understanding (or equivalent) between the Company and the third party for the investment of funds from the third party into the Company. As of December 31, 2023, the Company does not expect any future sales or licenses nor does the Company considers an FDA approval or change in control of the company as events that are probable to occur. Therefore, no balances were recorded for these commitments in the financial statements . D. Laboratory Renting Agreement The Company rents a laboratory from Yissum starting July 1, 2018. The rent is for an initial three-year term expiring on June 30, 2021. The Company extended the lease until December 31, 2023, and it has an option to further extend the term for an additional one-year period. Each party shall be entitled to terminate the agreement within 30 days’ notice. The company shall pay NIS 3,000 Total rent cost associated with this lease for the year ended December 31, 2023, and 2022 was US$ 21 43 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 8— SUBSEQUENT EVENTS The Company evaluated subsequent events through the date these financial statements were available to be issued and filed with the SEC. During the fourth quarter of 2023, the Company entered into negotiations with NewStem stockholders for the acquisition of the shares not held by the Company. The negotiations are ongoing for the transaction in which the Company would acquire all outstanding shares in exchange for shares of NovelStem stock. Company management anticipates the transaction to conclude in the second quarter of 2024. In anticipation of the Company acquiring the remaining ownership of NewStem, the Company has loaned $ 500,000 250,000 As disclosed in Note 4, related party loan agreements were amended in March 2024 to increase the total borrowing to $ 650,000 September 1, 2025 250,000 |
Cash and Cash Equivalents
Cash and Cash Equivalents | 12 Months Ended |
Dec. 31, 2023 | |
NewStem Ltd [Member] | |
Cash and Cash Equivalents | Note 3 - Cash and Cash Equivalents The Company’s cash and cash equivalents balance as of December 31, 2023, and 2022, is denominated in the following currencies: Schedule of Cash and Cash Equivalents 2023 2022 December 31 2023 2022 US$ thousands US$ thousands US Dollars 257 811 New Israeli Shekels 67 57 Euro - 9 Great British Pound - 1 Cash and cash equivalents 324 878 |
Other Current Assets
Other Current Assets | 12 Months Ended |
Dec. 31, 2023 | |
NewStem Ltd [Member] | |
Other Current Assets | Note 4 - Other Current Assets Schedule of Other Current Assets 2023 2022 December 31 2023 2022 US$ thousands US$ thousands Government institutions 3 29 Prepaid expenses 12 4 Related parties 14 - Other current assets 29 33 |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2023 | |
NewStem Ltd [Member] | |
Property and Equipment, net | Note 5 - Property and Equipment, net Schedule of Property and Equipment, Net 2023 2022 December 31 2023 2022 US$ thousands US$ thousands Cost: Software and Computers 62 62 Accumulated depreciation: Software and Computers 53 39 Depreciated cost 9 23 NewStem Ltd. Notes to the Financial Statements for the year ended December 31, 2023 |
Accounts payable
Accounts payable | 12 Months Ended |
Dec. 31, 2023 | |
NewStem Ltd [Member] | |
Accounts payable | Note 6 - Accounts payable Schedule of Accounts Payable 2023 2022 December 31 2023 2022 US$ thousands US$ thousands Employees and payroll accruals 21 53 Accrued expenses and other payables 13 44 Accounts payable 34 97 |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2023 | |
NewStem Ltd [Member] | |
Revenues | Note 8 - Revenues On December 23, 2022, The Company signed a Sub-License Agreement (the “Agreement”), which entered into effect in January 2023, for a sub-license of the Company’s intellectual property related to Fragile X Syndrome (“IP”). In consideration for the grant of each period of the sub-license, the Company will be entitled to license fees of a lump sum of US$ 95 50 100 24 NewStem Ltd. Notes to the Financial Statements for the year ended December 31, 2023 Note 8 - Revenues (cont’d) In addition, the Company will be entitled to royalties upon future sales of products that are based on the Company’s licensed intellectual property at a rate of 3.5 50 13.2 22.0 0.5 The Company determined that the customer has received rights of use of the IP, which are functional in nature, since the Company will not perform any activities to change functionality of the IP during the terms of the sub-license. The Company did not identify a promise to provide future services in the Agreement, and hence the rights to use the IP are the only performance obligations in the Agreement. Therefore, the Company recognized revenues of $ 95 Sales-based royalties and milestone payments dependent of future sales will be recognized upon the occurrence of applicable future sales, under the royalty exception. Other milestone payments are currently fully constrained under the variable consideration guidance. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2023 | |
NewStem Ltd [Member] | |
Related Parties | Note 1 0 - Related Parties The Company engaged with its shareholders to receive consulting services and laboratory renting (see also Note 9D). In addition, the Company is required to pay a shareholder sublicense fees at a rate of up to 12 Schedule of Related Party Transactions A. Transactions Year ended Year ended December 31 2023 December 31 2022 US$ thousands US$ thousands Cost of revenues 11 - Research and development expenses 176 353 NewStem Ltd. Notes to the Financial Statements for the year ended December 31, 2023 Note 1 0 - Related Parties (cont’d) B. Balances December 31, 2023 December 31, 2022 US$ thousands US$ thousands Other current assets 14 - Accounts payable 11 - Related party (*) 250 - (*) The Company negotiates with a related party to make an additional investment in the Company. In December 2023, as part of this negotiation, the Company received funds from the related party in the amount of US$ 250 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Basis of Presentation | Basis of Presentation The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Financial Accounting Standards Board (“FASB”) has established the FASB Accounting Standards Codification (“ASC”) as the single source of authoritative GAAP. |
Use of estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. NOVELSTEM INTERNATIONAL CORP. Notes to Financial Statements |
Cash and cash equivalents | Cash and Cash Equivalents Cash and cash equivalents include certain investments in highly liquid debt instruments with original maturities of three months or less at the date of purchase. The Company had no cash equivalents as of either year end. |
Equity Investments | Equity Investments Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an Investee depends on an evaluation of several factors, including, among others, representation on the Investee company’s board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the Investee company. When the Company’s carrying value in an equity method Investee company is reduced to zero, no further losses are recorded in the Company’s financial statements unless the Company guarantied obligations of the Investee company or has committed additional funding. When the Investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized. The Company reviews equity investments for impairment on an annual basis, or earlier if events or changes in circumstances indicate that the carrying amounts might not be recoverable. The Company holds a minority investment in an entity, NewStem, which is accounted for pursuant to the equity method of accounting. Additionally, the Company is a 50 |
Derivative Financial Instruments | Derivative Financial Instruments The Company has in place a financial instrument, in the form of a note payable, with an identified embedded derivative in the form of a guarantee. The identified embedded derivative has been bifurcated and accounted for separately. Such derivative financial instruments are measured at fair value at each financial statement reporting date. If the fair value of a financial liability (the derivative) exceeds the proceeds received for the issuance of a hybrid instrument in an arms length transaction with no rights or privileges that require separate accounting recognition as an asset identified, then the embedded derivative is recorded at fair value with the excess of fair value over proceeds recognized as a loss in earnings. During the year ended December 31, 2023, the Company recognized a loss on derivative financial instruments of $ 260,000 |
Treasury Stock | Treasury Stock Shares of common stock repurchased are recorded at cost as treasury stock. NOVELSTEM INTERNATIONAL CORP. Notes to Financial Statements |
Stock-based compensation | Stock-Based Compensation The Company accounts for stock-based awards in accordance with applicable accounting principles, which requires compensation expense related to share-based transactions to be measured and recognized in the financial statements based on a determination of the fair value of the stock options. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. For all stock options, the Company recognizes expense on an accelerated basis over the requisite service period (generally the vesting period of the equity grant). The Company’s option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility, expected term, and forfeiture rate. Any changes in these highly subjective assumptions significantly impact stock-based compensation expense. Options awarded to purchase shares of common stock issued to non-employees in exchange for services are accounted for as variable awards in accordance with applicable accounting principles. Such options are valued using the Black-Scholes option pricing model. In the event of the termination of an employee, third party service provider, officer or Director’s service on the Board of the Company for any reason other than for cause, all of the options which are then vested may be exercised within 18 months of such termination, provided that, in no event shall this extension period continue beyond the expiration of the term of the option(s). In addition, any such extension shall be applicable only to the extent that such option or options are vested and exercisable according to the terms of the Plan and this Agreement. Any unvested options are immediately terminated on the effective date of the termination. In the event of termination of an employee, third party service provider, officer or Director’s service for cause, all options are forfeited and deemed cancelled and no longer exercisable on the date of termination. See Note 5 for the assumptions used to calculate the fair value of stock-based compensation. Upon the exercise of options, it is the Company’s policy to issue new shares rather than utilizing treasury shares. |
Income taxes | Income Taxes Deferred income taxes are determined using the asset and liability method in accordance with Accounting Standards Codification (“ASC”) Topic 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income taxes are measured using enacted tax rates expected to apply to taxable income in years in which such temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred income taxes is recognized in the statement of operations of the period that includes the enactment date. In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will not be realized. NOVELSTEM INTERNATIONAL CORP. Notes to Financial Statements |
Basic and Diluted Net Loss Per Share | Basic and Diluted Net Loss Per Share Basic net income per share is computed by dividing the net income by the weighted average number of shares outstanding during the year, excluding treasury stock. Diluted net income per share is computed by dividing the net income by the weighted average number of shares outstanding plus the dilutive potential of common shares which would result from the exercise of stock options and warrants. The dilutive effects of stock options and warrants are excluded from the computation of diluted net income per share if the effect of doing so would be antidilutive. The following data represents the amounts used in computing earnings per share and the effect on net income (loss) and the weighted average number of shares of dilutive potential common stock: SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES OF DILUTIVE Year Ended December 31, 2023 2022 Net loss available to common shareholders $ (4,187,301 ) $ (765,730 ) Weighted average shares outstanding: -Basic 46,881,475 46,881,475 Add: Warrants - - Add: Stock options - - -Diluted 46,881,475 46,881,475 Basic and diluted net loss per share $ (0.09 ) $ (0.02 ) |
NewStem Ltd [Member] | |
Basis of Presentation | A. Basis of Presentation The financial statements are prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”). |
Use of estimates | C. Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions regarding transactions or matters the final effect of which on the financial statements cannot be accurately determined at the time of their preparation. Even though the estimates and assumptions are based on management’s best judgment, the final effect of such transactions or matters may be different from the estimates and assumptions made in their respect. As applicable to these financial statements, the most significant estimates and assumptions relate to stock-based compensation. |
Cash and cash equivalents | D. Cash and cash equivalents Cash and cash equivalents include short-term bank deposits with an original maturity not exceeding three months, that is not restricted for use. |
Stock-based compensation | L. Stock-based compensation The Company accounts for its stock options grants under the fair value recognition provisions of ASC Topic 718. The Company currently uses the straight-line amortization method for recognizing share option compensation costs. The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that is vested at that date. The Company has elected to account for forfeitures as they occur; any compensation cost previously recognized for an award that is forfeited because of a failure to satisfy the service condition is reversed in the period of the forfeiture. The Company records prepaid stock-based payment as an asset in cases where a fully vested equity award was granted but the services have not been fully received, as required by ASC 718-10 Stock compensation NewStem Ltd. Notes to the Financial Statements for the year ended December 31, 2023 Note 2 - Significant Accounting Policies (cont’d) |
Income taxes | I. Income taxes Deferred income taxes are determined using the asset and liability method in accordance with Accounting Standards Codification (“ASC”) Topic 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income taxes are measured using enacted tax rates expected to apply to taxable income in years in which such temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred income taxes is recognized in the statement of operations of the period that includes the enactment date. In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will not be realized. NewStem Ltd. Notes to the Financial Statements for the year ended December 31, 2023 Note 2 - Significant Accounting Policies (cont’d) |
Functional currency | B. Functional currency The currency of the primary economic environment in which the Company conducts its operations is the U.S. dollar. The Company raises funds in US dollars and manages its budget in US dollars. Initial revenues recorded in 2023 were generated in US dollars, and future revenues are also expected to be generated in US dollars. Accordingly, the Company uses the U.S. dollar as its functional and reporting currency. |
Property and equipment | E. Property and equipment Property and equipment are stated at cost. Depreciation is computed by using the straight-line method, over the assets’ estimated useful life. The annual depreciation rate for Software and Computers is 33 Estimates of the depreciation method, useful life and residual value are reviewed at least at the end of each reporting year and adjusted as necessary. Long-lived assets held and used by the Company, are reviewed for impairment whenever events or changes in circumstance indicate that the carrying amount of the assets may not be recoverable. No NewStem Ltd. Notes to the Financial Statements for the year ended December 31, 2023 Note 2 - Significant Accounting Policies (cont’d) |
Concentrations of credit risk | F. Concentrations of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. Cash and cash equivalents are invested in a major bank in Israel. Management believes that the financial institution that holds the Company’s investments is financially sound and, accordingly, a minimal credit risk exists with respect to these investments. The Company has no off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements. |
Severance pays | G. Severance pays Pursuant to Section 14 of the Severance Compensation Law, 1963 (“Section 14”), the Company’s employees, covered by this section, are entitled only to monthly deposits, at a rate of 8.33% of their monthly salary, made in their name with insurance companies and/or pension funds. Payments in accordance with Section 14 release the Company from any liability for future severance payments in respect of those employees. Deposits under Section 14 are not recorded as an asset in the Company’s balance sheet. All of the Company’s employees are included under Section 14. |
Research and development costs | H. Research and development costs Research and development expenses consist mainly of labor costs. Costs are expensed as incurred. A grant received is offset from research and development expenses. See also Note 2M. |
Fair value of financial instruments | J. Fair value of financial instruments The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: The carrying amounts of cash and cash equivalents, trade receivables, other accounts receivable, trade payables and other liabilities approximate their fair value due to the short-term maturity of such instruments. The Company adopted ASC 820 Fair Value Measurements (“ASC 820”) which clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Other inputs that are directly or indirectly observable in the marketplace. Level 3 - Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. |
Collaborative arrangement | K. Collaborative arrangement The Company may enter into collaborative agreement with a third party. According to such agreement, the Company further develops its intellectual property to meet the needs of the third party and is entitled to royalties from any future sales that include its IP. The Company also receives reimbursement for the R&D costs it incurred as part of such agreement. Such agreements are considered to be within the scope of ASC 808 Collaborative Arrangements (“ASC 808”), as the parties are active participants and exposed to the risks and rewards of the collaborative activity. Performing R&D services for reimbursement is considered to be a collaborative activity under the scope of ASC 808. The Company records reimbursement payments received from the collaboration partner as reductions to R&D expense. |
Grants received | M. Grants received The Company receives from time-to-time grants from various sources to fund certain research and development activities. To date, the grants’ terms have stated that if such research and development activities are not successful, the Company would not be obligated to refund any payment previously received. Given such terms, since the financial risk associated with the research and development remains with the grantor, the Company does not recognize a liability associated with such funding. Grants that do not include a specific deliverable in the terms are offset from research and development expenses. |
Leases | N. Leases The Company is a lessee in two agreements. 1. Laboratory The Company leases a certain portion of a laboratory space for its use from a related party. The leased space of the laboratory is not considered to be an identified asset as the agreement does not explicitly specify a distinct space for the Company’s use, nor implicitly specify a distinct space as it does not represent a substantial portion of the laboratory’s capacity. Furthermore, other parties may also use the laboratory and have access to the laboratory. Therefore, the lease is not under the scope of ASC-842. (see also Note 9D). 2. Vehicle lease The lease agreement is for a period of 12 |
Revenue recognition | O. Revenue recognition The Company views granting of licenses and sublicenses as outputs of its ordinary business activities, and recipients of such licenses as customers. Thus, the Company considered such licenses agreements to be in the scope of ASC 606 Revenue from Contracts with Customers (“ASC 606”) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES OF DILUTIVE | The following data represents the amounts used in computing earnings per share and the effect on net income (loss) and the weighted average number of shares of dilutive potential common stock: SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES OF DILUTIVE Year Ended December 31, 2023 2022 Net loss available to common shareholders $ (4,187,301 ) $ (765,730 ) Weighted average shares outstanding: -Basic 46,881,475 46,881,475 Add: Warrants - - Add: Stock options - - -Diluted 46,881,475 46,881,475 Basic and diluted net loss per share $ (0.09 ) $ (0.02 ) |
EQUITY METHOD INVESTMENTS (Tabl
EQUITY METHOD INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
New Stem Ltd [Member] | |
SCHEDULE OF INVESTMENTS | The following table represents the Company’s investment in NewStem: SCHEDULE OF INVESTMENTS 2023 2022 Year Ended December 31, 2023 2022 Investment in NewStem, beginning $ 2,090,286 $ 2,435,155 Allocation of net loss from NewStem (342,191 ) (732,393 ) Gain on dilution of equity method investment 36,139 387,524 Investment in NewStem, ending $ 1,784,234 $ 2,090,286 |
SCHEDULE OF OPERATIONS AND FINANCIAL POSITION INVESTMENT | The results of operations and financial position of the Company’s investment in NewStem are summarized below: SCHEDULE OF OPERATIONS AND FINANCIAL POSITION INVESTMENT 2023 2022 Year Ended December 31, 2023 2022 Condensed income statement information: License fees $ 95,000 $ - Gross profit $ 84,000 $ - Net loss $ (1,119,000 ) $ (2,341,000 ) Company’s allocation of net loss from NewStem $ (342,191 ) $ (732,393 ) 2023 2022 As of December 31, 2023 2022 Condensed balance sheet information: Current assets $ 353,000 $ 911,000 Non-current assets $ 9,000 $ 23,000 Current liabilities $ 284,000 $ 97,000 Non-current liabilities $ - $ 121,000 |
Net Co Partners [Member] | |
SCHEDULE OF INVESTMENTS | The following table represents the Company’s investment in NetCo: SCHEDULE OF INVESTMENTS 2023 2022 Year Ended December 31, 2023 2022 Investment in NetCo, beginning $ 137,011 $ 137,011 Allocation of net income from Netco 3,573 12,591 Distribution from NetCo (6,875 ) (12,591 ) Investment in NetCo, ending $ 133,709 $ 137,011 |
SCHEDULE OF OPERATIONS AND FINANCIAL POSITION INVESTMENT | The results of operations and financial position of the Company’s investment in NetCo are summarized below: SCHEDULE OF OPERATIONS AND FINANCIAL POSITION INVESTMENT 2023 2022 Year Ended December 31, 2023 2022 Condensed income statement information: Net sales $ 25,789 $ 25,182 Gross profit $ 19,422 $ 25,182 Net income $ 7,146 $ 25,182 Company’s allocation of net income from NetCo $ 3,573 $ 12,591 2023 2022 As of December 31, 2023 2022 Condensed balance sheet information: Current assets $ 1,820 $ 13,473 Non-current assets $ 272,799 $ 272,799 Current liabilities $ 325 $ 12,250 Non-current liabilities $ - $ - |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF LONG TERM NOTES PAYABLE | Long-term notes payable are summarized as follows: SCHEDULE OF LONG TERM NOTES PAYABLE As of December 31, 2023 2022 Notes payable related parties: Notes payable director and Executive Chairman $ 400,000 $ 280,000 Accrued interest added to note balance 43,588 8,450 Total notes payable director and Executive Chairman 443,588 288,450 Note payable shareholder, principal amount 275,000 - Less unamortized discount (213,185 ) - Total note payable shareholder 61,815 - Note payable, litigation funding agreement: Note payable Omni Bridgeway (Fund 4) Invt. 3 L.P. 2,819,196 - Total notes payable 3,324,599 288,450 Less current portion - - Long-term notes payable $ 3,324,599 $ 288,450 |
EQUITY (Tables)
EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SCHEDULE OF FAIR VALUE OF OPTION USING VALUATION ASSUMPTIONS | The Company utilized the Black-Scholes option-pricing model to estimate fair value, utilizing the following assumptions for the respective years (all in weighted averages): SCHEDULE OF FAIR VALUE OF OPTION USING VALUATION ASSUMPTIONS Year Ended December 31, 2023 2022 Risk-free interest rate 3.4 % 1.5 % Expected term, in years 3.91 3.82 Expected volatility 118.3 % 183.7 % Expected dividend yield 0 % 0 % Determined weighted average grant date fair value per option $ 0.17 $ 0.27 |
Summary of Employee Option Activity | A summary of the Company’s option plans as of December 31, 2023 and 2022, as well as changes during each of the years then ended, is presented below: SCHEDULE OF STOCK OPTION ACTIVITIES Year Ended December 31, 2023 2022 Number Weighted Number Weighted of Average of Average Options Exercise Options Exercise (in shares) Price (in shares) Price Outstanding at beginning of year 5,400,000 0.14 4,300,000 0.10 Granted 360,000 0.20 1,100,000 0.29 Outstanding at end of year 5,760,000 0.14 5,400,000 0.14 Exercisable at end of year 5,400,000 0.14 4,800,000 0.12 |
SUMMARY OF WARRANTS ACTIVITY | The Company has issued warrants at exercise prices equal to or greater than market value of the Company’s common stock at the date of issuance. A summary of warrant activity follows: SUMMARY OF WARRANTS ACTIVITY Year Ended December 31, 2023 2022 Number of Weighted Number Weighted shares Average of Average underlying Exercise Options Exercise warrants Price (in shares) Price Outstanding at beginning of year 3,000,000 0.12 3,000,000 0.12 Granted - - - - Exercised - - - - Forfeited or expired - - - - Outstanding at end of year 3,000,000 0.12 3,000,000 0.12 |
NewStem Ltd [Member] | |
Summary of Employee Option Activity | Summary of Employee Option Activity Year ended December 31, 2023 Weighted Weighted average average remaining Number of exercise price contractual options US$ term (years) Outstanding at the beginning of the year 13,145 146.63 Forfeited (6 ) 80 Outstanding at the end of the year 13,139 146.66 1.80 Exercisable at the end of the year 12,598 144.38 1.58 |
Schedule of Share Capital Composition | Schedule of Share Capital Composition Composition: As of December 31, 2023 Authorized Issued and fully paid Number of shares Ordinary shares NIS 0.01 par value ( Ordinary Shares ) 1,000,000 163,906 Ordinary shares NIS 0.01 ( Ordinary Shares ) 1,000,000 163,906 As of December 31, 2022 Issued and Authorized fully paid Number of shares Ordinary shares 1,000,000 163,494 |
Schedule of Stock-based Compensation Expense | Schedule of Stock-based Compensation Expense 2023 2022 Year ended December 31 2023 2022 US$ thousands US$ thousands Research and development 212 321 General and administrative 144 181 Total stock-based compensation expense 356 502 |
Schedule of Change in Liability Measured at Fair Value | Schedule of Change in Liability Measured at Fair Value 2023 2022 US$ thousands US$ thousands Balance as of January 1, 121 134 Change in fair value 4 (13 ) Conversion of a convertible financial instrument (125 ) - Balance as of December 31, - 121 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SCHEDULE OF INCOME BEFORE INCOME TAX | The Company’s income tax provision differs from the expense that would result from applying statutory rates to income before taxes. A reconciliation of the provision (benefit) for income taxes with amounts determined by applying the statutory U.S. federal income tax rate to income before income taxes is as follows: SCHEDULE OF INCOME BEFORE INCOME TAX 2023 2022 Year Ended December 31, 2023 2022 Computed tax at the federal statutory rate of 21% $ (879,333 ) $ (160,803 ) State income taxes, net of federal income tax benefit (181,938 ) (33,271 ) Foreign rate differential (48,968 ) (171,089 ) Change in federal valuation allowance 1,110,239 365,163 Total provision for income tax $ - $ - |
Schedule of Deferred Tax Assets | SCHEDULE OF DEFERRED TAX ASSETS 2023 2022 As of December 31, 2023 2022 Outside tax basis difference in equity investments $ 1,700,000 $ 1,700,000 Federal and state net operating loss carryforwards available after consideration of IRC Section 382 limitations 2,540,308 1,686,708 General business credit 41,551 41,551 Related party interest and accretion of note discount 25,691 - Loss on derivative instrument 68,900 Stock compensation 252,275 174,009 Total deferred tax assets 4,630,725 3,602,268 Federal and state net operating loss carryforwards subject to IRC Section 382 limitations 13,644,005 15,465,570 Less valuation allowance for net operating loss limitations (13,644,005 ) (15,465,570 ) Valuation allowance (4,130,103 ) (2,971,573 ) Subtotal deferred tax assets 500,622 630,695 Deferred tax liability, equity method basis difference (500,622 ) (630,695 ) Net deferred tax assets $ - $ - |
NewStem Ltd [Member] | |
Schedule of Deferred Tax Assets | The tax effects of temporary differences that give rise to significant components of the Company’s deferred tax assets and liabilities are as follows: Schedule of Deferred Tax Assets 2023 2022 December 31, 2023 2022 US$ thousands US$ thousands Deferred tax assets: Net operating losses 1,024 885 Research and development credit carried forward 188 229 Other 12 26 Total deferred tax assets 1,224 1,140 Less valuation allowance (1,224 ) (1,140 ) Net deferred tax assets - - |
Cash and Cash Equivalents (Tabl
Cash and Cash Equivalents (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
NewStem Ltd [Member] | |
Schedule of Cash and Cash Equivalents | The Company’s cash and cash equivalents balance as of December 31, 2023, and 2022, is denominated in the following currencies: Schedule of Cash and Cash Equivalents 2023 2022 December 31 2023 2022 US$ thousands US$ thousands US Dollars 257 811 New Israeli Shekels 67 57 Euro - 9 Great British Pound - 1 Cash and cash equivalents 324 878 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
NewStem Ltd [Member] | |
Schedule of Other Current Assets | Schedule of Other Current Assets 2023 2022 December 31 2023 2022 US$ thousands US$ thousands Government institutions 3 29 Prepaid expenses 12 4 Related parties 14 - Other current assets 29 33 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
NewStem Ltd [Member] | |
Schedule of Property and Equipment, Net | Schedule of Property and Equipment, Net 2023 2022 December 31 2023 2022 US$ thousands US$ thousands Cost: Software and Computers 62 62 Accumulated depreciation: Software and Computers 53 39 Depreciated cost 9 23 |
Accounts payable (Tables)
Accounts payable (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
NewStem Ltd [Member] | |
Schedule of Accounts Payable | Schedule of Accounts Payable 2023 2022 December 31 2023 2022 US$ thousands US$ thousands Employees and payroll accruals 21 53 Accrued expenses and other payables 13 44 Accounts payable 34 97 |
Related Parties (Tables)
Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
NewStem Ltd [Member] | |
Schedule of Related Party Transactions | Schedule of Related Party Transactions A. Transactions Year ended Year ended December 31 2023 December 31 2022 US$ thousands US$ thousands Cost of revenues 11 - Research and development expenses 176 353 NewStem Ltd. Notes to the Financial Statements for the year ended December 31, 2023 Note 1 0 - Related Parties (cont’d) B. Balances December 31, 2023 December 31, 2022 US$ thousands US$ thousands Other current assets 14 - Accounts payable 11 - Related party (*) 250 - (*) The Company negotiates with a related party to make an additional investment in the Company. In December 2023, as part of this negotiation, the Company received funds from the related party in the amount of US$ 250 |
NATURE OF OPERATIONS (Details N
NATURE OF OPERATIONS (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2018 | |
Accumulated deficit | $ 293,127,811 | $ 288,940,510 | $ 6,447,000 |
Net income loss | 4,187,301 | 765,730 | |
operating activities | 348,283 | 182,320 | |
NewStem Ltd [Member] | |||
Accumulated deficit | 9,089,000 | 7,970,000 | |
Net income loss | 1,119,000 | 2,341,000 | |
Cash and cash equivalents | 324,000 | 878,000 | |
operating activities | 804,000 | $ 1,173,000 | |
Shareholders And Directors [Member] | |||
Borrow for working capital needs | 650,000 | ||
Additional Borrowings for working capital needs | $ 300,000 | ||
New Stem Ltd [Member] | |||
Equity interest percentage | 31% | ||
Net Co Partners [Member] | |||
Equity interest percentage | 50% |
SCHEDULE OF WEIGHTED AVERAGE NU
SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES OF DILUTIVE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Net loss available to common shareholders | $ (4,187,301) | $ (765,730) |
Weighted average shares outstanding: | ||
-Basic | 46,881,475 | 46,881,475 |
Add: Warrants | ||
Add: Stock options | ||
-Diluted | 46,881,475 | 46,881,475 |
Basic net loss per share | $ (0.09) | $ (0.02) |
Diluted net loss per share | $ (0.09) | $ (0.02) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Equity method investment description | Investee company’s board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the Investee company. | |
Loss on derivative instrument | $ 260,000 | |
NewStem Ltd [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Annual depreciation rate for Software and Computers | 33% | |
Impairment amount | $ 0 | $ 0 |
NewStem Ltd [Member] | Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Lease term | 12 months | |
Net Co Partners [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Equity interest percentage | 50% |
SCHEDULE OF INVESTMENTS (Detail
SCHEDULE OF INVESTMENTS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Gain on dilution of equity method investment | $ 36,139 | $ 387,524 |
New Stem Ltd [Member] | ||
Investment in NetCo, beginning | 2,090,286 | 2,435,155 |
Allocation of net income from Netco | (342,191) | (732,393) |
Gain on dilution of equity method investment | 36,139 | 387,524 |
Investment in NetCo, ending | 1,784,234 | 2,090,286 |
Net Co Partners [Member] | ||
Investment in NetCo, beginning | 137,011 | 137,011 |
Allocation of net income from Netco | 3,573 | 12,591 |
Investment in NetCo, ending | 133,709 | 137,011 |
Distribution from NetCo | $ (6,875) | $ (12,591) |
SCHEDULE OF OPERATIONS AND FINA
SCHEDULE OF OPERATIONS AND FINANCIAL POSITION INVESTMENT (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Net income | $ (4,187,301) | $ (765,730) |
Company’s allocation of net income from NetCo | (338,618) | (719,802) |
Current assets | 86,603 | 58,907 |
Current liabilities | 346,480 | 64,876 |
Non-current liabilities | 3,859,599 | 288,450 |
New Stem Ltd [Member] | ||
Net sales | 95,000 | |
Gross profit | 84,000 | |
Net income | (1,119,000) | (2,341,000) |
Company’s allocation of net income from NetCo | (342,191) | (732,393) |
Current assets | 353,000 | 911,000 |
Non-current assets | 9,000 | 23,000 |
Current liabilities | 284,000 | 97,000 |
Non-current liabilities | 121,000 | |
Net Co Partners [Member] | ||
Net sales | 25,789 | 25,182 |
Gross profit | 19,422 | 25,182 |
Net income | 7,146 | 25,182 |
Company’s allocation of net income from NetCo | 3,573 | 12,591 |
Current assets | 1,820 | 13,473 |
Non-current assets | 272,799 | 272,799 |
Current liabilities | 325 | 12,250 |
Non-current liabilities |
EQUITY METHOD INVESTMENTS (Deta
EQUITY METHOD INVESTMENTS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Apr. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2024 | |
Schedule of Equity Method Investments [Line Items] | |||||||
Payments to Acquire Loans Receivable | $ 250,000 | ||||||
New Stem [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Additional funding | $ 1,450,000 | ||||||
Subsequent Event [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Long-Term Debt | $ 250,000 | ||||||
New Stem Ltd [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership investment percentage | 30.51% | 30.58% | 20% | ||||
New Stem Ltd [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Sale of stock | 50,000 | ||||||
Percentage of outstanding shares | 33% | ||||||
Shares acquisitions shares | 12,500 | 12,500 | 25,000 | ||||
Shares acquisitions | $ 1,000,000 | $ 1,000,000 | $ 2,000,000 | ||||
Audit and audit related costs | $ 58,000 | $ 105,000 | |||||
Equity interest percentage | 31% | ||||||
New Stem Ltd [Member] | Investment, Affiliated Issuer, Controlled, Not Majority-Owned [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Carrying value of investment | $ 1,800,000 | $ 1,900,000 | |||||
Net Co Partners [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Equity interest percentage | 50% | ||||||
Maximum [Member] | New Stem Ltd [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Equity method investments | $ 4,000,000 |
SCHEDULE OF LONG TERM NOTES PAY
SCHEDULE OF LONG TERM NOTES PAYABLE (Details) - USD ($) | Dec. 31, 2023 | May 05, 2023 | Dec. 31, 2022 |
Defined Benefit Plan Disclosure [Line Items] | |||
Total notes payable | $ 3,324,599 | $ 288,450 | |
Less current portion | |||
Long-term notes payable | 3,324,599 | 288,450 | |
Omni Bridgeway (Fund 4) Invt. 3 L.P. [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total notes payable | 2,819,196 | ||
Director and Executive Chairman [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total notes payable | 443,588 | 288,450 | |
Related Party [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accrued interest added to note balance | 43,588 | 8,450 | |
Note payable, principal amount | 275,000 | ||
Less unamortized discount | (213,185) | ||
Related Party [Member] | Director and Executive Chairman [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total notes payable | 400,000 | 280,000 | |
Related Party [Member] | Shareholder [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total notes payable | $ 61,815 | ||
Long-term notes payable | $ 300,000 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||
Mar. 31, 2024 | May 05, 2023 | Nov. 11, 2022 | Feb. 11, 2022 | Apr. 12, 2021 | May 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Oct. 31, 2023 | Feb. 16, 2022 | |
Short-Term Debt [Line Items] | ||||||||||
Debt instrument carrying amount | $ 125,000 | |||||||||
Working capital | $ 250,000 | |||||||||
Interest rate | 8% | 12% | ||||||||
Maturity date | Sep. 01, 2025 | Dec. 21, 2024 | ||||||||
Interest expense | $ 99,023 | $ 11,018 | ||||||||
Working capital | $ 600,000 | |||||||||
Short term debt, interest rate increase | 10% | |||||||||
Advances received | 400,000 | 280,000 | ||||||||
Long term note payable | 3,324,599 | 288,450 | ||||||||
Derivative fair value liability | 535,000 | |||||||||
Contra expenses - legal fees and administrative costs | 310,000 | |||||||||
Liability | $ 4,206,079 | 353,326 | ||||||||
Omni Bridgeway (Fund 4) Invt. 3 L.P. [Member] | ||||||||||
Short-Term Debt [Line Items] | ||||||||||
Interest rate | 5% | |||||||||
Litigation settlement, expense | $ 1,000,000 | |||||||||
Investment return due | $ 1,886,131 | |||||||||
Related Party [Member] | Omni Bridgeway (Fund 4) Invt. 3 L.P. [Member] | ||||||||||
Short-Term Debt [Line Items] | ||||||||||
Due to related parties | 933,065 | |||||||||
Working capital and related fees | 310,000 | |||||||||
Liability | 2,819,196 | |||||||||
Related Party [Member] | Shareholder [Member] | ||||||||||
Short-Term Debt [Line Items] | ||||||||||
Interest rate | 0% | |||||||||
Maturity date | May 05, 2025 | |||||||||
Long term note payable | $ 300,000 | |||||||||
Advance of long term note payable | $ 150,000 | $ 150,000 | ||||||||
Derivative fair value liability | 535,000 | |||||||||
Accretion of note discount | $ 61,815 | |||||||||
Subsequent Event [Member] | ||||||||||
Short-Term Debt [Line Items] | ||||||||||
Working capital | $ 650,000 | |||||||||
Maturity date | Sep. 01, 2025 | |||||||||
Advances received | $ 250,000 | |||||||||
Promissory Note [Member] | ||||||||||
Short-Term Debt [Line Items] | ||||||||||
Interest rate | 8% | |||||||||
Maturity date | Apr. 12, 2022 | |||||||||
Interest expense | $ 1,198 | |||||||||
Related party amount | $ 100,000 | |||||||||
Interest expense paid | $ 6,752 | |||||||||
Note Agreements [Member] | ||||||||||
Short-Term Debt [Line Items] | ||||||||||
Debt instrument, description | The note agreements include a provision whereby, in the event of a capital raise transaction by the Company, the note holders would be entitled to participate in the transaction in an amount equal to 133% of the amounts owed on the note agreements at the closing of the transaction | |||||||||
Interest expense | $ 822 |
SCHEDULE OF FAIR VALUE OF OPTIO
SCHEDULE OF FAIR VALUE OF OPTION USING VALUATION ASSUMPTIONS (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Risk-free interest rate | 3.40% | 1.50% |
Expected term, in years | 3 years 10 months 28 days | 3 years 9 months 25 days |
Expected annual volatility | 118.30% | 183.70% |
Expected dividend yield | 0% | 0% |
Determined weighted average grant date fair value per option | $ 0.17 | $ 0.27 |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITIES (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Weighted Average Exercise Price, Granted | $ 0.17 | $ 0.27 |
Equity Option [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of Options Outstanding beginning | 5,400,000 | 4,300,000 |
Weighted Average Exercise Price Outstanding beginning | $ 0.14 | $ 0.10 |
Number of Options, Granted | 360,000 | 1,100,000 |
Weighted Average Exercise Price, Granted | $ 0.20 | $ 0.29 |
Number of Options Outstanding ending | 5,760,000 | 5,400,000 |
Weighted Average Exercise Price Outstanding ending | $ 0.14 | $ 0.14 |
Number of Options Exercisable | 5,400,000 | 4,800,000 |
Weighted Average Exercise Price, Exercisable | $ 0.14 | $ 0.12 |
SUMMARY OF WARRANTS ACTIVITY (D
SUMMARY OF WARRANTS ACTIVITY (Details) - Warrant [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Number of shares underlying warrants, Beginning balance | 3,000,000 | 3,000,000 |
Weighted average exercise price, Beginning balance | $ 0.12 | $ 0.12 |
Number of shares underlying warrants, Granted | ||
Weighted average exercise price, Granted | ||
Number of shares underlying warrants, Exercised | ||
Number of shares underlying warrants, Forfeited or expired | ||
Number of shares underlying warrants, Ending balance | 3,000,000 | 3,000,000 |
Weighted average exercise price, Ending balance | $ 0.12 | $ 0.12 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) $ / shares in Units, £ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||||||||||||
Dec. 23, 2022 USD ($) shares | Apr. 30, 2022 USD ($) shares | Nov. 30, 2023 shares | Sep. 30, 2021 USD ($) shares | Jun. 30, 2018 USD ($) shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) shares | Dec. 31, 2019 USD ($) shares | Dec. 31, 2018 USD ($) shares | Dec. 31, 2016 shares | Dec. 31, 2023 ₪ / shares | Dec. 23, 2022 ₪ / shares | Apr. 30, 2022 ₪ / shares | Dec. 31, 2021 shares | Nov. 30, 2021 USD ($) | Nov. 30, 2021 GBP (£) | Jun. 30, 2021 shares | Nov. 12, 2018 shares | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Common stock, shares issued | 50,316,672 | 50,316,672 | ||||||||||||||||||
Common stock, shares outstanding | 46,881,475 | 46,881,475 | ||||||||||||||||||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | ||||||||||||||||||
Treasury stock, shares | 3,435,197 | 3,435,197 | ||||||||||||||||||
Expected term of options, in years | 3 years 10 months 28 days | 3 years 9 months 25 days | ||||||||||||||||||
Expected dividend yield | 0% | 0% | ||||||||||||||||||
Stock based compensation expense | $ | $ 302,890 | $ 282,662 | ||||||||||||||||||
Compensation cost | $ | $ 13,000 | 13,000 | ||||||||||||||||||
Options unvested | 500,000 | |||||||||||||||||||
Number of ordinary shares issued, value | $ | ||||||||||||||||||||
NewStem Ltd [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Common stock, shares issued | 163,906 | 163,494 | ||||||||||||||||||
Common stock, par value | ₪ / shares | ₪ 0.01 | |||||||||||||||||||
Stock based compensation expense | $ | $ 356,000 | $ 1,273,000 | ||||||||||||||||||
NewStem Ltd [Member] | Stock Option Plan [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Ordinary shares reserved for issuance | 6,250 | 13,654 | ||||||||||||||||||
Contractual life of share option | 10 years | |||||||||||||||||||
Vesting period of share options | 4 years | |||||||||||||||||||
NewStem Ltd [Member] | Investment Agreement [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Number of ordinary shares | 50,000 | 12,500 | 25,000 | |||||||||||||||||
Ordinary shares issued and outstanding percentage | 33% | |||||||||||||||||||
Number of ordinary shares issued, value | $ | $ 4,000,000 | $ 1,000,000 | $ 2,000,000 | |||||||||||||||||
Investment subject to two equal tranches milestones | $ | $ 2,000,000 | |||||||||||||||||||
NewStem Ltd [Member] | Investment Agreement [Member] | Third Party [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Percentage of ordinary shares | 5% | |||||||||||||||||||
Number of ordinary shares issued for services | 8,696 | |||||||||||||||||||
Number of Ordinary shares issued for services, value | $ | $ 1,952,000 | |||||||||||||||||||
NewStem Ltd [Member] | Investment Agreement [Member] | Share-Based Payment Arrangement, Tranche Three [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Number of ordinary shares | 12,500 | |||||||||||||||||||
Investment tranche paid | $ | $ 1,000,000 | |||||||||||||||||||
NewStem Ltd [Member] | Simple Agreement for Future Equity [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Investments | $ 134,000 | £ 100 | ||||||||||||||||||
Conversion of ordinary share description | If no financing round occurs, the SAFE amount shall automatically be converted into ordinary shares at the earlier of: (a) an M&A transaction – using the price per share determined in such transaction, or (b) 36 months after the date of the agreement, at the fair market value of an ordinary share at that time. | |||||||||||||||||||
NewStem Ltd [Member] | Simple Agreement for Future Equity [Member] | Least 1 Million [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Conversion of ordinary share description | In the event of a financing round of at least 1 million GBP, the SAFE will be automatically converted at the end of the round into ordinary shares at the price determined in such round. | |||||||||||||||||||
NewStem Ltd [Member] | Simple Agreement for Future Equity [Member] | Below 1 Million [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Conversion of ordinary share description | In the event that the financing round is below 1 million GBP, the SAFE may be converted into ordinary shares at the price determined in such round, at the discretion of the investor. | |||||||||||||||||||
Warrant [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Stock based compensation expense | $ | $ 243,000 | |||||||||||||||||||
Maturity date | Jun. 28, 2025 | |||||||||||||||||||
Warrants outstanding weighted average remaining contractual life | 1 year 6 months | |||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Number of ordinary shares | ||||||||||||||||||||
Number of ordinary shares issued, value | $ | ||||||||||||||||||||
Common Stock [Member] | NewStem Ltd [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Number of ordinary shares | 412 | |||||||||||||||||||
Number of ordinary shares issued for services | 4,798 | |||||||||||||||||||
Number of Ordinary shares issued for services, value | $ | [1] | |||||||||||||||||||
Equity Option [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Number of options, shares | 5,760,000 | 5,400,000 | 4,300,000 | |||||||||||||||||
Stock based compensation expense | $ | $ 303,000 | $ 283,000 | ||||||||||||||||||
Maximum [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Expected term of options, in years | 6 years | |||||||||||||||||||
Directot and Investor [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Number of options, shares | 5,760,000 | |||||||||||||||||||
Founders [Member] | NewStem Ltd [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Number of ordinary shares | 100,000 | |||||||||||||||||||
Two Investors [Member] | NewStem Ltd [Member] | Share Purchase Agreement [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Number of ordinary shares | 2,647 | |||||||||||||||||||
Number of ordinary shares issued, value | $ | $ 800,000 | |||||||||||||||||||
Share price per share | ₪ / shares | ₪ 0.01 | |||||||||||||||||||
Investors [Member] | NewStem Ltd [Member] | Share Purchase Agreement [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Number of ordinary shares | 2,151 | |||||||||||||||||||
Number of ordinary shares issued, value | $ | $ 650,000 | |||||||||||||||||||
Share price per share | ₪ / shares | ₪ 0.01 | |||||||||||||||||||
[1]Represents an amount less than $1 thousand. |
SCHEDULE OF INCOME BEFORE INCOM
SCHEDULE OF INCOME BEFORE INCOME TAX (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Computed tax at the federal statutory rate of 21% | $ (879,333) | $ (160,803) |
State income taxes, net of federal income tax benefit | (181,938) | (33,271) |
Foreign rate differential | (48,968) | (171,089) |
Change in federal valuation allowance | 1,110,239 | 365,163 |
Total provision for income tax |
SCHEDULE OF INCOME BEFORE INC_2
SCHEDULE OF INCOME BEFORE INCOME TAX (Details) (Parenthetical) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Computed tax at the federal statutory rate | 21% | 21% |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Outside tax basis difference in equity investments | $ 1,700,000 | $ 1,700,000 |
Federal and state net operating loss carryforwards available after consideration of IRC Section 382 limitations | 2,540,308 | 1,686,708 |
General business credit | 41,551 | 41,551 |
Related party interest and accretion of note discount | 25,691 | |
Loss on derivative instrument | 68,900 | |
Stock compensation | 252,275 | 174,009 |
Total deferred tax assets | 4,630,725 | 3,602,268 |
Federal and state net operating loss carryforwards subject to IRC Section 382 limitations | 13,644,005 | 15,465,570 |
valuation allowance for net operating loss limitations | (13,644,005) | (15,465,570) |
Valuation allowance | (4,130,103) | (2,971,573) |
Subtotal deferred tax assets | 500,622 | 630,695 |
Deferred tax liability, equity method basis difference | (500,622) | (630,695) |
Net deferred tax assets |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | ||
Operating loss | $ 54,000,000 | $ 61,000,000 |
Operating tax losses | 9,900,000 | 6,400,000 |
Federal and state losses | 5,331,000 | |
Valuation allowance increase amount | (13,644,005) | (15,465,570) |
NewStem Ltd [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating tax losses | $ 4,400,000 | $ 3,800,000 |
Israeli corporate tax rate | 23% | 23% |
Statutory tax rate | 0% | |
Valuation allowance increase amount | $ 84,000 | $ 187,000 |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating tax losses | 8,000,000 | 55,000,000 |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating tax losses | $ 4,000,000 | $ 25,000,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 1 Months Ended | 12 Months Ended | ||||
Oct. 31, 2022 | Dec. 31, 2023 ILS (₪) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2017 | |
Loss Contingencies [Line Items] | ||||||
Litigation expenses | $ 2,872,522 | $ (310,000) | ||||
NewStem Ltd [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Royalties percentage | 3% | |||||
Sublicense fees percentage | 12% | |||||
Provision on commitments | 11,000 | |||||
Rent expense | ₪ 3,000 | $ 21,000 | 43,000 | |||
NewStem Ltd [Member] | Future Sales [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Royalties percentage | 1.50% | |||||
NewStem Ltd [Member] | Future License [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Royalties percentage | 10% | |||||
NewStem Ltd [Member] | Third Party [Member] | Maximum [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Royalties percentage | 3.50% | |||||
Litigation Funding Agreement [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation expenses | $ 2,819,196 | |||||
Research Agreement [Member] | NewStem Ltd [Member] | Third Party [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Research and development | $ 200,000 | $ 200,000 | ||||
Net Co Partners [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Equity interest percentage | 50% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | May 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Subsequent Event [Line Items] | ||||
Working capital | $ 250,000 | |||
Meturity date | Sep. 01, 2025 | Dec. 21, 2024 | ||
Advances received | $ 400,000 | $ 280,000 | ||
NewStem Ltd [Member] | ||||
Subsequent Event [Line Items] | ||||
Proceeds from loan originations | $ 250,000 | |||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Long term debt | $ 250,000 | |||
Working capital | $ 650,000 | |||
Meturity date | Sep. 01, 2025 | |||
Advances received | $ 250,000 | |||
Subsequent Event [Member] | NewStem Ltd [Member] | ||||
Subsequent Event [Line Items] | ||||
Long term debt | $ 500,000 |
Schedule of Cash and Cash Equiv
Schedule of Cash and Cash Equivalents (Details) - NewStem Ltd [Member] - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Cash and cash equivalents | $ 324 | $ 878 |
USD Currency [Member] | ||
Cash and cash equivalents | 257 | 811 |
ILS Currency [Member] | ||
Cash and cash equivalents | 67 | 57 |
EUR currency [Member] | ||
Cash and cash equivalents | 9 | |
GBP currency [Member] | ||
Cash and cash equivalents | $ 1 |
Schedule of Other Current Asset
Schedule of Other Current Assets (Details) - NewStem Ltd [Member] - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Government institutions | $ 3 | $ 29 |
Prepaid expenses | 12 | 4 |
Related parties | 14 | |
Other current assets | $ 29 | $ 33 |
Schedule of Property and Equipm
Schedule of Property and Equipment, Net (Details) - NewStem Ltd [Member] - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Cost: | ||
Software and Computers | $ 62 | $ 62 |
Accumulated depreciation: | ||
Software and Computers | 53 | 39 |
Depreciated cost | $ 9 | $ 23 |
Schedule of Accounts Payable (D
Schedule of Accounts Payable (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Accounts payable | $ 54,257 | $ 21,203 |
NewStem Ltd [Member] | ||
Employees and payroll accruals | 21,000 | 53,000 |
Accrued expenses and other payables | 13,000 | 44,000 |
Accounts payable | $ 34,000 | $ 97,000 |
Schedule of Share Capital Compo
Schedule of Share Capital Composition (Details) - shares | Dec. 31, 2023 | Dec. 31, 2022 |
Ordinary shares, Number of shares authorized | 100,000,000 | 100,000,000 |
Ordinary shares, Number of shares issued and fully paid | 50,316,672 | 50,316,672 |
NewStem Ltd [Member] | ||
Ordinary shares, Number of shares authorized | 1,000,000 | 1,000,000 |
Ordinary shares, Number of shares issued and fully paid | 163,906 | 163,494 |
Schedule of Share Capital Com_2
Schedule of Share Capital Composition (Details) (Parenthetical) | Dec. 31, 2023 $ / shares | Dec. 31, 2023 ₪ / shares | Dec. 31, 2022 $ / shares |
Ordinary shares par value | $ / shares | $ 0.01 | $ 0.01 | |
NewStem Ltd [Member] | |||
Ordinary shares par value | ₪ / shares | ₪ 0.01 |
Summary of Employee Option Acti
Summary of Employee Option Activity (Details) - Equity Incentive Plan [Member] - NewStem Ltd [Member] | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Options Outstanding beginning | shares | 13,145 |
Weighted Average Exercise Price Outstanding beginning | $ / shares | $ 146.63 |
Number of options outstanding, Forfeited | shares | (6) |
Weighted average exercise price, Forfeited | $ / shares | $ 80 |
Number of Options Outstanding ending | shares | 13,139 |
Weighted Average Exercise Price Outstanding ending | $ / shares | $ 146.66 |
Weighted average remaining contractual term (years) | 1 year 9 months 18 days |
Number of Options Exercisable | shares | 12,598 |
Weighted average exercise price, Exercisable | $ / shares | $ 144.38 |
Weighted average remaining contractual term (years), Exercisable | 1 year 6 months 29 days |
Schedule of Stock-based Compens
Schedule of Stock-based Compensation Expense (Details) - NewStem Ltd [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Total stock-based compensation expense | $ 356 | $ 502 |
Research and Development Expense [Member] | ||
Total stock-based compensation expense | 212 | 321 |
General and Administrative Expense [Member] | ||
Total stock-based compensation expense | $ 144 | $ 181 |
Schedule of Change in Liability
Schedule of Change in Liability Measured at Fair Value (Details) - NewStem Ltd [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Balance as of January 1, | $ 121 | $ 134 |
Change in fair value | 4 | (13) |
Conversion of a convertible financial instrument | (125) | |
Balance as of December 31, | $ 121 |
Revenues (Details Narrative)
Revenues (Details Narrative) - NewStem Ltd [Member] - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 23, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 23, 2023 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||||
Sublicense fees percentage | 12% | ||||
Revenues | $ 95 | ||||
Sub-License Agreement [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales percentage | 3.50% | ||||
Sub-license income rate | 50% | ||||
Exit fee percentage | 0.50% | ||||
Sub-License Agreement [Member] | Minimum [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Sublicense fees percentage | 13.20% | ||||
Sub-License Agreement [Member] | Maximum [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Sublicense fees percentage | 22% | 12% | |||
Sub-License Agreement [Member] | Patents [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
License fees | $ 24 | ||||
Sub-License Agreement [Member] | 1-5 Year License Period [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
License fees | 95 | ||||
Sub-License Agreement [Member] | 6-7 Year License Period [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
License fees | 50 | ||||
Sub-License Agreement [Member] | Year 8 and Onwards License Period [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
License fees | $ 100 | ||||
Sub-License Agreement [Member] | First License Period [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | $ 95 |
Schedule of Related Party Trans
Schedule of Related Party Transactions (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Related Party Transaction [Line Items] | |||
Research and development expenses | |||
Accounts payable | 54,257 | 21,203 | |
NewStem Ltd [Member] | |||
Related Party Transaction [Line Items] | |||
Research and development expenses | 965,000 | 2,099,000 | |
Other current assets | 29,000 | 33,000 | |
Accounts payable | 34,000 | 97,000 | |
Other Liabilities, Current | 250,000 | ||
NewStem Ltd [Member] | Related Party [Member] | |||
Related Party Transaction [Line Items] | |||
Cost of revenues | 11,000 | ||
Research and development expenses | 176,000 | 353,000 | |
Other current assets | 14,000 | ||
Accounts payable | 11,000 | ||
Other Liabilities, Current | [1] | $ 250,000 | |
[1]The Company negotiates with a related party to make an additional investment in the Company. In December 2023, as part of this negotiation, the Company received funds from the related party in the amount of US$ 250 |
Schedule of Related Party Tra_2
Schedule of Related Party Transactions (Details) (Parenthethical) $ in Thousands | Dec. 31, 2023 USD ($) |
NewStem Ltd [Member] | |
Due to related party | $ 250 |
Schedule of Deferred Tax Asse_2
Schedule of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Total deferred tax assets | $ 4,630,725 | $ 3,602,268 |
Less valuation allowance | (4,130,103) | (2,971,573) |
Net deferred tax assets | ||
NewStem Ltd [Member] | ||
Net operating losses | 1,024,000 | 885,000 |
Research and development credit carried forward | 188,000 | 229,000 |
Other | 12,000 | 26,000 |
Total deferred tax assets | 1,224,000 | 1,140,000 |
Less valuation allowance | (1,224,000) | (1,140,000) |
Net deferred tax assets |
Related Parties (Details Narrat
Related Parties (Details Narrative) - NewStem Ltd [Member] | Dec. 23, 2023 | Dec. 23, 2022 | Dec. 31, 2017 |
Sublicense fees percentage | 12% | ||
Sub-License Agreement [Member] | Maximum [Member] | |||
Sublicense fees percentage | 12% | 22% |