NLS Pharmaceutics (NLSP) to Merge with Kadimastem

NLS Pharmaceutics Ltd. (NASDAQ: NLSP) ("NLS"), a biopharmaceutical company, and Kadimastem Ltd., a clinical-stage cell therapy company developing and manufacturing "off-the-shelf" allogeneic cell products for the treatment of neurodegenerative diseases and potential cure of diabetes, announced today that they have entered into a definitive merger agreement (the "Merger Agreement") to combine the two companies to focus on advancing NLS' promising, first-in class Dual Orexin Agonist platform ("DOXA") and Kadimastem's allogenic cell therapy program with its clinical assets (mainly targeting diabetes and amyotrophic lateral sclerosis (ALS), with Phase 2a studies that are planned to be initiated in the U.S. following the closing of the transaction). Following the closing of the transactions contemplated by the Merger Agreement (the "Closing"), NLS intends to divest its other legacy assets (including the Mazindol ER but excluding the DOXA platform), and the net proceeds of any such disposition, after deducting certain costs, fees, and expenses as set forth in a contingent value agreement (the "CVR Agreement"), will be distributed to NLS's shareholders and warrant holders, subject to the terms of the Merger Agreement and the CVR Agreement. At the Closing, pursuant to the terms of the Merger Agreement, NLS will issue shares of its common stock to Kadimastem's shareholders based on an initial target fully diluted share split, post transaction, of 85% to Kadimastem stakeholders and 15% to NLS stakeholders, in exchange for 100% of Kadimastem's issued and outstanding shares. The target fully diluted share split of 85% / 15% is subject to adjustment pursuant to the terms of the Merger Agreement, including as a result of estimated closing cash of NLS and Kadimastem and estimated closing indebtedness of NLS. Based on the cash balance of NLS following its most recent successful financing transaction, the parties currently estimate the fully diluted share split at the Closing will be 80% to Kadimastem stakeholders and 20% to NLS stakeholders. The boards of directors of Kadimastem and NLS have unanimously approved this transaction and expect it to close in January 2025, pending approval of each of NLS' and Kadimastem's shareholders, as well as other customary closing conditions, including Nasdaq approval.

‟I believe that the merger is an outstanding opportunity to progress our proprietary DOXA platform and help to enhance Kadimastem's portfolio of neurodegenerative and diabetes candidates,″ said Alex Zwyer, Chief Executive Officer of NLS. "This transaction represents NLS' commitment to delivering value to its shareholders by preserving the value of our legacy assets, including Mazindol, through the contingent value rights agreement, while also providing the opportunity for upside in the combined company with a promising cell therapy technological platform."

Ronen Twito, Kadimastem's Executive Chairman & President, commented, "We are pleased to announce our merger with NLS and believe that the exposure of the combined company's assets to the U.S. capital markets through our new Nasdaq listing will enable us to develop our portfolio and increase Kadimastem shareholder value. We remain focused on initiating our Phase IIa multi-site clinical trial of AstroRx®, a product candidate for the potential treatment of ALS, which is planned to be initiated following the closing of the merger, and jointly progressing our diabetes program IsletRx with our U.S. based partner to a pre-investigational new drug (IND) submission with the U.S. Food and Drug Administration in the first quarter of 2025."

Professor Michel Revel, Kadimastem's Chief Scientific Officer ("CSO"), said, "I'm excited about this merger because the combined company presents a significant opportunity to progress our portfolio and product candidates into and through clinical trials. As the inventor of Rebif® (interferon beta-1a) and having had the experience of taking it from the lab to a blockbuster product on the market, I also see a tremendous opportunity for Kadimastem to further develop our product candidates for ALS and diabetes. Together with the assets from NLS, we believe that we will be well-positioned to promote and expand these promising treatments."

About Kadimastem

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

IsletRx is Kadimastem‘s treatment for diabetes. IsletRx is comprised of functional pancreatic islet cells producing and releasing insulin and glucagon. IsletRx is intended to treat and potentially cure patients with insulin-dependent diabetes.

Kadimastem was founded by Professor Michel Revel, CSO of Kadimastem, who is Professor Emeritus of Molecular Genetics at the Weizmann Institute of Science. Professor Revel received the Israel Prize for the invention and development of Rebif®, a multiple sclerosis blockbuster drug sold worldwide.

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