ZURICH , June 16, 2025 /PRNewswire/ -- NLS Pharmaceutics Ltd. (NASDAQ: NLSP), a Swiss clinical-stage biopharmaceutical company focused on developing innovative therapies for central nervous system $(CNS)$ disorders, today issued a letter to its shareholders.

Dear Shareholders,

We are delighted to share a summary of NLS Pharmaceutics' achieved milestones since the fourth quarter of 2024. Here's a snapshot of our progress and what lies ahead:

1. Completion of Major Financing Events

   -- During the first quarter of 2025, we initially closed two equity 
      financing transactions, resulting in aggregate gross proceeds of $2.5 
      million, priced at $3.10 and $1.65 per share at a premium to the market 
      share price as of the date of the transactions, representing a premium of 
      48% and 10%, respectively. 
 
   -- In addition, we signed a $25 million equity facility commitment. The 
      potential proceeds from this facility are earmarked to support the merger 
      with Kadimastem Ltd. (TASE: KDST). ("Kadimastem") and the Company's 
      advance clinical programs. 

Since we first announced the proposed merger with Kadimastem, we have raised more than $6 million in the aggregate to support the pending transaction and the combined company's clinical trials post-merger. Moreover, we have converted all of the Company's outstanding liabilities into equity, reflecting a strong balance sheet of a company free of debt. These financing events have not only strengthened our balance sheet, but have extended our cash runway, enabling us to pursue continued research & development efforts and proceed with the execution of the merger.

2. Positive Clinical and Preclinical Developments

   -- In February 2025, we announced encouraging preclinical data for AEX--2, 
      further validating our dual orexin receptor agonist platform ("DOXA") for 
      central nervous systems ("CNS") disorders. 
 
   -- In February 2025, we announced that Kadimastem and iTolerance 
      successfully completed a Pre-IND Meeting with the U.S. Food and Drug 
      Administration (FDA) for its Type 1 Diabetes Treatment, representing a 
      significant asset for the merged company, NewcelX. 
 
   -- In April 2025, positive results from Study KO--943 revealed that Mazindol 
      ER significantly reduced fentanyl--induced reward behaviors in animal 
      models. These results represent important proof--points for both safety 
      and therapeutic potential as we prepare for next--stage trials. 

3. Merger with Kadimastem -- Strategic Synergy in Action

   -- In January 2025, following the approval by the board of directors of NLS 
      and Kadimastem, Kadimastem's shareholders overwhelmingly approved the 
      merger, a critical step in closing the merger and in bringing together 
      the complementary strengths of Kadimastem and NLS. 
 
   -- Amendments to the Registration Statements on Form F--4 were filed, paving 
      the way for the final NLS shareholder vote. 

Today, the merger process is progressing. We target completing the merger in early Q3 2025, subject to requirements set forth by all regulatory agents.

Ronen Twito, Executive Chairman and Chief Executive Officer of Kadimastem, said, "We are excited about the upcoming merger, which aligns with our strategic goals and will enable us to provide comprehensive therapeutic options for patients. By joining forces, we can better serve those with diabetes and combat its complexity. This merger demonstrates a commitment to innovation, patient care, and long-term value. Together, we aim to improve the lives of diabetics and patients with related conditions. We are committed to ensuring a smooth integration process as we move forward, following the completion of the merger. In addition to the equity investment, we believe the committed equity facility agreement of $25 million will enhance the combined company's balance sheet and could provide flexibility to support future pipeline development."

4. What the Combined Company Will Look Like

   -- The combined entity will be named NewcelX and intends to be a 
      Nasdaq--listed clinical--stage biotech with a robust pipeline spanning 
      neurodegenerative disease (AstroRx$(R)$ for amyotrophic lateral sclerosis 
      ("ALS") in a Phase IIa stage), diabetes (IsletRx), and CNS disorders via 
      the DOXA platform. 
 
   -- Shareholders are expected to continue to benefit from our legacy 
      assets--notably Mazindol ER--through contingent value rights subject to 
      potential future sales. 

5. Looking Ahead

As we approach the anticipated closing of the merger, we are preparing to rapidly initiate:

   -- Phase IIa multi--site clinical trial for AstroRx(R), targeting ALS. 
 
   -- Phase I study for IsletRx in Type I diabetes. 
 
   -- Continued preclinical progression of AEX--2/AEX--41 toward late--stage 
      development (e.g., narcolepsy, neurodegeneration). 

Our anticipated merger with Kadimastem is expected to mark a transformational pivot--uniting our proprietary DOXA platform and the cell--therapy assets under one roof. With a fortified capital structure, and a unified board guiding our research and development direction, we are strategically positioned for meaningful value creation.

In Conclusion

Thanks to your trust and resilience, NLS stands on the edge of a powerful new chapter. We anticipate the closing of the merger to occur in the near future, followed by an energized integration phase and accelerated clinical momentum.

Thank you for your enduring support. Together, we will accelerate development, diversify our pipeline, and enhance long-term shareholder value.

With optimism,

Alexander C. Zwyer

Chief Executive Officer

NLS Pharmaceutics (NASDAQ: NLSP)

About NLS Pharmaceutics Ltd.

NLS is a global development-stage biopharmaceutical company, working with a network of world-class partners and internationally recognized scientists, focused on the discovery and development of innovative therapies for patients with rare and complex central nervous system disorders who have unmet medical needs. Headquartered in Switzerland and founded in 2015, NLS is led by an experienced management team with a track record of developing and commercializing product candidates. For more information, please visit www.nlspharma.com.

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(R), the company'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 the company's treatment for diabetes. IsletRx is comprised of functional pancreatic islet cells producing and releasing insulin and glucagon, intended to treat and potentially cure patients with insulin-dependent diabetes. Kadimastem was founded by Professor Michel Revel, Chief Scientific Officer of Kadimastem and Professor Emeritus of Molecular Genetics at the Weizmann Institute of Science. Professor Revel received the Israel Prize for the invention and development of Rebif(R), a multiple sclerosis blockbuster drug sold worldwide. Kadimastem is traded on the Tel Aviv Stock Exchange (TASE: KDST).

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Safe Harbor Statement

This press release contains expressed or implied forward-looking statements pursuant to U.S. Federal securities laws. For example, NLS and Kadimastem are using forward-looking statements when they discuss the expected closing, and the timing of the closing, of the transaction and the potential benefits of the transaction to NLS and Kadimastem and their respective shareholders, including value creation for shareholders, as well as the expected strategic position of the combined company following the Merger, if completed, and the plan to prepare and initiate a Phase IIa multi-site clinical trial of AstroRx(R), Kadimastem's product candidate for Amyotrophic Lateral Sclerosis (ALS). These forward-looking statements and their implications are based on the current expectations of the management of NLS and Kadimastem and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: risks related to the companies' ability to complete the Merger on the proposed terms and schedule, including risks and uncertainties related to the satisfaction of the closing conditions related to the merger agreement and risks and uncertainties related to the failure to timely, or at all, obtain shareholder approvals for the transaction; unexpected costs, charges or expenses resulting from the transaction and potential adverse reactions or changes to business relationships resulting from the announcement or completion of the Merger; changes in technology and market requirements; either or both companies may encounter delays or obstacles in launching and/or successfully completing their clinical trials; the companies' products may not be approved by regulatory agencies; their technologies may not be validated as they progress and their methods may not be accepted by the scientific community; either of both of the companies may be unable to retain or attract key employees whose knowledge is essential to the development of their products; unforeseen scientific difficulties may develop with the products being advanced by the companies; their products may wind up being more expensive than anticipated; results in the laboratory may not translate to equally good results in real clinical settings; results of preclinical studies may not correlate with the results of human clinical trials; the companies' patents may not be

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