Scinai Immunotherapeutics Ltd.

All right, I think we're live now, so let's jump in. Thank you, everyone, for joining today, Sinai Immunotherapeutics Corporate Overview in 2026 Mid-Year Business Update. My name is Andrew Erickson. I'm a Managing Director here at Aleo Capital who works directly with the Sinai team, and we're helping kind of put on this event today. So we're going to run through a bit of the first half results that you might have noticed Sinai published just yesterday. We'll do some of those financials, some of those business updates, and then Amir's going to give us a bit of an outlook for the rest of 2026 and why the team is ultimately really excited about what's to come. So without further ado, we'll get into it, and then we'll save the questions at the end. If you're watching on LinkedIn or YouTube, there's chat boxes for both of those platforms. So submit your questions, and we'll get to those at the end of the conversation. Without further ado, let's jump into the call here, Amir. Maybe what you can do is, I'm sure a lot of people on the call are familiar with who you are, but maybe just a quick background on yourself and your role at Sinai, and then we can get into some of the first half details.

Thank you very much, Andrew, and welcome everybody to our webinar today. I'm Amir Reichman. I have a biotechnology engineering master's degree and an MBA from the Working School of Penn University. My background goes back more than 20 years in pharmaceutical industry between the United States, Europe, and Israel. And now I'm leading Sinai as the CEO of Sinai Immunotherapeutics, the parent company, and also of the subsidiary Sinai Biopharma Services, our CDMO daughter company.

With that, let's kind of jump in. So, you know, as we discussed, The first half results got published yesterday. I think there was a lot of positives coming out of that. Before we get into the individual numbers, can you put the first half of 2026 into perspective for investors, Amir? What changed at Sinai? Where does the company stand today versus the beginning of the year?

Yeah, the day before yesterday, time flies. So I think the most important way to look at the first half of 2026 is that Sinai today is a materially different company than the one that entered the year. At the beginning of 2026, we had our innovative immunology R&D pipeline and an emergency VMO business in Jerusalem. During the first half, We significantly expanded the commercial side of the company through the acquisition of former ReptiPharm operations in Yavne, Israel. That transaction added much more than equipment and infrastructure. It added an experienced operating team, established quality systems, technical know-how, customer relationships, and additional manufacturing capabilities. So today, Sinai has two complementary value-creating platforms. Our Immunology R&D activities and the broader two-site CDMO business operating in Jerusalem and Yavne, Israel. The first half was therefore largely about transforming the operating platform. The second half is increasingly about demonstrating what we can do with it. Converting Customer Activity into Revenue, Increasing Utilization of the Infrastructure we now have, and Advancing our R&D Programs into Capital Discipline Way.

Perfect. Thank you. Yeah, thanks for correcting me. Sorry. The week moves fast, just as this summer has been moving fast for us. So, you know, two days ago was the earnings. But thanks for that kind of initial update. And I think I think from what I observed, at least from the report, there were several moving pieces in the first half financials as a result of this Resifarm transaction that you just alluded to. What are the real numbers that investors should be focusing on as they think about that report?

Thank you, Andrew. So there are a few numbers I think investors should focus on, but it is important to distinguish between the accounting effects of the Resifarm transaction and the underlying operating performance. Revenue for the first half was approximately $949,000, compared approximately $773,000 in the first half of 2025. At the same time, the expanded CDMO footprint brought a larger fixed, semi-fixed cost base into the company before utilization had fully ramped. As a result, we reported a gross loss of approximately $2.37 million and an operating loss of approximately $4.6 million. The most significant accounting item was the approximately $6.4 million bargain purchase gain associated with the Recipharm transaction. That is a non-cash, non-operating accounting gain based on the Preliminary Purchase Price Allocation, what's called PPA. Preliminary, because of that gain, primarily, sorry, because of that gain, we reported net income of approximately 1.50 million for the first half, 1.57 billion, sorry. So I would not want investors to interpret the reported net income as an operating profitability. The underlying business still generated an operating loss during the period. From liquidity perspective, however, as of June 30th, 2026, we had approximately 2.85 million of cash and restricted cash. The financial picture, therefore, reflects a company that has expanded its operating capabilities materially, while the revenues and utilization of that infrastructure are still in the process of scaling, and I believe you will see that in the coming quarter and the next half.

Great, great, thank you. Yeah, that's important nuance there with the with the accounting with this transaction and where that leads us and how the Sinai business is actually in a very good spot right now with how that all places out. So, great. Moving on here into more, you know, the fundamental business, can you talk a little bit about what capabilities Sinai has today that did not have that during 2026? And, you know, is management still integrating now at this stage from that transaction or has it shifted to an execution mode?

Thank you, that's an excellent question. So the transaction significantly broadened what Sinai can offer to customers. In Jerusalem, our capabilities are focused primarily on biologic developments, analytical services, aseptic processing and clinical CGMP manufacturing. Yavne's side, as complementary capabilities in early chemistry development and small-scale CGMP manufacturing of active pharmaceutical ingredients, API, for clinical programs. But I think it is important to emphasize that we did not simply acquire equipment. We acquired an experienced pharmaceutical team, established quality systems, operating procedures, customer relations, and know-how that will take considerable time and Capital to build independently. At this point, management's focus is increasingly on execution, utilization and commercialization rather than simply integration. The relationship with Resifarm is also strategically important. The commercial collaboration is intended to facilitate cooperation and potential customer referrals between our early and clinical stage capabilities and Resifarm's broader manufacturing network as programs mature. Just to clarify, Resifarm AB was the international CDMO company that sold us Resifarm Israel facility and business. So the objective is to make the combined platform productive, bring in more customer work, execute well, increase utilization and build longer-term customer relationships.

Great, fantastic. Yeah, and I think a key takeaway from what you just said, right, is the way that you were able to structure this transaction is you can hit the ground running and start executing sooner because you're not building this from scratch, right? There was this fundamental business in place that you're essentially just integrating with your already outstanding business, which I think is an exciting aspect of this transaction. So, moving back more to the financial side of this, you know, I saw one of the items in the first half report was, you know, one of the more notable updates is the approximately, I think it was 3.1 million of committed customer orders as of August 16th, which obviously happened post, you know, the end of the quarter. Can you tell us a little bit about what that represents?

All right. So, committed customer orders is a management KPI. and almost 16, we had approximately 3.1 million of what we define as committed customer orders. These are signed customer purchase orders for specified CDMO services under existing contractual agreements. Usually they are non-cancellable and usually clients pay an upfront payment against it. Approximately 1.6 million of that relates to the Avne and approximately 1.5 million I want to be precise about what that number means. It is a measure of customer authorized commercial activity. It should not be interpreted as 3.1 million of future revenue or as a traditional backlog figure, because portions may have already been invoiced or recognized as revenues. and the timing of the remaining revenue recognition depends on execution on our side of the underlying project and satisfaction of the applicable accounting criteria. However, as of August 10th, I can tell you that approximately $2.1 million had been already invoiced to customers, while approximately $1 million of the $3.1 represents signed work orders that had not yet been invoiced. What I find encouraging is that the activity is distributed almost equally between Jerusalem and Naama. That indicates that we are seeing meaningful commercial activity across the broader CDMO platform rather than only within the business we acquired.

Gotcha. Okay, that's helpful. Thank you. Speaking more on that kind of CDMO commercial traction and that expansion you allude to, What does the extended U.S. clinical manufacturing engagement tell you about the platform as it stands today?

So I think this is a very good example of the kind of customer progression we want to see. The relationship began with feasibility and CGMP readiness activities, subsequently expanded toward the broader CNC development and clinical manufacturing program intended to support the customer's planned U.S. regulatory submission, with the FDA and subsequent clinical development. We have already commenced substantive activities and received approximately $650,000 in cash payments and advances after June 30th. The expanded definitive agreement remains under negotiation, so I do not want to imply a final contract value, scope, or development timeline that has not yet been agreed. But strategically, this is exactly the type of relationship we want to build. beginning with a defined technical need and expanding into a broader development and manufacturing engagement.

Fantastic. Yeah, it's great to see that clientele and that customer base expanding out progressively. So that's fantastic. Another thing I wanted to go back to is that commercial execution and some of some targets you've previously announced. So I believe it was an objective of approximately $5 million in CDMO revenue for 2026. We continue to pursue approximately $5 million of CDMO revenue for 2026. Achievement of that objective, of course, will depend on the timing and execution of customer projects.

and, in addition, satisfaction of the applicable revenue recognition criteria and our ability to continue converting additional commercial opportunities. I would not want investors to derive that target mechanically from the 3.1 million of committed customer orders because these are different measures. For me, successful execution by year-end would mean several things. First, converting meaningful amount of customer work into recognized revenue. Second, continuing to expand the level of customer authorized work across the sites. And then third, increasing utilization of the infrastructure and workforce that we already have in place. And fourth, generating repeat business. Repeat business is particularly important in CDMO because winning the third project shows that a customer is willing to work with you, while winning the next project is a much stronger indication So success is not just increasing the commercial pipeline, it is turning customer commitments into executive work, revenue, and longer-term relationships. And to go back, yes, we are still supporting the $5 million CDMO revenue for 2026.

Fantastic. Yeah, no, that's great, too. Like you said, not only get new business, but keep building on that current business you have and expanding those relationships into those and those later stage projects, which I think is a great sign of good work delivered. Now I want to shift a little bit from the CDMO to some of these R&D priorities, right? Because as we talked about at the offset, Sinai is a platform that is not only developing this growing CDMO business, but there's this exciting early preclinical platform as well. So beyond the commercial business, what should investors watch first? or from the R&D pipeline during the remainder of 2026.

So, on the R&D side, our focus is increasingly on prioritization and capital discipline. We continue to believe that our Naama platform can support differentiated therapeutic formats, but we are being very deliberate about where we allocate capital. For each program, we are looking not only at the science, but also at intended product profile, development feasibility, differentiation, technical risk and the financing required to reach the next meaningful value inflection point. We therefore intend to use non-dilutive funding, collaborations and strategic partnerships whenever possible rather than asking shareholders to finance every stage of development internally. PC111 remains an important program for us and is being advanced under our option agreement with PINCEP. We believe it addresses serious dermatology conditions with significant unmet medical need, but we are also maintaining a disciplined approach to how and when we deploy capital toward the program.

Yeah, very smart. I think there's a lot of excitement with a few different assets within the pipeline. So I would definitely encourage folks to check those out. Great. And, you know, I think we hit on a lot of the core takeaways from the report. So, you know, I'd encourage people to continue submitting questions as we're getting close to wrapping up here. I have one more question for Amir, but then we'll jump into the audience Q&A. But before we wrap up here, I think a good place to leave on is, you know, if we're having this conversation again at the beginning of 2027, so Looking several months down the road, what would you like to have accomplished between now and then? What should investors be looking out for from an execution story? Exactly tapping into the last word you just said.

I would like investors to be able to look back at the second half of 2026 and see measurable execution. On the commercial side, I would like to see customer commitments translated into work and revenue. additional customers coming onto the platform, higher utilization of our capacity across Jerusalem and Yavne, and evidence of repeat business. On the R&D side, I would like us to have advanced our highest priority programs through clearly defined milestones while maintaining the capital discipline we have established. And at the corporate level, I would like the market to have a much clearer understanding of what Sinai has become. We are building a company that combines innovative immunology R&D with real pharmaceutical development and manufacturing capabilities. So, when we speak again in Area 27, I want to be talking less about what we intend to build and much more about what we have demonstrated. Revenue generated, customers added, utilization increased, R&D milestones achieved, and capital deployed intelligently.

Fantastic. Thank you. Thank you. That was quite helpful. So, perfect. Now, I'd like to take some time to jump into some audience questions. So, I see one or two coming in here. I'll give everyone another kind of call, 15, 20 seconds to submit some additional questions. And what I'll just add at the end here is I think Sinai represents a really unique opportunity, right? Not only is this growing CDMO platform that is clearly getting more customer accounts, but then there's the excitement behind this R&D pipeline, which on the earlier side is still very exciting with some of the assets that you have acquired and are focused on developing in spaces So I think it's a really exciting time for Sinai as a platform at this stage, and excited to see what the rest of this year and early 2027 looks like. With that said, I see a couple questions coming in here on both platforms, so let me just pull those up, and I think we have time for a couple. So this was the first one I saw, so we'll start here. Okay, so this one has to do with kind of, you know, the SEPA that your team has in place in here. But the question says, I saw that Sinai is updating the F-1 registration statement covering the $15 million SEPA. Should shareholders expect $15 million of dilution in the near term?

Absolutely not. The finding... The August 21st and also we had to reflect in this post-effective amendment also the August 21st ADS ratio change. So it's not a new 15 million financing and it does not mean that we have decided to draw the full amount. However, the SEPA gives us the right, but not the obligation, to access capital under the facility. We as management control whether and when to use it and the size of each draw subject to terms of the agreement. I also want to be clear that any actual issuance of new equity is diluted. That's clear. The advantage of the SEPA is flexibility. Advances through the SEPA are priced at 97% of the applicable VWA pricing formula and do not carry warrants. The commitment fee is separate from the pricing of individual advances and have already been paid. So, when deciding whether to use the facility, we can take into account the company's funding needs, prevailing share price and the market liquidity, volume trade, etc., and size any draw in a responsible way. We therefore view the SIPA as one additional financing tool available to the company alongside Cash Generation from the CDMO Business, Customer Advances, Non-Digital Funding, and Other Financing Alternatives.

Gotcha, thank you. Yeah, I'm glad you clarified that as, you know, it's a tool that can be used that doesn't have to be used. And in your last statement there actually, you know, transitions well into this next question that I saw come in also on the liquidity funding angle. But, you know, it says your cash and restricted cash was approximately... We are very focused on improving the company's liquidity through a combination of operational execution, sales, and disciplined financing.

On the operating side, I would say the priority is to expand our customer base, increase the number and value of committed customer orders to generate more stability and ability to project how much we are going to generate, and execute those projects efficiently so that customer commitments convert into revenues in a reliable way and as quickly as possible. Where customer agreements allow it, we also seek to structure advances and milestone payments in a way that helps cash flow and help us fund the underlying project activity and reduces the working capital burden on sign-up. At the same time, I would say, we continue to control discretionary spending and prioritize capital allocation carefully, particularly within R&D. On the financing side, We continue to pursue non-dilutive funding, grants for example, governmental grants and NGOs, and maintain access to capital market tools such as the SIPA, which we intend to use selectively, rather than as an automatic source of funding. So, our approach is not based on one financing source. It is a combination of our growing CDMO cash generation Improving in working capital efficiency, discipline spending, and non-dilutive funding, and of course, selective use of capital markets.

Fantastic, fantastic. Now that's, I think, helpful and answers the question. And, you know, the best companies in the market use a variety of different financing mechanisms, right, to get the cash they need. So, I think you're thinking about that the right way. I think we've got time for one more question before we enter kind of closing up here. So, I'd like to go back to this one because this is something you touched upon earlier in the call. I think it's important kind of clarifying, verifying. So it says, how much of the $3.1 million of committed customer orders is still future revenue, and are you still pursuing the approximately $5 million CDMO revenue objective for 2026? Which I think you stated at the end of the call that you are, but maybe you can talk a little bit more on that $3.1 million number.

Absolutely, it is important to clarify and it is an industry standard and also across industries to use management KPIs to clarify the situation because not always accounting can capture exactly what's going on now and give the visibility to investors of the health of the business. So the first point I would like to emphasize is that committed customer orders, as I said before, should not be interpreted as forecasts The 3.1 million represents signed customer purchase orders for the specified CDMO services that we provide. So as we disclose, approximately $2.1 million has been already invoiced, so it means that's going to be paid rather soon, or has been paid already. So that was August 10, we are already in the 25th, so while approximately 1 million, as of August 10, represented signed work orders that had not been yet invoiced. That doesn't mean that the 2.1 million invoiced has all been recognized as revenue, because as you know, according to accounting rules, sometimes you take an advance, it's not regarded as a revenue until you finish. They deliver, for example, a project end report and things like that. The more important thing is that it is really talking a lot about the cash we have and the ability to maintain our runway. And that's something for companies at our size is quite important for investors. So again, revenue recognition depends on the performance of applicable services and satisfaction of the relevant accounting criteria. But yes, we continue to pursue the 5 million of CDMO revenue for 26. that remains our objective, subject to, of course, timing and execution of customer projects, satisfaction of the applicable revenue recognition criteria, and our ability to continue converting additional commercial opportunities. So, the 3.1 million of committed customer orders and the 5 million revenue objectives are related indicators of commercial progress, but they are not the same measure and should not be added or compared mechanically.

Fantastic. I think that provides great clarity, so appreciate that. I do see one or two other questions here, but in the sense of time here, I just want to make sure we're cognizant. We will follow up separately with those who submitted those offline and make sure you get answers to that, but I want to jump to kind of wrapping up and closing statements here. I think before we hop, I think what would be helpful is, what is the one takeaway you would like investors to leave with today after everything we discussed, right? Because we did talk about it a lot.

So, I'm quite excited about where we are now, and I would want investors to leave with a clear understanding that Sinai is now in a completely different stage of its development. We have significantly expanded our commercial platform. We are seeing increasing customer activity across both Jerusalem and Yavne. Our focus now is on execution, converting the activity into revenues, improving utilization, and strengthening the financial resilience of the company. At the same time, we are continuing to advance our R&D programs with greater discipline around prioritization, funding, and capital allocation. We want to invest where we believe we can create the greatest value while using non-valuative funding, partnerships, and external capital efficiency. So, for the remainder of 26, the focus is very straightforward. Execute commercially, strengthen the financial position of the company, and advance the R&D portfolio in a disciplined way. I want to thank and everybody who took the time to join us today and for your continued interest in Sinai.

Fantastic. Thank you, Amir. Thank you for your time and walking through everyone the core fundamental updates of the recent financial report and the excitement for the rest of 2026. And we appreciate your time and thank you to everyone who joined the call today, as Amir said, and the interest in the story. And we look forward to continuing to update you as we progress through the rest of the year. So thanks again and we'll talk soon.

Thank you, Andrew. Thank you everybody for attending.