MITOCAREX TRANSACTION

12 Months Ended

Dec. 31, 2025

NOTE 4 – MITOCAREX TRANSACTION

On February 25, 2025, the Company, entered into a securities purchase and exchange agreement (the “Mito Agreement”) with MitoCareX, SciSparc Ltd., an Israeli public company (“SciSparc”), Dr. Alon Silberman (“Alon”) and Prof. Ciro Leonardo Pierri (“Ciro”, and together with SciSparc and Alon, the “Sellers”) pursuant to which the Company will acquire from each of the Sellers their respective ordinary shares, nominal (par) value NIS 0.01 each, of MitoCareX (the “Ordinary Shares”), thereby resulting in MitoCareX becoming a wholly-owned subsidiary of the Company.

The acquisition was undertaken as the Company’s management believes that the business activities of MitoCareX operate in a sector with significant growth potential and are expected to support the Company’s long-term strategic development.

The closing of the Mito Agreement occurred on October 20, 2025 (“Closing date”), after all customary closing conditions, including stockholder approval, had been satisfied.

Prior to the Closing date, the Company had provided MitoCareX with a short-term loan in the amount of approximately $1,053. Upon completion of the acquisition, this balance was effectively settled as part of the business combination.

On the closing date, SciSparc transferred 6,622 Ordinary Shares to the Company, in consideration for a cash payment of $700. The Company issued and delivered shares of Common Stock to the Sellers equal to 40% of the capital stock of the Company on a fully diluted basis, calculated as of immediately following the closing date (collectively, the “Exchanged Common Stock”); and as consideration for the Exchanged Common Stock, (1) Alon transferred 11,166 Ordinary Shares to the Company, which represented 100% of the Ordinary Shares owned by Alon as of the closing date; (2) Ciro transferred 5,584 Ordinary Shares to the Company, which represented 100% of the Ordinary Shares owned by Ciro as of the closing date; and (3) SciSparc transferred 12,066 Ordinary Shares to the Company (“SciSparc’s Exchanged Shares”) and together with Alon’s Shares and Ciro’s Shares, the (“Exchanged Ordinary Shares”), which represented 100% of the holdings in MitoCareX.

Following the closing, until December 31, 2028, the Sellers will have the right to receive additional shares of Common Stock, for no additional consideration, in an aggregate amount of up to 25% of the issued and outstanding capital stock of the Company on a fully-diluted basis calculated immediately following the Closing date subject to MitoCareX meeting certain milestones (the “Contingent share consideration”).

NEXENTIS TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and per share data)

NOTE 4 – MITOCAREX TRANSACTION (continued)

Immediately prior to the closing date, Alon entered into an amended employment agreement with the Company and MitoCareX in connection with his employment as the Chief Executive Officer of MitoCareX, which provides, among other things, for a grant of restricted stock representing 5% of the capital stock of the Company on a fully diluted basis (calculated as of immediately following the closing date), pursuant to the Company’s 2022 Share Incentive Plan. Such shares will vest in three equal installments on each of the first, second and third anniversary of the closing date, subject to Alon’s continued employment with MitoCareX.

As additional consideration for the Exchanged Ordinary Shares, each of SciSparc, Alon and Ciro will receive, collectively, 30% of the gross proceeds of each financing transaction closed by the Company within five years of the closing, provided that the maximum amount payable to the foregoing parties will be $1,600 (the “ Contingent cash consideration”).

The Company’s chairman of the board of directors and one of the Company’s directors are also members of the board of directors of SciSparc.

Acquisition-related costs incurred in connection with the transaction were recognized as an expense in the consolidated statement of operations as incurred.

The total consideration of the acquisition was calculated using a third-party appraiser at approximately $8,864 and is comprised of the following components:

	1.	Cash consideration of $700.

	2.	Share consideration consisting of 1,171,942 shares of the Company’s Common Stock, issued at a fair value of $4.13 per share Company’s close share price at the Closing date totaled to approximately $4,840.

	3.	The fair value of the Contingent share consideration of up to 976,618 shares (25% of the issued and outstanding capital stock of the Company on a fully-diluted basis calculated as of immediately following the Closing date) were calculated as of the Closing date, using third-party appraiser. The third-party appraiser considered the expected probability for each milestone, its expected period and discount rate. The Company concluded that the Contingent share consideration fail the indexation guidance of ASC 815-40 and was classified as a liability. The Contingent share consideration as of the Closing date and as of December 31,2025, were calculated at approximately $2,034 and $854, respectively, and is included in non-current liabilities.

	4.	The fair value of Contingent cash consideration was calculated using third-party appraiser. The third-party appraiser considered the expected future financing transaction during the period through October 2030, its expected period and 21% discount rate. The Contingent cash consideration was calculated as of the Closing date and as of December 31, 2025, at approximately $1,290 and $1,287, respectively.

As of December 31, 2025, the Company recorded $47 of accrued liability, related to the Contingent cash consideration as a result of financing transaction closed by the Company by December 31, 2025. The remaining Contingent cash consideration balance of $1,287 is included in non-current liabilities, as repayment is contingent upon future financing transactions under the Company’s control.

From the acquisition date through December 31, 2025, MitoCareX did not generate revenues and incurred only operating expenses. Accordingly, the acquisition did not contribute revenues to the Company’s consolidated results for the period.

The annual MitoCareX net loss for the year ended December 31, 2025 amounted to $1,394, of which $276 related to the period after closing and which was included in the consolidated statements of operations for the year ended December 31, 2025.

The annual MitoCareX net loss for the year ended December 31, 2024 amounted to $886.

NEXENTIS TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and per share data)

NOTE 4 – MITOCAREX TRANSACTION (continued)

Purchase price allocation

The Company has performed a valuation analysis to determine the fair market value of the assets acquired and liabilities assumed of MitoCareX. Based on the total consideration transferred in connection with the acquisition, the Company has determined the allocation of the purchase consideration to the identifiable assets acquired and liabilities assumed. The following table summarizes the total purchase price and purchase price allocation as of the Closing date:

	Unaudited
	USD in thousands
Cash consideration		700
Share consideration		4,840
Contingent share consideration		2,034
Contingent cash consideration		1,290
Fair value of total consideration transferred		8,864

Recognized amounts of identifiable assets acquired and liabilities assumed
Cash and cash equivalents		135
Other accounts receivables		35
Fixed assets		7
Pre-existing relationship		(1,053	)
Other accounts payables		(298	)
Net liabilities assumed		(1,174	)

Identifiable intangible asset (1)		4,506
Goodwill (2)		6,291
Deferred taxes liability		(759	)
Total		8,864

	(1)	A proprietary algorithm developed by MitoCareX, with an estimated useful life of 11 years. The fair value of the identifiable intangible asset was determined using an income approach, specifically a discounted cash flow method, based on projected future economic benefits expected to be generated from the technology, discounted using a rate of 21%. The valuation incorporated assumptions regarding the expected commercialization potential of the technology, future development milestones, and an appropriate discount rate reflecting the risks associated with early-stage biotechnology assets. The valuation of the identifiable intangible asset involves significant estimates and assumptions, including projections of future cash flows and the selection of an appropriate discount rate. Although management believes these assumptions are reasonable, actual results may differ materially from those estimates. The Identifiable intangible asset is amortized on a straight-line basis over its estimated useful life, resulting in an amortization expense of approximately $78 during the year ended December 31, 2025. The Company does not expect the goodwill recognized in the transaction to be deductible for income tax purposes.

	(2)	The valuation of goodwill is based on significant estimates and assumptions as of the acquisition date. As of December 31, 2025, no changes in these assumptions were identified.

Net cash used in acquisition is as follows:
Cash consideration paid	700
Less: cash and cash equivalents acquired	(135	)
Net cash used in acquisition	565

2025 Goodwill Impairment Test

The Company performed its annual goodwill impairment assessment for the year ended December 31, 2025. The assessment was conducted using a qualitative evaluation in accordance with ASC 350.

In performing the qualitative assessment, the Company considered various factors, including, among others, the financial performance and operating results of MitoCareX, the proximity of acquisition date to the impairment test date, as well as industry and market conditions, and the overall economic environment.

Based on this assessment, the Company concluded that it is more likely than not that the fair value of the reporting unit to which the goodwill is attributed exceeds its carrying amount. Therefore, no impairment was recorded.

Due to the equity of the Company being above the market capitalization of the Company as of December 31, 2025, a further sustained decline in the Company’s share price and market capitalization may require further testing, which may result in an impairment.

NEXENTIS TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and per share data)