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All right. I think we're live now, so let's jump in. Thank you, everyone, for joining today, Scinai Immunotherapeutics corporate overview and 2026 midyear business update. My name is Andrew Eriksen. I'm a Managing Director here at Allele Capital, who works directly with the Scinai 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 Scinai published just yesterday, review some of those financials, some of those business updates, and then Amir is 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. So 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 Scinai 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 Wharton School of Penn University. My background goes back more than 20 years in pharmaceutical industry between the United States, Europe and Israel. Now I'm leading Scinai as the CEO of Scinai Immunotherapeutics, the parent company and also of the subsidiary, Scinai Biopharma Services, our CDMO daughter company.

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

Yes. The day before yesterday, time flies. So I think the most important way to look at the first half of 2026 is that Scinai today is 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 emerging CDMO business in Jerusalem. During the first half, we significantly expanded the commercial side of the company through the acquisition of former Recipharm 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, Scinai 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 disciplined way.

Perfect. Thank you. Yes, thanks for correcting me. The week moves fast just as the summer has been moving fast for us. So 2 days ago, it was the earnings, but thanks for that kind of initial update. I think from what I observed at least from the report, there are several moving pieces in the first half financials as a result of this Recipharm 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 Recipharm 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 noncash, nonoperating 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 million, 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 a liquidity perspective, however, as of June 30, 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. Yes, that's important nuance there with the accounting with this transaction and where that leaves us and how the Scinai business is actually in a very good spot right now with how that all places out. So great. Moving on here into more of the fundamental business, can you talk a little bit about what capabilities Scinai has today that it did not have entering 2026? And is management still integrating now at this stage from that transaction? Or is it -- has it shifted to an execution focus?

Thank you. That's an excellent question. So the transaction significantly broadened what Scinai can offer to customers. In Jerusalem, our capabilities are focused primarily on biologics development, analytical services, aseptic processing and clinical CGMP manufacturing. Yavne site adds complementary capabilities in early chemistry development and small-scale CGMP manufacturing of active pharmaceutical ingredient, 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 Recipharm is also strategically important. The commercial collaboration is intended to facilitate cooperation and potential customer referrals between our early and clinical stage capabilities, and Recipharm's broader manufacturing network as programs mature. Just to clarify, Recipharm AB was the international CDMO company that sold us Recipharm Israel facility and business, so the objective is to make the combined platform productive, bringing more customer work, execute well, increase utilization and build longer-term customer relationships.

Great. Fantastic. Yes. 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. I saw one of the items in the first half report was -- one of the more notable updates is the approximately, I think it was $3.1 million of committed customer orders as of August 16, which obviously happened post the end of the quarter. Can you tell us a little bit about what that represents?

All right. So committed customer order is a management KPI. As of August 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 noncancelable and usually clients pay an upfront payment against them. Approximately $1.6 million of that relates to the Yavne, and approximately $1.5 million to Jerusalem.

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 projects and satisfaction of the applicable accounting criteria. However, as of August 10, I can tell you that approximately $2.1 million had been already invoiced to customers. While approximately $1 million of the $3.1 million 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 Yavne. That indicates that we are seeing meaningful commercial activity across the broader CDMO platform rather than only within the business we acquired.

Got you. Okay. That's helpful. Thank you. And speaking more on that kind of CDMO commercial traction and that expansion you alluded to, what does the expanded 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 CMC 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 30. The expanded definitive agreement remains under negotiation, so I do not want to imply a final contract value, scope or development time line that has not yet been agreed. But strategically, this is exactly the type of relationship we want to build, beginning with the defined technical need and expanding into a broader development and manufacturing engagement.

Fantastic. Yes, 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 targets you've previously announced. So I believe it was an objective of approximately $5 million in CDMO revenue for 2026, which was the initial objective. Is that still the objective today? And what would a successful execution look like by year-end?

Yes, 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 the 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, both -- and then third, sorry, 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 first project shows that a customer is willing to work with you while winning the next project is a much stronger indication that you delivered. So success is not just increasing the commercial pipeline. It is turning customer commitments into executed work, revenue and longer-term relationships. And to go back, yes, we are still supporting the $5 million in CDMO revenue for 2026.

Fantastic. Yes, 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 later-stage projects, which I think is a great sign of good work delivered. So beyond -- now I want to shift a little bit from the CDMO, it's more of some of these R&D priorities, right? Because as we talked about the offset, Scinai 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 for 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 NanoAb 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 Pincell. 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.

Yes, 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 I think we hit on a lot of the core takeaways from the reports, so 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 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, right? What should investors be looking out for from an execution story?

So 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 in revenue, additional customers coming on to 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 Scinai 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 early '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'll give -- I see one or two coming in here. I'll give everyone another kind of, call it, 15, 20 seconds to submit some additional questions. And what I'll just add at the end here is I think Scinai 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 between -- behind this R&D pipeline, which on the earlier side but still very exciting with some of the assets that you have acquired and are focused on developing and in spaces that we're seeing continued interest and support just across the sector. So I think it's a really exciting time for Scinai as a platform at this stage and excited to see what the rest of this year and kind of early 2027, looks like.

But with that said, I see a couple of 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 the SEPA that your team has in place, Amir. But the question says, I saw that Scinai 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 filing updates the registration statement that we already had, underlying our existing SEPA to reflect our June 30 financial information. This is a post-effective amendment, it's very normal. It doesn't basically mean that we are going to raise $15 million tomorrow through this instrument. The August 21 -- and also we had to reflect in this post-effective amendment, also the August 21 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 dilutive. That's clear. The advantage of the SEPA is flexibility. Advances using -- through the SEPA are priced at 97% of the applicable VWAP 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, et cetera, and size any draw responsibly, in the responsible way. We, therefore, view the SEPA as one additional financing tool available to the company alongside cash generation from the CDMO business, customer advances, non-dilutive funding, and other financing alternatives.

Got you. Thank you. I'm glad to clarify that as it's a tool that can be used that doesn't have to be used. And your last statement there actually transitions well into this next question that I saw come in also on the liquidity funding angle. It says your cash and restricted cash was approximately $2.85 million and the filings say the company will require additional capital. How do investors think about funding from here? Obviously, SEPA is one vehicle, but I would love to hear kind of what I think -- what this question is asking is kind of what are the ways you think about funding at this stage?

Yes. So 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're 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 Scinai.

At the same time, I would say, we continue to control discretionary spending and prioritize capital allocation cleverly, 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 SEPA, 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, disciplined 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 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 this -- I'd like to go back to this one because this is something you touched on earlier in the call, and I think it's important to kind of clarify and 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 and what that relates to.

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 forecast of future revenue or future cash. The $3.1 million represents signed customer purchase orders for the specified CDMO services that we provide. So as we disclosed, 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 as August 10. We are already in the 25. So while approximately $1 million as of August 10 represented signed work orders that had not been yet invoiced, okay?

That doesn't mean that the $2.1 million invoice has all been recognized as revenue because, as you know, according to accounting rules, sometimes you take in advance, it's not regarded as a revenue until you finish the deliverable, for example, a project and report and things like that, so -- but the more important thing is that it is really talking a lot about the cash we have and the ability to maintain our run rate. And that's something for companies at our size, it's 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 objective 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 I appreciate that. And 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 just jump to kind of wrapping up the closing statements here. So I think before we hop, I think, Amir, 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 a lot here.

So I'm quite excited about where we are now, and I would want investors to leave with a clear understanding that Scinai 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, and 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 nondilutive funding, partnerships and external capital efficiently. 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 you and everybody who took the time to join us today and for your continued interest in Scinai.

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.