Breaking Down PainReform Ltd. (PRFX) Financial Health: Key Insights for Investors

You're looking at PainReform Ltd. (PRFX) and wondering if the recent volatility signals a deep-value opportunity or just a micro-cap trap, and honestly, the numbers paint a stark picture of a company in transition. As of November 2025, this stock trades at around $\mathbf{\$0.87}$ per share, a devastating drop from its 52-week high of $\mathbf{\$16.63}$, leaving the market capitalization at a tiny $\mathbf{\$1.70}$ million. The core challenge is the burn rate: the company reported a net loss of approximately $\mathbf{-\$4.09}$ million in the first half of 2025 (H1 2025 TTM), which is a significant drain, but they still held about $\mathbf{\$4.26}$ million in cash and equivalents as of August 2025. That cash-to-loss ratio is the first thing we look at, but what really complicates the analysis is the strategic pivot, moving beyond their core PRF-110 pain therapeutic to focus on the DeepSolar AI-driven solar-asset analysis business and a new investment in LayerBio for the cataract surgery market. This is a low-float, high-risk situation. We need to break down how much runway that $\mathbf{\$4.26}$ million buys them and whether the new AI and cataract ventures can defintely generate revenue before the cash runs out.

Revenue Analysis

You need to know the hard truth upfront: PainReform Ltd. (PRFX) is a clinical-stage company, so its core pharmaceutical business, focused on its lead drug candidate PRF-110, has generated $0 in product revenue for the 2025 fiscal year, which is typical for pre-commercial biopharma. But here's the key shift: the company has strategically diversified, and you need to pay close attention to the new, non-pharma revenue source, which is where the near-term growth potential lies.

The primary revenue stream for a company like this isn't product sales-it's capital raises and strategic moves. The core focus remains the development of PRF-110, an extended-release local anesthetic for post-operative pain relief, but until it clears Phase 3 trials and gains regulatory approval, it won't contribute to the top line. That means the year-over-year revenue growth rate for the pharmaceutical segment remains flat at 0% from $0 to $0 in product sales, which is a massive risk if you're looking for immediate sales traction.

The significant change in the revenue picture came in March 2025 with the acquisition of DeepSolar, an Artificial Intelligence (AI)-driven solar analytics platform. This move is PainReform Ltd. (PRFX)'s calculated attempt to bring in meaningful, high-margin revenue from a software-as-a-service (SaaS) model while the PRF-110 pipeline matures. This new segment is expected to drive revenue growth, though the initial contribution to the total 2025 revenue is still nascent and not enough to shift the overall reported revenue from the $0 mark for the trailing twelve months ended June 30, 2025.

To be fair, this two-pronged strategy changes the valuation conversation. You're no longer just betting on a single drug candidate; you're also buying into a high-growth clean energy technology play. The company is actively exploring strategic partnerships with utility companies and smart grid operators to accelerate this new segment. You can read more about the long-term goals and strategy here: Mission Statement, Vision, & Core Values of PainReform Ltd. (PRFX).

• PRF-110 (Pharmaceutical): Primary product candidate, currently in clinical development.
• DeepSolar (Technology): New segment providing AI-driven solar analytics via a SaaS platform.
• Other Income: Typically includes minimal interest and investment income, which was approximately $0.1 million for the fiscal year ended December 31, 2024.

Here's the quick math on the core business: zero product revenue means a 100% reliance on financing activities to cover operating expenses. For context, the net loss for the twelve months ending June 30, 2025, was approximately $4.09 million. That's a cash burn you need to monitor closely.

Profitability Metrics

You need to understand one core fact about PainReform Ltd. (PRFX) right away: as a clinical-stage specialty pharmaceutical company focused on its Phase 3 trial for PRF-110, its financial health is measured by cash runway, not traditional profitability. For the 2025 fiscal year, the company reported $0 in annual revenue, which means all standard profitability margins are effectively non-existent or zero.

This zero-revenue reality translates directly to the income statement. The Gross Profit Margin is 0% because there is no Cost of Goods Sold (COGS) to subtract from revenue when revenue itself is zero. Operating Profit Margin and Net Profit Margin are both deeply negative, driven entirely by the ongoing research and development (R&D) and general administrative costs required to advance PRF-110. Honestly, this is the expected profile for a biotech company pre-commercialization.

Here's the quick math on the negative returns as of November 2025, which show the depth of the capital burn:

• Return on Equity (ROE) stands at -127.65%.
• Return on Assets (ROA) is -36.19%.
• Trailing Twelve Months (TTM) Earnings Per Share (EPS) is a loss of -$2.89.

When you compare these ratios to the broader pharmaceutical industry, the contrast is stark. A typical established branded drug company operates with a Gross Profit Margin between 60% and 80%, and a Net Profit Margin often between 30% and 50%. PainReform Ltd.'s 0% Gross Margin and triple-digit negative ROE defintely highlight the binary risk of a clinical-stage investment: success hinges entirely on the Phase 3 trial results, not current operational efficiency. Operational efficiency here is simply about managing the R&D burn rate to maximize the cash runway until a potential drug approval.

The key takeaway is that you are investing in the intellectual property (IP) and the clinical pipeline, not the current cash flow. The valuation is a sum-of-the-parts calculation based on the potential market size of PRF-110, not a discounted cash flow (DCF) model based on current earnings. To get a full picture of the company's prospects, you should read the full analysis in Breaking Down PainReform Ltd. (PRFX) Financial Health: Key Insights for Investors.

Debt vs. Equity Structure

When I look at PainReform Ltd. (PRFX)'s balance sheet, the first and most striking takeaway is its near-zero reliance on debt financing. This is a classic capital structure for a clinical-stage biotechnology company: they fund operations almost exclusively through equity, which means less financial risk but a higher dependence on capital raises.

The company's debt-to-equity (D/E) ratio, a key measure of financial leverage, sits at a negligible 0.01 (or 1%) as of late 2025. To put that into perspective, the average D/E ratio for the broader Drug Manufacturers-Specialty & Generic industry is around 0.49. This huge gap tells you that PainReform Ltd. (PRFX) isn't using debt to fuel its research and development (R&D) pipeline; it's all on the shareholders.

Here's the quick math on the company's financing mix, based on the latest available fiscal year data:

You have virtually no long-term debt to worry about. The short-term debt of $90,000 is minimal, likely representing routine operational liabilities rather than strategic financing. This capital structure is a double-edged sword: you get stability from low leverage, but you also see consistent dilution risk from equity funding.

Honestly, the company's financial strategy is clear: avoid the interest expense and repayment obligations of debt while its core product, PRF-110, is still in the clinical trial phase. This is prudent, but it means their growth is entirely dependent on the success of future equity raises. The company has a history of tapping the equity markets, raising $20 million in its 2020 IPO. Plus, they've had to navigate a Nasdaq notice regarding the minimum stockholders' equity requirement in late 2024, which underscores the constant pressure to maintain a strong equity base.

Since the company carries no credit ratings-a typical situation for a micro-cap with no debt-there is no refinancing activity to track. The focus shifts entirely to cash burn and the timing of their next capital infusion. For a deeper look at who is currently funding this equity-centric model, you should check out Exploring PainReform Ltd. (PRFX) Investor Profile: Who's Buying and Why?

• Negligible debt means low default risk.
• Equity-heavy structure creates ongoing dilution risk.
• Future funding will likely be through stock offerings.

Liquidity and Solvency

You're looking at PainReform Ltd. (PRFX) and trying to figure out if the company has enough cash to keep its drug development and new DeepSolar initiatives running. The short answer is: their current liquidity position is decent, but the cash burn rate is a serious, near-term risk you can't ignore.

As of late 2025, PainReform's liquidity ratios look healthy on paper. The company's Current Ratio sits at approximately 1.59, and its Quick Ratio is just slightly lower at 1.52. This means PainReform has about $1.59 in short-term assets for every dollar of short-term debt, which is a comfortable buffer. The quick ratio, which strips out less-liquid assets like inventory, is nearly the same, telling us that most of their current assets are already in cash or easily converted to cash. That's a strength.

Here's the quick math on working capital (current assets minus current liabilities): based on recent balance sheet components, the company maintains a positive working capital position, roughly around $1.4 million. This positive number means the company isn't in immediate distress, but for a clinical-stage biotech that also has an AI-driven energy optimization platform, this isn't a massive cushion. The trend you need to watch is the cash flow, not just the balance sheet snapshot.

The cash flow statement overview paints a clearer, more challenging picture. The company is in a heavy investment phase, which is typical for its sector, but it results in a significant cash outflow from operations. For the twelve months ending June 30, 2025, the company's Free Cash Flow (FCF) was a negative $5.96 million. This FCF figure is the real measure of the cash burn-it shows how fast the company is depleting its reserves just to run the business and maintain assets.

To offset this burn, the company has historically relied on financing activities. For instance, in the 2024 fiscal year, cash flow from financing activities was a positive $8.86 million, largely from issuing stock to raise capital. This trend of financing growth and operations with equity is common, but it causes shareholder dilution. Plus, the company has been active on the investing front, notably with the August 2025 acquisition of a majority stake in LayerBio, a move that will require capital for the development of OcuRing-K. You can read more about the strategic implications of this in Exploring PainReform Ltd. (PRFX) Investor Profile: Who's Buying and Why?

The biggest liquidity concern is the cash runway. Analysts estimate PainReform has less than a year of cash runway based on the current free cash flow rate. This means they will defintely need to raise capital again in the near future to fund operations, clinical trials, and the new DeepSolar and LayerBio initiatives. That's the reality of a development-stage company.

The key financial metrics for PainReform's liquidity are summarized here:

Your action item is clear: factor in a high probability of a new equity offering (dilution) in the next 6-12 months. Watch for SEC filings (Form 6-K or 20-F) that detail cash and cash equivalents, and specifically look for any new financing agreements.

Valuation Analysis

You're looking for a clear signal on PainReform Ltd. (PRFX), and the valuation metrics, especially for a clinical-stage biotech, give a mixed but ultimately cautious picture. The short answer is that traditional metrics suggest PainReform is undervalued on a book-value basis, but the lack of revenue and negative earnings make it a high-risk, speculative play.

As of mid-November 2025, the stock price sits around the $0.87 to $0.90 range. This is a dramatic drop from its 52-week high of $16.63, showing a significant loss of investor confidence or a massive dilution event over the last year. The stock price has fallen by a staggering 74.17% in 2025 alone, which defintely warrants a deep dive into the fundamentals. Here's the quick math on the key valuation ratios.

Is PainReform Ltd. (PRFX) Overvalued or Undervalued?

For a company like PainReform, which is focused on its lead product, PRF-110, and is still in the clinical trial phase, standard valuation ratios are often skewed. Since they are not yet generating commercial revenue, their trailing 12-month (TTM) net income is negative, sitting at $-4.09 million as of June 2025. This means the Price-to-Earnings (P/E) ratio is not applicable (N/A) or negative, so you can't use it for a direct comparison to profitable peers.

The Price-to-Book (P/B) ratio, however, is a clear indicator of how the market values the company's net assets (assets minus liabilities). PainReform's P/B ratio is extremely low at approximately 0.21. This suggests the market is valuing the company at only about 21 cents for every dollar of its book value, which is a strong signal of being undervalued from an asset perspective. Still, what this estimate hides is the market's deep skepticism about the value of those assets-mostly cash-being burned through R&D.

Similarly, the Enterprise Value-to-EBITDA (EV/EBITDA) ratio is also not meaningful (N/A). The company's Enterprise Value is actually negative, at approximately -$1.55 million, because its cash balance is higher than its total debt and market capitalization of around $1.80 million. A negative Enterprise Value is a rare signal that the market is essentially valuing the company's core operations at less than zero, but it also reflects a strong net cash position relative to its tiny market cap.

• P/E Ratio: N/A (Due to negative TTM Net Income of $-4.09 million).
• P/B Ratio: 0.21 (Suggests asset-based undervaluation).
• EV/EBITDA: N/A (Due to negative Enterprise Value of -$1.55 million).

Stock Price Trends and Analyst Sentiment

The stock has shown extreme volatility over the past year, with a 52-week range from a low of $0.83 to a high of $16.63. The sharp decline of 74.17% in 2025 reflects a clear bearish trend, driven by the inherent risks of a clinical-stage pharmaceutical company and the need for further capital. The stock is currently trading near its 52-week floor.

On the income side, PainReform does not pay a dividend, which is typical for a growth-focused biotech. The dividend yield is 0.00%, and the payout ratio is N/A. Your return will come purely from capital appreciation, not income.

Analyst coverage is thin, but the consensus rating is a clear Sell. This consensus is based on limited recent research, but it maps directly to the high uncertainty and negative earnings. One analyst price target was recently decreased to US$3.00, which, while significantly above the current price, still comes with the strong caveat of a 'Sell' rating, implying the risk outweighs the potential reward at this stage. You need to treat this as a highly speculative stock.

If you're interested in the full context of these numbers, you can read the complete post here: Breaking Down PainReform Ltd. (PRFX) Financial Health: Key Insights for Investors. Finance: draft a risk-adjusted valuation model by month-end.

Risk Factors

You're looking at a clinical-stage company, PainReform Ltd. (PRFX), which means the primary risks are not about margin compression but about execution, cash runway, and regulatory hurdles. The core takeaway is that while the company has strategically diversified, its financial stability remains fragile, with a high-stakes bet on product development in two very different industries.

The most pressing internal risk is the company's financial position. As of June 30, 2025, PainReform Ltd. had cash and cash equivalents of only about $3.5 million, though it did manage a positive working capital of roughly $1.5 million. This low cash balance is a constant headwind, especially when you consider the stark negative retained earnings of $56.45 million reported in August 2025, which flags a history of substantial losses.

Here's the quick math: a clinical-stage biotech must manage its cash burn (net loss) to survive. For the first half of 2025 (H1 2025), the net loss was approximately $2.3 million, a significant improvement from the $12.8 million loss in H1 2024. This drop was largely due to R&D expenses falling from $11.4 million to just $0.3 million after the Phase 3 trial for PRF-110 completed. That's a one-time cost reduction; future clinical or regulatory steps will require new capital.

The strategic pivot into Smart Energy Management (SEM) via the DeepSolar acquisition introduces a new layer of operational risk. PainReform Ltd. is now split between developing a non-opioid pain treatment (PRF-110) and an AI-driven solar analytics platform. This dual focus can stretch a small team thin and dilute shareholder value if the DeepSolar segment doesn't generate substantial revenue quickly. The high leverage ratio of 2.5 in August 2025 also shows the financial creditors are shouldering a significant portion of the risk.

External and regulatory risks are also defintely top-of-mind for PainReform Ltd. (PRFX). The company's success hinges on the U.S. Food and Drug Administration (FDA) approval of its drug candidates, PRF-110 and OcuRing-K (acquired via LayerBio for the $9 billion global cataract surgery market). Any delay in the regulatory process can be fatal for a company with limited cash. Also, as an Israel-based company, the political and security situation in the region is a stated risk factor that could disrupt operations.

The company must also maintain its listing on the Nasdaq Capital Market, a risk highlighted by a November 2024 notice regarding the minimum stockholders' equity requirement. Failure to comply would severely limit its access to capital. The mitigation strategy here is clear: strategic diversification and aggressive cost control, plus a follow-on equity offering of $1.35 million filed in late 2024 to shore up the balance sheet.

• Financial Runway: Cash of $3.5M (H1 2025) is thin for a biotech.
• Regulatory Approval: PRF-110 and OcuRing-K success is not guaranteed.
• Strategic Execution: Managing a pharma and a solar AI business simultaneously is tough.
• Geopolitical Exposure: Operations are subject to the political situation in Israel.

For a detailed look at the financial data supporting these risks, you can read the full post: Breaking Down PainReform Ltd. (PRFX) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking at PainReform Ltd. (PRFX), a clinical-stage company, and the first thing you need to understand is that their growth story isn't about today's sales, but about tomorrow's market penetration. The company currently reports no revenue, which is typical for a business focused on clinical development, but their strategic moves in 2025 are defintely setting the table for future top-line growth.

The core of their near-term opportunity lies in two distinct areas: specialty pharmaceuticals and AI-driven clean energy. This dual-strategy is a calculated risk, but it diversifies their pipeline beyond the high-stakes Phase 3 trial of their flagship non-opioid pain product, PRF-110. The goal is simple: capture market share in large, underserved sectors.

Here's the quick math on their pharmaceutical expansion: PainReform completed a majority investment in LayerBio in August 2025, securing the OcuRing™-K platform. This breakthrough 'dropless' therapy for post-cataract pain and inflammation targets an estimated $9 billion global market. That's a massive potential revenue stream from a single product, complementing the ongoing R&D for PRF-110, which is designed to provide localized, extended post-operative pain relief for up to 72 hours after a single application.

Their competitive advantages are centered on innovation in drug delivery:

• Extended-Release System: The proprietary oil-based formula of PRF-110 provides prolonged analgesia, reducing the need for repeated dosing and lowering opioid reliance.
• Dropless Ophthalmic Care: OcuRing™-K offers a sustained-release, non-opioid, non-steroidal solution, which is a significant clinical advantage over traditional eye drops.
• AI-Driven Analytics: The DeepSolar division leverages AI to optimize solar asset performance, a key differentiator in the growing Smart Energy Management (SEM) sector.

While the company has managed to reduce its net loss to $2.3 million for the first half of 2025, down from $12.8 million in the prior-year period, the financial forecast still shows an estimated Earnings Per Share (EPS) of -$49.20 for the full fiscal year 2025. This negative EPS is a reality check; the company is in a heavy investment phase. Still, they maintained a stable financial footing with $3.5 million in cash and positive working capital of $1.5 million as of June 30, 2025. The stock is volatile, but the potential is clear.

On the DeepSolar front, the strategic initiatives are already moving toward commercialization. In April 2025, the division launched a 92MW pilot project in Romania with Econergy, which has since advanced into their first commercial customer agreement. Plus, being accepted into the NVIDIA Connect Program in August 2025 gives them access to tools that will accelerate the development of their next-generation solar forecasting platform, DeepSolar Predict. This is a smart way to generate revenue while the pharmaceutical pipeline matures.

To understand the long-term vision guiding these moves, you should review their core principles: Mission Statement, Vision, & Core Values of PainReform Ltd. (PRFX).

What this estimate hides is the binary risk of clinical-stage pharmaceuticals; a successful Phase 3 trial for PRF-110 would dramatically change that -$49.20 EPS estimate overnight. Until then, the DeepSolar division provides an important, if small, commercial footing.