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CAN-FITE BIOPHARMA LTD. INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 UNAUDITED INDEX Page Review of Interim Consolidated Financial Statements 2 Interim Consolidated Statements of Financial Position 3 - 4

Key Takeaway: CAN-FITE BIOPHARMA LTD. INTERIM CONSOLIDATED FINANCIAL STATEMENTS Page Review of Interim Consolidated Financial Statements 2 Interim Consolidated Statements of Financial Position 3 - 4 Interim Consolidated Statements of Comprehensive Income 5 Interim Consolidated Statements of

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CAN-FITE BIOPHARMA LTD.
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Page
Review of Interim Consolidated Financial Statements 2
Interim Consolidated Statements of Financial Position 3 - 4
Interim Consolidated Statements of Comprehensive Income 5
Interim Consolidated Statements of Changes in Equity 6 - 9
Interim Consolidated Statements of Cash Flows 10 - 11
Notes to Interim Consolidated Financial Statements 12 - 17
Auditors' Review Report to the Shareholders
of Can-Fite BioPharma Ltd.
We have reviewed the accompanying financial
information of Can-Fite BioPharma Ltd. (the "Company") and its subsidiary, OphthaliX, Inc. ("OphthaliX"),
which comprises the condensed consolidated statement of financial position as of June 30, 2013 and the related condensed consolidated
statements of comprehensive income, changes in equity and cash flows for the six and three-month periods then ended. The Company's
board of directors and management are responsible for the preparation and presentation of interim financial information for these
periods in accordance with IAS 34, "Interim Financial Reporting", and are responsible for the preparation of this interim
financial information in accordance with Chapter D of the Securities Regulations (Periodic and Immediate Reports), 1970. Our responsibility
is to express a conclusion on this interim financial information based on our review.
We conducted our review in accordance with
Review Standard 1 of the Institute of Certified Public Accountants in Israel, "Review of Interim Financial Information Performed
by the Independent Auditor of the Entity." A review of interim financial information consists of making inquiries, primarily
of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with generally accepted auditing standards in Israel and consequently does
not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Based on our review, nothing has come to
our attention that causes us to believe that the accompanying financial information is not prepared, in all material respects,
in accordance with IAS 34.
In addition to the abovementioned, based
on our review, nothing has come to our attention that causes us to believe that the accompanying financial information does not
comply, in all material respects, with the disclosure requirements of Chapter D of the Securities Regulations (Periodic and Immediate
/s/ Kost Forer Gabbay & Kasierer
Haifa, Israel KOST FORER GABBAY & KASIERER
August 29, 2013 A Member of Ernst & Young Global
CAN-FITE BIOPHARMA LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Convenience translation into U.S. dollars.
June 30, June 30, December 31,
2013 2013 2012 2012
Unaudited Unaudited Audited
In thousands NIS in thousands
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 3,226 11,671 10,405 4,278
Short term investments 902 3,265 - -
Accounts receivable 460 1,664 3,059 1,672
4,588 16,600 13,464 5,950
NON-CURRENT ASSETS:
Property, plant and equipment, net 46 166 192 159
4,634 16,766 13,656 6,109
The accompanying notes are an integral
part of the interim consolidated financial statements.
CAN-FITE BIOPHARMA LTD.
INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL
Convenience translation into U.S. dollars.
June 30, June 30, December 31,
2013 2013 2012 2012
Unaudited Unaudited Audited
In thousands NIS in thousands
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Trade payables 406 1,468 1,466 2,821
Other accounts payable 949 3,434 2,292 4,586
Warrants exercisable into shares (series 6) 64 233 277 149
Warrants exercisable into shares (series 7) 134 485 - 773
Warrants exercisable into shares (series 8) 61 219 341 357
1,614 5,839 4,376 8,686
NON-CURRENT LIABILITIES:
Warrants exercisable into shares (series 7) - - 793 -
Warrants exercisable into shares (series 10) 878 3,178 - -
Warrants exercisable into shares (series 11) 858 3,103 - -
Employee benefit liabilities, net 18 66 83 68
1,754 6,347 876 68
3,368 12,186 5,252 8,754
EQUITY (DEFICIENCY) ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY:
Share capital 986 3,568 2,733 2,734
Share premium 69,315 250,782 233,717 233,754
Capital reserve from share-based payment transactions 4,291 15,522 15,073 15,279
Warrants exercisable into shares (series 9) 185 669 669 669
Treasury shares (1,003 ) (3,628 ) (5,805 )* (5,805 )*
Adjustments arising from translating financial statements of foreign operations (43 ) (155 ) 167 84
Accumulated deficit (73,102 ) (264,484 ) (238,977 )* (251,359 )*
629 2,274 7,577 (4,644 )
Non-controlling interests 637 2,306 827 1,999
Total equity 1,266 4,580 8,404 (2,645 )
4,634 16,766 13,656 6,109
Net of issuance expenses of NIS 1,951 thousand.
The accompanying notes are an integral
part of the interim consolidated financial statements.
August 29, 2013 /s/ Ilan Cohn /s/ Pnina Fisman /s/ Motti Farbstein
Date of approval of the financial statements Mr. Ilan Cohn Chairman of the Board of Directors Prof. Pnina Fishman Member of the Board and CEO Mr. Motti Farbstein Chief Operating and Financial Officer
CAN-FITE BIOPHARMA LTD.
INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE
Convenience translation into U.S. dollars
Six months ended June 30, Six months ended June 30, Three months ended June 30, Year ended December 31,
2013 2013 2012 2013 2012 2012
Unaudited Unaudited Audited
In thousands NIS in thousands (except per share data)
Research and development expenses 2,118 7,663 6,497 4,111 2,501 13,160
General and administrative expenses 1,822 6,591 4,138 3,849 2,391 9,230
Operating loss 3,940 14,254 10,635 7,960 4,892 22,390
Finance expenses 123 445 27 100 90 27
Finance income (114 ) (412 ) (304 ) (1,693 ) (197 ) (541 )
Loss before taxes on income 3,949 14,287 10,358 6,367 4,785 21,876
Taxes on income - - - - - 11
Net loss 3,949 14,287 10,358 6,367 4,785 21,887
Other comprehensive loss (income) - exchange differences on translation of foreign operations 80 291 (113 ) 204 (172 ) (7 )
Total comprehensive loss 4,029 14,578 10,245 6,571 4,613 21,880
Loss attributable to:
Equity holders of the Company 3,628 13,125 8,438 5,682 4,775 20,820
Non-controlling interests 321 1,162 1,920 685 10 1,067
3,949 14,287 10,358 6,367 4,785 21,887
Total comprehensive loss attributable to:
Equity holders of the Company 3,694 13,364 8,346 5,850 4,634 20,811
Non-controlling interests 335 1,214 1,899 721 (21 ) 1,069
4,029 14,578 10,245 6,571 4,613 21,880
Net loss per share attributable to equity holders of the Company (in NIS):
Basic and diluted net loss per share 0.31 1.11 0.98 * 0.47 0.44 * 2.18 *
The accompanying notes are an integral
part of the interim consolidated financial statements.
CAN-FITE BIOPHARMA LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share capital Share premium Capital reserve from share-based payment transactions Warrants exercisable into shares (series 9) Treasury shares Foreign currency translation reserve Accumulated deficit Total Non- controlling interests Total equity
Unaudited
NIS in thousands
Balance as of January 1, 2013 (audited) 2,734 233,754 15,279 669 (5,805 ) 84 (251,359 ) (4,644 ) 1,999 (2,645 )
Net loss - - - - - - (13,125 ) (13,125 ) (1,162 ) (14,287 )
Total other comprehensive loss - - - - - (239 ) - (239 ) (52 ) (291 )
Total comprehensive loss - - - - - (239 ) (13,125 ) (13,364 ) (1,214 ) (14,578 )
Exercise of unlisted share options 86 - - - - - - 86 - 86
Issuance of shares* 748 17,306 - - - - - 18,054 - 18,054
Sale of treasury shares to third party - (278 ) - - 2,177 - - 1,899 (61 ) 1,838
Cost of share-based payment - - 243 - - - - 243 1,582 1,825
Balance as of June 30, 2013 3,568 250,782 15,522 669 (3,628 ) (155 ) (264,484 ) 2,274 2,306 4,580
Balance as of January 1, 2012 (audited) 2,606 229,299 14,670 - (5,805 )* 75 (230,539 )* 10,306 2,221 12,527
Net loss - - - - - - (8,438 ) (8,438 ) (1,920 ) (10,358 )
Total other comprehensive income - - - - - 92 - 92 21 113
Total comprehensive loss - - - - - 92 (8,438 ) (8,346 ) (1,899 ) (10,245 )
Exercise of unlisted share options 4 134 - - - - - 138 - 138
Exercise of share warrants (series 5) 1 75 - - - - - 76 - 76
Issue of shares and warrants (series 9) 122 4,209 - 669 - - - 5,000 - 5,000
Cost of share-based payment - - 403 - - - - 403 505 908
Balance as of June 30, 2012 2,733 233,717 15,073 669 (5,805 )* 167 (238,977 )* 7,577 827 8,404
* Net of issuance expenses of NIS 1,951
The accompanying notes are an integral
part of the interim consolidated financial statements.
CAN-FITE BIOPHARMA LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share capital Share premium Capital reserve from share-based payment transactions Warrants exercisable into shares (series 9) Treasury shares Foreign currency translation reserve Accumulated deficit Total Non- controlling interests Total equity
Unaudited
NIS in thousands
Balance as of April 1, 2013 3,568 251,060 15,422 669 (5,805 ) 13 (258,802 ) 6,125 1,618 7,743
Net loss - - - - - - (5,682 ) (5,682 ) (685 ) (6,367 )
Total other comprehensive loss - - - - - (168 ) - (168 ) (36 ) (204 )
Total comprehensive income (loss) - - - - - (168 ) (5,682 ) (5,850 ) (721 ) (6,571 )
Sale of treasury shares to third party - (278 ) - - 2,177 - - 1,899 (61 ) 1,838
Cost of share-based payment - - 100 - - - - 100 1,470 1,570
Balance as of June 30, 2013 3,568 250,782 15,522 669 (3,628 ) (155 ) (264,484 ) 2,274 2,306 4,580
Balance as of April 1, 2012 2,608 229,414 14,744 - (5,805 ) 26 (234,202 ) 6,785 558 7,343
Net loss - - - - - - (4,775 ) (4,775 ) (10 ) (4,785 )
Total other comprehensive income - - - - - 141 - 141 31 172
Total comprehensive income (loss) - - - - - 141 (4,775 ) (4,634 ) 21 (4,613 )
Exercise of unlisted share options 3 94 - - - - - 97 - 97
Issue of shares and warrants (series 9) 122 4,209 - 669 - - - 5,000 - 5,000
Cost of share-based payment - - 329 - - - - 329 248 577
Balance as of June 30, 2012 2,733 233,717 15,073 669 (5,805 ) 167 (238,977 ) 7,577 827 8,404
The accompanying notes are an integral
part of the interim consolidated financial statements.
CAN-FITE BIOPHARMA LTD.
INTERIM CONSOLIDATED STATEMENTS OF CHANGES
Share capital Share premium Capital reserve from share-based payment transactions Warrants exercisable into shares (series 9) Treasury shares Foreign currency translation reserve Accumulated deficit Total Non- controlling interests Total equity
Audited
NIS in thousands
Balance as of January 1, 2012 2,606 229,299 14,670 - (5,805 )* 75 (230,539 )* 10,306 2,221 12,527
Loss - - - - - - (20,820 ) (20,820 ) (1,067 ) (21,887 )
Other comprehensive income (loss) - - - - - 9 - 9 (2 ) 7
Total comprehensive loss - - - - - 9 (20,820 ) (20,811 ) (1,069 ) (21,880 )
Exercise of unlisted share options 5 171 - - - - - 176 - 176
Exercise of warrants (series 5) 1 75 - - - - - 76 - 76
Issuance of shares and warrants (series 9) 122 4,209 - 669 - - - 5,000 - 5,000
Cost of share-based payment - - 609 - - - - 609 847 1,456
Balance as of December 31, 2012 2,734 233,754 15,279 669 (5,805 )* 84 (251,359 )* (4,644 ) 1,999 (2,645 )
* Net of issuance expenses of NIS 1,951
The accompanying notes are an integral
part of the interim consolidated financial statements.
CAN-FITE BIOPHARMA LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the Company
Share capital Share premium Capital reserve from share-based payment transactions Warrants exercisable into shares (series 9) Treasury shares Foreign currency translation reserve Accumulated deficit Total Non- controlling interests Total equity
Unaudited
USD in thousands
Balance as of January 1, 2013 (audited) 755 64,609 4,223 185 (1,605 )* 23 (69,474 )* (1,284 ) 553 (731 )
Loss - - - - - - (3628 ) (3,628 ) (321 ) (3,949 )
Other comprehensive loss - - - - - (66 ) - (66 ) (14 ) (80 )
Total comprehensive loss - - - - - (66 ) (3,628 ) (3,694 ) (335 ) (4,029 )
Exercise of unlisted share options 24 - - - - - - 24 - 24
Issuance of shares *) 206 4,783 - - - - - 4,989 - 4,989
Sale of treasury shares to third party - (77 ) - - 602 - - 525 (17 ) 508
Cost of share-based payment - - 68 - - - - 68 437 505
Balance as of June 30, 2013 986 69,315 4,291 185 (1,003 ) (43 ) (73,102 ) 629 637 1,266
* Net of issuance expenses of $539 thousand.
The accompanying notes are an integral
part of the interim consolidated financial statements.
CAN-FITE BIOPHARMA LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Convenience translation into U.S. dollars.
Six months ended June 30, Six months ended June 30, Three months ended June 30, Year ended December 31,
2013 2013 2012 2013 2012 2012
Unaudited Unaudited Audited
In thousands NIS in thousands
Cash flows from operating activities:
Net loss (3,949 ) (14,287 ) (10,358 ) (6,367 ) (4,785 ) (21,887 )
Adjustments to reconcile net loss to net cash used :
Depreciation of property, plant and equipment 8 27 49 13 24 86
Cost of share-based payment 479 1,731 908 1,570 577 1,456
Interest on deposits (3 ) (9 ) (38 ) (8 ) (23 ) (50 )
Loss (gain) from sale of property, plant and equipment (2 ) (6 ) (29 ) (1 ) 32 (42 )
Decrease in employee benefit liabilities, net (1 ) (2 ) (107 ) (3 ) (3 ) (122 )
Taxes on income - - - - - 11
Decrease in fair value of warrants exercisable into shares (series 5) - - (138 ) - - (138 )
Increase (decrease) in fair value of warrants exercisable into shares (series 6) 23 84 (119 ) 60 213 (247 )
Decrease in fair value of warrants exercisable into shares (series 7) (80 ) (288 ) - (80 ) (89 ) (20 )
Increase (decrease) in fair value of warrants exercisable into shares (series 8) (38 ) (138 ) (8 ) 65 (8 ) 8
Increase (decrease) in fair value of warrants exercisable into shares (series 10) 151 545 - (598 ) - -
Decrease in fair value of warrants exercisable into shares (series 11) (10 ) (36 ) - (860 ) - -
Exchange rate differences on balances of cash and cash equivalents (62 ) (227 ) 23 (126 ) (35 ) (217 )
465 1,681 541 32 688 725
Working capital adjustments:
Decrease in accounts receivable 2 8 701 629 298 2,088
Increase (decrease) in trade payables (374 ) (1,353 ) (464 ) (613 ) (1,023 ) 891
Increase (decrease) in other accounts payable (318 ) (1,152 ) (394 ) 314 (681 ) 1,900
(690 ) (2,497 ) (157 ) 330 (1,406 ) 4,879
Cash paid and received during the period for:
Interest received 2 9 38 8 23 50
Income tax paid - - - - - (11 )
2 9 38 8 23 39
Net cash used in operating activities (4,172 ) (15,094 ) (9,936 ) (5,997 ) (5,480 ) (16,244 )
The accompanying notes are an integral
part of the interim consolidated financial statements.
CAN-FITE BIOPHARMA LTD.
INTERIM CONSOLIDATED STATEMENTS OF CASH
Convenience translation into U.S. dollars.
Six months ended June 30, Six months ended June 30, Three months ended June 30, Year ended December 31 ,
2013 2013 2012 2013 2012 2012
Unaudited Unaudited Audited
In thousands NIS in thousands
Cash flows from investing activities:
Purchase of property, plant and equipment (10 ) (35 ) (13 ) (9 ) (13 ) (17 )
Proceeds from sale of property, plant and equipment 2 7 79 1 14 92
Purchase of assets measured by fair value (902 ) (3,265 ) - (3,265 ) - -
Net cash provided by (used in) investing activities (910 ) (3,293 ) 66 (3,273 ) 1 75
Cash flows from financing activities:
Issue of share capital (net of issue expenses) 5,016 18,148 4,331 - 4,331 4,331
Proceeds on account of share warrants (series 8 and 9) (net of issue expenses) - - 1,018 - 1,018 1,018
Proceeds on account of share warrants (series 10 and 11) (net of issue expenses) 1,595 5,772 - - - -
Exercise of unlisted share options 24 86 138 - 97 -
Exercise of share warrants (series 5) - - 76 - - 176
Sale of treasury shares to a third party 508 1,838 - 1,838 - 76
Net cash provided by financing activities 7,143 25,844 5,563 1,838 5,446 5,601
Exchange rate differences on balances of cash and cash equivalents (18 ) (64 ) 90 (78 ) 208 224
Increase (decrease) in cash and cash equivalents 2,043 7,393 (4,217 ) (7,510 ) 175 (10,344 )
Cash and cash equivalents at the beginning of the period 1,183 4,278 14,622 19,181 10,230 14,622
Cash and cash equivalents at the end of the period 3,226 11,671 10,405 11,671 10,405 4,278
The accompanying notes are an integral
part of the interim consolidated financial statements.
CAN-FITE BIOPHARMA LTD.
TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
consolidated financial statements have been prepared in accordance with IAS 34, "Interim Financial Reporting".
policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the
preparation of the annual consolidated financial statements, except as noted below:
10, "Consolidated Financial Statements":
IAS 27 regarding the accounting treatment in respect of consolidated financial statements and includes the accounting treatment
for the consolidation of structured entities previously accounted for under SIC 12, "Consolidation - Special Purpose Entities".
of IFRS 10 for the first time did not have a material effect on the Company's financial statements.
19 (Revised), "Employee Benefits":
the IASB issued IAS 19 (Revised) which is to be applied commencing January 1, 2013. The principal amendments address the accounting
treatment of defined benefit plans.
of IAS 19 for the first time did not have a material effect on the Company's financial statements.
CAN-FITE BIOPHARMA LTD.
TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
CAN-FITE BIOPHARMA LTD.
TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Except as set forth above,
the revised agreement has no effect on the original license terms agreed upon with the NIH.
Every 25 warrants (series 10)
are exercisable into one ordinary share, NIS 0.25 par value per share, of the Company for NIS 0.394, with the warrants being
linked to the Israeli consumer price index for December 2012. The warrants are exercisable until October 31, 2015.
In addition, every 25 warrants
Last updated: Sep 16, 2013