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ENLIVEX THERAPEUTICS LTD.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2023 AND DECEMBER 31, 2022
AND FOR THE THREE MONTH PERIODS ENDED MARCH
ENLIVEX THERAPEUTICS LTD.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2023 AND DECEMBER 31, 2022
AND FOR THE THREE MONTH PERIODS ENDED MARCH
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| Page | ||
| Condensed Consolidated Balance Sheets | F-1 | |
| Condensed Consolidated Statements of Operations and Comprehensive Loss | F-2 | |
| Condensed Consolidated Statements of Changes in Shareholders' Equity | F-3 | |
| Condensed Consolidated Cash Flow Statements | F-4 | |
| Notes to the Condensed Consolidated Financial Statements | F-5 |
ENLIVEX THERAPEUTICS LTD.
CONDENSED CONSOLIDATED BALANCE
U.S. dollars in thousands (except share data)
| March 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 13,138 | $ | 49,945 | ||||
| Short term deposits | 22,839 | 299 | ||||||
| Prepaid expenses and other receivables | 1,604 | 2,086 | ||||||
| Total Current Assets | 37,581 | 52,330 | ||||||
| Non-Current Assets | ||||||||
| Long term interest-bearing bank deposits | 7,252 | - | ||||||
| Property and equipment, net | 9,828 | 9,875 | ||||||
| Other assets | 5,361 | 5,437 | ||||||
| Total Non-Current Assets | 22,441 | 15,312 | ||||||
| TOTAL ASSETS | $ | 60,022 | $ | 67,642 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable trade | $ | 1,483 | $ | 1,948 | ||||
| Accrued expenses and other liabilities | 3,970 | 4,659 | ||||||
| Total Current Liabilities | 5,453 | 6,607 | ||||||
| Non-Current Liabilities | ||||||||
| Other long-term liabilities | 3,995 | 4,194 | ||||||
| Total Non-Current Liabilities | 3,995 | 4,194 | ||||||
| Commitments and Contingent Liabilities | ||||||||
| TOTAL LIABILITIES | 9,448 | 10,801 | ||||||
| SHAREHOLDERS' EQUITY | ||||||||
| Ordinary shares of NIS 0.4 par value:Authorized: 45,000,000 shares as of March 31, 2023 and December 31, 2022; Issued and outstanding: 18,566,262 and 18,421,852 as of March 31, 2023 and December 31, 2022; | 2,133 | 2,117 | ||||||
| Additional paid in capital | 137,583 | 136,648 | ||||||
| Foreign currency translation adjustments | 1,101 | 1,101 | ||||||
| Accumulated deficit | (90,243 | ) | (83,025 | ) | ||||
| TOTAL SHAREHOLDERS' EQUITY | 50,574 | 56,841 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 60,022 | $ | 67,642 |
The accompanying notes are an integral part of the condensed consolidated
financial statements.
ENLIVEX THERAPEUTICS LTD.
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
U.S. dollars in thousands (except share and
| For the three months ended | ||||||||
| March 31, | ||||||||
| 2023 | 2022 | |||||||
| Revenues | $ | - | $ | - | ||||
| Operating expenses: | ||||||||
| Research and development expenses | 5,176 | 4,682 | ||||||
| General and administrative expenses | 1,607 | 1,722 | ||||||
| 6,783 | 6,404 | |||||||
| Operating loss | (6,783 | ) | (6,404 | ) | ||||
| Other expense, net | (435 | ) | (1,821 | ) | ||||
| Net loss | (7,218 | ) | (8,225 | ) | ||||
| Total comprehensive loss | $ | (7,218 | ) | $ | (8,225 | ) | ||
| Basic & diluted loss per share | $ | (0.39 | ) | $ | (0.45 | ) | ||
| Weighted average number of shares outstanding | 18,516,438 | 18,369,827 |
The accompanying notes are an integral part of the condensed consolidated
financial statements.
ENLIVEX THERAPEUTICS LTD.
CONDENSED CONSOLIDATED STATEMENTS
OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
dollars in thousands (except share data)
| Ordinary Shares | Additional paid in | Currency translation | Accumulated | |||||||||||||||||||||
| Shares | Amount | capital | reserve | deficit | Total | |||||||||||||||||||
| Balance as of December 31, 2022 | 18,421,852 | 2,117 | 136,648 | $ | 1,101 | (83,025 | ) | 56,841 | ||||||||||||||||
| Changes during the three months period ended March 31, 2023: | ||||||||||||||||||||||||
| Restricted stock units vested | 34,295 | 3 | (3 | ) | - | - | - | |||||||||||||||||
| Issuance of shares for cash consideration of $470 net of $152 of issuance costs | 110,115 | 13 | 305 | - | - | 318 | ||||||||||||||||||
| Stock-based compensation | - | - | 633 | - | - | 633 | ||||||||||||||||||
| Net loss | - | - | - | - | (7,218 | ) | (7,218 | ) | ||||||||||||||||
| Balance as of March 31, 2023 (unaudited) | 18,566,262 | 2,133 | 137,583 | $ | 1,101 | (90,243 | ) | 50,574 | ||||||||||||||||
| Balance as of December 31, 2021 | 18,331,507 | $ | 2,107 | $ | 133,796 | $ | 1,101 | $ | (51,965 | ) | $ | 85,039 | ||||||||||||
| Changes during the three months period ended March 31, 2022: | ||||||||||||||||||||||||
| Restricted stock units vested | 34,295 | 4 | (4 | ) | - | - | - | |||||||||||||||||
| Exercise of options | 7,625 | 1 | 49 | - | - | 50 | ||||||||||||||||||
| Stock-based compensation | - | - | 788 | - | - | 788 | ||||||||||||||||||
| Net loss | - | - | - | - | (8,225 | ) | (8,225 | ) | ||||||||||||||||
| Balance as of March 31, 2022 (unaudited) | 18,373,427 | $ | 2,112 | $ | 134,629 | $ | 1,101 | $ | (60,190 | ) | $ | 77,652 |
The accompanying notes are an integral
part of the condensed consolidated financial statements.
ENLIVEX THERAPEUTICS LTD.
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS (UNAUDITED)
U.S. dollars in thousands
| For the three months ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities | ||||||||
| Net (loss) | $ | (7,218 | ) | $ | (8,225 | ) | ||
| Adjustments required to reflect net cash used in operating activities: | ||||||||
| Income and expenses not involving cash flows: | ||||||||
| Depreciation | 209 | 188 | ||||||
| Non-cash operating lease expenses | 208 | 185 | ||||||
| Share-based compensation | 633 | 788 | ||||||
| Loss on marketable securities and short-term bank deposits | 1,392 | 1,966 | ||||||
| Changes in operating asset and liability items: | ||||||||
| Decrease in prepaid expenses and other receivables | 492 | 1,058 | ||||||
| Increase (decrease) in accounts payable trade | (457 | ) | 480 | |||||
| Increase (decrease) in accrued expenses and other liabilities | (722 | ) | 468 | |||||
| Operating lease liabilities | (321 | ) | (177 | ) | ||||
| Net cash used in operating activities | (5,784 | ) | (3,269 | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of property and equipment | (162 | ) | (952 | ) | ||||
| Investment in bank deposits, net | (31,184 | ) | (315 | ) | ||||
| Purchases of marketable securities | - | (1,608 | ) | |||||
| Proceeds from sales of marketable securities | - | 62,549 | ||||||
| Net cash (used in) provided by investing activities | (31,346 | ) | 59,674 | |||||
| Cash flows from financing activities | ||||||||
| Proceeds from issuance of shares net of $152 issuance expenses | 318 | - | ||||||
| Proceeds from exercise of warrants | - | - | ||||||
| Proceeds from exercise of options | - | 50 | ||||||
| Net cash provided by financing activities | 318 | 50 | ||||||
| Increase (decrease) in cash and cash equivalents | (36,812 | ) | 56,455 | |||||
| Cash and cash equivalents - beginning of period | 50,357 | 11,636 | ||||||
| - | - | |||||||
| Cash and cash equivalents - end of period | $ | 13,545 | $ | 68,091 | ||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid for taxes | $ | - | $ | - | ||||
| Cash paid for interest, net | $ | 205 | $ | 7 |
The accompanying notes are an integral part of the condensed consolidated
financial statements.
ENLIVEX THERAPEUTICS LTD.
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS MARCH 31, 2023 (UNAUDITED)
The Company is a clinical stage macrophage
reprogramming immunotherapy company, developing AllocetraTM, a universal, off-the-shelf cell therapy designed to reprogram
macrophages into their homeostatic state. Resetting non-homeostatic macrophages into their homeostatic state is critical for immune system
rebalancing and resolution of life-threatening conditions. Non-homeostatic macrophages contribute significantly to the severity of certain
diseases, which include solid tumors, sepsis and others.
AllocetraTM is based on the
discoveries of Professor Dror Mevorach, an expert on immune activity, macrophage activation and clearance of dying (apoptotic) cells,
in his laboratory in the Hadassah University Hospital located in the State of Israel.
The Company's ordinary shares, par
value of NIS 0.40 per share ("Ordinary Shares"), are traded under the symbol "ENLV" on both the Nasdaq
Capital Market and on the Tel Aviv Stock Exchange.
The Company devotes substantially all
of its efforts toward research and development activities and raising capital to support such activities. The Company's activities
are subject to significant risks and uncertainties, including failing to secure additional funding before the Company achieves sustainable
revenues and profit from operations.
Research and development activities
have required significant capital investment since the Company's inception. The Company expects that its operations will require
additional cash investment to pursue the Company's research and development activities, including preclinical studies, formulation
development, clinical trials and related drug manufacturing. The Company has not generated any revenues or product sales and has not achieved
profitable operations or positive cash flow from operations. The Company has incurred net losses since its inception, and, as of March
31, 2023, had an accumulated deficit of $90,243 thousand.
The Company expects to continue to
incur losses for at least the next several years, and the Company will need to raise additional debt or equity financing or enter into
partnerships to fund its development. If the Company is not able to achieve its funding requirements, it may be required to reduce discretionary
spending, may not be able to continue the development of its product candidates or may be required to delay its development programs,
which could have a material adverse effect on the Company's ability to achieve its intended business objectives. There can be no
assurances that additional financing will be secured or, if secured, will be on favorable terms. The ability of the Company to transition
to profitability in the longer term is dependent on developing products and product revenues to support its expenses.
The Company's management and
board of directors (the "Board") are of the opinion that the Company's current financial resources will be sufficient
to continue the development of the Company's product candidates for at least twelve months from the date of filing of these financial
statements on Form 6-K; however, the Company may determine to raise additional capital during such period as the Board deems prudent.
The Company's management plans to finance its operations with issuances of the Company's equity securities and, in the longer
term, revenues. There are no assurances, however, that the Company will be successful in obtaining the financing necessary for its long-term
development. The Company's ability to continue to operate in the long term is dependent upon additional financial support.
NOTE 2 - SIGNIFICANT
Basis of Presentation
These unaudited condensed consolidated
financial statements include the accounts of the Company and have been prepared in accordance with U.S. generally accepted accounting
principles ("U.S. GAAP") for interim financial information. Accordingly, certain information and footnote disclosures normally
included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. In the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been made.
ENLIVEX THERAPEUTICS LTD.
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS MARCH 31, 2023 (UNAUDITED)
These unaudited condensed consolidated
financial statements should be read in conjunction with the Company's audited annual financial statements and notes thereto included
in the Company's 2022 Annual Report on Form 20-F, as filed with the SEC on April 10, 2023. The results of operations for the interim
periods presented are not necessarily indicative of the operating results for any future period. The December 31, 2022 financial
information has been derived from the Company's audited financial statements.
The preparation of interim financial
statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported
amounts in the consolidated balance sheets and statements of operations, it also requires that management exercise its judgment in applying
the Company's accounting policies. On an ongoing basis, management evaluates its estimates, including estimates related to its stock-based
compensation expense and implicit interest rate on new lease liabilities. Significant estimates in these interim financial statements
include estimates made for accrued research and development expenses and stock-based compensation expenses.
Functional Currency and Translation
to The Reporting Currency
The functional currency of the Company
is the U.S. dollar because the U.S. dollar is the currency of the primary economic environment in which the Company operates and expects