Full Press Release Details
ENLIVEX THERAPEUTICS LTD.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2019, AND DECEMBER
AND FOR THE THREE AND NINE MONTH PERIODS
ENDED SEPTEMBER 30, 2019 AND 2018
ENLIVEX THERAPEUTICS LTD.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2019 AND DECEMBER
AND FOR THE THREE AND NINE MONTH PERIODS
ENDED SEPTEMBER 30, 2019 AND 2018
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| Page | |
| Condensed Consolidated Balance Sheets | F-2 |
| Condensed Consolidated Statements of Operations and Comprehensive Loss | F-3 |
| Condensed Consolidated Cash Flow Statements | F-4 |
| Notes to the Condensed Consolidated Financial Statements | F-5 |
ENLIVEX THERAPEUTICS LTD.
CONDENSED CONSOLIDATED
U.S. dollars in thousands
| September 30, 2019 | December 31, 2018 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents (note 3) | $ | 5,448 | $ | 9,736 | ||||
| Short term deposits | 8,017 | 40 | ||||||
| Prepaid expenses | 658 | 288 | ||||||
| Cash held for CVR holders (note 1a) | 1,500 | - | ||||||
| Other receivables | 445 | 213 | ||||||
| Receivables for the sale of Trehalose (note 1a) | 2,000 | - | ||||||
| Total Current Assets | 18,068 | 10,277 | ||||||
| Non-Current Assets | ||||||||
| Restricted cash | 61 | 56 | ||||||
| Long-term prepaid expenses | 5 | 16 | ||||||
| Property and equipment, net (note 4) | 675 | 685 | ||||||
| Other assets (note 6) | 408 | - | ||||||
| Total Non-Current Assets | 1,149 | 757 | ||||||
| Total Assets | $ | 19,217 | $ | 11,034 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable trade | $ | 137 | $ | 173 | ||||
| Accrued expenses and other liabilities (notes 5, 6) | 899 | 722 | ||||||
| CVR holders (note 1a.) | 3,500 | - | ||||||
| Related parties | 14 | 13 | ||||||
| Total Current Liabilities | 4,550 | 908 | ||||||
| Non-Current Liabilities | ||||||||
| Retirement benefit obligations | 7 | 6 | ||||||
| Other long-term Liabilities (note 6) | 877 | 222 | ||||||
| Warrants (note 8) | - | 192 | ||||||
| Total Non-Current Liabilities | 884 | 420 | ||||||
| Commitments and Contingent Liabilities (note 7) | ||||||||
| TOTAL LIABILITIES | 5,434 | 1,328 | ||||||
| SHAREHOLDERS' EQUITY (note 8) | ||||||||
| Ordinary shares of NIS 0.4 ($0.11) par value as of September 30, 2019 and December 31, 2018: Authorized: 45,000,000 and 11,861,073 shares; Issued and outstanding: 10,334,126 and 3,509,405 shares | 1,151 | 396 | ||||||
| Series A Preferred Stock, NIS 0.4 ($0.11) par value as of September 30, 2019 and December 31, 2018: Authorized: none and 3,146,815 shares; Issued and outstanding: none and 3,059,730 shares | - | 309 | ||||||
| Series B Preferred Stock, NIS 0.4 ($0.11) par value as of September 30, 2019 and December 31, 2018: Authorized: none and 3,485,703 shares; Issued and outstanding: none and 1,373,804 shares | - | 156 | ||||||
| Series C Preferred Stock, NIS 0.4 ($0.11) par value as of September 30, 2019 and December 31, 2018: Authorized: none and 3,146,815 shares; Issued and outstanding: none and 525,171 shares | - | 59 | ||||||
| Additional paid in capital | 36,805 | 27,326 | ||||||
| Foreign currency translation adjustments | (1,367 | ) | (2,251 | ) | ||||
| Accumulated deficit | (22,806 | ) | (16,289 | ) | ||||
| TOTAL SHAREHOLDERS' EQUITY | 13,783 | 9,706 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 19,217 | $ | 11,034 |
The accompanying notes are an integral part of the condensed
consolidated financial statements.
ENLIVEX THERAPEUTICS LTD.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNADITED)
U.S. dollars in thousands (except share and per share data)
| For the three months ended | For the nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Revenues | $ | - | $ | - | $ | - | $ | - | ||||||||
| Operating expenses: | ||||||||||||||||
| Research and development expenses | 1,576 | 1,045 | 3,850 | 2,631 | ||||||||||||
| General and administrative expenses | 545 | 196 | 1,930 | 600 | ||||||||||||
| 2,121 | 1,241 | 5,780 | 3,231 | |||||||||||||
| Operating loss | (2,121 | ) | (1,241 | ) | (5,780 | ) | (3,231 | ) | ||||||||
| Financial income | 72 | 140 | 165 | 576 | ||||||||||||
| Financial expenses | (342 | ) | (1 | ) | (902 | ) | (2 | ) | ||||||||
| Net (loss) | (2,391 | ) | (1,102 | ) | (6,517 | ) | (2,657 | ) | ||||||||
| Other comprehensive (loss) | ||||||||||||||||
| Exchange differences arising from translating financial statements from functional to presentation currency | 350 | (40 | ) | 884 | (413 | ) | ||||||||||
| Total other comprehensive (loss) | 350 | (40 | ) | 884 | (413 | ) | ||||||||||
| Total comprehensive (loss) | $ | (2,041 | ) | $ | (1,142 | ) | $ | (5,633 | ) | $ | (3,070 | ) | ||||
| Basic & diluted (loss) per share | $ | (0.23 | ) | $ | (0.35 | ) | $ | (0.83 | ) | $ | (0.88 | ) | ||||
| Weighted average number of shares outstanding | 10,206,837 | 3,509,344 | 8,098,581 | 3,509,344 |
The accompanying notes are an integral part of the condensed
consolidated financial statements.
ENLIVEX THERAPEUTICS LTD.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNADITED)
U.S. dollars in thousands
| For the nine months ended September 30, | ||||||||
| 2019 | 2018 | |||||||
| Cash flows from operating activities | ||||||||
| Net (loss) | $ | (6,517 | ) | $ | (2,657 | ) | ||
| Adjustments required to reflect net cash used in operating activities: | ||||||||
| Income and expenses not involving cash flows: | ||||||||
| Depreciation | 144 | 82 | ||||||
| Accrued income on deposits | (16 | ) | ||||||
| Share-based compensation | 512 | 341 | ||||||
| Loss on sale of property and equipment | 75 | - | ||||||
| Changes in values of warrants exercisable into shares liability | 50 | (75 | ) | |||||
| Changes in operating asset and liability items: | ||||||||
| Decrease (increase) in prepaid expenses | 112 | (28 | ) | |||||
| Decrease (increase) in other receivables | (47 | ) | (72 | ) | ||||
| (Decrease) increase in accounts payable trade | (58 | ) | 94 | |||||
| (Decrease) increase in accrued expenses and other liabilities | 341 | 207 | ||||||
| (Decrease) increase in related parties | - | (1 | ) | |||||
| Net cash (used in) operating activities | (5,404 | ) | (2,109 | ) | ||||
| Cash flows from investing activities | ||||||||
| Short term bank deposit | (7,960 | ) | (40 | ) | ||||
| Restricted cash | - | (33 | ) | |||||
| Proceeds from sale of property and equipment | 4 | - | ||||||
| Purchase of property and equipment | (162 | ) | (180 | ) | ||||
| Net cash received in the issuance of shares for the net assets of Bioblast Pharma Ltd. | 44 | - | ||||||
| Net cash (used in) investing activities | (8,074 | ) | (253 | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from issuance of shares net of $655 and $156 issuance expenses, respectively | 7,706 | 5,144 | ||||||
| Proceeds from exercise of options | 599 | - | ||||||
| Net cash (used in) provided by financing activities | 8,305 | 5,144 | ||||||
| Increase (decrease) in cash and cash equivalents | (5,173 | ) | 2,782 | |||||
| Cash and cash equivalents - beginning of year | 9,736 | 9,005 | ||||||
| Exchange rate differences on cash and cash equivalents | 885 | (436 | ) | |||||
| Cash and cash equivalents - end of period | $ | 5,448 | $ | 11,351 | ||||
| Non-cash transactions: | ||||||||
| Conversion of preferred stock to ordinary shares | 525 | - | ||||||
| Conversion of 6% preference on preferred stock to ordinary shares | $ | 2,071 | - | |||||
| Issuance of ordinary shares upon exercise of warrants | $ | 249 | $ | - | ||||
| Issuance of shares in connection with merger | $ | 47 | $ | - | ||||
| Assets acquired excluding cash and cash equivalents | 4,132 | - | ||||||
| Less - liabilities assumed | (3,532 | ) | - | |||||
| Net assets acquired excluding cash and cash equivalents | $ | 600 | $ | - | ||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid for taxes | $ | - | $ | - | ||||
| Cash received for interest | $ | 149 | $ | 85 |
The accompanying notes are an integral part of the condensed
consolidated financial statements.
ENLIVEX THERAPEUTICS LTD.
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS SEPTEMBER 30, 2019 (UNAUDITED)
U.S. dollars in thousands
In January 2015, Bioblast Pharma
Inc. was established in the State of Delaware as a wholly owned subsidiary of the Parent (the "Subsidiary").
On March 26, 2019, upon consummation
of a merger transaction between the Parent and Enlivex Therapeutics R&D Ltd., ("Enlivex R&D", formerly known
as Enlivex Therapeutics Ltd.), whereby Enlivex R&D merged with Treblast Ltd. (a subsidiary of the Parent) with Enlivex R&D
remaining as the surviving entity in the merger (the "Merger"), the Parent changed its name to Enlivex Therapeutics
The Company is a clinical-stage
biotechnology company. Enlivex R&D was incorporated in September 2005 under the laws of the State of Israel and has been engaged
since inception in the development of an allogeneic drug pipeline for immune system rebalancing. Immune system rebalancing is critical
for the treatment of life-threatening immune and inflammatory conditions, which involve the hyper-expression of cytokines (Cytokine
Release Syndrome) and for which there are no U.S. Food and Drug Administration ("FDA") approved treatments,
as well as treating solid tumors via modulating immune-checkpoint rebalancing. The Company's innovative immunotherapy candidate,
Allocetra , is a novel immunotherapy candidate based on a unique mechanism of action that targets clinical indications that
are defined as "unmet medical needs," such as preventing or treating complications associated with bone marrow transplants
and/or hematopoietic stem cell transplants, sepsis and acute multiple organ failure. The Company also intends to develop its cell-based
therapy to be combined with currently effective treatments of solid tumors via immune checkpoint rebalancing to increase the efficacy
of various anti-cancer therapies, including Chimeric Antigen Receptor T-Cell Therapy and therapies targeting T-Cell Receptor Therapy.
The Company's development is based on the discoveries of Professor Dror Mevorach, an expert on clearance of dying (apoptotic)
cells, in his laboratory in the Hadassah University Hospital located in the State of Israel.
At the closing of the Merger,
the Parent, Enlivex R&D, the Parent's pre-Merger CEO, as representative of the pre-Merger Parent's shareholders,
and a rights agent entered into a Contingent Value Rights Agreement (the "CVR Agreement"). Pursuant to the CVR Agreement,
the Parent's shareholders immediately prior to the Merger received one CVR for each of the Parent's' ordinary
shares held of record immediately prior to the closing of the Merger. Each CVR represents the right to receive payments based on
the Parent's pre-Merger clinical development programs. CVR holders are entitled to receive 100% of any payments up to $20,000
received and 50% of any subsequent consideration in excess of such amount, in each case, net of all related transaction expenses.
On February 19, 2019 the Parent
sold its pre-Merger clinical development programs for "Trehalose" to Seelos Therapeutics, Inc. ("Seelos"),
a clinical-stage biopharmaceutical company. Under the terms of the agreement between the Parent and Seelos, Seelos paid $1,500
upon closing and will pay additional $2,000 upon the first anniversary of the closing. Seelos has agreed to pay additional milestone
payments of up to $17,000 upon completion of the related clinical study and approval of a New Drug Application by the FDA, as well
The Merger has been treated
as a reverse recapitalization of the Parent for financial accounting and reporting purposes. As such, Enlivex R&D is treated
as the acquirer and the Parent is treated as the acquired entity for accounting and financial reporting purposes.
The Company's ordinary
shares ("Ordinary Shares") are traded on the Nasdaq Capital Market and on the on the Tel Aviv Stock Exchange under
Company devotes substantially all of its efforts toward research and development activities. In the course of such activities,
the Company has sustained operating losses and expects such losses to continue for the foreseeable future. The Company has not
generated any revenues or product sales and has not achieved profitable operations or positive cash flow from operations. The Company's
accumulated deficit aggregated $22,806 as of September 30, 2019. There is no assurance that profitable operations will ever be
achieved, or, if ever achieved, could be sustained on a continuing basis.
ENLIVEX THERAPEUTICS LTD.
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS SEPTEMBER 30, 2019 (UNAUDITED)
U.S. dollars in thousands
NOTE 1 - GENERAL (cont.)
Company's management plans to finance its operations with issuances of the Company's equity and equity-linked securities
and, in the longer term, revenues. There are no assurances, however, that the Company will be successful in obtaining an adequate
level of financing needed for its long-term development.
Company's ability to continue to operate in the long term is dependent upon additional financial support.
Company's management and Board of Directors believe that the Company's current cash resources will enable the continuance
of the Company's activities for at least the twelve month period following the date on which these financial statements are
issued with no need for additional fundraising. The Company may determine, however, to raise additional capital during such period
as the Board of Directors deems prudent.
SIGNIFICANT ACCOUNTING POLICIES
In the opinion of management,
all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been made.
These unaudited condensed consolidated
financial statements should be read in conjunction with the Company's audited annual consolidated financial statements and
notes thereto included in the Company's 2018 Annual Report on Form 20-F, as filed with the SEC on April 30, 2019.
The results of operations for
the interim periods presented in these unaudited condensed consolidated financial statements are not necessarily indicative of
the operating results for any future period. The December 31, 2018 financial information has been derived from the Company's
audited financial statements.