Full Press Release Details
Interim Financial Statements
Condensed Consolidated Unaudited
Interim Financial Statements as of June 30, 2018
| Page | |
| Condensed Consolidated Unaudited Interim Financial Statements as of June 30, 2018 | |
| Condensed Consolidated Interim Statements of Financial Position | 2 |
| Condensed Consolidated Interim Statements of Operations and Other Comprehensive Income | 3 |
| Condensed Consolidated Interim Statements of Changes in Equity | 4 |
| Condensed Consolidated Interim Statements of Cash Flows | 6 |
| Notes to the Condensed Consolidated Interim Financial Statements | 7 |
Condensed Consolidated Unaudited Interim Statements of Financial Position
| June 30, 2018 | December 31, 2017 | |||||||||
| Note | USD thousand | USD thousand | ||||||||
| Assets | ||||||||||
| Cash and cash equivalents | 5,363 | 3,947 | ||||||||
| Short term deposits | 6,467 | 3,488 | ||||||||
| Other current assets | 344 | 548 | ||||||||
| Total current assets | 12,174 | 7,983 | ||||||||
| Fixed assets, net | 30 | 28 | ||||||||
| Intangible assets | 6,172 | 6,172 | ||||||||
| Total assets | 18,376 | 14,183 | ||||||||
| Liabilities | ||||||||||
| Accounts payable | 767 | 215 | ||||||||
| Other payables | 2,159 | (*) 1,746 | ||||||||
| Derivative liabilities | 5 | 4,318 | 2,012 | |||||||
| Total current liabilities | 7,244 | 3,973 | ||||||||
| Non - current liabilities | ||||||||||
| Derivative liability | 4 | - | 1,030 | |||||||
| Post-employment benefit liabilities | 470 | 492 | ||||||||
| 470 | 1,522 | |||||||||
| Equity | ||||||||||
| Share capital, no par value | - | - | ||||||||
| Share premium | 44,437 | 35,979 | ||||||||
| Receipts on account of warrants | 7,415 | 7,415 | ||||||||
| Capital reserve for share-based payments | 1,713 | 1,725 | ||||||||
| Capital reserve from transactions with related parties | 761 | 761 | ||||||||
| Capital reserve from transactions with non-controlling interest | (859 | ) | - | |||||||
| Accumulated loss | (43,325 | ) | (*) (38,472 | ) | ||||||
| Equity attributable to owners of the Company | 10,142 | 7,408 | ||||||||
| Non-controlling interests | 520 | 1,280 | ||||||||
| Total equity | 10,662 | 8,688 | ||||||||
| Total liabilities and equity | 18,376 | 14,183 |
(*) Restated due to full retrospective
method of adoption of IFRS 15, see Note 3(2).
The accompanying notes are an
integral part of these condensed consolidated interim financial statements.
Condensed Consolidated Unaudited Interim Statements of Operations and
Other Comprehensive Income
| For the six months ended June 30 | ||||||||||
| 2018 | 2017 | |||||||||
| Note | USD thousand | USD thousand | ||||||||
| Revenues | 8 | 1,000 | - | |||||||
| Research and development expenses | 2,842 | 2,516 | ||||||||
| General and administrative expenses | 3,394 | 2,524 | ||||||||
| Other expenses (income), net | 4 | (866 | ) | 1,029 | ||||||
| Total expenses | 5,370 | 6,069 | ||||||||
| Operating loss | 4,370 | 6,069 | ||||||||
| Finance expense | 837 | 7 | ||||||||
| Finance income | (24 | ) | (63 | ) | ||||||
| Finance expense (income), net | 813 | (56 | ) | |||||||
| Loss for the period | 5,183 | 6,013 | ||||||||
| Loss attributable to: | ||||||||||
| Owners of the Company | 4,853 | 5,824 | ||||||||
| Non-controlling interests | 330 | 189 | ||||||||
| 5,183 | 6,013 | |||||||||
| Loss per share | ||||||||||
| Basic and diluted loss per share - USD | 0.02 | 0.04 | ||||||||
| Number of shares used in calculation | 248,117,119 | 163,781,022 |
The accompanying notes are an
integral part of these condensed consolidated interim financial statements.
Condensed Consolidated Unaudited
Interim Statements of Changes in equity
| Attributable to owners of the Company | ||||||||||||||||||||||||||||||||||||||||
| Share capital | Share premium | Receipts on account of warrants | Capital reserve for share based payments | Capital reserve from transactions with related parties | Capital reserve from transactions with Non- controlling interest | Accumulated loss | Total | Non- controlling interests | Total equity | |||||||||||||||||||||||||||||||
| USD thousand | ||||||||||||||||||||||||||||||||||||||||
| For the six months ended June 30, 2018: | ||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2018 (restated) see Note 3 | - | 35,979 | 7,415 | 1,725 | 761 | - | (38,472 | ) | 7,408 | 1,280 | 8,688 | |||||||||||||||||||||||||||||
| Issuance of American Depository Shares (ADSs) on the NASDAQ, net of issuance costs | - | 4,276 | - | - | - | - | - | 4,276 | - | 4,276 | ||||||||||||||||||||||||||||||
| Issuance of shares due to RSUs vesting | - | 139 | - | (139 | ) | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Exercise of warrants | - | 2,133 | - | - | - | - | - | 2,133 | - | 2,133 | ||||||||||||||||||||||||||||||
| Share issuance due to acquisition of Non-controlling interest (see Note 4) | - | 1,856 | - | - | - | (859 | ) | - | 997 | (861 | ) | 136 | ||||||||||||||||||||||||||||
| Share-based payments | - | 54 | - | 127 | - | - | - | 181 | 431 | 612 | ||||||||||||||||||||||||||||||
| Loss for the period | - | - | - | - | - | - | (4,853 | ) | (4,853 | ) | (330 | ) | (5,183 | ) | ||||||||||||||||||||||||||
| Balance as of June 30, 2018 | - | 44,437 | 7,415 | 1,713 | 761 | (859 | ) | (43,325 | ) | 10,142 | 520 | 10,662 |
The accompanying notes are integral
part of these condensed consolidated interim financial statements.
Condensed Consolidated Unaudited
Interim Statements of Changes in equity
| Attributable to owners of the Company | ||||||||||||||||||||||||||||||||||||
| Share capital | Share premium | Receipts on account of warrants | Capital reserve for share based payments | Capital reserve from transactions with related parties | Accumulated loss | Total | Non- controlling interests | Total equity | ||||||||||||||||||||||||||||
| USD thousand | ||||||||||||||||||||||||||||||||||||
| For the six months ended June 30, 2017: | ||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2017 | - | 30,826 | 7,415 | 583 | 761 | (26,200 | ) | 13,385 | - | 13,385 | ||||||||||||||||||||||||||
| Share issuance due to an acquisition of a subsidiary | - | 1,800 | - | - | - | - | 1,800 | 2,016 | 3,816 | |||||||||||||||||||||||||||
| Share-based payments | - | - | - | 1,283 | - | - | 1,283 | - | 1,283 | |||||||||||||||||||||||||||
| Loss for the period | - | - | - | - | - | (5,824 | ) | (5,824 | ) | (189 | ) | (6,013 | ) | |||||||||||||||||||||||
| Balance as of June 30, 2017 | - | 32,626 | 7,415 | 1,866 | 761 | (32,024 | ) | 10,644 | 1,827 | 12,471 |
Condensed Consolidated Unaudited
Interim Statements of Cash Flows
| For the six months ended June 30 | ||||||||
| 2018 | 2017 | |||||||
| USD thousand | USD thousand | |||||||
| Cash flows from operating activities: | ||||||||
| Loss for the period | (5,183 | ) | (6,013 | ) | ||||
| Adjustments : | ||||||||
| Depreciation | 3 | 2 | ||||||
| Finance expenses (income), net | 813 | (56 | ) | |||||
| Share-based payments | 612 | 1,283 | ||||||
| Expenses (income) in regards with settlement with a minority shareholder of a subsidiary (see Note 4) | (866 | ) | 1,000 | |||||
| (4,621 | ) | (3,784 | ) | |||||
| Changes in assets and liabilities: | ||||||||
| Changes in receivables | 202 | (536 | ) | |||||
| Changes in accounts payables | 525 | (240 | ) | |||||
| Changes in other payables | 412 | (303 | ) | |||||
| Changes in post - employment benefit liabilities | - | 172 | ||||||
| 1,139 | (907 | ) | ||||||
| Net cash used in operating activities | (3,482 | ) | (4,691 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Acquisition of subsidiary, net of cash acquired | - | (1,732 | ) | |||||
| Decrease (increase) in short term deposits | (3,061 | ) | 357 | |||||
| Acquisition of fixed assets | (5 | ) | (3 | ) | ||||
| Net cash used in investing activities | (3,066 | ) | (1,378 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from warrants exercised | 515 | - | ||||||
| Repayment of short term bank credit | - | (16 | ) | |||||
| Proceeds from issuance of shares and ADSs | 4,683 | - | ||||||
| Share and ADS issuance expenses paid | (407 | ) | - | |||||
| Proceeds from issuance of warrants | 3,467 | - | ||||||
| Warrants issuance expenses paid | (301 | ) | - | |||||
| Repayment of loans from related parties | - | (130 | ) | |||||
| Interest paid | (7 | ) | (8 | ) | ||||
| Interest received | 24 | - | ||||||
| Net cash provided by (used in) financing activities | 7,974 | (154 | ) | |||||
| Net increase (decrease) in cash and cash equivalents | 1,426 | (6,223 | ) | |||||
| Cash and cash equivalents at the beginning of the period | 3,947 | 6,758 | ||||||
| Effect of translation adjustments on cash and cash equivalents | (10 | ) | (8 | ) | ||||
| Cash and cash equivalents at the end of the period | 5,363 | 527 |
The accompanying notes are an
integral part of these condensed consolidated interim financial statements.
Notes to Condensed Consolidated
Unaudited Interim Financial Statements as of June 30, 2018
Pharma Ltd. (formerly "Kitov Pharmaceuticals Holdings Ltd.") (hereinafter: "the Company") is an Israeli
company, that was incorporated in Israel as a private company in August 1968, and has been listed for trading on the Tel Aviv
Stock Exchange since September 1978. In October 2012, the Company disposed of all of its previous operations, and in July 2013,
the Company acquired shares of Kitov Pharmaceuticals Ltd. (hereinafter: "Kitov") from its shareholders, in exchange
for the Company's shares (hereinafter: "the Acquisition").
January 2018, the Company changed its name to Kitov Pharma Ltd.
Company's securities (American Depository Shares ("ADS") as well as Series A warrants) were listed for trading
on the NASDAQ in November 2015. Each ADS represents 20 ordinary shares with no par value. Each Series A Warrant enables the purchase
December 2017, the Company completed its merger with its wholly owned subsidiary, Kitov, with the Company remaining as the surviving
entity. The Company received the Merger Certificate from the Israeli Registrar of Companies with a merger date effective as of
December 14, 2017. As set forth in the Agreement and Plan of Merger between the Company and Kitov, and in accordance with Section
103 of the Israeli Income Tax Ordinance [New Version], 1961, the merger shall be deemed to have been consummated on, and effective
as of, December 31, 2017.
Company's address is One Azrieli Center, Round Tower, 132 Menachem Begin Road, Tel Aviv 671101, Israel.
January 2017, the Company acquired the majority of shares of TyrNovo Ltd (hereinafter: TyrNovo"). In each of March
and June 2018, the Company acquired additional shares of TyrNovo from various minority shareholders, see also Note 4.
Company together with TyrNovo are referred to, in these financial statements, as the "Group".
of the date of the financial statements, the Group is engaged, through Kitov, in the development of combination drugs that treat
two clinical conditions simultaneously, pain caused by osteoarthritis and hypertension, and
through TyrNovo, in the development of a small molecule that has demonstrated the potential to overcome resistance to multiple
incorporation through June 30, 2018, the Group has incurred losses and negative cash flows from operations mainly attributed to
its development efforts and has an accumulated deficit of USD 43 million. The Group has financed its operations mainly through
private and public financing rounds. Management anticipates that its existing capital resources will be adequate to satisfy liquidity
requirements for at least 12 months. At present, the Company has limited revenue and may require additional funding for future
plans. However, there is no assurance that, if required, the Company will be able to raise additional capital to provide the required
Notes to Condensed Consolidated
Unaudited Interim Financial Statements as of June 30, 2018
2 - Basis of Preparation
condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting
and do not include all of the information required for full annual financial statements. They should be read in conjunction
with the financial statements as at and for the year ended December 31, 2017 (hereinafter - "the Annual Financial Statements").
They do not include all of the information required for a complete set of IFRS financial statements. However, selected explanatory
notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's
financial position and performance since the last annual financial statements.
condensed consolidated interim financial statements were authorized for issue by the Group's Board of Directors on August
preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty
were the same as those described in the Annual Financial Statements, except for new significant judgments and key sources of estimation
uncertainty related to the application of IFRS 15, which are described in Note 4.
Group's management regularly reviews significant unobservable inputs and valuation adjustments, including obtaining valuations
prepared by third parties and assessing the evidence to support the conclusion that these valuations meet the requirements of
IFRS, including the level in the fair value hierarchy in which the valuations should be classified.
valuation issues are reported to the Group Audit Committee.
measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values are
categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
the inputs used to measure the fair value of an asset or a liability might be categorized in different levels of the fair value
hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the entire measurement.
Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change
information about the assumptions made in measuring fair value of share based payments and derivative liabilities are included
in Notes 7 and 6, respectively.
Notes to Condensed Consolidated
Unaudited Interim Financial Statements as of June 30, 2018
3 - Significant Accounting Policies
as described below in Items 1-2, the accounting policies applied by the Group in these condensed consolidated interim financial
statements are the same as those applied by the Group in its Annual Financial Statements.
hereunder is a description of the changes in accounting policies applied in these condensed consolidated interim financial statements
application of new standards, amendments to standards and interpretations
from January 1, 2018 the Group applies the new standards and amendments to standards described below:
from January 1, 2018 the Group applies IFRS 9 (2014), Financial Instruments (in this item: "the standard" or
"IFRS 9"), which replaces IAS 39, Financial Instruments: Recognition and Measurement (in this item "IAS
39"). The Group has chosen to apply the standard and the amendment to the standard as from January 1, 2018. The application
of this standard has no impact on the Group's financial statements.
hereunder are the principal changes in accounting policies following application of the standard as from January 1, 2018:
and measurement of financial assets and financial liabilities
assets and financial liabilities are recognized initially on the trade date at which the Group becomes a party to the contractual
provisions of the instrument. Generally, a financial asset or financial liability is initially measured at fair value plus, in
the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly