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CONSOLIDATED FINANCIAL STATEMENTS
| Page | |
| Consolidated Balance Sheets | F-2 |
| Consolidated Statements of Comprehensive Loss | F-3 |
| Statements of Changes in Equity | F-4 |
| Consolidated Statements of Cash Flows | F-5 - F-6 |
| Notes to Interim Consolidated Financial Statements | F-7 - F-11 |
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CELLECT BIOTECHNOLOGY LTD.
thousands, except share and per share data
| Convenience | ||||||||||||||
| translation | ||||||||||||||
| (Note 2c) | ||||||||||||||
| December 31, | June 30, | June 30, | ||||||||||||
| 2016 | 2017 | 2017 | ||||||||||||
| Audited | Unaudited | Unaudited | ||||||||||||
| Note | N I S | U.S. dollars | ||||||||||||
| CURRENT ASSETS: | ||||||||||||||
| Cash and cash equivalents | 6,279 | 4,349 | 1,244 | |||||||||||
| Short-term deposits | 19,660 | 17,867 | 5,111 | |||||||||||
| Marketable securities | 4,997 | - | - | |||||||||||
| Other receivables | 1,461 | 1,106 | 316 | |||||||||||
| 32,397 | 23,322 | 6,671 | ||||||||||||
| LONG-TERM ASSETS: | ||||||||||||||
| Restricted cash | 140 | 305 | 87 | |||||||||||
| Other long term assets | - | 119 | 34 | |||||||||||
| Property, plant and equipment, net | 1,373 | 1,305 | 373 | |||||||||||
| 1,513 | 1,729 | 494 | ||||||||||||
| 33,910 | 25,051 | 7,165 | ||||||||||||
| CURRENT LIABILITIES: | ||||||||||||||
| Trade payables | 1,401 | 1,521 | 435 | |||||||||||
| Other payables | 2,084 | 1,335 | 382 | |||||||||||
| 3,485 | 2,856 | 817 | ||||||||||||
| NON CURRENT LIABILITIES: | ||||||||||||||
| Traded Warrants to ADS | 1,938 | 7,251 | 2,074 | |||||||||||
| SHAREHOLDERS' EQUITY: | ||||||||||||||
| Ordinary shares of no par value: | ||||||||||||||
| Authorized: 500,000,000 shares at December 31, 2016 and June 30, 2017; Issued and outstanding: 107,583,485*) at December 31, 2016; and 108,804,540*) at June 30, 2017. | 3 | - | - | - | ||||||||||
| Additional paid-in capital | 67,414 | 67,328 | 19,258 | |||||||||||
| Share-based payments and proceeds from conversion option | 4 | 6,217 | 9,813 | 2,807 | ||||||||||
| Treasury shares | (9,425 | ) | (9,425 | ) | (2,696 | ) | ||||||||
| Accumulated deficit | (35,719 | ) | (52,772 | ) | (15,095 | ) | ||||||||
| 28,487 | 14,944 | 4,274 | ||||||||||||
| 33,910 | 25,051 | 7,165 |
of 2,686,693 treasury shares of the Company held by the Company.
accompanying notes are an integral part of the interim consolidated financial statements.
CELLECT BIOTECHNOLOGY LTD.
STATEMENTS OF COMPREHENSIVE LOSS
thousands, except share and per share data
| Convenience | ||||||||||||||
| translation | ||||||||||||||
| (Note 2c) | ||||||||||||||
| Six months ended June 30, | Six months ended June 30, | |||||||||||||
| 2016 | 2017 | 2017 | ||||||||||||
| Unaudited | Unaudited | |||||||||||||
| Note | N I S | U.S. dollars | ||||||||||||
| Research and development expenses | 3,679 | 5,227 | 1,495 | |||||||||||
| General and administrative expenses | 3,547 | 6,046 | 1,729 | |||||||||||
| Other income | (280 | ) | - | - | ||||||||||
| Total operating expenses | 6,946 | 11,273 | 3,224 | |||||||||||
| Operating loss | 6,946 | 11,273 | 3,224 | |||||||||||
| Financial income | (18 | ) | (40 | ) | (11 | ) | ||||||||
| Financial expenses | 41 | 5,820 | 1,665 | |||||||||||
| Total comprehensive loss | 6,969 | 17,053 | 4,878 | |||||||||||
| Loss per share: | ||||||||||||||
| Basic and diluted loss per share | 0.088 | 0.158 | 0.045 | |||||||||||
| Weighted average number of shares outstanding used to compute basic and diluted loss per share | 79,113,097 | 108,034,218 | 108,034,218 |
accompanying notes are an integral part of the interim consolidated financial statements.
CELLECT BIOTECHNOLOGY LTD.
OF CHANGES IN EQUITY
thousands, except share and per share data
| Share capital | Additional paid-in capital | Treasury shares | Share based payments and proceeds from conversion option | Accumulated deficit | Total equity | |||||||||||||||||||
| N I S | ||||||||||||||||||||||||
| Balance as of January 1, 2016 (audited) | - | 36,725 | (9,425 | ) | 3,603 | (20,402 | ) | 10,501 | ||||||||||||||||
| Issuance of share capital net of issue costs | - | 30,682 | - | 1,062 | - | 31,744 | ||||||||||||||||||
| Share-based payment | - | - | - | 1,552 | - | 1,552 | ||||||||||||||||||
| Exercise of share options | - | 7 | - | - | - | 7 | ||||||||||||||||||
| Total comprehensive loss | - | - | - | - | (15,317 | ) | (15,317 | ) | ||||||||||||||||
| Balance as of December 31, 2016 (audited) | - | 67,414 | (9,425 | ) | 6,217 | (35,719 | ) | 28,487 | ||||||||||||||||
| Share-based payment | - | 120 | - | 2,324 | - | 2,444 | ||||||||||||||||||
| Exercise of share options | - | 1,802 | - | (736 | ) | - | 1,066 | |||||||||||||||||
| Change in terms of options series 1 | - | (2,008 | ) | - | 2,008 | - | - | |||||||||||||||||
| Total comprehensive loss | - | - | - | - | (17,053 | ) | (17,053 | ) | ||||||||||||||||
| Balance as of June 30, 2017 (unaudited) | - | 67,328 | (9,425 | ) | 9,813 | (52,772 | ) | 14,944 | ||||||||||||||||
| Balance as of as of June 30, 2017 (convenience translation in U.S. dollars (unaudited)) | - | 19,258 | (2,696 | ) | 2,807 | (15,095 | ) | 4,274 |
accompanying notes are an integral part of the interim consolidated financial statements.
CELLECT BIOTECHNOLOGY LTD.
STATEMENTS OF CASH FLOWS
thousands, except share and per share data
| Convenience | ||||||||||||
| translation | ||||||||||||
| (Note 2c) | ||||||||||||
| Six months ended June 30, | Six months ended June 30, | |||||||||||
| 2016 | 2017 | 2017 | ||||||||||
| Unaudited | Unaudited | |||||||||||
| N I S | U.S. dollars | |||||||||||
| Cash flows from operating activities: | ||||||||||||
| Total comprehensive loss | (6,969 | ) | (17,053 | ) | (4,878 | ) | ||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
| Adjustments to profit or loss items: | ||||||||||||
| Net financing expenses | 9 | 533 | 152 | |||||||||
| Loss (gain) from revaluation of financial assets presented at fair value through profit or loss | (1 | ) | 289 | 83 | ||||||||
| Depreciation and capital loss from sale of property, plant and equipment | 189 | 184 | 53 | |||||||||
| Share-based payment | 1,510 | 2,444 | 699 | |||||||||
| Changes in fair value of traded warrants to ADS | - | 5,313 | 1,519 | |||||||||
| 1,707 | 8,763 | 2,506 | ||||||||||
| Changes in asset and liability items: | ||||||||||||
| Decrease (increase) in other receivables | (760 | ) | 236 | 68 | ||||||||
| Decrease in other payables | (495 | ) | (629 | ) | (180 | ) | ||||||
| (1,255 | ) | (393 | ) | (112 | ) | |||||||
| Cash paid and received during the period for: | ||||||||||||
| Net cash used in operating activities | (6,517 | ) | (8,683 | ) | (2,484 | ) |
accompanying notes are an integral part of the interim consolidated financial statements.
CELLECT BIOTECHNOLOGY LTD.
STATEMENTS OF CASH FLOWS
thousands, except share and per share data
| Convenience | ||||||||||||
| translation | ||||||||||||
| (Note 2c) | ||||||||||||
| Six months ended June 30, | Six months ended June 30, | |||||||||||
| 2016 | 2017 | 2017 | ||||||||||
| Unaudited | Unaudited | |||||||||||
| N I S | U.S. dollars | |||||||||||
| Cash flows from investing activities: | ||||||||||||
| Proceeds received from the sale of fixed assets | 95 | - | - | |||||||||
| Short-term deposits | - | 1,510 | 432 | |||||||||
| Restricted deposit, net | - | (165 | ) | (47 | ) | |||||||
| Investment in marketable securities measured at fair value through profit or loss | (120 | ) | - | - | ||||||||
| Sales of marketable securities measured at fair value through profit or loss | 1,801 | 4,991 | 1,427 | |||||||||
| Purchase of property, plant and equipment | (1,124 | ) | (116 | ) | (33 | ) | ||||||
| Net cash provided by investing activities | 652 | 6,220 | 1,779 | |||||||||
| Cash flows from financing activities: | ||||||||||||
| Exercise of share options | 7 | 1,066 | 305 | |||||||||
| Issuance of share capital, net of issue costs | 7,464 | - | - | |||||||||
| Net cash provided by financing activities | 7,471 | 1,066 | 305 | |||||||||
| Exchange differences on balances of cash and cash equivalents | (9 | ) | (533 | ) | (152 | ) | ||||||
| Increase (decrease) in cash and cash equivalents | 1,597 | (1,930 | ) | (552 | ) | |||||||
| Cash and cash equivalents at beginning of period | 3,913 | 6,279 | 1,796 | |||||||||
| Cash and cash equivalents at end of period | 5,510 | 4,349 | 1,244 | |||||||||
| (a) Non-cash activities: | ||||||||||||
| Exercise of share options | - | (114 | ) | (33 | ) |
accompanying notes are an integral part of the interim consolidated financial statements.
TO CONSOLIDATED FINANCIAL STATEMENTS
thousands, except share and per share data
accompanying financial statements have been prepared in conformity with International Financial Reporting Standards (IFRS), assuming
that the Company will continue to operate as a going concern. During the period ended June 30, 2017, the Company incurred total
comprehensive loss of NIS 17,053 ($4,878) and had negative cash flows from operating activities of NIS 8,683 ($2,484). In addition,
the Company had an accumulated deficit of NIS 52,772 ($15,095) at June 30, 2017. The Company's management plans to seek additional
equity financing. The Company believes its current capital resources are sufficient to support its operations through the end
of the second quarter of 2018.
Company's activities since inception have consisted of raising capital and performing research and development activities. As
of June 30, 2017, principal commercial operations have not commenced. Successful completion of the Company's development programs
and, ultimately, the attainment of profitable operations, if any, are dependent on future events, including, among other things,
its ability to obtain marketing approval from regulatory authorities and access potential markets, secure financing, develop a
customer base, attract, retain and motivate qualified personnel and develop strategic alliances. Although management believes
that the Company will be able to successfully fund its operations, there can be no assurance that the Company will be able to
do so or that the Company will ever operate profitably.
Company expects to continue to incur substantial losses over the next several years during its development phase. To fully execute
its business plan, the Company will need, among other things, to complete its research and development efforts and clinical and
regulatory activities. These activities may take several years and will require significant operating and capital expenditures
in the foreseeable future. There can be no assurance that these activities will be successful. If the Company is not successful
in these activities it could delay, limit, reduce or terminate preclinical studies, clinical trials or other research and development
activities. To fund its capital needs, the Company plans to raise funds through equity or debt financings or other sources, such
as strategic partnerships and alliance and licensing arrangements, and in the long term, from the proceeds from sales. Additional
funds may not be available when the Company needs them, on terms that are acceptable to it, or at all. These matters raise substantial
doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments to the
carrying amounts and classifications of assets and liabilities that would result if the Company was unable to continue as a going
TO CONSOLIDATED FINANCIAL STATEMENTS
thousands, except share and per share data
Interim Financial Statements:
accompanying consolidated balance sheet as of June 30, 2017, the consolidated statements of income, the consolidated statements
of comprehensive income and the consolidated statements of cash flows for the six months ended June 30, 2016 and 2017, as well
as the statement of changes in shareholders' equity for the six months ended June 30, 2017, are unaudited. These unaudited interim
consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards ("IFRS") and applicable rules and regulations of the Securities and Exchange Commission
regarding interim financial reporting. In the management's opinion, the unaudited interim consolidated financial statements
include all adjustments of a normal recurring nature necessary for the fair presentation of the Company's financial position
as of June 30, 2017, as well as its results of operations and cash flows for the six months ended June 30, 2016 and 2017. The
results of operations for the six months ended June 30, 2017 are not necessarily indicative of the results to be expected for
the year ending December 31, 2017.
accompanying unaudited interim financial statements should be read in conjunction with the Company's Annual Report on Form
20-F filed with the Securities and Exchange Commission (the "SEC") on March 23, 2017.
have been no changes to the significant accounting policies described in the Annual Report on Form 20-F for the fiscal year ended
December 31, 2016 that have had a material impact on the unaudited interim consolidated financial statements and related notes.
Estimates and assumptions:
preparation of the Group's financial statements requires management to make estimates and assumptions that have an effect on application
of the accounting policies and on the reported amounts of assets, liabilities and expenses. Changes in accounting estimates are
reported in the period of the change in estimate.
key assumptions made in the financial statements concerning uncertainties at the reporting date and the critical estimates computed
by the Company that may result in a material adjustment to the carrying amounts of assets and liabilities within the next financial
year are discussed below.
fair value of share based transactions is determined upon initial recognition using acceptable option pricing models. The model
is based on per-share price data and the exercise price and assumptions regarding expected volatility, expected life, expected
dividend and risk-free interest rate.
Convenience translation into U.S. dollars:
consolidated financial statements as of June 30, 2017 and for the six months then ended have been translated into U.S. dollars
using the exchange rate of the U.S. dollar as of June 30, 2017 (U.S. $1.00 = NIS 3.496). The translation was made solely for convenience
dollar amounts presented in these financial statements should not be construed as representing amounts that are receivable or
payable in dollars or convertible into dollars, unless otherwise indicated.
TO CONSOLIDATED FINANCIAL STATEMENTS
thousands, except share and per share data
| Number of | |||||
| shares | |||||
| Balance at January 1, 2015 (audited) | 75,949,888 | *) | |||
| Issuance of shares in private placement | 5,783,437 | ||||
| Exercise of share options | 4,000 | ||||
| Issuance of shares in IPO | 25,846,160 | ||||
| Balance at December 31, 2016 (audited) | 107,583,485 | *) | |||
| Issuance of shares | 100,000 | ||||
| Exercise of share options and warrants | 1,121,055 | ||||
| Balance at June 30, 2017 (unaudited) | 108,804,540 | *) |
| 4. | On May 9, 2017, the Company's shareholders, at a general shareholders' meeting approved the following changes in the terms of the options (Series 1): (i) extension of the expiration date of the options (Series 1) to a date that is 80 days from court approval for such of the exercise period of the options (Series 1) (i.e. August 17, 2017, following court approval), and (ii) reduction in the exercise price of the options (Series 1) from NIS 1.85 per option to NIS 1.20 per option, in accordance with Section 350 of the Israeli Companies Law. On May 29, 2017, the court approved the changes to the options (Series 1). The fair value of the change in terms of options (Series 1) amounts to NIS 2,008. | |
| During June 2017, an aggregate of 350,455 options (Series 1) were exercised at an exercise price of NIS 1.20 per option. |
TO CONSOLIDATED FINANCIAL STATEMENTS
thousands, except share and per share data
TO CONSOLIDATED FINANCIAL STATEMENTS
thousands, except share and per share data
table below includes the number of share options, and the weighted average of their exercise prices:
| December 31, 2016 (audited) | June 30, 2017 (unaudited) | ||||||||||||||||
| Number of options | Weighted average exercise price | Number of options | Weighted average exercise price | ||||||||||||||
| NIS | NIS | ||||||||||||||||
| Outstanding at beginning of period | 5,764,866 | 1.37 | 5,979,973 | 1.25 | |||||||||||||
| Options exercised for shares | - | - | (500,000 | ) | 1.29 | ||||||||||||
| Options forfeited | (2,054,396 | ) | 1.43 | - | - | ||||||||||||
| Option expired | (337,000 | ) | 1.42 | - | - | ||||||||||||
| Granted | 2,606,503 | 1.14 | 5,628,269 | 1.14 | |||||||||||||
| Outstanding at end of period | 5,979,973 | 1.25 | 11,108,242 | 1.19 |
Company provided a NIS 185 restricted bank deposit to secure credit card payments.
Company provided a NIS 120 restricted bank deposit to secure the rent payment.
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