Full Press Release Details
The COVID-19 pandemic and government measures taken
in response to the pandemic have had a negative impact on the Company's operations. Access to healthcare providers has been limited, which
has negatively impacted sales and the Company's ability to execute its commercial strategy with respect to AMZEEQ and ZILXI. In addition,
the commercial launches of both AMZEEQ and ZILXI have been negatively impacted by unfavorable payor decisions in March 2021 on product
pricing. These conditions have impaired the Company's ability to generate revenue consistent with internal forecasts, which has had a
negative impact on its financial condition and liquidity subsequent to the issuance of our Form 10-K on March 4, 2021. As a result of
these effects, Note 1 to the financial statements as well as the report of our Independent Registered Public Accounting Firm set forth
in this Exhibit 99.1 have been updated from the footnotes and the report of our Independent Registered Public Accounting Firm to the financial
statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. No other changes, modifications or updates
have been made to the 2020 financial statements. The 2020 financial statements do not reflect events that may have occurred after the
original filing date except as noted above. Revisions are highlighted in blue font.
VYNE THERAPEUTICS INC.
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020
| Page | |
| Report of Independent Registered Public Accounting Firm | F-1 |
| Consolidated Balance Sheets | F-4 |
| Consolidated Statements of Operations | F-6 |
| Consolidated Statements of Comprehensive Loss | F-7 |
| Statements of Changes in Shareholders' Equity | F-8 |
| Consolidated Statements of Cash Flows | F-9 |
| Notes to Consolidated Financial Statements | F-11 |
of Independent Registered Public Accounting Firm
To the Board of Directors
and Shareholders of VYNE Therapeutics Inc.
Opinion on the Financial
We have audited the accompanying
consolidated balance sheet of VYNE Therapeutics Inc. and its subsidiaries (the "Company") as of December 31, 2020, and the
related consolidated statements of operations, of comprehensive loss, of changes in shareholders' equity and of cash flows for the year
then ended, including the related notes (collectively referred to as the "consolidated financial statements"). In
our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company
as of December 31, 2020, and the results of its operations and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
These consolidated financial
statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the
Company's consolidated financial statements based on our audit. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
conducted our audit of these consolidated financial statements in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not
required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits
we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such
Our audit included performing
procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud,
and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that our audit provides a reasonable basis for our opinion.
As discussed in Note 1 to
the consolidated financial statements, the future viability of the Company is dependent on its ability to successfully pivot to a research
and development business strategy and develop commercially viable drug candidates and raise additional capital to finance its operations.
Management's evaluation of these events and conditions and management's plan to mitigate these matters are also described
/s/ PricewaterhouseCoopers
Florham Park, New Jersey
except for the seventh, eighth and ninth paragraphs under, Liquidity and Capital Resources, in Note 1, as to which the date is
We have served as the Company's
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the shareholders and the board of directors of VYNE Therapeutics
Opinion on the Financial Statements
We have audited the consolidated balance sheet
of VYNE Therapeutics Inc. (formerly known as Foamix Pharmaceuticals Ltd.) and its subsidiary (the "Company") as of December
31, 2019, and the related consolidated statements of operations, comprehensive loss, changes in shareholders' equity and cash flows for
each of the two years in the period ended December 31, 2019, including the related notes (collectively referred to as the "consolidated
financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2019, and the results of its operations and its cash flows for each of the two years in the
period ended December 31, 2019 in conformity with accounting principles generally accepted in the United States of America.
Change in Accounting Principle
As discussed in Note 2p to the consolidated financial
statements, the Company changed the manner in which it accounts for leases in 2019.
These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial
statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated
financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess
the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide
a reasonable basis for our opinion.
| /s/ Kesselman & Kesselman | |
| Certified Public Accountants (Isr.) | |
| A member firm of PricewaterhouseCoopers International Limited | |
| Tel-Aviv, Israel | |
| March 12, 2020, except for the effects of the reverse stock split discussed in Note 1, and except for the effects of the merger exchange ratio discussed in Note 3, and except for the effects of disclosing the reconciliation of income taxes at the U.S. federal statutory rate discussed in Note 14, as to which the date is March 4, 2021 |
We served as the Company's auditor from 2006 to 2020.
VYNE THERAPEUTICS INC.
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
| December 31 | ||||||||
| 2020 | 2019 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 57,563 | $ | 43,759 | ||||
| Restricted cash | 855 | 825 | ||||||
| Short term bank deposits | - | 12,102 | ||||||
| Investment in marketable securities (Note 6) | 1,027 | 16,246 | ||||||
| Restricted investment in marketable securities (Note 6) | - | 434 | ||||||
| Trade receivable, net of allowances | 15,819 | 135 | ||||||
| Prepaid and other assets | 4,591 | 1,557 | ||||||
| Inventory (Note 7) | 7,404 | 1,356 | ||||||
| Total Current Assets | 87,259 | 76,414 | ||||||
| Non-current Assets: | ||||||||
| Property and equipment, net (Note 8) | 555 | 2,885 | ||||||
| Operating lease right of use assets (Note 9) | 1,583 | 1,694 | ||||||
| Other | 4,345 | 166 | ||||||
| Total Non-current Assets | 6,483 | 4,745 | ||||||
| Total Assets | $ | 93,742 | $ | 81,159 |
The accompanying notes are an integral part
of these consolidated financial statements.
VYNE THERAPEUTICS INC.
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
| December 31 | ||||||||
| 2020 | 2019 | |||||||
| Liabilities and shareholders' equity | ||||||||
| Current Liabilities: | ||||||||
| Trade payables | $ | 4,780 | $ | 19,352 | ||||
| Accrued expenses (Note 4) | 11,452 | 3,381 | ||||||
| Employee-related obligations | 4,360 | 5,231 | ||||||
| Operating lease liabilities (Note 9) | 757 | 1,092 | ||||||
| Other | 104 | 270 | ||||||
| Total Current Liabilities | 21,453 | 29,326 | ||||||
| Long-term Liabilities: | ||||||||
| Liability for employee severance benefits | 312 | 424 | ||||||
| Operating lease liabilities (Note 9) | 853 | 653 | ||||||
| Long-term debt (Note 12) | 33,174 | 32,725 | ||||||
| Other liabilities | 457 | 456 | ||||||
| Total Long-term Liabilities | 34,796 | 34,258 | ||||||
| Total Liabilities | 56,249 | 63,584 | ||||||
| Commitments and Contingencies (Note 11) | - | - | ||||||
| Shareholders' Equity: | ||||||||
| Preferred stock: $0.0001 par value; 20,000,000 shares authorized at December 31, 2020 and December 31, 2019, respectively; no shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively | - | - | ||||||
| Common stock: $0.0001 par value; 75,000,000 shares authorized at December 31, 2020 and December 31, 2019, respectively; 43,205,221 and 9,120,078 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively | 4 | 1 | ||||||
| Additional paid-in capital | 603,685 | 328,156 | ||||||
| Accumulated deficit | (566,196 | ) | (310,587 | ) | ||||
| Accumulated other comprehensive income | - | 5 | ||||||
| Total Shareholders' Equity | 37,493 | 17,575 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 93,742 | $ | 81,159 |
The accompanying notes are an integral part
of these consolidated financial statements.
VYNE THERAPEUTICS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except per share data)
| Year ended December 31 | ||||||||||||
| 2020 | 2019 | 2018 | ||||||||||
| Revenues (Note 4) | ||||||||||||
| Product sales, net | $ | 10,202 | $ | - | $ | - | ||||||
| License revenues | 10,000 | - | - | |||||||||
| Royalty revenues | 791 | 443 | 3,533 | |||||||||
| Other revenues | - | - | 62 | |||||||||
| Total Revenues | 20,993 | 443 | 3,595 | |||||||||
| Cost of goods sold | 1,392 | - | - | |||||||||
| Operating Expenses: | ||||||||||||
| Research and development | 43,533 | 51,202 | 64,474 | |||||||||
| Selling, general and administrative | 89,543 | 45,114 | 14,013 | |||||||||
| Goodwill and in-process research & development impairments | 54,345 | - | - | |||||||||
| Contingent Stock Remeasurement | 84,726 | - | - | |||||||||
| Total Operating Expenses | 272,147 | 96,316 | 78,487 | |||||||||
| Operating Loss | 252,546 | 95,873 | 74,892 | |||||||||
| Interest Expense | 4,390 | 921 | - | |||||||||
| Other Income, net | (1,110 | ) | (1,440 | ) | (941 | ) | ||||||
| Loss Before Income Tax | 255,826 | 95,354 | 73,951 | |||||||||
| Income Tax (Benefit) Expense (Note 14) | (258 | ) | (176 | ) | 212 | |||||||
| Net Loss | $ | 255,568 | $ | 95,178 | $ | 74,163 | ||||||
| Loss per share basic and diluted | $ | 7.88 | $ | 11.22 | $ | 11.47 | ||||||
| Weighted average shares outstanding - basic and diluted | 32,418 | 8,485 | 6,466 |
The accompanying notes are an integral part
of these consolidated financial statements.
VYNE THERAPEUTICS INC.