Exhibit 2
BioLineRx Ltd.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
AS OF JUNE 30, 2020
BioLineRx Ltd.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
AS OF JUNE 30, 2020
TABLE OF CONTENTS
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BioLineRx Ltd.
(UNAUDITED)
December 31, | June 30, | |||||||
2019 | 2020 | |||||||
in USD thousands | ||||||||
Assets | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | 5,297 | 5,523 | ||||||
Short-term bank deposits | 22,192 | 21,779 | ||||||
Prepaid expenses | 108 | 426 | ||||||
Other receivables | 613 | 441 | ||||||
Total current assets | 28,210 | 28,169 | ||||||
NON-CURRENT ASSETS | ||||||||
Property and equipment, net | 1,816 | 1,580 | ||||||
Right-of-use assets, net | 1,650 | 1,490 | ||||||
Intangible assets, net | 21,891 | 21,750 | ||||||
Total non-current assets | 25,357 | 24,820 | ||||||
Total assets | 53,567 | 52,989 | ||||||
Liabilities and equity | ||||||||
CURRENT LIABILITIES | ||||||||
Current maturities of long-term loans | 2,692 | 2,867 | ||||||
Accounts payable and accruals: | ||||||||
Trade | 7,794 | 7,396 | ||||||
Other | 1,280 | 1,260 | ||||||
Lease liabilities | 202 | 200 | ||||||
Total current liabilities | 11,968 | 11,723 | ||||||
NON-CURRENT LIABILITIES | ||||||||
Warrants | 658 | 6,077 | ||||||
Long-term loans, net of current maturities | 5,799 | 4,329 | ||||||
Lease liabilities | 1,762 | 1,630 | ||||||
Total non-current liabilities | 8,219 | 12,036 | ||||||
COMMITMENTS AND CONTINGENT LIABILITIES | ||||||||
Total liabilities | 20,187 | 23,759 | ||||||
EQUITY | ||||||||
Ordinary shares | 4,692 | 8,281 | ||||||
Share premium | 265,938 | 271,107 | ||||||
Capital reserve | 12,132 | 12,639 | ||||||
Other comprehensive loss | (1,416 | ) | (1,416 | ) | ||||
Accumulated deficit | (247,966 | ) | (261,381 | ) | ||||
Total equity | 33,380 | 29,230 | ||||||
Total liabilities and equity | 53,567 | 52,989 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
F - 1
BioLineRx Ltd.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2019 | 2020 | 2019 | 2020 | |||||||||||||
in USD thousands | in USD thousands | |||||||||||||||
RESEARCH AND DEVELOPMENT EXPENSES | (5,302 | ) | (4,640 | ) | (9,694 | ) | (10,062 | ) | ||||||||
SALES AND MARKETING EXPENSES | (226 | ) | (182 | ) | (482 | ) | (357 | ) | ||||||||
GENERAL AND ADMINISTRATIVE EXPENSES | (949 | ) | (744 | ) | (1,879 | ) | (1,987 | ) | ||||||||
OPERATING LOSS | (6,477 | ) | (5,566 | ) | (12,055 | ) | (12,406 | ) | ||||||||
NON-OPERATING INCOME (EXPENSES), NET | 1,261 | (843 | ) | 921 | (374 | ) | ||||||||||
FINANCIAL INCOME | 171 | 35 | 381 | 175 | ||||||||||||
FINANCIAL EXPENSES | (440 | ) | (396 | ) | (887 | ) | (810 | ) | ||||||||
NET LOSS AND COMPREHENSIVE LOSS | (5,485 | ) | (6,770 | ) | (11,640 | ) | (13,415 | ) |
in USD | in USD | |||||||||||||||
LOSS PER ORDINARY SHARE - BASIC AND DILUTED | (0.04 | ) | (0.03 | ) | (0.08 | ) | (0.07 | ) | ||||||||
WEIGHTED AVERAGE NUMBER OF SHARES USED IN CALCULATION OF LOSS PER ORDINARY SHARE | 145,461,598 | 220,317,889 | 139,270,178 | 198,277,447 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
F - 2
BioLineRx Ltd.
(UNAUDITED)
Ordinary | Share | Capital | Other Comprehensive | Accumulated | ||||||||||||||||||||
shares | premium | reserve | loss | deficit | Total | |||||||||||||||||||
in USD thousands | ||||||||||||||||||||||||
BALANCE AT JANUARY 1, 2019 | 3,110 | 250,192 | 11,955 | (1,416 | ) | (222,520 | ) | 41,321 | ||||||||||||||||
CHANGES FOR SIX MONTHS ENDED JUNE 30, 2019: | ||||||||||||||||||||||||
Issuance of share capital, net | 890 | 10,437 | - | - | - | 11,327 | ||||||||||||||||||
Employee stock options exercised | 1 | 27 | (27 | ) | - | - | 1 | |||||||||||||||||
Employee stock options forfeited and expired | - | 866 | (866 | ) | - | - | - | |||||||||||||||||
Share-based compensation | - | - | 773 | - | - | 773 | ||||||||||||||||||
Comprehensive loss for the period | - | - | - | - | (11,640 | ) | (11,640 | ) | ||||||||||||||||
BALANCE AT JUNE 30, 2019 | 4,001 | 261,522 | 11,835 | (1,416 | ) | (234,160 | ) | 41,782 |
Ordinary | Share | Capital | Other Comprehensive | Accumulated | ||||||||||||||||||||
shares | premium | reserve | loss | deficit | Total | |||||||||||||||||||
in USD thousands | ||||||||||||||||||||||||
BALANCE AT JANUARY 1, 2020 | 4,692 | 265,938 | 12,132 | (1,416 | ) | (247,966 | ) | 33,380 | ||||||||||||||||
CHANGES FOR SIX MONTHS ENDED JUNE 30, 2020: | ||||||||||||||||||||||||
Issuance of share capital, net | 3,581 | 4,754 | - | - | - | 8,335 | ||||||||||||||||||
Employee stock options exercised | 8 | 224 | (224 | ) | - | - | 8 | |||||||||||||||||
Employee stock options forfeited and expired | - | 191 | (191 | ) | - | �� | - | - | ||||||||||||||||
Share-based compensation | - | - | 922 | - | - | 922 | ||||||||||||||||||
Comprehensive loss for the period | - | - | - | - | (13,415 | ) | (13,415 | ) | ||||||||||||||||
BALANCE AT JUNE 30, 2020 | 8,281 | 271,107 | 12,639 | (1,416 | ) | (261,381 | ) | 29,230 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
F - 3
BioLineRx Ltd.
CONDENSED INTERIM STATEMENTS OF CHANGES IN EQUITY
(UNAUDITED)
Ordinary | Share | Capital | Other Comprehensive | Accumulated | ||||||||||||||||||||
shares | premium | reserve | loss | deficit | Total | |||||||||||||||||||
in USD thousands | ||||||||||||||||||||||||
BALANCE AT APRIL 1, 2019 | 3,928 | 259,860 | 12,191 | (1,416 | ) | (228,675 | ) | 45,888 | ||||||||||||||||
CHANGES FOR THREE MONTHS ENDED JUNE 30, 2019: | ||||||||||||||||||||||||
Issuance of share capital, net | 73 | 817 | - | - | - | 890 | ||||||||||||||||||
Employee stock options exercised | - | 9 | (9 | ) | - | - | - | |||||||||||||||||
Employee stock options forfeited and expired | - | 836 | (836 | ) | - | - | - | |||||||||||||||||
Share-based compensation | - | - | 489 | - | - | 489 | ||||||||||||||||||
Comprehensive loss for the period | - | - | - | - | (5,485 | ) | (5,485 | ) | ||||||||||||||||
BALANCE AT JUNE 30, 2019 | 4,001 | 261,522 | 11,835 | (1,416 | ) | (234,160 | ) | 41,782 |
Ordinary | Share | Capital | Other Comprehensive | Accumulated | ||||||||||||||||||||
shares | premium | reserve | loss | deficit | Total | |||||||||||||||||||
in USD thousands | ||||||||||||||||||||||||
BALANCE AT APRIL 1, 2020 | 4,907 | 267,140 | 12,488 | (1,416 | ) | (254,611 | ) | 28,508 | ||||||||||||||||
CHANGES FOR THREE MONTHS ENDED JUNE 30, 2020: | ||||||||||||||||||||||||
Issuance of share capital, net | 3,373 | 3,859 | - | - | - | 7,232 | ||||||||||||||||||
Employee stock options exercised | 1 | 20 | (20 | ) | - | - | 1 | |||||||||||||||||
Employee stock options forfeited and expired | - | 88 | (88 | ) | - | - | - | |||||||||||||||||
Share-based compensation | - | - | 259 | - | - | 259 | ||||||||||||||||||
Comprehensive loss for the period | - | - | - | - | (6,770 | ) | (6,770 | ) | ||||||||||||||||
BALANCE AT JUNE 30, 2020 | 8,281 | 271,107 | 12,639 | (1,416 | ) | (261,381 | ) | 29,230 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
F - 4
BioLineRx Ltd.
(UNAUDITED)
Six months ended June 30, | ||||||||
2019 | 2020 | |||||||
in USD thousands | ||||||||
CASH FLOWS - OPERATING ACTIVITIES | ||||||||
Comprehensive loss for the period | (11,640 | ) | (13,415 | ) | ||||
Adjustments required to reflect net cash used in operating activities (see appendix below) | 573 | 1,112 | ||||||
Net cash used in operating activities | (11,067 | ) | (12,303 | ) | ||||
CASH FLOWS - INVESTING ACTIVITIES | ||||||||
Investments in short-term deposits | (27,510 | ) | (23,751 | ) | ||||
Maturities of short-term deposits | 24,441 | 24,335 | ||||||
Purchase of property and equipment | (53 | ) | (1 | ) | ||||
Net cash provided by (used in) investing activities | (3,122 | ) | 583 | |||||
CASH FLOWS - FINANCING ACTIVITIES | ||||||||
Issuance of share capital and warrants, net of issuance costs | 15,879 | 13,411 | ||||||
Employee stock options exercised | 1 | 8 | ||||||
Repayments of loans | (47 | ) | (1,331 | ) | ||||
Repayments of lease liabilities | (110 | ) | (121 | ) | ||||
Net cash provided by financing activities | 15,723 | 11,967 | ||||||
INCREASE IN CASH AND CASH EQUIVALENTS | 1,534 | 247 | ||||||
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 3,404 | 5,297 | ||||||
EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS | 34 | (21 | ) | |||||
CASH AND CASH EQUIVALENTS - END OF PERIOD | 4,972 | 5,523 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
F - 5
BioLineRx Ltd.
APPENDIX TO CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENTS
(UNAUDITED)
Six months ended June 30, | ||||||||
2019 | 2020 | |||||||
in USD thousands | ||||||||
Adjustments required to reflect net cash used in operating activities: | ||||||||
Income and expenses not involving cash flows: | ||||||||
Depreciation and amortization | 439 | 533 | ||||||
Long-term prepaid expenses | (4 | ) | - | |||||
Exchange differences on cash and cash equivalents | (34 | ) | 21 | |||||
Fair value adjustments of warrants | (1,354 | ) | (250 | ) | ||||
Share-based compensation | 773 | 922 | ||||||
Warrant issuance costs | 417 | 593 | ||||||
Interest and exchange differences on short-term deposits | (440 | ) | (171 | ) | ||||
Interest on loans | 292 | 36 | ||||||
Exchange differences on lease liability | - | (8 | ) | |||||
89 | 1,676 | |||||||
Changes in operating asset and liability items: | ||||||||
Decrease (increase) in prepaid expenses and other receivables | 848 | (146 | ) | |||||
Decrease in accounts payable and accruals | (364 | ) | (418 | ) | ||||
484 | (564 | ) | ||||||
573 | 1,112 | |||||||
Supplemental information on interest received in cash | 442 | 300 | ||||||
Supplemental information on interest paid in cash | 477 | 534 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
F - 6
NOTE 1 – GENERAL INFORMATION
a. | General |
BioLineRx Ltd. (“BioLineRx”), headquartered in Modi’in, Israel, was incorporated and commenced operations in April 2003.
BioLineRx and its subsidiaries (collectively, the “Company”) are engaged in the development of therapeutics, primarily in clinical stages, with a focus on the field of oncology.
In February 2007, BioLineRx listed its ordinary shares on the Tel Aviv Stock Exchange (“TASE”) and they have been traded on the TASE since that time. Since July 2011, BioLineRx’s American Depositary Shares (“ADSs”) have also been traded on the NASDAQ Capital Market.
In March 2017, the Company acquired Agalimmune Ltd. (“Agalimmune”), a privately held company incorporated in the United Kingdom, with a focus on the field of immuno-oncology.
Although it has generated revenues from out-licensing transactions in the past, the Company has incurred accumulated losses in the amount of $261 million through June 30, 2020, and cannot determine with reasonable certainty when and if it will have sustainable profits. Management believes that the Company’s current cash and other resources will be sufficient to fund its projected cash requirements through the end of 2021. However, in the event that the Company does not begin to generate sustainable cash flows from its operating activities in the future, the Company will need to carry out significant cost reductions or raise additional funding. Management regularly evaluates various financing alternatives, including funding its clinical development activities via out-licensing or collaborations, and fundraising in the public or private equity markets. However, there is no certainty about the Company’s ability to obtain such funding.
b. | Approval of financial statements |
The condensed consolidated interim financial statements of the Company as of June 30, 2020, and for the six months then ended, were approved by the Board of Directors on August 5, 2020, and signed on its behalf by the Chairman of the Board, the Chief Executive Officer and the Chief Financial Officer.
NOTE 2 – BASIS OF PREPARATION
The Company’s condensed consolidated interim financial statements as of June 30, 2020 and for the three and six months then ended (the “interim financial statements”) have been prepared in accordance with International Accounting Standard No. 34, “Interim Financial Reporting” (“IAS 34”). These interim financial statements, which are unaudited, do not include all disclosures necessary for a fair statement of financial position, results of operations, and cash flows in conformity with International Financial Reporting Standards (“IFRS”). The condensed consolidated interim financial statements should be read in conjunction with the Company’s annual financial statements as of December 31, 2019 and for the year then ended and their accompanying notes, which have been prepared in accordance with IFRS. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the entire fiscal year or for any other interim period.
F - 7
BioLineRx Ltd.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 2 – BASIS OF PREPARATION (cont.)
In the process of preparing the interim financial statements, management makes estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity and expenses, as well as the related disclosures of contingent assets and liabilities. These inputs also consider, among other things, the implications of COVID-19 on the Company’s activities, and the resultant effects on critical and significant accounting estimates, most significantly in relation to the value of intangible assets. The COVID-19 virus has spread to many countries throughout the world, including to the United States, Europe and Israel, where we currently have our therapeutic candidates manufactured and conduct our clinical trials. At present, we are experiencing some recruitment delays from the deepening and extended impact of COVID-19 on our clinical trials; however, at present, we do not believe these delays will significantly impact our clinical development plans. Future developments related to COVID-19 are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, as well as its overall economic impact, and more specifically its effects on the financial markets. All estimates made by the Company related to the impact of COVID-19 in its financial statements may change in future periods. Actual results could differ from those estimates.
NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES
The accounting policies and calculation methods applied in the preparation of these interim financial statements are consistent with those applied in the preparation of the annual financial statements as of December 31, 2019 and for the year then ended.
NOTE 4 – AT-THE-MARKET (“ATM”) SALES AGREEMENT WITH BTIG
In October 2017, the Company entered into an at-the-market (“ATM”) sales agreement with BTIG, LLC (“BTIG”), pursuant to which the Company was entitled, at its sole discretion, offer and sell through BTIG, acting as sales agent, ADSs having an aggregate offering price of up to $30.0 million throughout the period during which the ATM facility remains in effect. The Company agreed to pay BTIG a commission of 3.0% of the gross proceeds from the sale of ADSs under the facility.
During the six-month period ended June 30, 2020, the Company issued a total of 676,750 ADSs for total net proceeds of $1.4 million under the ATM facility. From the effective date of the agreement through June 30, 2020, an aggregate of 2,923,552 ADSs were sold under the facility for total gross proceeds of approximately $13.0 million. In April 2020, the Company filed a prospectus supplement reducing the available balance under the facility to approximately $8.5 million. In May 2020, in connection with the registered direct offering (see Note 5), the Company terminated the prospectus supplement and, accordingly, no sales may be made under the facility at the present time.
F - 8
BioLineRx Ltd.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 5 – FINANCINGS
a. | In May 2020, the Company completed a registered direct offering of 5,142,859 ADSs at a price of $1.75 per ADS. In a concurrent private placement, the Company issued to investors in the offering unregistered warrants to purchase 5,142,859 ADSs. The warrants are exercisable immediately, expire two and half years from the date of issuance and have an exercise price of $2.25 per ADS. In addition, the Company granted to the placement agent’s designees, as part of the placement fee, warrants to purchase 257,143 ADSs. These warrants are exercisable immediately, expire two and half years from the date of issuance and have an exercise price of $2.1875 per ADS. The offering raised a total of $9.0 million, with net proceeds of $8.1 million, after deducting fees and expenses. |
The warrants issued have been classified as a non-current financial liability due to a net settlement provision. This liability was initially recognized at its fair value on the date the contract was entered into and is subsequently accounted for at fair value at each balance sheet date. The fair value changes are charged to non-operating income and expense in the statement of comprehensive loss.
The fair value of the warrants is computed using the Black-Scholes option pricing model. The fair value of the warrants upon issuance was computed based on the then current price of an ADS, a risk-free interest rate of 0.20% and an average standard deviation of 80.2%.
b. | In June 2020, the Company completed a registered direct offering of 2,510,286 ADSs at a price of $1.75 per ADS. In a concurrent private placement, the Company issued to investors in the offering unregistered warrants to purchase 2,510,286 ADSs. The warrants are exercisable immediately, expire two and half years from the date of issuance and have an exercise price of $2.25 per ADS. In addition, the Company granted to the placement agent’s designees, as part of the placement fee, warrants to purchase 125,514 ADSs. These warrants are exercisable immediately, expire two and half years from the date of issuance and have an exercise price of $2.1875 per ADS. The offering raised a total of $4.4 million, with net proceeds of $3.9 million, after deducting fees and expenses. |
The warrants issued have been classified as a non-current financial liability due to a net settlement provision. This liability was initially recognized at its fair value on the date the contract was entered into and is subsequently accounted for at fair value at each balance sheet date. The fair value changes are charged to non-operating income and expense in the statement of comprehensive loss.
The fair value of the warrants is computed using the Black-Scholes option pricing model. The fair value of the warrants upon issuance was computed based on the then current price of an ADS, a risk-free interest rate of 0.23% and an average standard deviation of 80.9%.
F - 9
BioLineRx Ltd.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 6 – SHAREHOLDERS’ EQUITY
As of December 31, 2019 and June 30, 2020, the Company’s share capital is composed of ordinary shares, as follows:
Number of ordinary shares | ||||||||
December 31, | June 30, | |||||||
2019 | 2020 | |||||||
Authorized share capital | 500,000,000 | 500,000,000 | ||||||
Issued and paid-up share capital | 171,269,528 | 296,508,550 |
In USD and NIS | ||||||||
December 31, | June 30, | |||||||
2019 | 2020 | |||||||
Authorized share capital (in NIS) | 50,000,000 | 50,000,000 | ||||||
Issued and paid-up share capital (in NIS) | 17,126,953 | 29,650,855 | ||||||
Issued and paid-up share capital (in USD) | 4,691,734 | 8,280,633 |
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