Page
| |
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - U.S DOLLARS IN THOUSANDS ($):
| |
Condensed consolidated statements of financial position |
F-2
|
Condensed consolidated statements of comprehensive loss |
F-3
|
Condensed consolidated statements of changes in shareholders' equity |
F-4 - F-5
|
Condensed consolidated statements of cash flows |
F-6 - F-7
|
Notes to the condensed consolidated financial statements |
F-8 - F-13
|
September 30
|
December 31
| |||||||
2021
|
2020
| |||||||
U.S. dollars in thousands
| ||||||||
A s s e t s
| ||||||||
CURRENT ASSETS:
| ||||||||
Cash and cash equivalents
|
27,395
|
8,593
| ||||||
Accounts receivable
|
252
|
255
| ||||||
Other current assets
|
459
|
261
| ||||||
TOTAL CURRENT ASSETS
|
28,106
|
9,109
| ||||||
NON-CURRENT ASSETS:
| ||||||||
Property and equipment
|
161
|
192
| ||||||
Right of use assets
|
244
|
356
| ||||||
Intangible assets
|
605
|
605
| ||||||
TOTAL NON-CURRENT ASSETS
|
1,010
|
1,153
| ||||||
TOTAL ASSETS
|
29,116
|
10,262
| ||||||
Liabilities and shareholders' equity
| ||||||||
CURRENT LIABILITIES:
| ||||||||
Accounts payable:
| ||||||||
Trade
|
325
|
164
| ||||||
Other
|
1,691
|
1,330
| ||||||
Current maturities of lease liabilities
|
179
|
189
| ||||||
Warrants to purchase ordinary shares
|
698
|
1,432
| ||||||
Contract liabilities
|
-
|
158
| ||||||
TOTAL CURRENT LIABILITIES
|
2,893
|
3,273
| ||||||
NON-CURRENT LIABILITIES:
| ||||||||
Lease liabilities
|
153
|
243
| ||||||
Severance pay obligations, net
|
88
|
81
| ||||||
TOTAL NON-CURRENT LIABILITIES
|
241
|
324
| ||||||
TOTAL LIABILITIES
|
3,134
|
3,597
| ||||||
COMMITMENTS AND CONTINGENCIES
| ||||||||
SHAREHOLDERS' EQUITY:
| ||||||||
Ordinary Shares, NIS 0.0000769 par value:
| ||||||||
Authorized - as of September 30, 2021 and December 31, 2020, 140,010,000 shares; issued and outstanding: as of September 30, 2021, and December 31, 2020 28,784,411
and 21,057,922 shares, respectively
|
*
|
*
| ||||||
Accumulated other comprehensive income
|
41
|
41
| ||||||
Other reserves
|
10,142
|
8,924
| ||||||
Additional paid in capital
|
105,797
|
70,595
| ||||||
Accumulated deficit
|
(89,998
|
)
|
(72,895
|
)
| ||||
TOTAL SHAREHOLDERS' EQUITY
|
25,982
|
6,665
| ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
29,116
|
10,262
|
Nine months ended
|
Three months ended
| |||||||||||||||
September 30
|
September 30
| |||||||||||||||
2021
|
2020
|
2021
|
2020
| |||||||||||||
U.S. dollars in thousands
| ||||||||||||||||
REVENUE
|
406
|
144
|
140
|
50
| ||||||||||||
COST OF REVENUE
|
186
|
104
|
65
|
31
| ||||||||||||
RESEARCH AND DEVELOPMENT EXPENSES, NET
|
4,146
|
5,222
|
1,729
|
1,606
| ||||||||||||
GENERAL AND ADMINISTRATIVE EXPENSES
|
4,209
|
3,656
|
1,450
|
829
| ||||||||||||
OTHER INCOME
|
(33
|
) |
-
|
(11
|
)
|
-
| ||||||||||
OPERATING LOSS
|
8,102
|
8,838
|
3,093
|
2,416
| ||||||||||||
FINANCIAL EXPENSES (INCOME):
| ||||||||||||||||
Loss (income) from change in fair value of financial
liabilities at fair value
|
8,833
|
(1,123
|
)
|
(697
|
)
|
(805
|
)
| |||||||||
Other financial expenses, net
|
45
|
17
|
20
|
13
| ||||||||||||
FINANCIAL EXPENSES (INCOME),NET
|
8,878
|
(1,106
|
)
|
(677
|
)
|
(792
|
)
| |||||||||
NET LOSS BEFORE TAXES
|
16,980
|
7,732
|
2,416
|
1,624
| ||||||||||||
TAXES ON INCOME
|
123
|
-
|
45
|
-
| ||||||||||||
NET COMPREHENSIVE LOSS FOR THE PERIOD
|
17,103
|
7,732
|
2,461
|
1,624
|
U.S. dollars
| ||||||||||||||||
LOSS PER ORDINARY SHARE:
| ||||||||||||||||
Basic
|
0.68
|
0.42
|
0.09
|
0.09
| ||||||||||||
Diluted
|
0.68
|
0.42
|
0.09
|
0.09
| ||||||||||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: | ||||||||||||||||
Basic
|
25,203,221
|
18,204,684
|
28,680,833
|
18,329,561
| ||||||||||||
Diluted
|
25,203,221
|
18,204,684
|
28,680,833
|
18,329,561
|
Number of Ordinary Shares | Ordinary Shares-Amount | Accumulated other comprehensive income |
Other reserve
|
Additional paid in capital
|
Accumulated deficit
|
Total
| ||||||||||||||||||||||
U.S dollars in thousands
| ||||||||||||||||||||||||||||
BALANCE AT JANUARY 1, 2020
|
17,864,684
|
*
|
41
|
11,398
|
63,392
|
(62,912
|
)
|
11,919
| ||||||||||||||||||||
CHANGES DURING THE NINE MONTHS ENDED SEPTEMBER 30, 2020:
| ||||||||||||||||||||||||||||
Net loss for the period
|
-
|
-
|
-
|
-
|
-
|
(7,732
|
)
|
(7,732
|
)
| |||||||||||||||||||
Exercise of options to ordinary shares
|
31,954
|
*
|
-
|
(35
|
)
|
103
|
-
|
68
| ||||||||||||||||||||
Issuance of shares and warrant due to a private placement, net of issuance costs | 337,553 | * | - | - | 573 | - | 573 | |||||||||||||||||||||
Issuance of shares due to the ATM program, net of issuance costs |
106,806
|
*
|
-
|
-
|
212
|
-
|
212
| |||||||||||||||||||||
Expiration of options and warrants
|
-
|
-
|
-
|
(2,896
|
)
|
2,896
|
-
|
-
| ||||||||||||||||||||
Vesting of restricted share units
|
21,000
|
*
|
-
|
-
|
-
|
-
|
-
| |||||||||||||||||||||
Share-based compensation
|
-
|
-
|
-
|
700
|
-
|
-
|
700
| |||||||||||||||||||||
BALANCE AT SEPTEMBER 30, 2020
|
18,361,997
|
*
|
41
|
9,167
|
67,176
|
(70,644
|
)
|
5,740
| ||||||||||||||||||||
BALANCE AT JANUARY 1, 2021
| ||||||||||||||||||||||||||||
CHANGES DURING THE NINE MONTHS ENDED SEPTEMBER 30, 2021:
|
21,057,922
|
*
|
41
|
8,924
|
70,595
|
(72,895
|
)
|
6,665
| ||||||||||||||||||||
Net loss for the period
|
-
|
-
|
(17,103
|
)
|
(17,103
|
)
| ||||||||||||||||||||||
Exercise of warrants to ordinary shares
|
3,175,050
|
*
|
-
|
12,725
|
-
|
12,725
| ||||||||||||||||||||||
Exercise of options to ordinary shares
|
157,711
|
*
|
-
|
(262
|
)
|
659
|
-
|
397
| ||||||||||||||||||||
Issuance of shares under the ATM program, net of issuance costs
|
4,386,728
|
*
|
-
|
-
|
21,805
|
-
|
21,805
| |||||||||||||||||||||
Vested restricted share units
|
7,000
|
-
|
-
|
(13
|
)
|
13
|
-
|
-
| ||||||||||||||||||||
Share-based compensation
|
-
|
-
|
-
|
1,493
|
-
|
-
|
1,493
| |||||||||||||||||||||
BALANCE AT SEPTEMBER 30, 2021
|
28,784,411
|
*
|
41
|
10,142
|
105,797
|
(89,998
|
)
|
25,982
|
Number of Ordinary Shares |
Ordinary Shares-Amount
| Accumulated other comprehensive income | Other reserve |
Additional paid in capital
|
Accumulated deficit
|
Total
| ||||||||||||||||||||||
U.S dollars in thousands
| ||||||||||||||||||||||||||||
BALANCE AT JULY 1, 2020
|
18,234,191
|
*
|
41
|
10,468
|
65,740
|
(69,020
|
)
|
7,229
| ||||||||||||||||||||
CHANGES DURING THE THREE MONTHS ENDED SEPTEMBER 30, 2020:
| ||||||||||||||||||||||||||||
Net loss for the period
|
-
|
-
|
-
|
-
|
-
|
(1,624
|
)
|
(1,624
|
)
| |||||||||||||||||||
Expiration of warrants
|
-
|
-
|
-
|
(1,224
|
)
|
1,224
|
-
|
-
| ||||||||||||||||||||
Issuance of shares due to the ATM program, net of issuance costs |
106,806
|
-
|
-
|
-
|
212
|
212
| ||||||||||||||||||||||
Vesting of restricted share units
|
21,000
|
*
|
-
|
-
|
-
|
-
|
-
| |||||||||||||||||||||
Share-based compensation
|
-
|
-
|
-
|
(77
|
)
|
-
|
-
|
(77
|
)
| |||||||||||||||||||
BALANCE AT SEPTEMBER 30, 2020
|
18,361,997
|
*
|
41
|
9,167
|
67,176
|
(70,644
|
)
|
5,740
| ||||||||||||||||||||
BALANCE AT JULY 1, 2021
| ||||||||||||||||||||||||||||
CHANGES DURING THE THREE MONTHS ENDED SEPTEMBER 30, 2021:
|
28,286,211
|
*
|
41
|
9,722
|
103,089
|
(87,537
|
)
|
25,315
| ||||||||||||||||||||
Net loss for the period
|
-
|
-
|
-
|
-
|
(2,461
|
)
|
(2,461
|
)
| ||||||||||||||||||||
Exercise of options to ordinary shares
|
57,737
|
*
|
-
|
(123
|
)
|
245
|
-
|
122
| ||||||||||||||||||||
Issuance of shares under the ATM program, net of issuance costs
|
440,463
|
*
|
-
|
-
|
2,463
|
-
|
2,463
| |||||||||||||||||||||
Share-based compensation
|
-
|
-
|
-
|
543
|
-
|
-
|
543
| |||||||||||||||||||||
BALANCE AT SEPTEMBER 30, 2021
|
28,784,411
|
*
|
41
|
10,142
|
105,797
|
(89,998
|
)
|
25,982
|
Nine months ended
September 30
| ||||||||
2021
|
2020
| |||||||
(Unaudited)
| ||||||||
U.S dollars in thousands
| ||||||||
CASH FLOWS USED IN OPERATING ACTIVITIES:
| ||||||||
Net loss for the period
|
(17,103
|
)
|
(7,732
|
)
| ||||
Adjustments required to reflect net cash
| ||||||||
used in operating activities (see appendix A)
|
10,697
|
(1,298
|
)
| |||||
Net cash used in operating activities
|
(6,406
|
)
|
(9,030
|
)
| ||||
CASH FLOWS USED IN INVESTING ACTIVITIES:
| ||||||||
Purchase of property and equipment
|
(7
|
)
|
(51
|
)
| ||||
Net cash used in investing activities
|
(7
|
)
|
(51
|
)
| ||||
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
| ||||||||
Proceeds from issuance of ordinary shares and warrants, net of issuance costs
|
-
|
797
| ||||||
Issuance of shares due to the ATM program, net of issuance costs
|
21,805
|
212
| ||||||
Proceeds from exercise of options and warrants
|
3,555
|
68
| ||||||
Principle element of lease payments
|
(145
|
)
|
(113
|
)
| ||||
Net cash provided by financing activities
|
25,215
|
964
| ||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
18,802
|
(8,117
|
)
| |||||
CASH AND CASH EQUIVALENTS AT BEGINNING
OF THE PERIOD
|
8,593
|
15,185
| ||||||
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD
|
27,395
|
7,068
|
Nine months ended September 30
| ||||||||
2021
|
2020
| |||||||
(Unaudited)
| ||||||||
U.S dollars in thousands
| ||||||||
APPENDIX A:
| ||||||||
Adjustments required to reflect net cash used in operating activities:
| ||||||||
Depreciation
|
182
|
152
| ||||||
Change in fair value of financial liabilities at fair value through profit or loss |
8,833
|
(1,123
|
)
| |||||
Financial expenses
|
36
|
33
| ||||||
Net changes in severance pay obligation
|
7
|
5
| ||||||
Share-based compensation
|
1,493
|
700
| ||||||
10,551
|
(233
|
)
| ||||||
Changes in working capital:
| ||||||||
Decrease in accounts receivables
|
3
|
278
| ||||||
Increase in other current assets
|
(198
|
)
|
(549
|
)
| ||||
Increase (decrease) in accounts payable and accruals:
| ||||||||
Trade
|
161
|
(246
|
)
| |||||
Other
|
361
|
(377
|
)
| |||||
Decrease in contract liabilities
|
(158
|
)
|
(144
|
)
| ||||
169
|
(1,038
|
)
| ||||||
Cash used for operating activities -
| ||||||||
Interest paid
|
(23
|
)
|
(27
|
)
| ||||
10,697
|
(1,298
|
)
| ||||||
APPENDIX B:
| ||||||||
Supplementary information on investing and financing activities not involving cash flows: | ||||||||
Right of use assets obtained in exchange for new operating lease liabilities
|
31
|
23
| ||||||
Exercise of warrants
|
9,567
|
-
| ||||||
Cashless exercise of warrants
|
*
|
-
| ||||||
Vested restricted shares units
|
*
|
-
|
a. |
General: |
1) |
Entera Bio Ltd. (collectively with its subsidiary, the "Company") was incorporated on September 30, 2009 and commenced operation on June 1, 2010. On January 8, 2018 the Company incorporated Entera Bio Inc., a fully owned subsidiary incorporated in Delaware USA. The Company is a leader in the development and commercialization of orally delivered large molecule therapeutics for use in areas with significant unmet medical need where adoption of injectable therapies is limited due to cost, convenience and compliance challenges for patients. The Company's most advanced product candidates, EB613 for the treatment of osteoporosis and EB612 for the treatment of hypoparathyroidism, are based on its proprietary technology platform and are both in Phase 2 clinical development. The Company also licenses its technology to biopharmaceutical companies for use with their proprietary compounds and, to date, has completed one such collaboration with Amgen Inc.
|
2) |
The Company's securities have been listed for trading on the Nasdaq Capital Market since the Company's initial public offering in July 2018, where a total of 1,400,000 new ordinary shares were issued in consideration of net proceeds of $9.6 million, after deducting offering expenses.
|
b. |
Since the Company is engaged in research and development activities, it has not derived significant income from its activities and has incurred accumulated losses in the amount of $90 million through September 30, 2021 and negative cash flows from operating activities. The Company's management is of the opinion that its available funds as of September 30, 2021 will allow the Company to operate under its current plans into the fourth quarter of 2022. These factors raise substantial doubt as to the Company's ability to continue as a going concern.
Management is in the process of evaluating various financing alternatives in the public or private equity markets, government grants or through license of the Company's technology to additional external parties through partnerships or research collaborations as the Company will need to finance future research and development activities, general and administrative expenses and working capital through fund raising. However, there is no certainty about the Company's ability to obtain such funding.
|
The financial information has been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business. If the Company does not raise the requisite funds, it will need to curtail or cease operations. These financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern.
|
c. |
Approval of financial statements
These financial statements were approved by the Company's Board of Directors on November 9, 2021.
|
Financial liabilities at fair value through profit or loss
| Financial liabilities at amortized cost |
Total
| ||||||||||
U.S. dollars in thousands
| ||||||||||||
As of September 30, 2021:
| ||||||||||||
Trade and other payable
|
-
|
2,016
|
2,016
| |||||||||
Warrants to purchase ordinary shares (level 1) (1) |
698
|
-
|
698
| |||||||||
Lease liabilities
|
-
|
332
|
332
| |||||||||
698
|
2,348
|
3,046
| ||||||||||
As of December 31, 2020: | ||||||||||||
Trade and other payable
|
-
|
1,494
|
1,494
| |||||||||
Warrants to purchase ordinary shares (level 1) (1) |
239
|
-
|
239
| |||||||||
Warrants to purchase ordinary shares (level 3) (2) |
1,193
|
-
|
1,193
| |||||||||
Lease liabilities
|
432
|
432
| ||||||||||
1,432
|
1,926
|
3,358
|
(1) |
Tradable warrants presented above are valuated based on the market price (a level 1 valuation) as of September 30, 2021. |
(2) |
Warrants to purchase ordinary shares issued in December 2019 and February 2020 presented are valued based on the Monte-Carlo pricing model (a level 3 valuation) as of September 30, 2020. As of September 30, 2021,all these warrants were exercised, see additional information in Note 61.d .
|
1. |
Equity: |
a. |
In February and March 2021, the Company issued additional 2,546,265 ordinary shares for net proceeds of $9.9 million at a weighted average price of $3.99 per ordinary share through the Company's ATM Program established in July 2020.
|
b. |
In March 2021, 4,500 tradable warrants were exercised into 2,250 ordinary shares of the Company for a total consideration of $13 thousand at an exercise price of $5.85 per ordinary share. |
c. |
During the nine months ended September 30, 2021, several employees and service providers exercised 157,711 options into 157,711 ordinary shares of the Company for a total consideration of $397 thousand at a weighted average price of $2.54 per ordinary share.
|
d. |
On April 21, 2021, upon satisfaction of the sale price condition pursuant to the subscription agreement signed in December 2019, the Company's Board of Directors decided to accelerate the termination date of the Investors and Broker warrants issued in December 2019 and February 2020. In accordance with the terms of the agreement, as of the notice date and until June 23, 2021 (the "Early Termination Exercise Period"), the holders may exercise their warrants and following such Early Termination Exercise Period, these warrants shall be deemed terminated. During the six months ended June 30, 2021, the warrants holders, including our Chairman of the board and D.N.A Biomedical Solutions Ltd. ("DNA") exercised 3,300,645 warrants into 3,172,800 ordinary shares through cash or cashless mechanism. The total consideration from the exercise of these warrants was $3,145 thousand at an exercise price of $1.05. |
e. |
On May 7, 2021, the Company entered into a new At-the-market equity program (the "Second ATM Program") that allows the Company to issue up to additional 5 million ordinary shares, at the Company's discretion. Distributions of the ordinary shares through the Second ATM Program were made pursuant to the terms of an equity distribution agreement dated May 7, 2021 among the Company and B. Riley Securities, Inc (the "Agent"). |
2. |
Options Grants |
a. |
On January 4, 2021 options to purchase 1,314,218 ordinary shares were granted to the Chief Executive officer of the Company, with an exercise price of $1.24. The options vest over 4 years from the date of grant; 25% vest on the first anniversary of the date of grant and the remaining 75% of the option will vest in twelve equal quarterly installments following the first anniversary of the grant date. The grant was subject to the approval by the shareholders of the Company, which approved the grant in March 2021. The fair value of the options at the date of grant was $1,320 thousand.
|
b. |
On April 7, 2021, the Company's Board of Directors approved the following option grants:
|
i. |
Options grant to purchase 150,000 ordinary shares to the new US-based CFO, with an exercise price of $3.61 per share. The options vest over 4 years from the date of grant; 25% vest on the first anniversary of the date of grant and the remaining 75% of the option will vest in twelve equal quarterly installments following the first anniversary of the grant date. This grant was subject to shareholders approval, which was not obtained on October 4, 2021, and is still subject to additional formal approvals. The fair value of the options on September 30, 2021 was $478 thousand.
|
ii. |
Options grants to purchase 213,000 ordinary shares to certain employees and 70,000 options granted to service providers, with an exercise price of $3.61 per share. The options vest over 4 years from the date of grant; 25% vest on the first anniversary of the date of grant and the remaining 75% of the option will vest in twelve equal quarterly installments following the first anniversary of the grant date. The fair value of the options at the date of grant was $646 thousand.
|
iii. |
Options grant to purchase 33,368 ordinary shares to a non-executive director of the Company, with an exercise price of $3.61. The options will vest over 3 years in twelve equal quarterly instalments starting on the vesting commencement date. These options were subject to the approval of the shareholders of the Company, which was approved on October 4, 2021. The fair value of the options at the shareholders' approval date was $104 thousand. |
c. |
On April 21, 2021, options to purchase 345,000 ordinary shares were granted to several executive officers of the Company, with an exercise price of $3.15. The options vest over 4 years from the date of grant; 25% vest on the first anniversary of the date of grant and the remaining 75% of the option will vest in twelve equal quarterly installments following the first anniversary of the grant date. These options were subject to the approval of the shareholders of the Company, which was approved on October 4, 2021. The fair value of the options at the shareholders' approval date was $1,140 thousand.
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Entera Bio Ltd. published this content on 10 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 November 2021 13:38:06 UTC.