EX-99 3 exhibit_2.htm CONSOLIDATED INTERIM FINANCIAL STATEMENTS AS OF JUNE 30, 2019.
Exhibit 2

BioLineRx Ltd.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
AS OF JUNE 30, 2019
 

BioLineRx Ltd.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
AS OF JUNE 30, 2019

TABLE OF CONTENTS

   
Page
 
F-1
 
F-2
 
F-3
 
F-4 - F-5
 
F-6 - F-9


BioLineRx Ltd.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(UNAUDITED)

   
December 31,
    
June 30,
  
   
2018
    
2019
  
   
in USD thousands
  
Assets
            
CURRENT ASSETS
            
Cash and cash equivalents
    
3,404
      
4,972
  
Short-term bank deposits
    
26,747
      
30,256
  
Prepaid expenses
    
488
      
451
  
Other receivables
    
1,339
      
528
  
Total current assets
    
31,978
      
36,207
  
                 
NON-CURRENT ASSETS
                
Long-term prepaid expenses
    
56
      
60
  
Property and equipment, net
    
2,227
      
2,047
  
Right-of-use assets
    
-
      
1,716
  
Intangible assets, net
    
21,972
      
21,928
  
Total non-current assets
    
24,255
      
25,751
  
Total assets
    
56,233
      
61,958
  
                 
Liabilities and equity
                
CURRENT LIABILITIES
                
Current maturities of long-term loans
    
895
      
2,395
  
Accounts payable and accruals:
                
Trade
    
4,493
      
4,565
  
Other
    
1,363
      
927
  
Lease liabilities
    
-
      
672
  
Total current liabilities
    
6,751
      
8,559
  
NON-CURRENT LIABILITIES
                
Warrants
    
323
      
3,938
  
Long-term loans, net of current maturities
    
7,838
      
6,583
  
Lease liabilities
    
-
      
1,096
  
Total non-current liabilities
    
8,161
      
11,617
  
COMMITMENTS AND CONTINGENT LIABILITIES
                
Total liabilities
    
14,912
      
20,176
  
                 
EQUITY
                
Ordinary shares
    
3,110
      
4,001
  
Share premium
    
250,192
      
261,522
  
Capital reserve
    
11,955
      
11,835
  
Other comprehensive loss
    
(1,416
)
    
(1,416
)
Accumulated deficit
    
(222,520
)
    
(234,160
)
Total equity
    
41,321
      
41,782
  
Total liabilities and equity
    
56,233
      
61,958
  

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
(UNAUDITED)

   
Three months ended June 30,
    
Six months ended June 30,
  
   
2018
    
2019
    
2018
    
2019
  
   
in USD thousands
    
in USD thousands
  
RESEARCH AND DEVELOPMENT EXPENSES
    
(4,484
)
    
(5,302
)
    
(9,554
)
    
(9,694
)
SALES AND MARKETING EXPENSES
    
(360
)
    
(226
)
    
(844
)
    
(482
)
GENERAL AND ADMINISTRATIVE EXPENSES
    
(883
)
    
(949
)
    
(1,958
)
    
(1,879
)
OPERATING LOSS
    
(5,727
)
    
(6,477
)
    
(12,356
)
    
(12,055
)
NON-OPERATING INCOME, NET
    
663
      
1,261
      
1,125
      
921
  
FINANCIAL INCOME
    
287
      
171
      
462
      
381
  
FINANCIAL EXPENSES
    
(11
)
    
(440
)
    
(217
)
    
(887
)
                                 
NET LOSS AND COMPREHENSIVE LOSS
    
(4,788
)
    
(5,485
)
    
(10,986
)
    
(11,640
)

   
in USD
    
in USD
  
LOSS PER ORDINARY SHARE - BASIC AND DILUTED
    
(0.05
)
    
(0.04
)
    
(0.10
)
    
(0.08
)
                                 
WEIGHTED AVERAGE NUMBER OF SHARES USED IN CALCULATION OF LOSS PER ORDINARY SHARE
    
106,630,704
      
145,461,598
      
106,524,332
      
139,270,178
  

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 2
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 JANUARY 1, 2018
    
2,836
      
240,682
      
10,337
      
(1,416
)
    
(199,558
)
    
52,881
  
CHANGES FOR SIX MONTHS ENDED JUNE 30, 2018:
                                                
Issuance of share capital, net
    
83
      
2,764
      
-
      
-
      
-
      
2,847
  
Employee stock options exercised
    
1
      
38
      
(39
)
    
-
      
-
      
-
  
Employee stock options forfeited and expired
    
-
      
399
      
(399
)
    
-
      
-
      
-
  
Share-based compensation
    
-
      
-
      
1,444
      
-
      
-
      
1,444
  
Comprehensive loss for the period
    
-
      
-
      
-
      
-
      
(10,986
)
    
(10,986
)
BALANCE AT JUNE 30, 2018
    
2,920
      
243,883
      
11,343
      
(1,416
)
    
(210,544
)
    
46,186
  

   
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
  

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 3
 
BioLineRx Ltd.
CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENTS
 (UNAUDITED)

   
Six months ended June 30,
  
   
2018
    
2019
  
   
in USD thousands
  
             
CASH FLOWS - OPERATING ACTIVITIES
            
Comprehensive loss for the period
    
(10,986
)
    
(11,640
)
Adjustments required to reflect net cash used in operating activities (see appendix below)
    
(2,054
)
    
573
  
Net cash used in operating activities
    
(13,040
)
    
(11,067
)
                 
CASH FLOWS - INVESTING ACTIVITIES
                
Investments in short-term deposits
    
(15,000
)
    
(27,510
)
Maturities of short-term deposits
    
24,385
      
24,441
  
Proceeds from realization of long-term investment
    
1,500
      
-
  
Purchase of property and equipment
    
(76
)
    
(53
)
Purchase of intangible assets
    
(37
)
    
-
  
Net cash provided by (used in) investing activities
    
10,772
      
(3,122
)
                 
CASH FLOWS - FINANCING ACTIVITIES
                
Issuances of share capital and warrants, net of issuance cost
    
2,847
      
15,879
  
Employee stock options exercised
    
-
      
1
  
Repayments of loans
    
(47
)
    
(47
)
Repayments of lease liabilities
    
-
      
(110
)
Net cash provided by financing activities
    
2,800
      
15,723
  
                 
INCREASE IN CASH AND CASH EQUIVALENTS
    
532
      
1,534
  
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD
    
5,110
      
3,404
  
EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS
    
147
      
34
  
CASH AND CASH EQUIVALENTS - END OF PERIOD
    
5,789
      
4,972
  

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 4
 
BioLineRx Ltd.
APPENDIX TO CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENTS
 (UNAUDITED)
 
   
Six months ended June 30,
  
   
2018
    
2019
  
   
in USD thousands
  
             
Adjustments required to reflect net cash used in operating activities:
            
Income and expenses not involving cash flows:
            
Depreciation and amortization
    
288
      
439
  
Long-term prepaid expenses
    
(2
)
    
(4
)
Exchange differences on cash and cash equivalents
    
(147
)
    
(34
)
Gain on adjustment of warrants to fair value
    
(625
)
    
(1,354
)
Gain on realization of long-term investment
    
(500
)
    
-
  
Share-based compensation
    
1,444
      
773
  
Warrant issuance costs
    
-
      
417
  
Interest and exchange rate differences on short-term deposits
    
(351
)
    
(440
)
Interest on loans
    
(1
)
    
292
  
     
106
      
89
  
                 
Changes in operating asset and liability items:
                
Decrease )increase(in prepaid expenses and other receivables
    
(776
)
    
848
  
  Decrease in accounts payable and accruals
    
(1,384
)
    
(364
)
     
(2,160
)
    
484
  
     
(2,054
)
    
573
  
                 
Supplemental information on interest received in cash
    
377
      
442
  
                 
Supplemental information on interest paid in cash
    
167
      
477
  
                 
Supplemental information on non-cash transaction -
Initial establishment of right-of-use assets against lease liabilities
    
-
      
1,878
  

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 5
BioLineRx Ltd.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)

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 the Company has generated significant revenues from a number of out-licensing transactions in the past, the Company cannot determine with reasonable certainty when and if it will have sustainable profits.


 b.
Approval of financial statements

The condensed consolidated interim financial statements of the Company as of June 30, 2019, and for the three and six months then ended, were approved by the Board of Directors on August 6, 2019, 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, 2019 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, 2018 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, 2019 are not necessarily indicative of the results that may be expected for the entire fiscal year or for any other interim period.

F - 6
BioLineRx Ltd.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)

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, 2018 and for the year then ended, except for the adoption of IFRS No. 16, “Leases”.


 a.
Adjustments recognized on adoption of IFRS 16

The Company has adopted IFRS 16 retrospectively from January 1, 2019 but has not restated comparatives for the 2018 reporting period, as permitted under the specific transitional provisions in the standard. On adoption of IFRS 16, the Company recognized lease liabilities in relation to leases which had previously been classified as “operating leases” under the principles of IAS 17, “Leases.” These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as of January 1, 2019. The remeasurements to the lease liabilities were recognized as adjustments to the related right-of-use assets immediately after the date of initial application. The associated right-of-use assets for property leases were measured on a retrospective basis as if the new rules had always been applied. Other right-of use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognized in the balance sheet as of December 31, 2018. The lessee’s weighted average incremental borrowing rate applied to the lease liabilities on January 1, 2019 was 15.1%.

   
January 1,
    
June 30,
  
   
2019
    
2019
  
Composition of right-of-use assets by type:
            
Property
    
1,552
      
1,485
  
Motor vehicles
    
326
      
231
  
Total right-of-use asset
    
1,878
      
1,716
  

Composition of lease liabilities recognized as of January 1, 2019:
        
Current lease liabilities
    
713
    
Non-current lease liabilities
    
1,165
    
     
1,878
    

F - 7
 
BioLineRx Ltd.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (cont.)
 

 b.
Practical expedients applied on adoption of IFRS 16

In applying IFRS 16 for the first time, the Company has used the following practical expedients permitted by the standard:


 •
Use of a single discount rate to a portfolio of leases with reasonably similar characteristics;

•
Reliance on previous assessments on whether leases are onerous;

•
Accounting for operating leases with a remaining lease term of less than 12 months as of January 1, 2019, as short-term leases;

•
Exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application;

•
Use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.

The Company has also elected not to reassess whether a contract is, or contains, a lease at the date of initial application. Instead, for contracts entered into before the transition date, the Company relied on its assessment made applying IAS 17 and IFRIC 4, “Determining whether an Arrangement contains a Lease.”


 c.
Other information relating to IFRS 16

As of June 30, 2019, the weighted average remaining lease term on the Company’s existing leases was 11.0 years for its property lease and 1.2 years for motor vehicle leases. Lease expense (substantially all of which is non-cash) for the six months ended June 30, 2019 amounted to $0.2 million. Cash paid for amounts included in the measurement of the operating lease liabilities for the six months ended June 30, 2019 was $0.1 million.

NOTE 4 – ISSUANCES OF SHARE CAPITAL AND WARRANTS


 a.
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 may, 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 will pay BTIG a commission of 3.0% of the gross proceeds from the sale of ADSs under the facility. From the effective date of the agreement through June 30, 2019, 9,655,387 ADSs were sold under the program for total net proceeds of approximately $7.0 million, leaving an available balance under the facility of approximately $23.0 million as of June 30, 2019.

F - 8
 
BioLineRx Ltd.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 4 – ISSUANCES OF SHARE CAPITAL AND WARRANTS (cont.)


 b.
Underwritten public offering

In February 2019, the Company completed an underwritten public offering of 28,000,000 of its ADSs and warrants to purchase 28,000,000 ADSs, at a public offering price of $0.55 per ADS and accompanying warrant. The warrants are exercisable immediately, expire five years from the date of issuance and have an exercise price of $0.75 per ADS. The offering raised a total of $15.4 million, with net proceeds of $14.1 million, after deducting fees and expenses. The amount of the offering consideration initially allocated to the warrants was $5.0 million. Total issuance costs initially allocated to the warrants were $0.4 million.

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 and 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 2.50% and an average standard deviation of 62.8%. The fair value of the warrants as of June 30, 2019 was based on the then current price of an ADS, a risk-free interest rate of 1.76% and an average standard deviation of 65.2%. The change in fair value from the date of issuance through June 30, 2019 amounted to $1.3 million.
 
NOTE 5 – SHAREHOLDERS’ EQUITY
 
As of December 31, 2018 and June 30, 2019, share capital is composed of ordinary shares, as follows:

   
Number of ordinary shares
  
   
December 31,
    
June 30,
  
   
2018
    
2019
  
             
Authorized share capital
    
250,000,000
      
250,000,000
  
                 
Issued and paid-up share capital
    
114,933,144
      
147,183,744
  

   
In USD and NIS
  
   
December 31,
    
June 30,
  
   
2018
    
2019
  
             
Authorized share capital (in NIS)
    
25,000,000
      
25,000,000
  
                 
Issued and paid-up share capital (in NIS)
    
11,493,314
      
14,718,374
  
                 
Issued and paid-up share capital (in USD)
    
3,109,746
      
4,000,676
  

NOTE 6 – EVENT SUBSEQUENT TO THE BALANCE SHEET DATE

On July 15, 2019, the Company implemented a change in the ratio of its ADSs to ordinary shares, from one ADS representing one ordinary share to a new ratio of one ADS representing 15 ordinary shares.

F - 9