EX-99.2 3 f6k082218bex99-2_biondvax.htm BIONDVAX PHARMACEUTICALS LTD. UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2018

Exhibit 99.2

BIONDVAX PHARMACEUTICALS LTD.

INTERIM FINANCIAL STATEMENTS

AS OF JUNE 30, 2018

NIS IN THOUSANDS

UNAUDITED

INDEX

	Page

Balance Sheets	2

Statements of Comprehensive Loss	3

Statements of Changes in Shareholders’ Equity	4 – 6

Statements of Cash Flows	7 – 8

Notes to Financial Statements	9 – 11

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BIONDVAX PHARMACEUTICALS LTD.

BALANCE SHEETS

In thousands, except share and per share data

										Convenience translation (Note 2)
	December 31,			June 30,						June 30,
	2017			2017			2018			2018
	Audited			Unaudited						Unaudited
	N I S									U.S. dollars
CURRENT ASSETS:
Cash and cash equivalents		71,382			31,334			37,128			10,172
Marketable securities		-			4,067						-
Short-term deposits		-			1,200			-			-
Other receivables		3,923			2,812			4,067			1,114

		75,305			39,413			41,195			11,286
LONG-TERM ASSETS:
Property, plant and equipment		5,510			1,233			18,793			5,149
Other long term assets		880			505			880			241

		6,390			1,738			19,673			5,390

		81,695			41,151			60,868			16,676
CURRENT LIABILITIES:
Trade payables		6,223			1,188			1,323			363
Other payables		660			664			780			214

		6,883			1,852			2,103			577
LONG-TERM LIABILITIES:
Liability in respect of government grants		10,300			-			12,790			3,504
Loan from others		-			-			20,710			5,674
Warrants		8,177			18,231			8,475			2,322
Severance pay liability, net		83			79			79			22

		18,560			18,310			42,054			11,522
SHAREHOLDERS’ EQUITY:
Ordinary shares of NIS 0.0000001 par value:
Authorized: 391,000,000 shares as of June 30, 2018, 2017 (unaudited) and December 31, 2017; Issued and Outstanding: 261,419,599, 179,595,199 and 261,419,599 shares respectively		*) -			*) -			*) -			*) -
Share premium		179,669			132,824			179,821			49,265
Options		-			533			-			-
Other comprehensive income		-			2			-			-
Accumulated deficit		(123,417	)		(112,370	)		(163,110	)		(44,688	)

		56,252			20,989			16,711			4,577

		81,695			41,151			60,868			16,676

*)	Represents an amount lower than NIS 1.

The accompanying notes are an integral part of the interim financial statements


Date of approval of the	Avner Rotman	Ron Babecoff	Uri Ben-Or
financial statements	Chairman of the Board	Chief Executive officer	Chief Financial officer

BIONDVAX PHARMACEUTICALS LTD.

STATEMENTS OF COMPREHENSIVE LOSS

In thousands, except share and per share data

																Convenience translation (Note 2)
	Year ended December 31,			Three months ended June 30,						Six months ended June 30,						Six months ended June 30,
	2017			2017			2018			2017			2018			2018
				Unaudited												Unaudited
	N I S															U.S. dollars
	(In thousands, except per share data)
Operating expenses:
Research and development, net of participations		18,777			2,022			29,205			3,896			40,950			11,219
Marketing, general and administrative		4879			569			1,445			1,663			2,329			638

Total operating expenses		23,656			2,591			30,650			5,559			43,279			11,857

Operating loss		(23,656	)		(2,591	)		(30,650	)		(5,559	)		(43,279	)		(11,857	)

Financial income		18			5			6,386			13			6,386			1,255
Financial expense		(10,913	)		(9,086	)		(1,227	)		(17,958	)		(2,800	)		(273	)
		0
Total finance (expense) income, net		(10,895	)		(9,081	)		5,159			(17,945	)		3,586			982

Net loss		(34,551	)		(11,672	)		(25,491	)		(23,504	)		(39,693	)		(10,875	)

Other comprehensive loss:
Items to be reclassified to profit or loss in subsequent periods:
Loss from available-for-sale financial assets		(6	)		(4	)		-			(4	)		-			-

Total comprehensive loss		(34,557	)		(11,676	)		(25,491	)		(23,508	)		(39,693	)		(10,875	)

Basic and diluted net loss per share (NIS)		(0.17	)		(0.07	)		(0.10	)		(0.14	)		(0.15	)		(0.04	)

Weighted average number of shares outstanding used to compute basic and diluted loss per share		201,030,768			175,809,413			261,419,599			169,182,101			261,419,599			261,419,599

The accompanying notes are an integral part of the interim financial statements.

BIONDVAX PHARMACEUTICALS LTD.

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

	Share capital		Share premium		Accumulated deficit			Total Equity
	Unaudited
	NIS in thousands

Balance as of January 1, 2018		*) -		179,669		(123,417	)		56,252

Total comprehensive loss		-		-		(39,693	)		(39,693	)

Share-based compensation		-		152		-			152

Balance as of June 30, 2018		*) -		179,821		(163,110	)		16,711

Balance as of June 30, 2018 (convenience translation into U.S. dollars (see Note 2)		*) -		49,265		(44,688	)		4,577

	Share capital		Share premium		Options			Other Comprehensive income			Accumulated deficit			Total Equity
	Unaudited
	NIS in thousands

Balance as of January 1, 2017		*) -		113,041		1,435			6			(88,866	)		25,616

Loss		-		-		-			-			(23,504	)		(23,504	)
Other comprehensive loss		-		-		-			(4	)		-			(4	)
Total comprehensive loss		-		-		-			(4	)		(23,504	)		(23,508	)

Issuance of ordinary shares		*) -		15,387		-			-			-			15,387
Exercise of Options		-		3,069		-			-			-			3,069
Expiration of Options series 4		-		902		(902	)		-			-			-
Share-based compensation		-		425		-			-			-			425

Balance as of June 30, 2017 (unaudited)		*) -		132,824		533			2			(112,370	)		20,989

*)	Represents an amount lower than NIS 1.

The accompanying notes are an integral part of the interim financial statements.

BIONDVAX PHARMACEUTICALS LTD.

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

	Share capital		Share premium		Accumulated deficit			Total Equity
	Unaudited
	NIS in thousands

Balance as of April 1, 2018		*) -		179,747		(137,619	)		42,128

Total comprehensive loss		-		-		(25,491	)		(25,491	)

Share-based compensation		-		74		-			74

Balance as of June 30, 2018		*) -		179,821		(163,110	)		16,711

Balance as of June 30, 2018 (convenience translation into U.S. dollars (see Note 2)		*) -		49,265		(44,688	)		4,577

	Share capital		Share premium		Options		Other Comprehensive income			Accumulated deficit			Total Equity
	Unaudited
	NIS in thousands

Balance as of April 1, 2017		*) -		129,550		533		6			(100,698	)		29,391

Loss		-		-		-		-			(11,672	)		(11,672	)
Other comprehensive loss		-		-		-		(4	)		-			(4	)
Total comprehensive loss		-		-		-		(4	)		(11,672	)		(11,676	)

Exercise of Options		-		3,069		-		-			-			3,069
Share-based compensation		-		205		-		-			-			205

Balance as of June 30, 2017		*) -		132,824		533		2			(112,370	)		20,989

*)	Represents an amount lower than NIS 1.

The accompanying notes are an integral part of the interim financial statements.

BIONDVAX PHARMACEUTICALS LTD.

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

	Share capital		Share premium		Options			Unrealized gain (loss) on available-for-sale financial assets			Accumulated deficit			Total Equity
	NIS in thousands

Balance as of January 1, 2017		*) -		113,041		1,435			6			(88,866	)		25,616

Loss		-		-		-			-			(34,551	)		(34,551	)
Other comprehensive loss		-		-		-			(6	)		-			(6	)
Total comprehensive loss		-		-		-			(6	)		(34,551	)		(34,557	)

Issuance of ordinary shares, net of issuance costs		*) -		55,692		-			-			-			55,692
Exercise of employees options		*) -		18		-			-			-			18
Exercise of options		*) -		8,964		-			-			-			8,964
Expiration of options series 4		-		902		(902	)		-			-			-
Expiration of options series 5		-		533		(533	)		-			-			-
Share-based compensation		-		519		-			-			-			519

Balance as of December 31, 2017		*) -		179,669		-			-			(123,417	)		56,252

*)	Represents an amount lower than NIS 1.

The accompanying notes are an integral part of the interim financial statements.

BIONDVAX PHARMACEUTICALS LTD.

STATEMENTS OF CASH FLOWS

																Convenience translation (Note 2)
	Year ended December 31,			Three months ended June 30,						Six months ended June 30,						Six months ended June 30,
	2017			2017			2018			2017			2018			2018
				Unaudited												Unaudited
	N I S															U.S. dollars
	(In thousands)

Cash flows from operating activities:
Net loss		(34,551	)		(11,672	)		(25,491	)		(23,504	)		(39,693	)		(10,875	)

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to profit and loss items:
Depreciation and amortization		440			106			266			255			414			114
Net financial expenses (income)		10,895			9,080			(6,699	)		17,944			(6,077	)		(1,665	)
Increase in liability with respect to government grants		10,300			-			1,538			-			2,490			682
Share-based compensation		519			205			74			425			152			41
Change in employee benefit liabilities, net		7			3			1			3			(4	)		(1	)

		22,161			9,394			(4,820	)		18,627			(3,025	)		(829	)
Changes in asset and liability items:
Increase in other receivables		(3,108	)		(1,332	)		(1,092	)		(1,014	)		(144	)		(39	)
Increase (decrease) in trade payables		5,537			429			(7,203	)		502			(4,900	)		(1,342	)
Increase (decrease) in other payables		(29	)		138			12			(25	)		120			33

		2,400			(765	)		(8,283	)		(537	)		(4,924	)		(1,349	)

Cash paid and received during the year for:
Interest paid		(73	)		(7	)		(7	)		(15	)		(12	)		(3	)
Interest received		13			1			26			9			26			7

		(60	)		(6	)		19			(6	)		14			4

Net cash flows used in operating activities		(10,050	)		(3,049	)		(38,575	)		(5,420	)		(47,628	)		(13,049	)

The accompanying notes are an integral part of the interim financial statements.

BIONDVAX PHARMACEUTICALS LTD.

STATEMENTS OF CASH FLOWS

																Convenience translation (Note 2)
	Year ended December 31,			Three months ended June 30,						Six months ended June 30,						Six months ended June 30,
	2017			2017			2018			2017			2018			2018
				Unaudited												Unaudited
	N I S															U.S. dollars
	(In thousands)

Cash Flows from Investing Activities:

Increase in short-term deposits		7,602			5,551			-			6,402			-			-
Purchase of property and equipment		(4,508	)		(42	)		(6,522	)		(45	)		(13,697	)		(3,753	)
Proceeds from sale of marketable securities		4,067			-			-			-			-			-
Increase in other long term assets		(402	)		(27	)		-			(27	)		-			-

Net cash provided by (used in) investing activities		6,759			5,482			(6,522	)		6,330			(13,697	)		(3,753	)

Cash Flows from Financing Activities:

Proceeds from issuance of shares and options, net of issuance costs		55,692			4,482			-			15,387			-			-
Loan from others								25,272			-			25,272			6,924
Proceeds from exercise of options to employees		18			-			-			-			-			-
Proceeds from exercise of options		6,129			1,312						1,312			-			-

Net cash provided by financing activities		61,839			5,794			25,272			16,699			25,272			6,924

Exchange differences on balances of cash and cash equivalents		(2,871	)		(913	)		1,277			(1,980	)		1,799			493
Increase (decrease) in cash and cash equivalents		55,677			7,314			(18,548	)		15,629			(34,254	)		(9,385	)

Balance of cash and cash equivalents at the beginning of the period		15,705			24,020			55,676			15,705			71,382			19,557

Balance of cash and cash equivalents at the end of the period		71,382			31,334			37,128			31,334			37,128			10,172

The accompanying notes are an integral part of the interim financial statements.

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands (except share and per share data)

NOTE 1:

GENERAL

BiondVax Pharmaceuticals Ltd. (“the Company”) is focused on developing and ultimately, commercializing immunomodulation therapies for infectious diseases. The Company was incorporated on July 21, 2003 and started its activity on March 31, 2005.

On June 7, 2007, the Company issued ordinary shares and options on the TASE.

On March 28, 2017, the Company received an approval from the Investment Center of the Ministry of Economy and Industry of the State of Israel, for a grant representing 20% of NIS 20,000 budget to be utilized towards the construction of a factory for the production of Phase 3 and commercial batches of the Company is product (“the Grant”). The receipt of the Grant is subject to certain terms and conditions, including those outlined under the Israeli Encouragement of Capital Investment Law,1959. The terms and conditions include, inter alia, the following: (a) at least 24% of the investments in the planned manufacturing facility’s fixed assets will be financed by additional share capital; (b) the Company will maintain its intellectual property and manufacturing facility in Israel for a period of at least 10 years.

On July 20, 2017, the Compnay announced positive results for Phase 2b BVX-007 clinicaltrial, a clinical trial conducted with the collaboration of the European UNISEC consortium to work on promising concepts for a universal influenza vaccine.

On August 30, 2017, the Company announced that its Board of Directors has decided to voluntarily delist from the Tel Aviv Stock Exchange (TASE), while remaining listed on NASDAQ. The Company announced that the delisting process of BiondVax’s shares from trading on the TASE will take place by the end of 2017. An announcement regarding the delisting procedure and timeline will follow. In addition, during the interim period, BiondVax’s shares will continue to be traded on the TASE. The Company also announced that the Board of Directors has also decided to form a committee to identify a new Chairman of the Board with relevant global experience, to guide the Company through the anticipated upcoming international Phase 3 trials and global commercialization. Professor Avner Rotman will continue to serve as Chairman until a suitable replacement is identified.

On November 20, 2017, the Company announced the signing of a clinical trial agreement with the National Institute of Allergy and Infection Diseases of the U.S. National Institutes of Health for a Phase 2 clinical trial in the U.S. using BiondVax’s product candidate, M-001.

On January 22, 2018, the Company signed a letter of intent, or LOI, with a European contract research organization, for the purpose of conducting a phase 3 clinical trial in Europe, planned by the Company to begin prior to the 2018/19 flu season.

Under the LOI, the parties are to enter into a master service agreement and work order related to the performance of a phase 3 trial as soon as possible in order to assess the safety and clinical efficacy of BiondVax’s product candidate M-001, a universal influenza vaccine. The LOI includes an upfront fee payable by the Company of €200,000 for start-up activities, as detailed in the LOI. The LOI continues in effect until the earlier of: (1) the end of the one month period following the execution of the LOI or (2) the execution of the master service agreement, unless extended.

On June 18, 2018, the first trach of $7 million received by the Company according to the financing agreement signed in June 2017.

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands (except share and per share data)

NOTE 1:

GENERAL (Cont.)

On March 13, 2018, the Company announced the appointment of a contract research organization (CRO) to conduct the first pivotal phase 3 clinical trial of M-001, BiondVax’s universal flu vaccine candidate.

On March 15, 2018, the Company and the CRO executed a master service agreement and work order. According to the master service agreement, the Company undertakes to pay remuneration as well as to reimburse the CRO for costs incurred as a result of the master service agreement and work orders. The master service agreement shall be in effect as of March 8, 2018 for a period of five years or later, if a work order remains in effect, and until such work order’s completion. The first work order which governs the conduct of the Company’s clinical trial in Europe is scheduled for a total period of 32.5 months. The Company has a right to terminate the master service agreement or the work order by giving a 45 days’ notice or in the event of a material breach.

In the six months ended June 30, 2018, the Company incurred a loss of NIS 39,693 ($ 10,875) and negative cash flows from operating activities of NIS 47,630 ($ 13,049) and it has an accumulated deficit of NIS 163,110 ($ 44,688) as of that date.

To date the Company has not generated any revenues yet and will need additional funds to finance its Phase 3 clinical trials in the future.

NOTE 2:-

CONVENIENCE TRANSLATION INTO U.S. DOLLARS

The financial statements as of June 30, 2018 and for the six months then ended have been translated into dollars using the representative exchange rate as of that date ($ 1 = NIS 3.65). The translation was made solely for the convenience of the reader. The amounts presented in these financial statements should not be construed to represent amounts receivable or payable in dollars or convertible into dollars, unless otherwise indicated in these statements.

BIONDVAX PHARMACEUTICALS LTD.

NOTES TO FINANCIAL STATEMENTS

In thousands (except share and per share data)

NOTE 3:

SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation of the interim financial statements

The interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for the preparation of financial statements for interim periods, as prescribed in IAS 34, “Interim Financial Reporting”, and in accordance with the disclosure requirements of Chapter D of the Securities Regulations (Periodic and Immediate Reports), 1970.

The significant accounting policies and methods of computation adopted in the preparation of the interim financial statements are consistent with those followed in the preparation of the Company’s annual financial statements.

NOTE 4:

SUBSEQUENT EVENT

On August 13, 2018 the second trach of $7 million received by the Company according to the financing agreement signed in June 2017 ( see also Note 1g ).

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