Exhibit 99.1
G Medical Innovations Holdings Ltd.
Unaudited Interim Condensed Consolidated Financial Statements as of June 30, 2021
Table of Contents
G Medical Innovations Holdings Ltd.
Unaudited Interim Condensed Consolidated
Statements of Financial Position
(In thousands of USD)
| June 30, | **December 31, | ||||||||||||
| Note | 2021 | 2020 | |||||||||||
| Assets | |||||||||||||
| Cash and cash equivalents | |||||||||||||
| Restricted deposit | |||||||||||||
| Inventories | |||||||||||||
| Trade receivables, net | |||||||||||||
| Other accounts receivable | |||||||||||||
| Total current assets | |||||||||||||
| Other accounts receivable | |||||||||||||
| Property, plant and equipment, net | |||||||||||||
| Total non-current assets | |||||||||||||
| Total assets | |||||||||||||
| Liabilities and Shareholder’s | |||||||||||||
| Short term loan and current portion of long-term loans | |||||||||||||
| Trade payables | * | ||||||||||||
| Loan from controlling shareholder | |||||||||||||
| Convertible debenture | 3,6 | ||||||||||||
| Derivative liabilities – warrants | 3,6 | ||||||||||||
| Short term portion of lease liability | |||||||||||||
| Financial liability | |||||||||||||
| Other accounts payable | * | ||||||||||||
| Total current liabilities | |||||||||||||
| Long term lease liability | |||||||||||||
| Long term loans | |||||||||||||
| Total non-current liabilities | |||||||||||||
| Shareholder’s Equity (Deficit) | |||||||||||||
| Ordinary shares | |||||||||||||
| Other reserve | |||||||||||||
| Translation reserve | |||||||||||||
| Additional paid in capital | |||||||||||||
| Accumulated deficit | ( | ) | ( | ) | |||||||||
| G Medical Innovations Holdings Ltd. shareholders’ equity (deficit) | ( | ) | |||||||||||
| Non-controlling interest | |||||||||||||
| Total shareholders’ equity (deficit) | ( | ) | |||||||||||
| Total Liabilities and Shareholders’ Equity (Deficit) | |||||||||||||
| (*) |
| (**) |
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
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G Medical Innovations Holdings Ltd.
Unaudited Interim Condensed Consolidated Statements
of Loss and Other Comprehensive Loss
(In thousands of USD, except per share amounts)
| For the six-month period ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Revenue: | ||||||||
| Services | ||||||||
| Products | ||||||||
| Total revenue | ||||||||
| Cost of revenue: | ||||||||
| Cost of services | ||||||||
| Cost of sales of products | ||||||||
| Total cost of revenue | ||||||||
| Gross profit (loss) | ( | ) | ||||||
| Operating expenses: | ||||||||
| Research and development expenses | ||||||||
| Selling, general and administrative expenses | ||||||||
| Expected credit loss | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Finance income | ||||||||
| Finance expenses | ||||||||
| Financial expenses, net | ||||||||
| Loss before tax | ( | ) | ( | ) | ||||
| Income tax benefit | ||||||||
| Loss for the period | ( | ) | ( | ) | ||||
| Other comprehensive income, net of tax: | ||||||||
| Items that will or may be reclassified to profit or loss: | ||||||||
| Exchange gains arising on translation of foreign operations | ||||||||
| Other comprehensive income | ||||||||
| Total comprehensive loss for the period | ( | ) | ( | ) | ||||
| Loss for the period attributed to: | ||||||||
| Non-controlling interests | ( | ) | ( | ) | ||||
| The Company’s shareholders | ( | ) | ( | ) | ||||
| ( | ) | ( | ) | |||||
| Total comprehensive loss for the period attributed to: | ||||||||
| Non-controlling interests | ( | ) | ( | ) | ||||
| The Company’s shareholders | ( | ) | ( | ) | ||||
| ( | ) | ( | ) | |||||
| Basic and diluted loss per share attributable to the Company’s shareholders in USD | *US$ | ) | *US$ | ( | ) | |||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
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G Medical Innovations Holdings Ltd.
Unaudited Interim Condensed Consolidated Statements of Changes in Equity (Deficit)
(In thousands of USD)
For the six-month period ended June 30, 2021:
| Share capital | Other reserve | Translation reserve | Additional paid in capital | Accumulated deficit | Total | Non-controlling Interest | Total Shareholders’ deficit | |||||||||||||||||||||||||
| Balance at January 1, 2021 | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Changes during the period: | ||||||||||||||||||||||||||||||||
| Issuance of ordinary shares, net | ||||||||||||||||||||||||||||||||
| Issuance of shares within share based compensation | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Conversion of financial liability to shares | ||||||||||||||||||||||||||||||||
| Comprehensive loss for the period: | ||||||||||||||||||||||||||||||||
| Loss for the period | - | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||
| Other comprehensive income | - | |||||||||||||||||||||||||||||||
| Total comprehensive loss for the period | - | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||
| Balance at June 30, 2021 | ( |
) | ||||||||||||||||||||||||||||||
For the six-month period ended June 30, 2020:
| Share capital | Other reserve | Translation reserve | Additional paid in capital | Accumulated deficit | Total | Non-controlling Interest | Total Shareholders’ deficit | |||||||||||||||||||||||||
| Balance at January 1, 2020 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Changes during the period: | ||||||||||||||||||||||||||||||||
| Issuance of ordinary shares, net | ||||||||||||||||||||||||||||||||
| Issuance of shares within share based compensation | ||||||||||||||||||||||||||||||||
| Conversion of financial liability to shares | ||||||||||||||||||||||||||||||||
| Conversion of loans from controlling shareholder into shares | ||||||||||||||||||||||||||||||||
| Comprehensive loss for the period: | ||||||||||||||||||||||||||||||||
| Loss for the period | - | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
| Other comprehensive income | - | |||||||||||||||||||||||||||||||
| Total comprehensive loss for the period | - | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance at June 30, 2020 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
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G Medical Innovations Holdings Ltd.
Unaudited Interim Condensed Consolidated
Statements of Cash Flow
(In thousands of USD)
| For the six-month period ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Cash flow from operating activities: | ||||||||
| Net loss for the period | ( | ) | ( | ) | ||||
| Adjustments: | ||||||||
| Depreciation and amortization | ||||||||
| Share based compensation | ( | ) | ||||||
| Change in fair value of derivative liabilities – warrants | ( | ) | ( | ) | ||||
| Capital loss from sale of fixed assets | ||||||||
| Accrued interest of long-term loans | ||||||||
| Changes in deferred tax | ( | ) | ||||||
| Change in fair value of convertible debenture | ||||||||
| Changes in assets and liabilities: | ||||||||
| Decrease (Increase) in trade receivable | ( | ) | ||||||
| Decrease in other accounts receivable | ||||||||
| Decrease in inventories | ||||||||
| Increase (decrease) in trade payables | ( | )* | ||||||
| Increase (decrease) in other accounts payable | * | |||||||
| Accrued interest on loan from controlling shareholder | ||||||||
| Change in restricted deposit | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flow from investing activities | ||||||||
| Purchase of property, plant and equipment | ( | ) | ||||||
| Proceeds from sale of fixed assets | ||||||||
| Deposit in restricted deposit | ||||||||
| Net cash used in / provided by investing activities | ( | ) | ||||||
| Cash flow from financing activities | ||||||||
| Issuance of ordinary shares, net | ||||||||
| Loan received from controlling shareholder | ||||||||
| Receipts of long-term loans | ||||||||
| Principal paid on lease liabilities | ( | ) | ( | ) | ||||
| Repayment of long -term loans | ( | ) | ( | ) | ||||
| Short-term bank credit | ( | ) | ||||||
| Repayment of financial liability | ( | ) | ||||||
| Receipt (repayment (convertible debenture | ( | ) | ||||||
| Receipt of derivative liabilities – warrants | ||||||||
| Net cash provided by financing activities | ||||||||
| Increase (decrease) in cash and cash equivalents | ||||||||
| Cash and cash equivalents at beginning of the period | ||||||||
| Effects of exchange rate changes on cash and cash equivalents | ||||||||
| Cash and cash equivalents at the end of the period | ||||||||
| (*) | Reclassification |
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
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G Medical Innovations Holdings Ltd.
Unaudited Interim Condensed
Consolidated Statements of Cash Flow
(In thousands of USD)
APPENDIX A – NON-CASH ACTIVITIES:
| Six month period ended | ||||||||
| June 30, 2021 | June 30, 2020 | |||||||
| Conversion of convertible debenture into shares | ||||||||
| Conversion of convertible debenture into financial liability | ||||||||
| Conversion of loans into shares | ||||||||
| Conversion of loan from controlling shareholder into shares | ||||||||
| Non-cash issuance expenses in warrants | ||||||||
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G Medical Innovations Holdings Ltd.
Notes to the Unaudited Interim Condensed
Consolidated Financial Statements
(In thousands of USD, except per share amounts)
NOTE 1 - DESCRIPTION OF BUSINESS:
Overview
G Medical Innovations Holdings Ltd. (“G Medical” and together with its subsidiaries, the “Company”) was incorporated in October 2014 under the Cayman Island law. G Medical’s registered address is P.O. Box 10008, Willow House, Cricket Square, Grand Cayman, KY1-1001, Cayman Islands.
In May 2017, the Company was admitted to the official list on the Australian Stock Exchange (“ASX”) under the symbol GMV. In October 2020, the Company voluntarily delisted itself from the Official List on the Australian Stock Exchange (“ASX”).
The Company is ushering in a new era of healthcare and wellness by utilizing its patent-pending wireless technologies, and proprietary information technology and service platforms operating by two segments (see note 7), to empower a new generation of consumers, patients and providers to improve quality of life. The Company develops the next generation of mobile technologies that will empower consumers and providers to better monitor, manage, and improve clinical and personal health outcomes. The Company offers a suite of both consumer and clinical grade products and platforms which are positioned to reduce inefficiencies in healthcare delivery, improve access, reduce costs, increase quality of care, and make healthcare more personalized and precise.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:
Basis of preparation
These interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standards (the “IAS”) 34 Interim Financial Reporting. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2020 annual consolidated financial statements. The Company has applied the same accounting policies and methods of computation in its interim consolidated financial statements as in its 2020 annual consolidated financial statements.
Impact of accounting standards to be applied in future periods
There are a number of standards and interpretations which have been issued by the International Accounting Standards Board that are effective for periods beginning subsequent to December 31, 2021 (the date on which the Company’s next annual financial statements will be prepared up to) that the Company has decided not to adopt early. The Company does not believe these standards and interpretations will have a material impact on the financial statements once adopted.
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G Medical Innovations Holdings Ltd.
Notes to the Unaudited Interim Condensed
Consolidated Financial Statements
(In thousands of USD, except per share amounts)
NOTE 3 – SIGNIFICANT EVENTS AND TRANSACTIONS IN THE PERIOD:
A. CLA Transaction (Alpha Capital):
On December 21, 2020, the Company entered into
a transaction (the “Initial Alpha CLA Transaction”), whereby the Company entered into a securities purchase agreement with
Alpha Capital Anstalt (“Alpha”), pursuant to which the Company obtained a convertible loan in the aggregate amount of $
The Initial Alpha CLA Transaction debenture has
a six-month term from issuance and bear interest at
In addition, Alpha was also provided a right to
purchase an additional $
In case of cash consideration, the Company will
pay Alpha $
The convertible debentures, as well as the warrants and the right to purchase additional convertible debentures were classified as a derivative financial liability (see measurement method in note 6). The fair value of the Initial CLA Transaction is based on the assumption of converting into Units (shares and warrants).
B. Change in authorized share capital and reverse stock split:
On March 17, 2021, the Company gave public notice of an extraordinary general shareholders meeting to approve a reverse stock split, such that:
All ordinary shares (issued and unissued) be consolidated
on the basis that every five ordinary shares of par value $
The reverse stock split and the amendments to the Company’s authorized share capital entered into effect on March 25, 2021 (which is the date of the above referenced extraordinary general shareholders meeting).
All shares, per share information and notes thereto have been retroactively adjusted for the reverse stock split as if such split occurred on the first day of the first period presented.
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G Medical Innovations Holdings Ltd.
Notes to the Unaudited Interim Condensed
Consolidated Financial Statements
(In thousands of USD, except per share amounts)
NOTE 3 – SIGNIFICANT EVENTS AND TRANSACTIONS IN THE PERIOD (CONT.):
C. CLA Transactions (Jonathan B. Rubini):
On April 7, 2021, the Company entered into a transaction, whereby the
Company entered into a securities purchase agreement, with Jonathan B. Rubini, pursuant to which the Company obtained a convertible loan
in an aggregate amount of $
D. World event - Coronavirus (COVID 19):
The global pandemic resulting from the disease known as COVID-19, caused by a novel strain of coronavirus, SARS-CoV-2, has caused national and global economic and financial market disruptions and may adversely impact our business. Although the Company did see an increase in revenue for the six months ended June 30, 2021 due to the to the impact of lifting of social restrictions related to COVID-19 pandemic, which led to patients returning to their doctors for medical tests. The Company cannot predict the duration or magnitude of the pandemic or the full impact that it may have on the Company’s operations and workforce, including the Company’s research and clinical trials and its ability to raise capital, which in turn could have an adverse impact on the Company’s business, financial condition and results of operation.
In April 2020, under the Coronavirus Aid, Relief,
and Economic Security Act (the “CARES Act”) in the United States, the Company’s U.S. subsidiary signed an agreement
with the U.S. Small Business Administration (“SBA”) to receive a loan according to the Paycheck Protection Program (“PPP”)
in the amount of approximately $
The PPP loan was accounted for as a deduction from wage expenses in 2020 and not as a loan liability since all conditions for waiver were met as of December 31, 2020.
On April 3, 2021, the Company received approval for full forgiveness from the SBA and the loan was fully paid from SBA to Bank of America.
E. Nasdaq IPO:
On June 29, 2021, the Company
closed its initial public offering of
NOTE 4 - RELATED PARTIES AND SHAREHOLDERS:
During the six-month period ended June 30, 2021,
the Company issued to the Company’s CEO, Dr. Yacov Geva, In addition to his ordinary salary,
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G Medical Innovations Holdings Ltd.
Notes to the Unaudited Interim Condensed
Consolidated Financial Statements
(In thousands of USD, except per share amounts)
NOTE 5 - SHAREHOLDERS’ EQUITY (DEFICIT):
The ordinary shares in the Company confer upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right to receive dividends, if and when declared.
| Number of shares | ||||||||||||||||
| June 30, 2021 | December 31, 2020 | |||||||||||||||
| Unaudited | ||||||||||||||||
| Authorized | Issued and outstanding | Authorized | Issued and outstanding | |||||||||||||
| Ordinary shares of $0.09 par value | * | * | ||||||||||||||
| Warrants** | ||||||||||||||||
| (*) | After giving effect to the reverse stock split of 18:1 on October 29, 2020 and reverse stock split of 5:1 on March 25, 2021 (see below). |
| (**) | the Warrants will be exercisable
at a price equal to $ |
On October 29, 2020, the Company shareholders approved, a one-for-18 consolidation (hereinafter referred to as the reverse stock split of 18:1) of the Company’s ordinary shares pursuant to which holders of the ordinary shares received one ordinary share for every 18 ordinary share held. In addition, on March 25, 2021, the Company’s shareholders approved, a one-for-5 consolidation (hereinafter referred to as a reverse stock split of 5:1) of the Company’s ordinary shares pursuant to which holders of the Company’s ordinary shares received one ordinary share for every 5 ordinary share held.
On June 29, 2021, the Company closed its initial
public offering of
The Company also granted an option to the underwriter
to purchase up to
The Warrant were immediately exercisable on the
date of issuance at an exercise price of $
In addition, and upon the consummation of the
Company’s initial public offering, the Company issued
The Company issued
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G Medical Innovations Holdings Ltd.
Notes to the Unaudited Interim Condensed
Consolidated Financial Statements
(In thousands of USD, except per share amounts)
NOTE 6 - FAIR VALUE MEASUREMENT:
The following table sets out the Company’s liabilities that are measured at fair value in the financial statements:
| Fair value measurements using input type | ||||||||||||||||
| June 30, 2021 (Unaudited) | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Derivative liability - warrants | ( | ) | ( | ) | ||||||||||||
| Convertible debentures | ( | ) | ( | ) | ||||||||||||
Fair value measurements using input type | ||||||||||||||||
December 31, 2020 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Derivative liability - warrants | ( | ) | ( | ) | ||||||||||||
| Convertible debenture | ( | ) | ( | ) | ||||||||||||
As of June 30, 2021, the fair value measurement of the warrant’s securities in the table above, was estimated using the Black Scholes model, based on a variety of significant unobservable inputs and thus represent a level 3 measurement within the fair value hierarchy. The measurement of the convertible debentures in the table above, was estimated as follows:
| 1. | Alpha Capital convertible debentures were estimated under the assumption of converting to shares according to the fair value of the shares. | |
| 2. | Jonathan B. Rubini convertible debenture which conversion date is October 2021 were estimated using a Monte Carlo simulation analysis, based on a variety of significant unobservable inputs a thus represent a level 3 measurement within the fair value hierarchy. |
The key inputs that were used in the convertible
debenture and warrants valuation were: risk-free interest rate –
As of December 31, 2020, the fair value measurement of the convertible debenture and the warrant’s securities in the table above, was estimated using a Monte Carlo simulation analysis, based on a variety of significant unobservable inputs a thus represent a level 3 measurement within the fair value hierarchy.
The key inputs that were used in warrants and
the convertible securities were: the risk-free interest rate-
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G Medical Innovations Holdings Ltd.
Notes to the Unaudited Interim Condensed
Consolidated Financial Statements
(In thousands of USD, except per share amounts)
NOTE 6 - FAIR VALUE MEASUREMENT (CONT.):
The following tables describes the change in the Company’s liabilities that are measured at level 3 in the financial statements:
| Derivative liability | ||||
| Derivative liability - warrants as of December 31, 2020 | ( | ) | ||
| Issuance of financial instruments | ( | ) | ||
| Change in fair value | ||||
| Derivative liability - warrants as of June 30, 2021 | ( | ) | ||
| Convertible debenture | ||||
| Convertible debenture as of December 31, 2020 | ( | ) | ||
| issuance of convertible debenture | ( | ) | ||
| Gain due to change in fair value of convertible debenture | ( | ) | ||
| Convertible debenture as of June 30, 2021 | ( | ) | ||
NOTE 7 - REVENUE:
For the six months ended June 30, 2020 and June 30, 2021 total revenues
consist primarily of monitoring patient services (approximately
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G Medical Innovations Holdings Ltd.
Notes to the Unaudited Interim Condensed
Consolidated Financial Statements
(In thousands of USD, except per share amounts)
NOTE 8 - SEGMENT REPORTING:
The Company accounts for its segment information in accordance with IFRS 8 “Segment Reporting” which establishes annual and interim reporting standards for operating segments of a Company based on the Company’s internal accounting methods. Operating segments are based upon its internal organization structure, the manner in which our operations are managed and the availability of separate financial information. The Company has two operating segments: Products segment and Patient services segment.
Products:
Development, manufacture and marketing of trans-telephonic and wireless diagnostic equipment for the medical industry and consumer market. Mobile medical device platform designed for self-testing of vital signs for the consumer market.
Patient Services:
Cardiac monitoring services of MCT, Event, Holter and Extended Holter.
Summarized financial information by segment, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision makers, follows:
For the six-months period ended June 30, 2021:
| Products: | Patient Services: | Total: | ||||||||||
| Unaudited | ||||||||||||
| Revenues from external customers | ||||||||||||
| Segment loss | ||||||||||||
| Unallocated general and administrative expenses | ||||||||||||
| Finance expenses, net | ||||||||||||
| Loss before taxes on income | ||||||||||||
For the six-months period ended June 30, 2020:
| Products: | Patient Services: | Total: | ||||||||||
| Unaudited | ||||||||||||
| Revenues from external customers | ||||||||||||
| Segment loss | ||||||||||||
| Unallocated general and administrative expenses | ||||||||||||
| Finance expenses, net | ||||||||||||
| Loss before taxes on income | ||||||||||||
NOTE 9 - SUBSEQUENT EVENTS:
Options granted to directors and management
On September 5, 2021, the Board of the Company
approved to issue Options to the directors and to the management a total of
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