Exhibit 99.1
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
INTERIM CONDENSED FINANCIAL STATEMENTS
AS OF JUNE 30, 2021
UNAUDITED
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
(UNAUDITED)
TABLE OF CONTENTS
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
UNAUDITED INTERIM CONDENSED STATEMENTS OF FINANCIAL POSITION
(US dollars in thousands)
June 30, | December 31, | |||||||
2021 | 2020 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | ||||||||
Restricted cash | - | |||||||
Other accounts receivable | ||||||||
Total current assets | ||||||||
Non-Current Assets: | ||||||||
Right of use assets, net | ||||||||
Property, plant and equipment, net | ||||||||
Total non-current assets | ||||||||
Total Assets |
The accompanying notes are an integral part of the financial statements.
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
UNAUDITED INTERIM CONDENSED STATEMENTS OF FINANCIAL POSITION
(US dollars in thousands)
June 30, | December 31, | |||||||||
Note | 2021 | 2020 | ||||||||
LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||||
Current Liabilities: | ||||||||||
Trade accounts payables | ||||||||||
Other accounts payable | ||||||||||
Lease liabilities | ||||||||||
Financial Liabilities at Fair Value | 4 | |||||||||
Total current liabilities | ||||||||||
Non-Current Liabilities: | ||||||||||
Lease liabilities | ||||||||||
Financial Liabilities at Fair Value | 4 | - | ||||||||
Loan from the Israeli Innovation Authority | ||||||||||
Total non- current liabilities | ||||||||||
Deficit: | ||||||||||
Share capital and premium | 3 | |||||||||
Foreign exchange reserve | ( | ) | ( | ) | ||||||
share base compensation | ||||||||||
Accumulated deficit | ( | ) | ( | ) | ||||||
Total deficit | ( | ) | ( | ) | ||||||
Total Liabilities And Deficit |
October 13, 2021 | ||||
Joe Hayon Chief Financial Officer |
Dagi Ben-Noon Chief Executive Officer |
Date of approval of financial statements |
The accompanying notes are an integral part of the financial statements.
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
UNAUDITED INTERIM CONDENSED STATEMENTS OF COMPREHENSIVE LOSS
(US dollars in thousands)
Six months ended June 30, | Six months ended June 30, | |||||||
2021 | 2020 | |||||||
Research and development expenses | ||||||||
Sales and marketing expenses | - | |||||||
General and administrative expenses | ||||||||
Operating loss | ||||||||
Finance expense | ||||||||
Loss before tax | ||||||||
Taxes on income | ||||||||
Total net loss | ||||||||
Other comprehensive loss, net of tax: | ||||||||
Items that will not be reclassified to profit or loss: | ||||||||
Exchange losses arising on translation to presentation currency | ||||||||
Total comprehensive loss | ||||||||
Basic and diluted loss per share (*) | ( | ) | ( | ) |
(*) |
The accompanying notes are an integral part of the financial statements.
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
UNAUDITED INTERIM CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIENCY
(US dollars in thousands)
For the six months ended June 30, 2021:
Share capital | Premium | Adjustments arising from translating financial operation | Share-based payment reserve | Accumulated deficit | Total | |||||||||||||||||||
Balance at January 1, 2021: | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Changes during the period: | ||||||||||||||||||||||||
Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
Other comprehensive loss | - | ( | ) | ( | ) | |||||||||||||||||||
Total comprehensive loss | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Per value cancellation | ( | ) | ||||||||||||||||||||||
Options exercise | - | ( | ) | |||||||||||||||||||||
Share base compensation | - | |||||||||||||||||||||||
Balance at June 30, 2021 | ( | ) | ( | ) | ( | ) |
For the six months ended June 30, 2020:
Share capital | Adjustments arising from translating financial operation | Share-based payment reserve | Accumulated deficit | Total | ||||||||||||||||
Balance at January 1, 2020: | ( | ) | ( | ) | ( | ) | ||||||||||||||
Changes during the period: | ||||||||||||||||||||
Net loss | - | ( | ) | ( | ) | |||||||||||||||
Other comprehensive loss | - | ( | ) | ( | ) | |||||||||||||||
Total comprehensive loss | - | ( | ) | ( | ) | ( | ) | |||||||||||||
Share base compensation | - | |||||||||||||||||||
Balance at June 30, 2020 | ( | ) | ( | ) | ( | ) |
The accompanying notes are an integral part of the financial statements.
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
UNAUDITED INTERIM CONDENSED STATEMENTS OF CASH FLOWS
(US dollars in thousands)
Six months ended June 30, 2021 | Six months ended June 30, 2020 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | ( | ) | ( | ) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation | ||||||||
Increase in other accounts receivable | ( | ) | ( | ) | ||||
Increase in trade accounts payables | ||||||||
Increase (decrease) in other accounts payable | ( | ) | ||||||
Share based compensation | ||||||||
Change in fair value of Financial Liabilities at Fair Value | ||||||||
Financial expenses | ||||||||
Net cash used in operating activities | ( | ) | ( | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of property, plant and equipment | ( | ) | ( | ) | ||||
Payment of deposit | ( | ) | ( | ) | ||||
Net cash provided investing activities | ( | ) | ( | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Principal paid on lease liabilities | ( | ) | ( | ) | ||||
Receipt SAFE | ||||||||
Receipt convertible loan | - | |||||||
Payment of convertible loan | ( | ) | - | |||||
Loan from the Israeli Innovation Authority | ||||||||
Net cash provided financing activities | ||||||||
Net increase in cash and cash equivalents | ||||||||
Cash and cash equivalents at the beginning of the period | ||||||||
Effects of exchange rate changes on cash and cash equivalents | ( | ) | ||||||
Cash and cash equivalents at the end of the period |
APPENDIX A - AMOUNT PAID DURING THE PERIOD:
Six-months ended June 30, | ||||||||
2021 | 2020 | |||||||
Interest paid | - | |
The accompanying notes are an integral part of the financial statements.
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
(US dollars in thousands)
NOTE 1 – GENERAL:
1. | INSPIRA TECHNOLOGIES OXY B.H.N. LTD (formerly: INSENSE MEDICAL LTD) (the “Company”) was incorporated in, Israel and commenced its operations in February 27, 2018. The Company’s functional currency is the New Israeli Shekel (“NIS”). |
The Company operates in the medical technology industry and is developing a proprietary respiratory support device calles “ART system”. The ART system is a cost effective early extracorporeal respiratory support system with an intent to function as an “artificial lung” for deteriorating respiratory patients.
The ART system is designed to utilize a hemo-protective flow approach aimed to rebalance saturation levels while patients are awake and breathing, potentially minimizing the patient's need for mechanical ventilation.
The Company’s product has not yet been tested or used in humans and has not been approved by the U.S. Food and Drug Administration (FDA).
On July 16, 2021, the Company
completed its initial public offering (“IPO”) on Nasdaq Capital Market whereby he company
sold
On July 16, 2021, following the IPO, the Company issues
2. | The Company did not generate any revenue since its inception, the Company is still at the development stage of its products. The company's
operating loss for the six-months ended June 30, 2020 and 2021 were $ |
The management of the Company intends to seek additional funding through public offerings, which will be utilized to fund product development and continue operations. The Company does not have any material financial obligations as of the balance date.
This may raise substantial doubts about the company ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
3. | 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 continued to operate almost fully including carrying out the studies in compliance with all applicable Israeli rules and guidelines on COVID-19, the employees worked remotely when full lockdowns were enforced. The spread of an infectious disease, including COVID-19, may also result in the inability of the manufacturers to deliver components or finished products on a timely basis and may result in the inability of the Company’s suppliers to deliver the parts required by the manufacturers to complete manufacturing of components or finished products. 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. |
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
(US dollars in thousands)
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES:
Basis of preparation
These interim condensed financial statements have been prepared in accordance with the International Accounting Standards (the “IAS”) 34 Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB). 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 financial statements filed with the Company’s registration statement on Form F-1 (file no. 333-253920) declared effective by the U.S. Securities and Exchange Commission on July 13, 2021. The Company has applied the same accounting policies and methods of computation in its interim financial statements as in its 2020 annual 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 IAS 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.
NOTE 3 – SIGNIFICANT EVENTS AND TRANSACTIONS IN THE PERIOD:
General:
1. | On March 18, 2021, |
2. | On June 1, 2021 the Company’s shareholders approved an amendment to the structure of the Company’s share capital (both
authorized and issued) by cancelling the par value of the Company’s shares such that each Ordinary Share with par value of NIS |
3. | On June 1 ,2021 the Company’s shareholders approved an increase in the authorized share capital of the company to |
Following the share splits and the cancellation of the par value, all Ordinary Shares, options, financial liabilities at fair value, warrants, exercise prices and per share data have been adjusted retroactively for all periods presented in these financial statements.
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
(US dollars in thousands)
NOTE 4 – FINACIAL LIABILITIES VALUE:
June 30, 2021 | December 31, 2020 | |||||||
Warrants | ( | ) | ( | ) | ||||
SAFE | ( | ) | ( | ) | ||||
Convertible loan | ( | ) | - | |||||
Total | ( | ) | ( | ) |
1. | Simple Agreements for Future Equity, or SAFEs |
In December 2020 through March 2021, the Company entered into certain equity investment agreements, which known as simple agreements
for future equity, (“SAFEs”), for aggregate proceeds of
Out of the amounts the company received under
the SAFEs,
In addition, if the subscription amounts under the SAFEs is converted
to Ordinary Shares in connection with an initial public offering, then the company will issue the SAFE investors warrants to purchase
the Company’s Ordinary Shares with an exercise price equal to the
The remaining
The SAFE was designated to be measured at fair value through profit or loss.
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
(US dollars in thousands)
NOTE 4 – FINACIAL LIABILITIES VALUE (Cont.):
2. | Convertible loan |
In January through March 2021, the Company entered
into convertible loan agreements for the aggregate amount of
In May 2021, the Company offered an extension with a maturity date
of
The convertible loan was agreements were designated to be measured at fair value through profit or loss.
NOTE 5 – SHARE BASED COMPENSATION:
On December, 2019, the Company established a share option plan (the
“Plan”). Under the Plan, as of June 31, 2021 a total of
On February 21, 2021, the Company’s board of directors granted
a total of
On March 16, 2021, the Company’s board of directors granted a
total of
The fair value of all granted options was estimated by using the Black Scholes model, which was aimed to model the value of the Company’s assets over time. The simulation approach was designed to take into account the terms and conditions of the share options, as well as the capital structure of the Company and the volatility of its assets, on the date of grant based on certain assumptions. Those conditions are, among others:
(i) | The expected volatility is 50%; |
(ii) | The dividend rate 0%; and |
The valuation was completed with the assistance of an external valuator based on management’s assumptions.
During the six months ended June 30, 2021, the Company recorded share-based
payment expenses in the amount of
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
(US dollars in thousands)
NOTE 5 – SHARE BASED COMPENSATION (Cont.):
The options to services providers and advisers outstanding as of June 30, 2021, as follows:
Six months ended June 30, 2021 | ||||||||
Number of options | Weighted average Exercise price NIS | |||||||
Outstanding at beginning of year | ||||||||
Granted | ||||||||
Exercised | ( | ) | ||||||
Forfeited | ( | ) | ||||||
Outstanding as of June 30, 2021 | ||||||||
Exercisable options |
The options to employees and directors outstanding as of June 30, 2021, as follows:
Six months ended June 30, 2021 | ||||||||
Number of options | Weighted average Exercise price NIS | |||||||
Outstanding at beginning of year | ||||||||
Granted | ||||||||
Exercised | ( | ) | ||||||
Forfeited | ( | ) | ||||||
Outstanding as of June 30, 2021 | ||||||||
Exercisable options |
NOTE 6 – FAIR VALUE MEASUREMENT:
Fair value hierarchy
The following tables detail the Company’s assets and liabilities, measured or disclosed at fair value, using a three level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
At June 30, 2021: | Level 3 | |||
Warrants | ( | ) | ||
SAFE | ( | ) | ||
Convertible loan | ( | ) | ||
Total | ( | ) |
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
(US dollars in thousands)
NOTE 6 – FAIR VALUE MEASUREMENT (Cont.):
At December 31, 2020: | Level 3 | |||
Warrants | ( | ) | ||
SAFE | ( | ) | ||
Total | ( | ) |
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 SAFE and Convertible loan in the table above, was estimated under the assumption of converting to shares according to the fair value of the shares.
The key inputs that were used in the SAFE, Convertible loan and warrants
valuation were: risk-free interest rate between
As of December 31, 2020, the fair value measurement of the SAFE and the warrant’s securities in the table above, was estimated using the Black Scholes model, 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 SAFE were: the risk-free interest rate-
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair values due to their short-term nature.
Movements in level 3 assets and liabilities during the current and previous financial year are set out below:
Warrants | SAFE | Convertible loan | ||||||||||
Balance at December,31 2020 | ||||||||||||
Gains (losses) recognized in profit or loss | ||||||||||||
Gains (losses) recognized in other comprehensive loss | ( | ) | ||||||||||
Additions | ||||||||||||
Balance at June,30 2021 |
NOTE 7 – SUBSEQUENT EVENTS:
On August 12, 2021, the Company’s board
of directors resolved to increase the pool of options available under the Plan to
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