As of June 30, 2023, BiondVax had cash and
cash equivalents of $7.6 million as compared to $14.2 million as of December 31, 2022. In the six months ended June 30, 2023, BiondVax
had an operating loss of $7.3 million and negative cash flows from operating activities of $5.9 million. BiondVax’s current operating
budget includes various assumptions concerning the level and timing of cash receipts and cash outlays for operating expenses and capital
expenditures, including a cost-savings plan. BiondVax is planning to finance its operations from its existing working capital resources
and additional sources of capital and financing with respect to which the Company has initiated actions. However, there is no assurance
that additional capital and/or financing will be available to BiondVax, and even if available, whether it will be on terms acceptable
to BiondVax or in amounts required. Accordingly, BiondVax’s board of directors approved the cost-savings plan mentioned above, to
be implemented if and as required, in whole or in part, at its discretion, to allow BiondVax to continue its operations and meet its cash
obligations. The cost-savings plan consists of cutting expenditures by means of further efficiencies and synergies, which include mainly
the reduction in headcount and postponing or cancelling capital expenditures that would not be required for the implementation of the
revised business plan. BiondVax’s Board of Directors believes that BiondVax’s existing financial resources, potential successful
capital raisings and its current operating plans (including the possible disposition of assets outside the ordinary course of business)
and restructuring of debt, along with the effects of the cost-savings plan, may be adequate to satisfy its expected liquidity requirements
for a period of at least twelve months from the date hereof, although there is no guarantee.
BiondVax’s unaudited financial results
will be submitted to the Securities and Exchange Commission on Form 6-K. A summary of such results is included in the tables below.
BiondVax Pharmaceuticals Ltd. (Nasdaq: BVXV) is
a biotechnology company focused on developing, manufacturing, and commercializing innovative immunotherapeutic products primarily for
the treatment of infectious and autoimmune diseases. Since its inception, the company has executed eight clinical trials including a seven-country,
12,400-participant Phase 3 trial of its vaccine candidate and has built a state-of-the-art manufacturing facility for biopharmaceutical
products. With highly experienced pharmaceutical industry leadership, BiondVax is aiming to develop a pipeline of diversified and
commercially viable products and platforms beginning with an innovative nanosized antibody (NanoAb) pipeline. www.biondvax.com.
Exhibit
99.2
BIONDVAX
PHARMACEUTICALS LTD.
FINANCIAL
STATEMENTS
AS
OF JUNE 30, 2023
U.S.
DOLLARS IN THOUSANDS
Unaudited
INDEX
-
- - - - - - - - - - - - -
BIONDVAX
PHARMACEUTICALS LTD.
CONDENSED
BALANCE SHEETS (Unaudited)
U.S.
dollars in thousands (except share and per share data)
| |
June
30, | | |
December 31, | |
| |
2023 | | |
2022 | |
| |
Unaudited | | |
Audited | |
ASSETS | |
| | | |
| | |
| |
| | | |
| | |
CURRENT
ASSETS: | |
| | | |
| | |
Cash
and cash equivalents | |
$ | 7,506 | | |
$ | 14,075 | |
Restricted
cash | |
| 126 | | |
| 140 | |
Prepaid
expenses and other receivables | |
| 138 | | |
| 155 | |
| |
| | | |
| | |
Total
current assets | |
| 7,770 | | |
| 14,370 | |
| |
| | | |
| | |
NON-CURRENT
ASSETS: | |
| | | |
| | |
Property,
plant and equipment, net | |
| 10,802 | | |
| 11,245 | |
Operating
lease right-of-use assets | |
| 1,325 | | |
| 1,452 | |
| |
| | | |
| | |
Total
non-current assets | |
| 12,127 | | |
| 12,697 | |
| |
| | | |
| | |
Total
assets | |
$ | 19,897 | | |
$ | 27,067 | |
The
accompanying notes are an integral part of the unaudited condensed financial statements.
BIONDVAX
PHARMACEUTICALS LTD.
CONDENSED
BALANCE SHEETS (Unaudited)
U.S.
dollars in thousands (except share and per share data)
| |
June
30, | | |
December 31, | |
| |
2023 | | |
2022 | |
| |
Unaudited | | |
Audited | |
LIABILITIES AND SHAREHOLDERS’
EQUITY | |
| | |
| |
| |
| | |
| |
CURRENT LIABILITIES: | |
| | |
| |
Trade
payables | |
$ | 651 | | |
$ | 716 | |
Operating
lease liabilities | |
| 394 | | |
| 382 | |
Other
payables | |
| 843 | | |
| 1,240 | |
| |
| | | |
| | |
Total
current liabilities | |
| 1,888 | | |
| 2,338 | |
| |
| | | |
| | |
NON-CURRENT
LIABILITIES: | |
| | | |
| | |
Warrants
liability | |
| 902 | | |
| 5,329 | |
Loan
from others | |
| 23,292 | | |
| 20,082 | |
Non-current
operating lease liabilities | |
| 927 | | |
| 1,078 | |
| |
| | | |
| | |
Total
non-current liabilities | |
| 25,121 | | |
| 26,489 | |
| |
| | | |
| | |
CONTINGENT
LIABILITIES AND COMMITMENTS | |
| | | |
| | |
| |
| | | |
| | |
SHAREHOLDERS’
EQUITY (DEFICIT): | |
| | | |
| | |
Ordinary shares of no par value: Authorized: 20,000,000,000 shares at June 30, 2023 and at December 31, 2022; Issued and outstanding 1,453,970,784 shares at June 30, 2023 and 989,290,784 shares at December 31, 2022 | |
| - | | |
| - | |
Additional
paid-in capital | |
| 117,740 | | |
| 116,082 | |
Accumulated
deficit | |
| (123,112 | ) | |
| (115,835 | ) |
Accumulated
other comprehensive loss | |
| (1,740 | ) | |
| (2,007 | ) |
| |
| | | |
| | |
Total
shareholders’ deficit | |
| (7,112 | ) | |
| (1,760 | ) |
| |
| | | |
| | |
Total
liabilities and shareholders’ deficit | |
$ | 19,897 | | |
$ | 27,067 | |
The
accompanying notes are an integral part of the unaudited condensed financial statements.
BIONDVAX
PHARMACEUTICALS LTD.
CONDENSED
STATEMENTS OF OPERATIONS (Unaudited)
U.S.
dollars in thousands (except share and per share data)
| |
Three
months ended
June 30, | | |
Six
months ended
June 30, | |
| |
2023 | | |
2022 | | |
2023 | | |
2022 | |
| |
Unaudited | |
| |
| | |
| | |
| | |
| |
Research
and development expenses, net | |
$ | 1,454 | | |
$ | 1,974 | | |
$ | 3,449 | | |
$ | 3,137 | |
Marketing,
general and administrative | |
| 1,141 | | |
| 1,289 | | |
| 2,332 | | |
| 2,741 | |
| |
| | | |
| | | |
| | | |
| | |
Total
operating loss | |
| 2,595 | | |
| 3,263 | | |
| 5,781 | | |
| 5,878 | |
| |
| | | |
| | | |
| | | |
| | |
Financial
loss (income), net | |
| 1,167 | | |
| (280 | ) | |
| 1,496 | | |
| (420 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net
loss | |
$ | 3,762 | | |
$ | 2,983 | | |
$ | 7,277 | | |
$ | 5,458 | |
| |
| | | |
| | | |
| | | |
| | |
Net loss per share attributable to ordinary shareholders, basic and diluted | |
| (0.003 | ) | |
| (0.004 | ) | |
| (0.006 | ) | |
| (0.01 | ) |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted net loss per share | |
| | | |
| | | |
| | | |
| | |
Weighted average number of shares used for computing basic and diluted net loss per share | |
| 1,351,850,046 | | |
| 746,898,671 | | |
| 1,322,019,241 | | |
| 745,817,220 | |
The
accompanying notes are an integral part of the unaudited condensed financial statements.
BIONDVAX
PHARMACEUTICALS LTD.
CONDENSED
STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)
U.S.
dollars in thousands (except share and per share data)
| |
Three
months ended June 30, | | |
Six
months ended June 30, | |
| |
2023 | | |
2022 | | |
2023 | | |
2022 | |
| |
Unaudited | |
| |
| | |
| | |
| | |
| |
Net
loss | |
| (3,762 | ) | |
| (2,983 | ) | |
| (7,277 | ) | |
| (5,458 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other
comprehensive (income) loss: | |
| | | |
| | | |
| | | |
| | |
Foreign
currency translation adjustments | |
| 151 | | |
| (13 | ) | |
| 267 | | |
| (47 | ) |
| |
| | | |
| | | |
| | | |
| | |
Total
comprehensive loss | |
$ | 3,611 | | |
$ | (2,996 | ) | |
$ | 7,010 | | |
$ | (5,505 | ) |
The
accompanying notes are an integral part of the unaudited condensed financial statements.
BIONDVAX PHARMACEUTICALS LTD.
CONDENSED
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)
U.S.
dollars in thousands (except share and per share data)
| |
Three months ended June 30, 2023 | |
| |
Ordinary shares | | |
Additional paid-in | | |
Accumulated
comprehensive | | |
Accumulated | | |
Total shareholders’ | |
| |
Number | | |
Amount | | |
capital | | |
loss | | |
deficit | | |
equity | |
| |
| | |
| | |
| | |
| | |
| | |
| |
Balance as of March 31, 2023 | |
| 1,313,623,184 | | |
$ | - | | |
$ | 116,431 | | |
$ | (1,891 | ) | |
$ | (119,350 | ) | |
$ | (4,810 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Exercise of warrants | |
| 140,015,200 | | |
| - | | |
| 704 | | |
| - | | |
| - | | |
| 704 | |
Vested RSU’s | |
| 332,400 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Issuance of warrants | |
| - | | |
| | | |
| 398 | | |
| | | |
| | | |
| 398 | |
Share-based compensation | |
| - | | |
| - | | |
| 207 | | |
| - | | |
| - | | |
| 207 | |
Other comprehensive income | |
| - | | |
| - | | |
| - | | |
| 151 | | |
| - | | |
| 151 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| (3,762 | ) | |
| (3,762 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance as of June 30, 2023 | |
| 1,453,970,784 | | |
$ | - | | |
$ | 117,740 | | |
$ | (1,740 | ) | |
$ | (123,112 | ) | |
| (7,112 | ) |
| |
Six months ended June 30, 2023 | |
| |
Ordinary shares | | |
Additional paid-in | | |
Accumulated
comprehensive | | |
Accumulated | | |
Total shareholders’ | |
| |
Number | | |
Amount | | |
capital | | |
loss | | |
deficit | | |
equity | |
| |
| | |
| | |
| | |
| | |
| | |
| |
Balance as of January 1, 2023 | |
| 989,290,784 | | |
$ | - | | |
$ | 116,082 | | |
$ | (2,007 | ) | |
$ | (115,835 | ) | |
$ | (1,760 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Exercise of warrants | |
| 464,015,200 | | |
| - | | |
| 801 | | |
| - | | |
| - | | |
| 801 | |
Vested RSU’s | |
| 664,800 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Issuance of warrants | |
| - | | |
| | | |
| 398 | | |
| | | |
| | | |
| 398 | |
Share-based compensation | |
| - | | |
| - | | |
| 459 | | |
| - | | |
| - | | |
| 459 | |
Other comprehensive income | |
| - | | |
| - | | |
| - | | |
| 267 | | |
| - | | |
| 267 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| (7,277 | ) | |
| (7,277 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance
as of June 30, 2023 | |
| 1,453,970,784 | | |
$ | - | | |
$ | 117,740 | | |
$ | (1,740 | ) | |
$ | (123,112 | ) | |
| (7,112 | ) |
The
accompanying notes are an integral part of the unaudited condensed financial statements.
BIONDVAX PHARMACEUTICALS LTD.
CONDENSED
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)
U.S.
dollars in thousands (except share and per share data)
| |
Three months ended June 30, 2022 | |
| |
Ordinary shares | | |
Additional paid-in | | |
Accumulated
comprehensive | | |
Accumulated | | |
Total shareholders’ | |
| |
Number | | |
Amount | | |
capital | | |
loss | | |
deficit | | |
equity | |
| |
| | |
| | |
| | |
| | |
| | |
| |
Balance as of March 31, 2022 | |
| 745,048,544 | | |
| - | | |
| 113,777 | | |
| (2,089 | ) | |
| (112,514 | ) | |
| (862 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Expiration of employees options | |
| | | |
| - | | |
| 152 | | |
| - | | |
| - | | |
| 152 | |
Share-based compensation | |
| - | | |
| | | |
| 406 | | |
| - | | |
| - | | |
| 406 | |
Vested RSU’s | |
| 2,104,520 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Other comprehensive loss | |
| - | | |
| - | | |
| - | | |
| (13 | ) | |
| - | | |
| (13 | ) |
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| (2,983 | ) | |
| (2,983 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance
as of June 30, 2022 | |
| 747,153,064 | | |
$ | - | | |
$ | 114,335 | | |
$ | (2,102 | ) | |
$ | (115,497 | ) | |
$ | 3,264 | |
| |
Six months ended June 30, 2022 | |
| |
Ordinary shares | | |
Additional paid-in | | |
Accumulated
comprehensive | | |
Accumulated | | |
Total shareholders’ | |
| |
Number | | |
Amount | | |
capital | | |
loss | | |
deficit | | |
equity | |
| |
| | |
| | |
| | |
| | |
| | |
| |
Balance as of January 1, 2022 | |
| 739,048,544 | | |
| - | | |
| 113,076 | | |
| (2,055 | ) | |
| (110,039 | ) | |
| 982 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Issuance of shares, net of issuance costs of $6 | |
| 6,000,000 | | |
| - | | |
| 216 | | |
| - | | |
| - | | |
| 216 | |
Vested RSU’s | |
| 2,104,520 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Expiration of employees options | |
| | | |
| - | | |
| 152 | | |
| - | | |
| - | | |
| 152 | |
Share-based compensation | |
| - | | |
| | | |
| 891 | | |
| - | | |
| - | | |
| 891 | |
Other comprehensive loss | |
| - | | |
| - | | |
| - | | |
| (47 | ) | |
| - | | |
| (47 | ) |
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| (5,458 | ) | |
| (5,458 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance
as of June 30, 2022 | |
| 747,153,064 | | |
$ | - | | |
$ | 114,335 | | |
$ | (2,102 | ) | |
$ | (115,497 | ) | |
$ | 3,264 | |
BIONDVAX PHARMACEUTICALS LTD.
CONDENSED
STATEMENTS OF CASH FLOWS (Unaudited)
U.S.
dollars in thousands (except share and per share data)
| |
Six months ended
June 30, | |
| |
2023 | | |
2022 | |
| |
Unaudited | | |
Unaudited | |
Cash flows from operating activities: | |
| | |
| |
| |
| | |
| |
Net loss | |
$ | (7,277 | ) | |
$ | (5,458 | ) |
| |
| | | |
| | |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
| |
| | | |
| | |
Depreciation of property, plant and equipment | |
| 285 | | |
| 279 | |
Expense of in-process research and development | |
| - | | |
| 179 | |
Financial expenses related to loan from others | |
| 4,321 | | |
| - | |
Share-based compensation | |
| 452 | | |
| 870 | |
Decrease in other receivables | |
| 8 | | |
| 115 | |
Warrants revaluation | |
| (3,333 | ) | |
| - | |
Changes in operating lease right-of-use assets | |
| (16 | ) | |
| (10 | ) |
Increase in trade payables | |
| (31 | ) | |
| (317 | ) |
Changes in operating lease liabilities | |
| 3 | | |
| 9 | |
(Decrease) increase in other payables | |
| (347 | ) | |
| (437 | ) |
| |
| | | |
| | |
Net cash used in operating activities | |
| (5,935 | ) | |
| (4,770 | ) |
| |
| | | |
| | |
Cash flows from investing activities: | |
| | | |
| | |
| |
| | | |
| | |
Purchase of property, plant and equipment | |
| (383 | ) | |
| (486 | ) |
| |
| | | |
| | |
Net
cash used in investing activities | |
$ | (383 | ) | |
$ | (486 | ) |
The
accompanying notes are an integral part of the unaudited condensed financial statements.
BIONDVAX PHARMACEUTICALS LTD.
CONDENSED
STATEMENTS OF CASH FLOWS
U.S.
dollars in thousands (except share and per share data)
| |
Six months ended
June 30, | |
| |
2023 | | |
2022 | |
| |
Unaudited | | |
Unaudited | |
| |
| | |
| |
Cash
flows from financing activities: | |
| | |
| |
| |
| | |
| |
| |
$ | - | | |
$ | - | |
| |
| | | |
| | |
Net
cash provided by financing activities | |
| - | | |
| - | |
| |
| | | |
| | |
Effect
of exchange rate changes on cash, cash equivalents and restricted cash | |
| (265 | ) | |
| (839 | ) |
| |
| | | |
| | |
Decrease
in cash, cash equivalents and restricted cash | |
| (6,583 | ) | |
| (6,095 | ) |
Cash,
cash equivalents and restricted cash at the beginning of the period | |
| 14,215 | | |
| 17,518 | |
| |
| | | |
| | |
Cash,
cash equivalents and restricted cash at the end of the period | |
$ | 7,632 | | |
$ | 11,423 | |
| |
| | | |
| | |
Supplementary
disclosure of cash flows activities: | |
| | | |
| | |
| |
| | | |
| | |
(1)
Cash paid during the year for: | |
| | | |
| | |
| |
| | | |
| | |
Interest | |
$ | 725 | | |
$ | - | |
| |
| | | |
| | |
(2)
Non-cash transactions: | |
| | | |
| | |
| |
| | | |
| | |
Issuance
of warrants | |
| 398 | | |
| - | |
| |
| | | |
| | |
Exercise
of warrants liability to equity | |
$ | 801 | | |
$ | - | |
| |
| | | |
| | |
Reconciliation
of cash, cash equivalents and restricted cash: | |
| | | |
| | |
| |
| | | |
| | |
Cash
and cash equivalents | |
$ | 7,506 | | |
$ | 11,285 | |
Restricted
cash | |
| 126 | | |
| 138 | |
| |
| | | |
| | |
Cash,
cash equivalents and restricted cash | |
$ | 7,632 | | |
$ | 11,423 | |
The
accompanying notes are an integral part of the unaudited condensed financial statements.
BIONDVAX PHARMACEUTICALS LTD.
NOTES TO
CONDENSED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and
per share data and unless otherwise indicated)
NOTE
1:- GENERAL
| a. | Biondvax Pharmaceuticals Ltd. (the “Company”), is a biotechnology company focused on developing,
manufacturing, and commercializing innovative immunotherapeutic products primarily for the treatment of infectious and autoimmune diseases.
The Company was incorporated on July 21, 2003 in Israel, and started its activity on March 31, 2005. The Company’s principal executive
offices, manufacturing site and R&D laboratories are located at Jerusalem, Israel. |
| b. | On December 22, 2021, the Company signed an exclusive, worldwide,
license agreement with the Max Planck Society (“MPG”), the parent organization of the Max Planck Institute for Multidisciplinary
Sciences, and the University Medical Center Göttingen (“UMG”), both in Germany, for the development and commercialization
of an innovative Covid-19 NanoAb therapy and an accompanying research collaboration agreement with MPG and UMG in support of the abovementioned
development of a COVID-19 NanoAb. The agreements became effective January 1, 2022 and provide for an upfront payment, development and
sales milestones, and royalties based on sales and sharing of sublicense revenues. |
| c. | On February 7, 2022 the Company issued 15,000 ADSs (6,000,000 shares) to Max-Planck-Gesellschaft zur Förderung
der Wissenschaften e.V. under our exclusive, worldwide, License Agreement with MPG and UMG pursuant to Regulation S under the Securities
Act. |
| d. | On March 23, 2022, the Company executed an additional research collaboration agreement (RCA) with MPG
and UMG covering discovery, selection and characterization of NanoAbs for several other disease indications with large and growing markets
that leverage their unique and strong binding affinity, stability at high temperatures, and potential for more effective and convenient
routes of administration. These targets are the basis for validated and currently marketed monoclonal antibodies, including for conditions
such as psoriasis, asthma, macular degeneration, and psoriatic arthritis. According to the contract, BiondVax will have an exclusive option
for exclusive license agreement for the development and commercialization of each of the NanoAbs covered by the agreement with MPG and
UMG. |
| e. | As of June 30, 2023, the Company’s cash and cash equivalents
totaled $7,632. In the six months ended June 30, 2023, the Company had an operating loss of $7,277 and negative cash flows from operating
activities of $5,935. The Company’s current operating budget includes various assumptions concerning the level and timing of cash
receipts and cash outlays for operating expenses and capital expenditures, including a cost saving plan. The Company is planning to finance
its operations from its existing working capital resources and additional sources of capital and financing that are in the advanced planning
phase. However, there is no assurance that additional capital and/or financing will be available to the Company, and even if available,
whether it will be on terms acceptable to the Company or in amounts required. Accordingly, the Company’s board of directors approved
a cost saving plan, to be implemented if and as required, in whole or in part, at its discretion, to allow the Company to continue its
operations and meet its cash obligations. The cost saving plan consists of cutting expenditures by means of further efficiencies and
synergies, which include mainly the following steps: reduction in headcount and postponing or cancelling capital expenditures that would
not be required for the implementation of the revised business plan. Nevertheless, the Company and the board of directors believe that
its existing financial resources, potential successful capital raising exercises and its operating plans, including the possible disposition
of assets outside the ordinary course of business, restructuring of debt, along with the effects of the cost-saving plan, may be adequate
to satisfy its expected liquidity requirements for a period of at least twelve months from the end of the filing date. |
BIONDVAX PHARMACEUTICALS LTD.
NOTES TO
CONDENSED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and
per share data and unless otherwise indicated)
NOTE 2:- LOAN
FROM OTHERS
| a. | On June 19, 2017, the Company entered into a Finance Contract with the European Investment bank (EIB)
for a total amount of approximately $22,422 (€ 20,000) and up to 50% of the Company’s expected cost of developing and marketing the
Company’s product candidate, M-001. In addition, as a repayment feature, the EIB was entitled to receive the higher between 3% of
any M-001 sales revenues for a period of ten years, or realizing a cash-on-cash multiple of 2.8 times its financing. |
During 2018, the Company received
approximately $23,599 (€ 20,000) in two tranches of approximately $7,080 (€ 6,000) and the third tranche of approximately
$9,439 (€ 8,000).
In the event the Company elects to
prepay the EIB financing, or in the event the EIB shall demand prepayment following certain events, including a change of control, senior
management changes or merger events, the Company shall be required to pay the EIB the principal amount of the tranches already paid, or
the Prepayment Amount, plus the greater of:
| (i) | the amount, as determined by the EIB required in order for the EIB to realize an internal rate of return
on the relevant amount prepaid of 20%; and |
| (ii) | the Prepayment Amount. |
The Finance Contract also stipulates
that in the event the EIB demands prepayment of the loan due to any prepayment event to non-EIB lenders, the Company shall be obligated
to pay the Prepayment Amount plus an additional reduced amount. In addition, and as consideration for the EIB financing, the EIB shall
be entitled to 3% of any annual M-001 sales revenues.
| b. | On April 22, 2019, the Committee of the EIB Bank agreed to expand the 2017 financing agreement to the
Company by an additional approximately $4,502 (€ 4,000) to a total of approximately $27,013 (€ 24,000). An amendment to that
effect was signed in June 2019 (the “Amendment”). Those funds were received in October 2019 and were used in support of the
pivotal, clinical efficacy, Phase 3 trial of BiondVax’s M-001 Universal Flu Vaccine candidate in Europe that was ongoing at that
time. |
According to the Amendment, as repayment
features, the EIB is entitled to receive the higher between 3% of any M-001 sales revenues for a period of twelve years or realizing a
cash-on-cash multiple of 2.8 times its financing.
BIONDVAX PHARMACEUTICALS LTD.
NOTES TO
CONDENSED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and
per share data and unless otherwise indicated)
NOTE 2:- LOAN
FROM OTHERS (Cont.)
| c. | On October 23, 2020, the Company announced Phase 3 clinical trial results of the M-001 universal vaccine
product. The results did not demonstrate a statistically significant difference between the vaccinated group and the placebo group in
reduction of flu illness and severity. Therefore, the study failed to meet both the primary and secondary efficacy endpoints. However,
the study’s primary safety endpoint was met. |
As a result of the Phase 3 clinical
trial failure, Company’s management believes that there will be no revenues from the M-001 product. Therefore, most likely, there will
be no royalty payments to EIB.
Under the Finance Contract, the EIB
may accelerate all loans extended thereunder if an event of default has occurred, which includes, amongst other things, an event of default
arising from the occurrence of a material adverse change, defined as any event or change of condition, which in the opinion of the EIB,
has a material adverse effect on: our ability to perform our obligations under the Finance Documents; our business, operations, property,
condition (financial or otherwise) or prospects; or the rights or remedies of the EIB under the Finance Contract, amongst other things.
If the EIB determines that an event of default has occurred, it could accelerate the amounts outstanding under the Finance Contract, making
those amounts immediately due and payable.
In accordance with the EIB loan agreement,
and due to the above, the Company was required to pay the EIB the principal amount of the tranches already loaned by the EIB to the Company
within five years of the date of each tranche of the loan. On December 31, 2020, the Company re-evaluated the loan in the sum of $29,443.
As a result, the Company recorded an amount of $6,162 as revaluation income of the EIB loan in 2020.
On January 26,
2021, the EIB notified the Company that they welcome the Company’s efforts to secure future equity financing in an amount not less
than $2,000 in order to enable the Company to pursue new business opportunities, strengthen the Company’s balance sheet and invest
in growth. Thus, within that context, the EIB wrote in their letter that they will not consider the failure of the Company’s pivotal
phase 3 trial for M-001 to meet the primary and secondary efficacy endpoints as a trigger for prepayment of a loan extended under the
Finance Contract. However, the EIB cautioned the Company that their letter is not a consent, agreement, amendment or waiver in respect
of the terms of the Finance Contract, reserving any other right or remedy the EIB may have now or subsequently.
| d. | On August 9, 2022, the Company signed a loan restructuring agreement with the EIB for the new terms of
its outstanding approximately $24,554 (€ 24,000) loan to the Company. The new terms include: |
| 1. | An extension of the maturity dates from 2023 (approximately $20,462) and 2024 (approximately $4,092) until
December 31, 2027. |
| 2. | Interest on the Loan will begin to accrue starting January 1, 2022, at an annual rate of 7%. The interest
payments will be deferred until the new maturity date and will be added to the principal balance at the end of each year during the loan
period. |
BIONDVAX PHARMACEUTICALS LTD.
NOTES TO
CONDENSED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and
per share data and unless otherwise indicated)
NOTE 2:- LOAN
FROM OTHERS (Cont.)
| 3. | An amount of $ 900 (approximately € 880) were paid by BiondVax on August 15, 2022, shortly after
the execution of the relevant amendment letter with the EIB and was applied to reduce the outstanding loan. Going forward 10% of any capital
raises until maturity will be used to further repay the Loan principal including any outstanding accrued interest. |
| 4. | If the Company sales exceed approximately $5,332 (€ 5,000), 3% of the revenues will be paid to the
EIB as royalties until the EIB receives (from the Loan repayment, inter alia the interest and the royalties) the higher of (i) a total
of 2.8 times the original approximately $25,596 (€ 24,000) principal (as provided in the original Loan agreement) and (ii) 20% IRR
on the principal. |
| 5. | In case the Company decides to discharge all liabilities under the finance contract, inter alia payments
of the variable remuneration, the Company would need to repay to the EIB an indemnity amount in addition to the Loan principal and the
accrued interest. The indemnity amount will be calculated such that the EIB receives an additional payment equal to the greater of (i)
the prepayment amount (i.e. twice the prepayment amount in the aggregate) and (ii) the amount required to realize 20% IRR on the prepayment
amount at the time of prepayment. |
The Company recorded the cash received
in each tranche and a corresponding liability to repay the cash. The Company evaluates the estimated cash flows from the EIB loan at each
reporting period. When the estimated cash flows change from the estimates used as of the date on which the EIB loan was issued, the EIB
loan’s carrying amount is adjusted to an amount equal to the present value of the estimated remaining future payments, discounted by using
the original effective interest rate. The adjustment to the carrying amount is recognized in earnings as an adjustment to interest expenses,
in the period in which the change in estimate occurred.
On December 31, 2022 as a result of
the loan restructure, the Company recorded an amount of $ 7,168 under finance income. Interest expense related to the EIB loan were $87.
On February 16, 2023, $725
was paid to the EIB as part of the loan restructure agreement.
For the six-months ended at June 30,
2023 the company recorded $4,321 under finance expenses due to the loan revaluation.
As of June 30, 2023, the outstanding
principal amount related to the EIB loan in nominal terms is $ 26,065.
BIONDVAX PHARMACEUTICALS LTD.
NOTES TO
CONDENSED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and
per share data and unless otherwise indicated)
NOTE 3:- CONTINGENT
LIABILITIES AND COMMITMENTS
Since 2006, the Company received approximately
$5,830 in grants from the Israeli Innovation Authority (IIA), formerly known as the Office of the Chief Scientist. The grants were for
research and development of M-001.
In return for those grants, the Company
undertook to pay royalties amounting to 3%-5% on the revenues derived from sales of products or services developed in whole or in part
using these grants. The maximum aggregate royalties paid generally cannot exceed 100% of the grants received by the Company, plus annual
interest generally equal to the 12-month LIBOR applicable to dollar deposits, as published on the first business day of each calendar
year. The maximum royalty amounts payable by the Company as of June 30, 2023 is approximately $ 5,830 which represents the total gross
amount of grants actually received by the Company from the IIA including accrued interest. As of June 30, 2023, the Company had not paid
any royalties to the IIA.
In light of the Phase 3 clinical trial
results (see also Note 3.c above), the Company does not currently expect any revenues from M-001 and therefore does not currently expect
to make any royalty payments to the IIA. Therefore, the Company does not record a liability for amounts received from IIA. As previously
discussed, in the event of failure of a project that was partly financed by the IIA, the Company is not obligated to pay any royalties
or repay the amounts received.
The Company is also subject to various
other restrictions pursuant to the grant, including limitations on transferring IP developed with grant funds. In light of the Company’s
new strategy, it does not expect these restrictions to be material to its ongoing operations.
NOTE 4:- SHAREHOLDERS’
EQUITY
| a. | On December 20, 2022, the Company closed an underwritten public offering with gross proceeds to the Company
of $8,000,000, before deducting underwriting discounts and other expenses payable by the Company. The offering consisted of 1,600,000
units and pre-funded units. Each unit consisted of one American Depositary Share (“ADS”) and two warrants, each to purchase
one ADS, and each pre-funded unit consisted of one pre-funded warrant to purchase one ADS and two warrants each to purchase one ADS. One
of the warrants will expire three years from the date of issuance, and the other warrant will expire one year from the date of issuance
and may be exercised for half an ADS on or prior to six (6) months following the original issuance for no additional consideration. Each
ADS (or pre-funded warrant) was sold together with two warrants at a combined purchase price of $5.00 per unit (or $4.99 per pre-funded
unit after reducing $0.01 attributable to the exercise price of the pre-funded warrants). Each ADS represents 400 of our ordinary shares,
no par value per share. The Company received a net sum of $7,231 after deduction of underwriter discounts and issuance expenses of $769.
The warrants were classified as liabilities, initially and subsequently measured at fair value through earnings pursuant to ASC 480 as
the warrants are not considered indexed to the Company’s own shares. |
| b. | On January 5, 2023, the Company issued 810,000 ADSs (324,000,000 shares) as a result of warrant exercises. |
| c. | During June, 2023, the Company issued 350,038 ADSs (140,015,200 shares) as a result of warrant exercises. |
BIONDVAX PHARMACEUTICALS LTD.
NOTES TO
CONDENSED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and
per share data and unless otherwise indicated)
NOTE 5:- SHARE-BASED
COMPENSATION
Options granted under the Company’s
2005 Israeli Share Option Plan (“Plan”) were exercisable in accordance with the terms of the Plan, within 10 years from
the date of grant, against payment of an exercise price. The options generally vest over a period of three or four years.
In March 2018, the Company’s Board
of Directors approved the adoption of the Company’s 2018 Israeli Share Option Plan (“2018 Plan”) for the grant of options and
restricted shares (“RSU”) to employees, directors and service providers. The options are exercisable within 10 years from the
date of grant, against payment of the exercise price, in accordance with the terms of the 2018 Plan. The options generally vest over a
period of three or four years.
There were no option
grants during the six months ended June 30, 2023.
| b. | The total share-based compensation expense related to all of the Company’s equity-based awards, recognized
for the six months ended June 30, 2023 and 2022 is comprised as follows: |
| |
Six
months ended
June 30, | |
| |
2023 | | |
2022 | |
| |
Unaudited | | |
Unaudited | |
| |
| | |
| |
Research and development expenses | |
$ | 57 | | |
$ | 44 | |
Marketing, general and administrative expenses | |
| 395 | | |
| 826 | |
Total share-based compensation | |
$ | 452 | | |
$ | 870 | |
During the six months ended June 30,
2023, the company granted 126,931 RSU’s to employees and officers. These RSU’s vest over three years and the fair value of said
grant was $280.
As of June 30, 2023, there are $463
of total unrecognized costs related to share-based compensation that is expected to be recognized over a period of up to four years.
The fair value of the granted RSUs
was determined based on the stock marketprice of the Company’s ADS on the day of grant.
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Loan from Others
|
6 Months Ended |
Jun. 30, 2023 |
Loan from Others [Abstract] |
|
LOAN FROM OTHERS |
NOTE 2:- LOAN
FROM OTHERS
| a. | On June 19, 2017, the Company entered into a Finance Contract with the European Investment bank (EIB)
for a total amount of approximately $22,422 (€ 20,000) and up to 50% of the Company’s expected cost of developing and marketing the
Company’s product candidate, M-001. In addition, as a repayment feature, the EIB was entitled to receive the higher between 3% of
any M-001 sales revenues for a period of ten years, or realizing a cash-on-cash multiple of 2.8 times its financing. |
During 2018, the Company received
approximately $23,599 (€ 20,000) in two tranches of approximately $7,080 (€ 6,000) and the third tranche of approximately
$9,439 (€ 8,000).
In the event the Company elects to
prepay the EIB financing, or in the event the EIB shall demand prepayment following certain events, including a change of control, senior
management changes or merger events, the Company shall be required to pay the EIB the principal amount of the tranches already paid, or
the Prepayment Amount, plus the greater of:
| (i) | the amount, as determined by the EIB required in order for the EIB to realize an internal rate of return
on the relevant amount prepaid of 20%; and |
| (ii) | the Prepayment Amount. |
The Finance Contract also stipulates
that in the event the EIB demands prepayment of the loan due to any prepayment event to non-EIB lenders, the Company shall be obligated
to pay the Prepayment Amount plus an additional reduced amount. In addition, and as consideration for the EIB financing, the EIB shall
be entitled to 3% of any annual M-001 sales revenues.
| b. | On April 22, 2019, the Committee of the EIB Bank agreed to expand the 2017 financing agreement to the
Company by an additional approximately $4,502 (€ 4,000) to a total of approximately $27,013 (€ 24,000). An amendment to that
effect was signed in June 2019 (the “Amendment”). Those funds were received in October 2019 and were used in support of the
pivotal, clinical efficacy, Phase 3 trial of BiondVax’s M-001 Universal Flu Vaccine candidate in Europe that was ongoing at that
time. |
According to the Amendment, as repayment
features, the EIB is entitled to receive the higher between 3% of any M-001 sales revenues for a period of twelve years or realizing a
cash-on-cash multiple of 2.8 times its financing.
| c. | On October 23, 2020, the Company announced Phase 3 clinical trial results of the M-001 universal vaccine
product. The results did not demonstrate a statistically significant difference between the vaccinated group and the placebo group in
reduction of flu illness and severity. Therefore, the study failed to meet both the primary and secondary efficacy endpoints. However,
the study’s primary safety endpoint was met. |
As a result of the Phase 3 clinical
trial failure, Company’s management believes that there will be no revenues from the M-001 product. Therefore, most likely, there will
be no royalty payments to EIB.
Under the Finance Contract, the EIB
may accelerate all loans extended thereunder if an event of default has occurred, which includes, amongst other things, an event of default
arising from the occurrence of a material adverse change, defined as any event or change of condition, which in the opinion of the EIB,
has a material adverse effect on: our ability to perform our obligations under the Finance Documents; our business, operations, property,
condition (financial or otherwise) or prospects; or the rights or remedies of the EIB under the Finance Contract, amongst other things.
If the EIB determines that an event of default has occurred, it could accelerate the amounts outstanding under the Finance Contract, making
those amounts immediately due and payable.
In accordance with the EIB loan agreement,
and due to the above, the Company was required to pay the EIB the principal amount of the tranches already loaned by the EIB to the Company
within five years of the date of each tranche of the loan. On December 31, 2020, the Company re-evaluated the loan in the sum of $29,443.
As a result, the Company recorded an amount of $6,162 as revaluation income of the EIB loan in 2020.
On January 26,
2021, the EIB notified the Company that they welcome the Company’s efforts to secure future equity financing in an amount not less
than $2,000 in order to enable the Company to pursue new business opportunities, strengthen the Company’s balance sheet and invest
in growth. Thus, within that context, the EIB wrote in their letter that they will not consider the failure of the Company’s pivotal
phase 3 trial for M-001 to meet the primary and secondary efficacy endpoints as a trigger for prepayment of a loan extended under the
Finance Contract. However, the EIB cautioned the Company that their letter is not a consent, agreement, amendment or waiver in respect
of the terms of the Finance Contract, reserving any other right or remedy the EIB may have now or subsequently.
| d. | On August 9, 2022, the Company signed a loan restructuring agreement with the EIB for the new terms of
its outstanding approximately $24,554 (€ 24,000) loan to the Company. The new terms include: |
| 1. | An extension of the maturity dates from 2023 (approximately $20,462) and 2024 (approximately $4,092) until
December 31, 2027. |
| 2. | Interest on the Loan will begin to accrue starting January 1, 2022, at an annual rate of 7%. The interest
payments will be deferred until the new maturity date and will be added to the principal balance at the end of each year during the loan
period. |
| 3. | An amount of $ 900 (approximately € 880) were paid by BiondVax on August 15, 2022, shortly after
the execution of the relevant amendment letter with the EIB and was applied to reduce the outstanding loan. Going forward 10% of any capital
raises until maturity will be used to further repay the Loan principal including any outstanding accrued interest. |
| 4. | If the Company sales exceed approximately $5,332 (€ 5,000), 3% of the revenues will be paid to the
EIB as royalties until the EIB receives (from the Loan repayment, inter alia the interest and the royalties) the higher of (i) a total
of 2.8 times the original approximately $25,596 (€ 24,000) principal (as provided in the original Loan agreement) and (ii) 20% IRR
on the principal. |
| 5. | In case the Company decides to discharge all liabilities under the finance contract, inter alia payments
of the variable remuneration, the Company would need to repay to the EIB an indemnity amount in addition to the Loan principal and the
accrued interest. The indemnity amount will be calculated such that the EIB receives an additional payment equal to the greater of (i)
the prepayment amount (i.e. twice the prepayment amount in the aggregate) and (ii) the amount required to realize 20% IRR on the prepayment
amount at the time of prepayment. |
The Company recorded the cash received
in each tranche and a corresponding liability to repay the cash. The Company evaluates the estimated cash flows from the EIB loan at each
reporting period. When the estimated cash flows change from the estimates used as of the date on which the EIB loan was issued, the EIB
loan’s carrying amount is adjusted to an amount equal to the present value of the estimated remaining future payments, discounted by using
the original effective interest rate. The adjustment to the carrying amount is recognized in earnings as an adjustment to interest expenses,
in the period in which the change in estimate occurred.
On December 31, 2022 as a result of
the loan restructure, the Company recorded an amount of $ 7,168 under finance income. Interest expense related to the EIB loan were $87.
On February 16, 2023, $725
was paid to the EIB as part of the loan restructure agreement.
For the six-months ended at June 30,
2023 the company recorded $4,321 under finance expenses due to the loan revaluation.
As of June 30, 2023, the outstanding
principal amount related to the EIB loan in nominal terms is $ 26,065.
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