UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of August 2024
Commission File Number: 001-37643
PURPLE BIOTECH LTD.
(Translation of registrant’s name into English)
4 Oppenheimer Street, Science Park, Rehovot
7670104, Israel
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
On August 16, 2024, Purple Biotech Ltd. (the “Company”
or the “Registrant”) issued a press release, “Purple Biotech Reports Second Quarter 2024 Financial Results and
Business Highlights”, which is attached hereto as Exhibit 99.1.
Incorporation by Reference
This
Report on Form 6-K, including all exhibits attached hereto, is hereby incorporated by reference into each of the Registrant’s Registration
Statement on Form
S-8 filed with the Securities and Exchange Commission
on May 20, 2016 (Registration file number 333-211478), the Registrant’s Registration Statement on Form
S-8 filed with the Securities and Exchange Commission
on June 6, 2017 (Registration file number 333-218538), the Registrant’s Registration Statement on Form
F-3, as amended, originally filed with the Securities
and Exchange Commission on July 16, 2018 (Registration file number 333-226195), the Registrant’s Registration Statement on Form
S-8 filed with the Securities and Exchange Commission
on March 28, 2019 (Registration file number 333-230584), the Registrant’s Registration Statement on Form
F-3 filed with the Securities and Exchange Commission
on September 16, 2019 (Registration file number 333-233795), the Registrant’s Registration Statement on Form
F-1 filed with the Securities and Exchange Commission
on December 27, 2019 (Registration file number 333-235729), the Registrant’s Registration Statement on Form
F-3 filed with the Securities and Exchange Commission
on May 13, 2020 (Registration file number 333-238229), the Registrant’s Registration Statement on Form
S-8 filed with the Securities and Exchange Commission
on May 18, 2020 (Registration file number 333-238481), each of the Registrant’s Registration Statements on Form F-3 filed with
the Securities and Exchange Commission on July 10, 2020 (Registration file numbers 333-239807
and 333-233793), the
Registrant’s Registration Statement on Form
S-8 filed with the Securities and Exchange Commission
on April 4, 2022 (Registration file number 333-264107) and the Registrant’s Registration Statement on Form
F-3 filed with the Securities and Exchange Commission
on March 23, 2023 (Registration file number 333-270769), the Registrant’s Registration Statement on Form
F-3, as amended, originally filed with the Securities
and Exchange Commission on December 8, 2022 (Registration file number 333-268710), the Registrant’s Registration Statement on Form
F-1, as amended, originally filed with the
Securities and Exchange Commission on October 30, 2023 (Registration file number 333-275216) and the Registrant’s Registration
Statement on Form F-1, filed with the Securities and Exchange Commission on July 22, 2024 (Registration file number 333-280947), to be
a part thereof from the date on which this report is submitted, to the extent not superseded by documents or reports subsequently filed
or furnished.
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
| August 16, 2024 |
PURPLE BIOTECH LTD. |
| |
|
|
| |
By: |
/s/ Lior Fhima |
| |
|
Lior Fhima |
| |
|
Chief Financial Officer |
2
Exhibit 99.1
Purple
Biotech Reports Second Quarter 2024 Financial Results and Business Highlights
Positive randomized Phase 2 CM24 pancreatic
cancer study interim data presented at the American Society
of Clinical Oncology (ASCO) 2024 Annual Meeting demonstrates improvement in overall survival, progression free survival, objective
response rate and all other efficacy endpoints in the combination of CM24+nivolumab and NAL-IRI/5FU/LV chemotherapy cohort
Evaluating expansion of CM24 clinical program
to a biomarker driven study in additional indications based on CEACAM1
novel oncology target on Neutrophil Extracellular Traps (NETs) in addition to enhancing immune response through the inhibition of CEACAM1
to CEACAM1 interactions
Cash runway extended to Q3 2025
REHOVOT, Israel, August 16, 2024 –
Purple Biotech Ltd. (“Purple Biotech” or “the Company”) (NASDAQ/TASE: PPBT), a clinical-stage company
developing first-in-class therapies that overcome tumor immune evasion and drug resistance, today announced financial results for
the three and six months ended June 30, 2024.
“We
were very pleased to report CM24 phase 2 study positive interim results during the last quarter which demonstrated strong results across
all efficacy measures compared to the control arm in the NAL-IRI part of the study. The fact that this was a small study and the consistency
of the benefit across all efficacy endpoints amplify the potential meaningfulness of the results,” stated Gil Efron, Chief Executive
Officer of Purple Biotech. “Also highly encouraging is the additional data suggesting serum pre dose NET marker myeloperoxidase
(MPO) as a potential predictive biomarker of CM24 benefit. This biomarker data together with previous clinical results demonstrating reduction
in the serum NET marker in pancreatic ductal adenocarcinoma (PDAC)
patients treated with CM24, and preclinical results demonstrating the effect of CM24 on NET-related activities, support the potential
of CEACAM1 on NETs as a novel oncologic target. We are evaluating the expansion of our CM24 clinical program to biomarker-driven studies
in additional indications, based on this novel mechanism of action.”
“Having
reprioritized our activities, together with the recent financing, we extended our cash runway into the third quarter of 2025, providing
a longer lead time to reach our milestones, including more Phase 2 CM24 pancreatic cancer interim data at a medical conference in Sept
2024 and topline results in Q4 2024. Additionally, in the first half of 2025 we expect to have an end of Phase 2 meeting with the U.S.
Food and Drug Administration to discuss our plans
for pivotal studies with CM24, while we continue to evaluate potential collaborations for our pipeline.”
Q2 2024 and Recent Clinical & Corporate
Highlights:
| ● | CM24
randomized Phase 2 pancreatic cancer study interim data presented at ASCO 2024 Late Breaking
Session |
| o | Data demonstrate improvement in overall survival (OS), progression free survival (PFS), objective
response rate (ORR) and all other efficacy endpoints in the CM24+nivolumab+Nal-IRI/5FU/LV experimental arm as compared with the standard-of-care
(SoC) control arm |
| o | New CM24 potential predictive biomarkers for overall survival benefit
were identified |
| o | Additional interim data expected Q3 2024 |
| o | Final topline data expected in Q4 2024 |
| o | The gemcitabine/nab-paclitaxel-based
part of the study was impacted by informative censoring of the control arm that led to an imbalance between the control and experimental
cohorts, rendering this part of the study unsuitable for analysis; this part of the study has no impact on the CM24+nivolumab+Nal-IRI/5FU/LV
portion of the study |
Purple Biotech’s
poster titled “Interim results of the Randomized Phase 2 Cohort of Study FW-2020-01 Assessing the Efficacy, Safety and Pharmacodynamics
of CM24 in combination with Nivolumab and Chemotherapy in Advanced/Metastatic Pancreatic Cancer” was selected by the American Society
of Clinical Oncology (ASCO) for a Late Breaking presentation at its 2024 Annual Meeting.
The Phase 2 study is evaluating CM24 in combination
with Bristol Myers Squibb’s PD-1 inhibitor nivolumab plus SoC chemotherapy in second line pancreatic ductal adenocarcinoma (PDAC)
patients compared to SoC chemotherapy alone. The experimental arms of the study treat patients with CM24 plus nivolumab and one of two
SoC chemotherapies, gemcitabine/nab-paclitaxel or Nal-IRI/5FU/LV, while patients in the control arms are administered with either respective
chemotherapies alone. Sixty three patients have been enrolled in the randomized study across 18 centers in the U.S., Spain and Israel.
The summary of findings at the interim analysis
for the CM24+nivolumab+Nal-IRI/5FU/LV regimen as compared with SoC chemotherapy alone as of May 22, 2024, cut-off includes the following:
| ü | 26% reduction in the risk of death combined with median OS prolongation at 2.1 months |
| ü | 28% reduction in the risk of progression with median progression free survival (PFS) at 1.9 months |
| ü | 26% overall response rate (ORR) in the experimental arm compared to 6% in the control arm |
| ü | CA19-9, a validated and clinically predictive PDAC biomarker, consistently decreased in the CM24 treatment
arm vs. control |
| ü | Additional data from Purple Biotech’s Phase 2 study suggest that NET-related baseline MPO levels
below the threshold may predict OS improvement when comparing the CM24+nivolumab+Nal-IRI/5FU/LV vs. Nal-IRI/5FU/LV arms |
| ü | The CM24+nivolumab+Nal-IRI/5FU/LV regimen was well tolerated |
Further evaluation of the data in the second part
of the study concluded that unlike in the Nal-IRI/5FU/LV part, the gemcitabine/nab-paclitaxel-based portion of the study was significantly
impacted by informative censoring of the control arm that resulted in an imbalance between the control and experimental arms, rendering
this part of the study unsuitable for analysis. The study
was designed as a two-part study, with each of the Nal-IRI/5FU/LV and the gemcitabine/nab-paclitaxel parts
as a standalone, and therefore the analysis of each part is independent.
Final top line
data is expected to be reported before the end of 2024 while additional interim data is expected to be presented at a medical conference
in September 2024.
| ● | NT219’s
efficacy in suppressing cancer stem cell-mediated resistance to KRASG12C and KRASG12D
inhibitors in solid tumors presented at AACR 2024 |
| ● | Phase
1 dose escalation study of NT219 in combination with cetuximab in recurrent/metastatic head
and neck cancer concluded |
| ● | Early
activity, PK and biomarker analysis for NT219 therapy were presented at the AACR 2024 |
Key findings
were shared in two poster presentations, “NT219, a dual inhibitor of IRS1/2 and STAT3, suppresses cancer stem cell mediated resistance
to KRASG12C and KRASG12D inhibitors in solid tumors” and “Early activity and biomarker evaluation of NT219 in combination
with cetuximab in a Phase 1/2 study of recurrent/metastatic squamous cell carcinoma of the head and neck (R/M SCCHN)” at the American
Association for Cancer Research (AACR) 2024 Annual Meeting. NT219 was found to significantly suppress cancer stem cells, suggesting a
novel therapy and new mechanism to combat cancer recurrence and overcoming resistance to KRAS(G12C) and KRAS(G12D) inhibitors in non-small
cell lung cancer (NSCLC) and PDAC cells, respectively. NT219 reverses acquired resistance to KRAS inhibitors by addressing both cellular
escape pathways and cancer stem cell mechanisms. Potential biomarkers for NT219 treatment were presented in an additional poster at AACR
2024, and on-target effects of the therapy were demonstrated in patients’ tumors. Analysis of pre-treatment patients’ biopsies
suggests that activated IGF1R and STAT3 could serve as potential biomarkers for NT219 treatment. These findings should be verified in
a larger number of patients in the next clinical study.
Financial Results for the Three Months Ended June 30, 2024
Research and Development Expenses were
$2.4 million, a decrease of $1.3 million, or 35.1%, compared to $3.7 million in the same period of 2023, mainly due reduced chemistry,
manufacturing and controls (“CMC”) costs and clinical trials expenses.
Sales, General and Administrative Expenses
were $0.9 million, compared to $1.4 million in the same period of 2023, a decrease of $0.5 million, mainly due to salary and salary related
costs.
Operating Loss was $3.5 million, a decrease
of $1.6 million, or 31.4%, compared to $5.1 million in the same period of 2023, mainly due to the decrease in R&D expenses.
Adjusted Operating Loss (as reconciled
below) was $3.2 million, a decrease of $1.4 million, compared to $4.6 million in the same period of 2023.
Net Loss for the three months ended June
30, 2024, was $2.4 million, or $0.09 per basic and diluted ADS, compared to a net loss of $5.2 million, or $0.25 per basic and diluted
ADS, in the same period of 2023. The decrease in net loss was mainly due to a decrease in R&D expenses and an increase in financial
income related to changes in fair value of warrants.
Adjusted Net Loss (as reconciled below)
for the three months ended June 30, 2024, was $2.2 million, a decrease of $2.5 million or 53.2% compared to $4.7 million for the three
months ended June 30, 2023.
As of June 30, 2024, Purple Biotech had cash and
cash equivalents and short-term deposits of $7.4 million. On July 2, 2024, Purple Biotech announced the receipt of $2 million in gross
proceeds from the exercise of warrants in connection with a warrant exercise and reload transaction. The Company has reprioritized its
activities, and, in combination with cost saving measures including a 33% reduction in its workforce, Purple Biotech now has a cash runway
into the third quarter of 2025.
Financial Results for the Six Months Ended
June 30, 2024
Research and Development Expenses were
$5.8 million, a decrease of $1.4 million, or 19.4%, compared to $7.2 million in the same period of 2023. The decrease was mainly due to
reduced CMC costs and clinical trials expenses.
Sales, General and Administrative Expenses
were $1.8 million, a decrease of $1.2 or 40%, compared to $3.1 million in the same period of 2023, mainly due to salary and salary related
expenses and share based payment expenses.
Operating Loss was $7.9 million, a decrease
of $2.4 million, or 23.3%, compared to $10.3 million in the same period of 2023, mainly due to decrease in operating expenses.
Adjusted Operating Loss (as reconciled
below) was $7.4 million, a decrease of $1.6 million, compared to $9.0 million in the same period of 2023.
Net Loss for the six months ended
June 30, 2024, was $6.2 million, or $0.23 loss per basic and diluted ADS, compared to a net loss of $10.0 million, or $0.49 loss per basic
and diluted ADS, in the same period of 2023. The decrease in net loss was mainly due to a $2.4 million decrease in operating expenses.
Adjusted net loss (as reconciled below)
for the six months ended June 30, 2024, was $5.7 million, compared to $8.8 million in the six months ended June 30, 2023.
Non-IFRS Financial Measures.
This press release includes information about
certain financial measures that are not prepared in accordance with International Financial Reporting Standards (“IFRS”),
including adjusted operating loss and adjusted net loss. These non-IFRS measures are not based on any standardized methodology prescribed
by IFRS and are not necessarily comparable to similar measures presented by other companies. Adjusted operating loss and adjusted net
loss adjust for share-based compensation expenses. The Company’s management and board of directors utilize these non-IFRS financial measures
to evaluate the Company’s performance. The Company provides these non-IFRS measures of the Company’s performance to investors because
management believes that these non-IFRS financial measures, when viewed with the Company’s results under IFRS and the accompanying reconciliations,
are useful in identifying underlying trends in ongoing operations. However, these non-IFRS measures are not measures of financial performance
under IFRS and, accordingly, should not be considered as alternatives to IFRS measures as indicators of operating performance. Further,
these non-IFRS measures should not be considered measures of the Company’s liquidity. A reconciliation of certain IFRS to non-IFRS financial
measures has been provided in the tables included in this press release.
About Purple Biotech
Purple Biotech Ltd. (NASDAQ/TASE: PPBT) is a clinical-stage
company developing first-in-class therapies that seek to overcome tumor immune evasion and drug resistance. The Company’s oncology pipeline
includes CM24, NT219 and IM1240. CM24 is a humanized monoclonal antibody that blocks CEACAM1, that supports tumor immune evasion and survival
through multiple pathways. CEACAM1 on tumor cells, immune cells and neutrophils extracellular traps is a novel target for the treatment
of multiple cancer indications. As a proof of concept of these novel pathways, the Company is advancing CM24 as a combination therapy
with anti-PD-1 checkpoint inhibitors in a Phase 2 study for the treatment of pancreatic ductal adenocarcinoma (PDAC). The Company has
entered into a clinical collaboration agreement with Bristol Myers Squibb for the Phase 2 clinical trials to evaluate the combination
of CM24 with the PD-1 inhibitor nivolumab in addition to chemotherapy. NT219 is a dual inhibitor, novel small molecule that simultaneously
targets IRS1/2 and STAT3. A Phase 1 dose escalation study was concluded as a monotherapy and in combination with cetuximab in which NT219
demonstrated anti-tumor activity in combination with cetuximab in second line patients with recurrent and/or metastatic SCCHN (R/N SCCHN).
The Company is advancing CAPTN-3, a preclinical platform of conditionally-activated tri-specific antibody that engages both T cells and
NK cells to induce a strong, localized immune response within the tumor microenvironment. The cleavable capping technology confines the
compound’s therapeutic activity to the local tumor microenvironment, and thereby potentially increases the anticipated therapeutic window
in patients. The third arm specifically targets the Tumor Associated Antigen (TAA). The technology presents a novel mechanism of action
by unleashing both innate and adaptive immune systems to mount an optimal anti-tumoral immune response. IM1240 is the first tri-specific
antibody in development that targets 5T4 expressed in a variety of solid tumors and is correlated with advanced disease, increased invasiveness
and poor clinical outcomes. The Company’s corporate headquarters are located in Rehovot, Israel. For more information, please visit https://purple-biotech.com/.
Forward-Looking Statements and Safe Harbor
Statement
Certain statements in this press release that
are forward-looking and not statements of historical fact are forward-looking statements within the meaning of the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements that
are not statements of historical fact, and may be identified by words such as “believe”, “expect”, “intend”,
“plan”, “may”, “should”, “could”, “might”, “seek”, “target”, “will”,
“project”, “forecast”, “continue” or “anticipate” or their negatives or variations of these words
or other comparable words or by the fact that these statements do not relate strictly to historical matters. You should not place undue
reliance on these forward-looking statements, which are not guarantees of future performance. Forward-looking statements reflect our current
views, expectations, beliefs or intentions with respect to future events, and are subject to a number of assumptions, involve known and
unknown risks, many of which are beyond our control, as well as uncertainties and other factors that may cause our actual results, performance
or achievements to be significantly different from any future results, performance or achievements expressed or implied by the forward-looking
statements. Important factors that could cause or contribute to such differences include, among others, risks relating to: the plans,
strategies and objectives of management for future operations; product development for NT219, CM24 and IM1240; the process by which such
early stage therapeutic candidates could potentially lead to an approved drug product is long and subject to highly significant risks,
particularly with respect to a joint development collaboration; the fact that drug development and commercialization involves a lengthy
and expensive process with uncertain outcomes; our ability to successfully develop and commercialize our pharmaceutical products; the
expense, length, progress and results of any clinical trials; the impact of any changes in regulation and legislation that could affect
the pharmaceutical industry; the difficulty in receiving the regulatory approvals necessary in order to commercialize our products; the
difficulty of predicting actions of the U.S. Food and Drug Administration or any other applicable regulator of pharmaceutical products;
the regulatory environment and changes in the health policies and regimes in the countries in which we operate; the uncertainty surrounding
the actual market reception to our pharmaceutical products once cleared for marketing in a particular market; the introduction of competing
products; patents obtained by competitors; dependence on the effectiveness of our patents and other protections for innovative products;
our ability to obtain, maintain and defend issued patents; the commencement of any patent interference or infringement action against
our patents, and our ability to prevail, obtain a favorable decision or recover damages in any such action; and the exposure to litigation,
including patent litigation, and/or regulatory actions, and other factors that are discussed in our Annual Report on Form 20-F for the
year ended December 31, 2023 and in our other filings with the U.S. Securities and Exchange Commission (“SEC”), including our
cautionary discussion of risks and uncertainties under “Risk Factors” in our Registration Statements and Annual Reports. These
are factors that we believe could cause our actual results to differ materially from expected results. Other factors besides those we
have listed could also adversely affect us. Any forward-looking statement in this press release speaks only as of the date which it is
made. We disclaim any intention or obligation to publicly update or revise any forward-looking statement or other information contained
herein, whether as a result of new information, future events or otherwise, except as required by applicable law. You are advised, however,
to consult any additional disclosures we make in our reports to the SEC, which are available on the SEC’s website, https://www.sec.gov.
CONTACTS:
Company Contact:
Lior Fhima
Chief Financial Officer
IR@purple-biotech.com
| Purple Biotech Ltd. |
| |
| Condensed Consolidated Unaudited Interim Statements of Financial Position |
| | |
June 30, | | |
December 31, | |
| | |
2024 | | |
2023 | |
| | |
USD thousand | | |
USD thousand | |
| Assets | |
| | |
| |
| Cash and cash equivalents | |
| 6,524 | | |
| 14,489 | |
| Short term deposits | |
| 845 | | |
| 850 | |
| Other investments | |
| 22 | | |
| 73 | |
| Other current assets | |
| 473 | | |
| 376 | |
| | |
| | | |
| | |
| Total current assets | |
| 7,864 | | |
| 15,788 | |
| | |
| | | |
| | |
| Non-current assets | |
| | | |
| | |
| Right of use assets | |
| 240 | | |
| 316 | |
| Fixed assets, net | |
| 119 | | |
| 154 | |
| Intangible assets | |
| 27,842 | | |
| 28,044 | |
| | |
| | | |
| | |
| Total non–current assets | |
| 28,201 | | |
| 28,514 | |
| | |
| | | |
| | |
| Total assets | |
| 36,065 | | |
| 44,302 | |
| | |
| | | |
| | |
| Liabilities | |
| | | |
| | |
| Lease liability - short term | |
| 182 | | |
| 188 | |
| Accounts payable | |
| 3,042 | | |
| 3,532 | |
| Other payables | |
| 2,145 | | |
| 3,463 | |
| Warrants | |
| 1,099 | | |
| 2,518 | |
| | |
| | | |
| | |
| Total current liabilities | |
| 6,468 | | |
| 9,701 | |
| | |
| | | |
| | |
| Non-current liabilities | |
| | | |
| | |
| Lease liability | |
| 79 | | |
| 163 | |
| Post-employment benefit liabilities | |
| 141 | | |
| 141 | |
| | |
| | | |
| | |
| Total non-current liabilities | |
| 220 | | |
| 304 | |
| | |
| | | |
| | |
| Equity | |
| | | |
| | |
| Share capital, no par value | |
| - | | |
| - | |
| Share premium | |
| 135,597 | | |
| 133,184 | |
| Receipts on account of warrants | |
| 28,467 | | |
| 28,467 | |
| Capital reserve for share-based payments | |
| 8,972 | | |
| 10,088 | |
| Capital reserve from transactions with related parties | |
| 761 | | |
| 761 | |
| Capital reserves from hedging | |
| (2 | ) | |
| 19 | |
| Capital reserve from transactions with non-controlling interest | |
| (859 | ) | |
| (859 | ) |
| Accumulated loss | |
| (143,620 | ) | |
| (137,453 | ) |
| | |
| | | |
| | |
| Equity attributable to owners of the Company | |
| 29,316 | | |
| 34,207 | |
| Non-controlling interests | |
| 61 | | |
| 90 | |
| | |
| | | |
| | |
| Total equity | |
| 29,377 | | |
| 34,297 | |
| | |
| | | |
| | |
| Total liabilities and equity | |
| 36,065 | | |
| 44,302 | |
| Purple Biotech Ltd. |
| |
| Condensed Consolidated Unaudited Interim Statements of Operations and Other Comprehensive Income |
| | |
For the six months ended
June 30, | | |
For the three months ended
June 30, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| | |
USD thousand | | |
USD thousand | | |
USD thousand | | |
USD thousand | |
| | |
| | |
| | |
| | |
| |
| Research and development expenses | |
| 5,814 | | |
| 7,203 | | |
| 2,391 | | |
| 3,705 | |
| Sales, general and administrative expenses | |
| 1,840 | | |
| 3,054 | | |
| 865 | | |
| 1,430 | |
| Impairment loss | |
| 202 | | |
| - | | |
| 202 | | |
| - | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating loss | |
| 7,856 | | |
| 10,257 | | |
| 3,458 | | |
| 5,135 | |
| | |
| | | |
| | | |
| | | |
| | |
| Change in fair value of warrants | |
| (1,419 | ) | |
| - | | |
| (946 | ) | |
| - | |
| Finance expense | |
| 41 | | |
| 207 | | |
| 24 | | |
| 148 | |
| Finance income | |
| (282 | ) | |
| (401 | ) | |
| (121 | ) | |
| (123 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Finance expense (income), net | |
| (1,660 | ) | |
| (194 | ) | |
| (1,043 | ) | |
| 25 | |
| | |
| | | |
| | | |
| | | |
| | |
| Loss for the period | |
| 6,196 | | |
| 10,063 | | |
| 2,415 | | |
| 5,160 | |
| | |
| | | |
| | | |
| | | |
| | |
| Other Comprehensive Profit: | |
| | | |
| | | |
| | | |
| | |
| Items that will be transferred to profit or loss: | |
| | | |
| | | |
| | | |
| | |
| Loss (profit) on cash flow hedges | |
| 21 | | |
| (4 | ) | |
| 6 | | |
| (5 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Total comprehensive loss for the period | |
| 6,217 | | |
| 10,059 | | |
| 2,421 | | |
| 5,155 | |
| | |
| | | |
| | | |
| | | |
| | |
| Loss attributable to: | |
| | | |
| | | |
| | | |
| | |
| Owners of the Company | |
| 6,167 | | |
| 10,016 | | |
| 2,405 | | |
| 5,138 | |
| Non-controlling interests | |
| 29 | | |
| 47 | | |
| 10 | | |
| 22 | |
| | |
| | | |
| | | |
| | | |
| | |
| | |
| 6,196 | | |
| 10,063 | | |
| 2,415 | | |
| 5,160 | |
| | |
| | | |
| | | |
| | | |
| | |
| Total comprehensive loss attributable to | |
| | | |
| | | |
| | | |
| | |
| Owners of the Company | |
| 6,188 | | |
| 10,012 | | |
| 2,411 | | |
| 5,133 | |
| Non-controlling interests | |
| 29 | | |
| 47 | | |
| 10 | | |
| 22 | |
| | |
| | | |
| | | |
| | | |
| | |
| | |
| 6,217 | | |
| 10,059 | | |
| 2,421 | | |
| 5,155 | |
| | |
| | | |
| | | |
| | | |
| | |
| Loss per share data | |
| | | |
| | | |
| | | |
| | |
| Basic and diluted loss per ADS – USD | |
| 0.23 | | |
| 0.49 | | |
| 0.09 | | |
| 0.25 | |
| | |
| | | |
| | | |
| | | |
| | |
| Number of ADSs used in calculation | |
| 26,772,229 | | |
| 20,425,638 | | |
| 27,532,024 | | |
| 21,006,218 | |
Reconciliation of Adjusted Operating Loss
| | |
For the six months ended
June 30, | | |
For the three months ended
June 30, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| | |
USD thousand | | |
USD thousand | | |
USD thousand | | |
USD thousand | |
| | |
| | |
| | |
| | |
| |
| Operating loss for the period | |
| 7,856 | | |
| 10,257 | | |
| 3,458 | | |
| 5,135 | |
| Less ESOP expenses | |
| (484 | ) | |
| (1,245 | ) | |
| (218 | ) | |
| (493 | ) |
| | |
| 7,372 | | |
| 9,012 | | |
| 3,240 | | |
| 4,642 | |
Reconciliation of Adjusted Net Loss
| | |
For the six months ended
June 30, | | |
For the three months ended
June 30, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| | |
USD thousand | | |
USD thousand | | |
USD thousand | | |
USD thousand | |
| | |
| | |
| | |
| | |
| |
| Loss for the period | |
| 6,196 | | |
| 10,063 | | |
| 2,415 | | |
| 5,160 | |
| Less ESOP expenses | |
| (484 | ) | |
| (1,245 | ) | |
| (218 | ) | |
| (493 | ) |
| | |
| 5,712 | | |
| 8,818 | | |
| 2,197 | | |
| 4,667 | |
| Purple Biotech Ltd. |
| |
| Condensed Consolidated Unaudited Interim Statements of Cash Flows |
| | |
For the six months ended
June 30, | |
| | |
2024 | | |
2023 | |
| | |
USD thousand | | |
USD thousand | |
| Cash flows from operating activities: | |
| | |
| |
| Loss for the period | |
| (6,196 | ) | |
| (10,063 | ) |
| Adjustments: | |
| | | |
| | |
| Depreciation | |
| 97 | | |
| 99 | |
| Impairment loss | |
| 202 | | |
| - | |
| Finance expenses (income), net | |
| (1,660 | ) | |
| (194 | ) |
| Share-based payments | |
| 484 | | |
| 1,245 | |
| | |
| | | |
| | |
| | |
| (7,073 | ) | |
| (8,913 | ) |
| | |
| | | |
| | |
| Changes in assets and liabilities: | |
| | | |
| | |
| Changes in other investments and other current assets | |
| (162 | ) | |
| (118 | ) |
| Changes in accounts payables | |
| (490 | ) | |
| (628 | ) |
| Changes in other payables | |
| (1,333 | ) | |
| (1,467 | ) |
| Changes in post-employment benefit liabilities | |
| - | | |
| (161 | ) |
| | |
| | | |
| | |
| | |
| (1,985 | ) | |
| (2,374 | ) |
| | |
| | | |
| | |
| Net cash used in operating activities | |
| (9,058 | ) | |
| (11,287 | ) |
| | |
| | | |
| | |
| Cash flows from investing activities: | |
| | | |
| | |
| Acquisition of subsidiary, net of cash acquired | |
| - | | |
| (3,549 | ) |
| Proceed from other investments | |
| 187 | | |
| - | |
| Interest received | |
| 207 | | |
| 548 | |
| Decrease in short-term deposits | |
| 5 | | |
| 15,806 | |
| Acquisition of fixed assets | |
| - | | |
| (4 | ) |
| | |
| | | |
| | |
| Net cash provided by investing activities | |
| 399 | | |
| 12,801 | |
| | |
| | | |
| | |
| Cash flows from financing activities: | |
| | | |
| | |
| Proceeds from issuance ADSs | |
| 938 | | |
| 881 | |
| ADS issuance expenses paid | |
| (125 | ) | |
| (137 | ) |
| Repayment of lease liability | |
| (91 | ) | |
| (84 | ) |
| Interest paid | |
| (21 | ) | |
| (29 | ) |
| | |
| | | |
| | |
| Net cash provided by financing activities | |
| 701 | | |
| 631 | |
| | |
| | | |
| | |
| Net increase (decrease) in cash and cash equivalents | |
| (7,958 | ) | |
| 2,145 | |
| Cash and cash equivalents at the beginning of the period | |
| 14,489 | | |
| 15,030 | |
| Effect of translation adjustments on cash and cash equivalents | |
| (7 | ) | |
| 27 | |
| | |
| | | |
| | |
| Cash and cash equivalents at the end of the period | |
| 6,524 | | |
| 17,202 | |
Exhibit 99.2
Purple Biotech Ltd.
Condensed Consolidated
Unaudited Interim Financial Statements
As of June 30, 2024
| Purple Biotech Ltd. |
| |
| Condensed Consolidated Unaudited Interim Financial Statements as of June 30, 2024 |
Contents
| Purple Biotech Ltd. |
| |
| Condensed Consolidated Unaudited Interim Statements of Financial Position |
| | |
| |
June 30, | | |
December 31, | |
| | |
| |
2024 | | |
2023 | |
| | |
Note | |
USD
thousand | | |
USD
thousand | |
| Assets | |
| |
| | | |
| | |
| Cash and cash equivalents | |
| |
| 6,524 | | |
| 14,489 | |
| Short term deposits | |
| |
| 845 | | |
| 850 | |
| Other investments | |
| |
| 22 | | |
| 73 | |
| Other current assets | |
| |
| 473 | | |
| 376 | |
| | |
| |
| | | |
| | |
| Total current assets | |
| |
| 7,864 | | |
| 15,788 | |
| | |
| |
| | | |
| | |
| Non-current assets | |
| |
| | | |
| | |
| Right of use assets | |
| |
| 240 | | |
| 316 | |
| Fixed assets, net | |
| |
| 119 | | |
| 154 | |
| Intangible assets | |
| |
| 27,842 | | |
| 28,044 | |
| | |
| |
| | | |
| | |
| Total non–current assets | |
| |
| 28,201 | | |
| 28,514 | |
| | |
| |
| | | |
| | |
| Total assets | |
| |
| 36,065 | | |
| 44,302 | |
| | |
| |
| | | |
| | |
| Liabilities | |
| |
| | | |
| | |
| Lease liability - short term | |
| |
| 182 | | |
| 188 | |
| Accounts payable | |
| |
| 3,042 | | |
| 3,532 | |
| Other payables | |
| |
| 2,145 | | |
| 3,463 | |
| Warrants | |
| |
| 1,099 | | |
| (*)2,518 | |
| | |
| |
| | | |
| | |
| Total current liabilities | |
| |
| 6,468 | | |
| 9,701 | |
| | |
| |
| | | |
| | |
| Non-current liabilities | |
| |
| | | |
| | |
| Lease liability | |
| |
| 79 | | |
| 163 | |
| Post-employment benefit liabilities | |
| |
| 141 | | |
| 141 | |
| | |
| |
| | | |
| | |
| Total non-current liabilities | |
| |
| 220 | | |
| 304 | |
| | |
| |
| | | |
| | |
| Equity | |
| |
| | | |
| | |
| Share capital, no par value | |
| |
| - | | |
| - | |
| Share premium | |
4 | |
| 135,597 | | |
| 133,184 | |
| Receipts on account of warrants | |
| |
| 28,467 | | |
| 28,467 | |
| Capital reserve for share-based payments | |
6 | |
| 8,972 | | |
| 10,088 | |
| Capital reserve from transactions with related parties | |
| |
| 761 | | |
| 761 | |
| Capital reserves from hedging | |
| |
| (2 | ) | |
| 19 | |
| Capital reserve from transactions with non-controlling interest | |
| |
| (859 | ) | |
| (859 | ) |
| Accumulated loss | |
| |
| (143,620 | ) | |
| (137,453 | ) |
| | |
| |
| | | |
| | |
| Equity attributable to owners of the Company | |
| |
| 29,316 | | |
| 34,207 | |
| Non-controlling interests | |
| |
| 61 | | |
| 90 | |
| | |
| |
| | | |
| | |
| Total equity | |
| |
| 29,377 | | |
| 34,297 | |
| | |
| |
| | | |
| | |
| Total liabilities and equity | |
| |
| 36,065 | | |
| 44,302 | |
| Purple Biotech Ltd. |
| |
| Condensed Consolidated Unaudited Interim Statements of Operations and Other Comprehensive Income |
| | |
For the six months ended
June 30, | | |
For the three months ended
June 30, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| | |
USD
thousand | | |
USD
thousand | | |
USD
thousand | | |
USD
thousand | |
| | |
| | |
| | |
| | |
| |
| Research and development expenses | |
| 5,814 | | |
| 7,203 | | |
| 2,391 | | |
| 3,705 | |
| Sales, general and administrative expenses | |
| 1,840 | | |
| 3,054 | | |
| 865 | | |
| 1,430 | |
| Impairment loss | |
| 202 | | |
| - | | |
| 202 | | |
| - | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating loss | |
| 7,856 | | |
| 10,257 | | |
| 3,458 | | |
| 5,135 | |
| | |
| | | |
| | | |
| | | |
| | |
| Change in fair value of warrants | |
| (1,419 | ) | |
| - | | |
| (946 | ) | |
| - | |
| Finance expense | |
| 41 | | |
| 207 | | |
| 24 | | |
| 148 | |
| Finance income | |
| (282 | ) | |
| (401 | ) | |
| (121 | ) | |
| (123 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Finance expense (income), net | |
| (1,660 | ) | |
| (194 | ) | |
| (1,043 | ) | |
| 25 | |
| | |
| | | |
| | | |
| | | |
| | |
| Loss for the period | |
| 6,196 | | |
| 10,063 | | |
| 2,415 | | |
| 5,160 | |
| | |
| | | |
| | | |
| | | |
| | |
| Other Comprehensive Profit: | |
| | | |
| | | |
| | | |
| | |
| Items that will be transferred to profit or loss: | |
| | | |
| | | |
| | | |
| | |
| Loss (profit) on cash flow hedges | |
| 21 | | |
| (4 | ) | |
| 6 | | |
| (5 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Total comprehensive loss for the period | |
| 6,217 | | |
| 10,059 | | |
| 2,421 | | |
| 5,155 | |
| | |
| | | |
| | | |
| | | |
| | |
| Loss attributable to: | |
| | | |
| | | |
| | | |
| | |
| Owners of the Company | |
| 6,167 | | |
| 10,016 | | |
| 2,405 | | |
| 5,138 | |
| Non-controlling interests | |
| 29 | | |
| 47 | | |
| 10 | | |
| 22 | |
| | |
| | | |
| | | |
| | | |
| | |
| | |
| 6,196 | | |
| 10,063 | | |
| 2,415 | | |
| 5,160 | |
| | |
| | | |
| | | |
| | | |
| | |
| Total comprehensive loss attributable to | |
| | | |
| | | |
| | | |
| | |
| Owners of the Company | |
| 6,188 | | |
| 10,012 | | |
| 2,411 | | |
| 5,133 | |
| Non-controlling interests | |
| 29 | | |
| 47 | | |
| 10 | | |
| 22 | |
| | |
| | | |
| | | |
| | | |
| | |
| | |
| 6,217 | | |
| 10,059 | | |
| 2,421 | | |
| 5,155 | |
| | |
| | | |
| | | |
| | | |
| | |
| Loss per share data | |
| | | |
| | | |
| | | |
| | |
| Basic and diluted loss per ADS – USD | |
| 0.23 | | |
| 0.49 | | |
| 0.09 | | |
| 0.25 | |
| | |
| | | |
| | | |
| | | |
| | |
| Number of ADSs used in calculation | |
| 26,772,229 | | |
| 20,425,638 | | |
| 27,532,024 | | |
| 21,006,218 | |
The accompanying notes are an integral part of these condensed consolidated
interim financial statements.
| Purple Biotech Ltd. |
| |
| Condensed Consolidated Unaudited Interim Statements of Changes in Equity |
| | |
| | |
| | |
Receipts on | | |
Capital
reserve
For share | | |
| | |
Capital
reserve
from
transactions | | |
Capital
reserve
from
transactions
with non- | | |
| | |
| | |
Non- | | |
| |
| | |
Share | | |
Share | | |
account of | | |
based | | |
Hedging | | |
with related | | |
controlling | | |
Accumulated | | |
| | |
controlling | | |
Total | |
| | |
capital | | |
premium | | |
warrants | | |
payments | | |
reserve | | |
parties | | |
interest | | |
loss | | |
Total | | |
interests | | |
equity | |
| | |
USD thousand | |
| For the six months ended June 30, 2024: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| Balance as of January 1, 2024 (audited) | |
| - | | |
| 133,184 | | |
| 28,467 | | |
| 10,088 | | |
| 19 | | |
| 761 | | |
| (859 | ) | |
| (137,453 | ) | |
| 34,207 | | |
| 90 | | |
| 34,297 | |
| Transactions with owners of the Company: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Issuance of American Depository Shares (ADSs),
net of issuance costs | |
| - | | |
| 813 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 813 | | |
| - | | |
| 813 | |
| Share-based payments | |
| - | | |
| 1,600 | | |
| - | | |
| (1,116 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| 484 | | |
| - | | |
| 484 | |
| Loss for the
period | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (6,167 | ) | |
| (6,167 | ) | |
| (29 | ) | |
| (6,196 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Other comprehensive loss for the period | |
| - | | |
| - | | |
| - | | |
| - | | |
| (21 | ) | |
| - | | |
| - | | |
| - | | |
| (21 | ) | |
| - | | |
| (21 | ) |
| Balance as of June 30, 2024 | |
| - | | |
| 135,597 | | |
| 28,467 | | |
| 8,972 | | |
| (2 | ) | |
| 761 | | |
| (859 | ) | |
| (143,620 | ) | |
| 29,316 | | |
| 61 | | |
| 29,377 | |
The accompanying notes are integral part of these condensed consolidated
interim financial statements.
| Purple Biotech Ltd. |
| |
| Condensed Consolidated Unaudited Interim Statements of Changes in Equity |
| | |
| | |
| | |
Receipts on | | |
Capital
reserve
For share | | |
| | |
Capital
reserve
from
transactions | | |
Capital
reserve
from
transactions
with non- | | |
| | |
| | |
Non- | | |
| |
| | |
Share | | |
Share | | |
account of | | |
based | | |
Hedging | | |
with related | | |
controlling | | |
Accumulated | | |
| | |
controlling | | |
Total | |
| | |
capital | | |
premium | | |
warrants | | |
payments | | |
reserve | | |
parties | | |
interest | | |
loss | | |
Total | | |
interests | | |
equity | |
| | |
USD thousand | |
| For the six months ended June 30, 2023: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| Balance as of January 1, 2023 (audited) | |
| - | | |
| 126,407 | | |
| 28,017 | | |
| 10,164 | | |
| (6 | ) | |
| 761 | | |
| (859 | ) | |
| (117,573 | ) | |
| 46,911 | | |
| 187 | | |
| 47,098 | |
| Transactions with owners of the Company: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Issuance of American Depository Shares (ADSs),
net of issuance costs | |
| - | | |
| 680 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 680 | | |
| - | | |
| 680 | |
| Share-based payments | |
| - | | |
| 1,377 | | |
| - | | |
| (132 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| 1,245 | | |
| - | | |
| 1,245 | |
| ADS issued in connection with the
purchase of a subsidiary | |
| - | | |
| 3,781 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 3,781 | | |
| - | | |
| 3,781 | |
| Loss for the
period | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (10,016 | ) | |
| (10,016 | ) | |
| (47 | ) | |
| (10,063 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Other comprehensive profit for the period | |
| - | | |
| - | | |
| - | | |
| - | | |
| 4 | | |
| - | | |
| - | | |
| - | | |
| 4 | | |
| - | | |
| 4 | |
| Balance as of June 30, 2023 | |
| - | | |
| 132,245 | | |
| 28,017 | | |
| 10,032 | | |
| (2 | ) | |
| 761 | | |
| (859 | ) | |
| (127,589 | ) | |
| 42,605 | | |
| 140 | | |
| 42,745 | |
The accompanying notes are an integral part of these condensed consolidated
interim financial statements.
| Purple Biotech Ltd. |
| |
| Condensed Consolidated Unaudited Interim Statements of Cash Flows |
| | |
For the six months ended
June 30, | |
| | |
2024 | | |
2023 | |
| | |
USD
thousand | | |
USD
thousand | |
| Cash flows from operating activities: | |
| | |
| |
| Loss for the period | |
| (6,196 | ) | |
| (10,063 | ) |
| Adjustments: | |
| | | |
| | |
| Depreciation | |
| 97 | | |
| 99 | |
| Impairment loss | |
| 202 | | |
| - | |
| Finance expenses (income), net | |
| (1,660 | ) | |
| (194 | ) |
| Share-based payments | |
| 484 | | |
| 1,245 | |
| | |
| | | |
| | |
| | |
| (7,073 | ) | |
| (8,913 | ) |
| | |
| | | |
| | |
| Changes in assets and liabilities: | |
| | | |
| | |
| Changes in other investments and other current assets | |
| (162 | ) | |
| (118 | ) |
| Changes in accounts payables | |
| (490 | ) | |
| (628 | ) |
| Changes in other payables | |
| (1,333 | ) | |
| (1,467 | ) |
| Changes in post-employment benefit liabilities | |
| - | | |
| (161 | ) |
| | |
| | | |
| | |
| | |
| (1,985 | ) | |
| (2,374 | ) |
| | |
| | | |
| | |
| Net cash used in operating activities | |
| (9,058 | ) | |
| (11,287 | ) |
| | |
| | | |
| | |
| Cash flows from investing activities: | |
| | | |
| | |
| Acquisition of subsidiary, net of cash acquired | |
| - | | |
| (3,549 | ) |
| Proceed from other investments | |
| 187 | | |
| - | |
| Interest received | |
| 207 | | |
| 548 | |
| Decrease in short-term deposits | |
| 5 | | |
| 15,806 | |
| Acquisition of fixed assets | |
| - | | |
| (4 | ) |
| | |
| | | |
| | |
| Net cash provided by investing activities | |
| 399 | | |
| 12,801 | |
| | |
| | | |
| | |
| Cash flows from financing activities: | |
| | | |
| | |
| Proceeds from issuance ADSs | |
| 938 | | |
| 881 | |
| ADS issuance expenses paid | |
| (125 | ) | |
| (137 | ) |
| Repayment of lease liability | |
| (91 | ) | |
| (84 | ) |
| Interest paid | |
| (21 | ) | |
| (29 | ) |
| | |
| | | |
| | |
| Net cash provided by financing activities | |
| 701 | | |
| 631 | |
| | |
| | | |
| | |
| Net increase (decrease) in cash and cash equivalents | |
| (7,958 | ) | |
| 2,145 | |
| Cash and cash equivalents at the beginning of the period | |
| 14,489 | | |
| 15,030 | |
| Effect of translation adjustments on cash and cash equivalents | |
| (7 | ) | |
| 27 | |
| | |
| | | |
| | |
| Cash and cash equivalents at the end of the period | |
| 6,524 | | |
| 17,202 | |
The accompanying notes are an integral part of
these condensed consolidated interim financial statements.
| Purple Biotech Ltd. |
| |
| Notes to Condensed Consolidated Unaudited Interim Financial Statements as of June 30, 2024 |
Note 1 - General
| |
1. |
Purple Biotech Ltd. (hereinafter: the “Company” or “Purple”)
is a clinical-stage company developing first-in-class therapies that overcome tumor immune evasion and drug resistance. |
The Company was incorporated in Israel
as a private company in August 1968, and has been listed for trading on the Tel Aviv Stock Exchange since September 1978. In October 2012,
the Company disposed all its previous operations, and in July 2013, the Company acquired shares of Kitov Pharma Ltd. from its shareholders,
in exchange for the Company’s shares. In December 2020 the Company changed its name from Kitov Pharma Ltd. to Purple Biotech Ltd.
| |
2. |
The Company’s securities (American Depository Shares (“ADS”)) were listed for trading on the NASDAQ in November 2015 (including a Series A warrant that expired in November 2020). Each ADS represents 10 ordinary shares with no par value following a reverse split in effect from August 23, 2020 (see Note 10A in the annual financial statements). Each 10 shares enable the purchase of 1 ADS. |
The Company’s address is 4 Oppenheimer
St., Science Park, Rehovot 7670104 Israel.
The Company together with its subsidiaries
TyrNovo LTD, FameWave LTD, Purple Biotech GmbH and Immunorizon LTD are referred to, in these consolidated financial statements, as “the
Group”.
| |
3. |
Since incorporation through June 30, 2024, the
Group has incurred losses and negative cash flows from operations mainly attributed to its development efforts and has an accumulated
deficit of USD 143.6 million. The Group has financed its operations mainly through private and public financing rounds. Through June 30,
2024, the Company raised (excluding exercise of warrants) a total of USD 102.3 million net of issuance expenses.
Based on the projected cash flows and current
cash balances, management currently is of the opinion that its existing cash will be sufficient to fund operations until the end of the
third quarter of 2025. Subsequently, management’s plans include pursuing alternative financing arrangements or reducing expenditures
as necessary to meet the Company’s future cash requirements. However, there is no assurance that, the Company will be able to raise
additional capital, when needed, on favorable terms, or at all, or reduce discretionary spending to provide the required liquidity. |
| |
4. |
On October 2023, Hamas terrorists conducted attacks on civilian and
military targets in Israel, leading to a military campaign against the terrorist organizations. The ongoing conflict between Israel and
Hamas, as well as the potential escalation of tensions with Hezbollah, could adversely impact the Company's operations and ability to
raise capital.
While the Company's clinical studies for CM24 and NT219 have not yet
experienced material interruptions or delays, a prolonged conflict could disrupt the study sites located in Israel. Additionally, the
Company's employees are located in Israel, and shelter-in-place or work-from-home measures could temporarily affect their ability to perform
daily tasks.
The duration and severity of the ongoing conflict is uncertain, and
it could continue to disrupt the Company's business, operations, supply sources, and fundraising capabilities. |
| |
B. |
Events in the reporting period |
| |
|
On June 19, 2024 the Company signed a Note Payoff agreement with Coeptis and agreed to convert 50% of the then outstanding principal, approximately $219 thousand, into 1 million Coeptis shares and update the payment date of the remaining unpaid principal and accrued interest to August 31, 2024. |
| Purple Biotech Ltd. |
| |
| Notes to Condensed Consolidated Unaudited Interim Financial Statements as of June 30, 2024 |
Note 2 - Basis of Preparation
| |
A. |
Statement of compliance with International Financial Reporting Standards |
These condensed consolidated interim
financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and do not include all of the information
required for full annual financial statements. They should be read in conjunction with the financial statements as at and for the year
ended December 31, 2023 (hereinafter - “the Annual Financial Statements”). However, selected explanatory notes are included
to explain events and transactions that are significant to an understanding of the changes in the Group’s financial position and
performance since the last Annual Financial Statements.
These condensed consolidated interim
financial statements were approved for issue by the Group’s Board of Directors on August 15, 2024.
| |
B. |
Use of judgments and estimates |
The preparation of financial statements
in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies
and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
The significant judgments made by management
in applying the Group’s accounting policies and the principal assumptions used in the estimation of uncertainty were the same as
those that applied to the Annual Financial Statements.
Note 3 -
Material Accounting Policies
The accounting policies applied by the
Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its Annual Financial
Statements except as described below.
Initial application of new standards,
amendments to standards, and interpretations:
Amendment to IAS 1, Presentation
of Financial Statements: Classification of liabilities as current or non-current
The amendment replaces the specific
classification requirement of certain liabilities as current or non-current. According to the amendment, a liability will be classified
as non-current when the entity has a right to defer payment for a period of at least 12 months after the reporting period, which is "substantive"
(Substance) and which exists at the end of the reporting period. The amendment clarifies that the conversion right of a liability will
affect the classification of the instrument as a whole as current or non-current unless the conversion component is equity. The amendment
is affective retrospectively for reporting periods beginning on or after January 1, 2024.
| Purple Biotech Ltd. |
| |
| Notes to Condensed Consolidated Unaudited Interim Financial Statements as of June 30, 2024 |
As a result of implementing the amendment,
the company changed its policy regarding the classification of warrants classified as a liability. Prior to the implementation of the
amendment, when classifying the warrants as current or non-current, the conversion options of the counterparty were not considered. Following
the implementation of the amendment, since the warrants include a conversion component, the company takes into account the possible date
at which the warrants can be converted, when classifying the warrants as current or non-current. Since the conversion option can be exercised
within 12 months after the reporting period, the company retrospectively classified the warrants as a current liability.
Accounting standards issued not yet
adopted:
IFRS 18, Presentation and Disclosure
in Financial Statements.
This standard replaces IAS 1, Presentation
of Financial Statements. The purpose of the standard is to provide improved structure and content for financial statements, particularly
in the income statement. The standard includes new disclosure and presentation requirements as well as requirements brought from IAS 1,
Presentation of Financial Statements with minor wording changes. As part of the new disclosure requirements, companies will be required
to present two intermediate summaries in the profit or loss statement: operating profit and profit before finance and tax. In addition,
for most companies, the results in the profit or loss statement will be classified into three categories: operating profit, investment
profit, and financing profit. In addition to changes in the structure of the profit and loss statements, the standard also includes a
requirement to provide a separate disclosure in the financial statements regarding the use of performance measures defined by management
(non-GAAP measures). Also, as part of the amendment, specific guidance was added for the aggregation and disaggregation of items in the
financial statements and notes. The standard will encourage companies to avoid classifying items as 'other' (e.g., other expenses), and
such classification will trigger additional disclosure requirements. The standard is effective retrospectively for annual periods beginning
on or after January 1, 2027, with early application permitted. The group is examining the implications of the amendment on the financial
statements.
Amendments to IFRS 9 and IFRS 7 (Financial
Instruments)
In May 2024, the IASB issued amendments
to IFRS 9 (Financial instruments) and IFRS 7 (Financial instruments – Disclosures). The amendments provide clarifications for the
timing of recognition and derecognition of financial instruments, adding an exception regarding the write off date of financial liabilities
that are eliminated in electronic transfers of cash. The amendments also relate to the classification of financial assets and include
updated guidance on how to assess whether contractual cash flows of a financial asset are solely payments of principal and interest (SPPI)
when the contractual terms and interest of the asset include conditional features, adding examples such as index-linking to ESG. The amendments
clarify when financial instruments are contractually linked and when they constitute non-recourse financial assets for the purpose of
determining whether they include only payments of principal and interest (SPPI). The amendments also add certain disclosure requirements
for financial instruments with conditional features and for equity instruments measured at fair value through other comprehensive income.
The amendments are effective for annual periods beginning on or after January 1, 2026, with early adoption permitted. The Group is currently
assessing the potential effect of these amendments.
| Purple Biotech Ltd. |
| |
| Notes to Condensed Consolidated Unaudited Interim Financial Statements as of June 30, 2024 |
Note 4 - Capital and reserves
During the reported periods, the following
shares were issued:
| | |
For the six months ended | |
| | |
June 30,
2024 | | |
June 30,
2023 | |
| | |
Number of ADS in thousands | |
| Opening balance | |
| 25,238 | | |
| 18,482 | |
| Issuance of ADSs (1) | |
| 3,595 | | |
| 2,694 | |
| Vesting of RSUs | |
| 185 | | |
| 235 | |
| | |
| | | |
| | |
| | |
| 29,018 | | |
| 21,411 | |
| |
(1) |
During the period the Company issued under the ATM program 1,677 thousand ADSs. In addition, the Company converted October’s pre-funded warrants into 1,918 thousand ADSs. |
Note 5 - Financial Instruments
Financial instruments measured
at fair value
Fair value hierarchy of financial instruments
measured at fair value:
| | |
June 30, 2024 | |
| | |
Level 1 | | |
Level 2 | | |
Level 3 | | |
Total | |
| | |
USD thousands | |
| Financial asset and liabilities | |
| | | |
| | | |
| | | |
| | |
| Convertible debt instrument | |
| - | | |
| - | | |
| 22 | | |
| 22 | |
| Financial liability of October 2023 warrants | |
| - | | |
| - | | |
| 1,099 | | |
| 1,099 | |
| Purple Biotech Ltd. |
| |
| Notes to Condensed Consolidated Unaudited Interim Financial Statements as of June 30, 2024 |
| | |
June 30, 2023 | |
| | |
Level 1 | | |
Level 2 | | |
Level 3 | | |
Total | |
| | |
USD thousands | |
| Financial asset | |
| | |
| | |
| | |
| |
| Convertible debt instrument | |
| - | | |
| - | | |
| 352 | | |
| 352 | |
Details regarding fair value measurement at Level 3:
| | |
Financial asset-
convertible note | | |
Financial liability-
warrant | |
| | |
| | |
| |
| Balance as of January 1, 2024 | |
| 73 | | |
| 2,518 | |
| Revaluation | |
| (51 | ) | |
| (1,419 | ) |
| Balance as of June 30, 2024 | |
| 22 | | |
| 1,099 | |
| Financial instrument | |
Valuation
method
determining
fair value | |
Significant
unobservable
inputs | |
| |
| | |
| |
| |
| |
| For the year ended June 30, 2024 | |
| |
| |
| |
| Warrant | |
Black - Scholes | |
expected term | |
| 4.8 years | |
| | |
| |
expected volatility | |
| 94.53 | % |
| | |
| |
annual risk free interest | |
| 4.44 | % |
| | |
| |
dividend yield | |
| 0 | |
| | |
| |
| |
| | |
| Convertible debt instrument | |
| |
DLOM | |
| 11.7 | % |
| | |
| |
| |
| | |
| For the year ended June 30, 2023 | |
| |
| |
| | |
| Convertible debt instrument | |
| |
DLOM | |
| 44.0 | % |
| Purple Biotech Ltd. |
| |
| Notes to Condensed Consolidated Unaudited Interim Financial Statements as of June 30, 2024 |
Note 6 - Share-based payments
In the reporting period, no share-based
payments were granted.
During the three and six-month period
ended June 30, 2024 the Company recorded gross expenses of USD 238 thousand and USD 535 thousand, net of expenses forfeited for employees
who left amounting to USD 20 thousand and USD 51 thousand, respectively.
Of these amounts, USD 220 thousand and
USD 485 thousand are attributed to key management personnel, respectively. (For the three and six-month period ended June 30, 2023 the
Company recorded an expense of USD 493 thousand and USD 1,245 thousand of which USD 417 thousand and USD 1,095 thousand are to key management
personnel, respectively).
Note 7 - Commitments and contingent liability
2017 Motions to Approve a Class Action in
Israel
Following proceedings described in Note
13B(3) to the annual Financial statements of 2023, on June 19, 2024, the Tel Aviv District Court (Economic Division) dismissed the previously
disclosed lawsuit and motion to approve the lawsuit as a class action lawsuit which was filed against the Company, its executive directors
and certain of its present and former directors in February 2017 (the “2017 Motion”). As previously disclosed, in the 2017
Motion the plaintiffs alleged, among other things, that the Company included misleading information in its public filings related to its
former lead drug candidate, Consensi, which caused the class for which the plaintiffs were seeking recognition an aggregate loss of approximately
NIS 29 million (approximately $7.8 million). The Court has issued its final decision in the 2017 Motion, whereby it fully dismissed the
lawsuit against the defendants as well as the motion to approve the lawsuit as a class action lawsuit. Each party will bear its own court
expenses.
Note 8 - Subsequent
Events
| 1. | On July 2, 2024 the Company raised USD 2 million gross
(approximately USD 1.8 million net of placement agent fees) in a warrant inducement transaction. In this transaction, the Company
induced the exercise of certain existing warrants to purchase an aggregate of 5,633,509 American Depositary Shares (ADSs) of which
3,329,383 ADSs held in abeyance. The existing warrants had original exercise prices ranging from $1.25 to $20.00 per ADS and were originally
issued by the Company in October 2023, June 2020, January 2019 and June 2018. The exercise price for these existing warrants was reduced
to $0.36 per ADS. |
In consideration
for the exercise of the existing warrants, the Company issued new unregistered Series A-1 warrants to purchase up to an aggregate of 4,979,383
ADSs and new unregistered Series A-2 warrants to purchase up to an aggregate of 6,287,635 ADSs. The new warrants are immediately exercisable
at an exercise price of $0.40 per ADS. The Series A-1 warrants have a term of five years from the issuance date and the Series A-2 warrants
have a term of twenty-four months from the issuance date.
In
addition, the Company issued to the placement agent (or its designees) unregistered compensation warrants to purchase up to 394,346 ADSs
at an exercise price of USD 0.45 per ADS. The unregistered placement agent warrants are immediately exercisable and have a term
of five years from the date of July 2, 2024.
| 2. | On August 15, 2024, the board of directors of the Company granted
7,575 thousand options (to purchase the equivalent of 757.5 thousand ADSs) and 7,575 thousand RSUs (equivalent to 757.5 thousand ADSs)
to the Board members and CEO, subject to the approval of the shareholders, to management and employees. The options have an exercise price
of USD 0.37 per one ADS. The options and RSUs will vest over 3 years from the date of grant. The options are exercisable for 5 years from
grant date. The estimated fair value of these options and RSUs as of the grant date was measured at USD 473 thousand. |
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