Exhibit 99.2
CAN-FITE BIOPHARMA LTD.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2021
UNAUDITED
IN U.S. DOLLARS
INDEX
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CAN-FITE BIOPHARMA LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S dollars in thousands (except for share and per share data)
| June 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| Unaudited | Audited | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Short-term deposits | ||||||||
| Other receivable and prepaid expenses | ||||||||
| Short-term investment | ||||||||
| Total current assets | ||||||||
| NON-CURRENT ASSETS: | ||||||||
| Operating lease right of use assets | ||||||||
| Property, plant and equipment, net | ||||||||
| Total long-term assets | ||||||||
| Total assets | $ | $ | ||||||
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
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CAN-FITE BIOPHARMA LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S dollars in thousands (except for share and per share data)
| June 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| Unaudited | Audited | |||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Trade payables | $ | $ | ||||||
| Current maturity of operating lease liability | ||||||||
| Deferred revenues | ||||||||
| Other accounts payable | ||||||||
| Total current liabilities | ||||||||
| NON-CURRENT LIABILITIES: | ||||||||
| Long - term operating lease liability | ||||||||
| Deferred revenues | ||||||||
| Total long-term liabilities | ||||||||
| CONTINGENT LIABILITIES AND COMMITMENTS | ||||||||
| SHAREHOLDERS’ EQUITY: | ||||||||
| Ordinary shares of NIS | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive income | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total equity | ||||||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
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CAN-FITE BIOPHARMA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
U.S dollars in thousands (except for share and per share data)
Six months ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Unaudited | ||||||||
| Revenues | $ | $ | ||||||
| Research and development expenses | ( | ) | ( | ) | ||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Operating loss | ( | ) | ( | ) | ||||
| Total financial income (expenses), net | ( | ) | ||||||
| Net loss | ( | ) | ( | ) | ||||
| Total comprehensive loss | ( | ) | ( | ) | ||||
| Deemed dividend | ( | ) | ||||||
| Net loss attributed to ordinary shareholders | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted net loss per share | ( | ) | ( | ) | ||||
| Weighted average number of ordinary shares used in computing basic and diluted net loss per share | ||||||||
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
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CAN-FITE BIOPHARMA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
U.S dollars in thousands (except for share and per share data)
| Ordinary shares | Additional paid-in | Accumulated other comprehensive | Accumulated | Total | ||||||||||||||||||||
| Number | Amount | capital | income | deficit | equity | |||||||||||||||||||
| Balance as of January 1, 2020 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Deemed dividends related to the warrants exercise | - | ( | ) | |||||||||||||||||||||
| Issuance of share capital and warrants, net of issuance expenses of $ | ( | ) | ||||||||||||||||||||||
| Share-based payment | - | |||||||||||||||||||||||
| Balance as of June 30, 2020 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Balance as of January 1, 2021 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Issuance of share capital due to warrants exercise (Note 6a) | ( | ) | ||||||||||||||||||||||
| Issuance of share capital in exchange for services (Note 6b) | ( | ) | ||||||||||||||||||||||
| Share-based payment | - | |||||||||||||||||||||||
| Balance as of June 30, 2021 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
The accompanying notes are an integral part of the interim consolidated financial statements.
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CAN-FITE BIOPHARMA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S dollars in thousands (except for share and per share data)
| Six
months ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Unaudited | ||||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments required to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation of property, plant and equipment | ||||||||
| Decrease in operating lease right of use asset | ||||||||
| Issuance of share capital in exchange for services | ||||||||
| Share-based payment | ||||||||
| Changes in fair value of short-term investment | ( | ) | ( | ) | ||||
| Decrease (increase) in accounts receivable and prepaid expenses | ( | ) | ||||||
| Increase (decrease) in trade payables | ( | ) | ||||||
| Decrease in operating lease liability | ( | ) | ( | ) | ||||
| Increase (decrease) in deferred revenues | ( | ) | ||||||
| Decrease in other accounts payable | ( | ) | ( | ) | ||||
| Net cash used in operating activities | $ | ( | ) | $ | ( | ) | ||
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
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CAN-FITE BIOPHARMA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S dollars in thousands (except for share and per share data)
| Six
months ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Unaudited | ||||||||
| Cash flows from investing activities: | ||||||||
| Purchase of property, plant and equipment | ( | ) | ||||||
| Net cash used in investing activities | $ | ( | ) | $ | ||||
| Cash flows from financing activities: | ||||||||
| Issuance of share capital and warrants, net of issuance expenses | ||||||||
| Net cash provided by financing activities | $ | $ | ||||||
| Exchange differences on balances of cash and cash equivalents | ||||||||
| Increase (decrease) in cash, cash equivalents and short-term deposits | ( | ) | ||||||
| Cash, cash equivalents and short-term deposits at the beginning of the period | ||||||||
| Cash,cash equivalents and short-term deposits at the end of the period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Net cash paid during the year for interest | ||||||||
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
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CAN-FITE BIOPHARMA LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S dollars in thousands (except for share and per share data)
| NOTE 1:- | GENERAL |
| a. | Can-Fite Biopharma Ltd. (the “Company”) was incorporated and started to operate in September 1994 as a private Israeli company. Can-Fite is a clinical-stage biopharmaceutical company focused on developing orally bioavailable small molecule therapeutic products for the treatment of cancer, liver, inflammatory diseases, COVID-19 and erectile dysfunction. Its platform technology utilizes the Gi protein associated A3AR as a therapeutic target. A3AR is highly expressed in inflammatory and cancer cells, and not significantly expressed in normal cells, suggesting that the receptor could be a unique target for pharmacological intervention. The Company’s pipeline of drug candidates are synthetic, highly specific agonists and allosteric modulators, or ligands or molecules that initiate molecular events when binding with target proteins, targeting the A3AR.
The Company’s ordinary shares have been publicly traded on the Tel-Aviv Stock Exchange since October 2005 under the symbol “CFBI” and the Company’s American Depositary Shares (“ADSs”) began public trading on the over the counter market in the U.S. in October 2012 and since November 2013 the Company’s ADSs have been publicly traded on the NYSE American under the symbol “CANF”. Each ADS represents 30 ordinary shares of the Company. | |
| b. | In the six months ended June 30, 2021, the Company incurred net losses
of $ |
Furthermore, the Company intends to continue to finance its operating activities by raising capital and seeking collaborations with multinational companies in the industry. There are no assurances that the Company will be successful in obtaining an adequate level of financing needed for its long-term research and development activities.
On
August 11, 2021, the Company entered into a definitive agreement for the issuance of ordinary shares, pre-funded warrants and warrants
for a total consideration of $
If the Company will not have sufficient liquidity resources, the Company may not be able to continue the development of all of its products or may be required to implement cost reduction and may be required to delay part of its development programs. The Company’s management and board of directors are of the opinion that its current financial resources will be sufficient to continue the development of the Company’s products for at least the next twelve months beyond the date of the filing date of these consolidated financial statements.
| c. | The global pandemic resulting from the disease known as COVID-19, caused by a novel strain of coronavirus, SARS-CoV-2, has caused national and global economic and financial market disruptions and may adversely impact our business. Although the Company did not see a material impact on its results of operations for the six months ended June 30, 2021 due to the COVID-19 pandemic, the Company cannot predict the duration or magnitude of the pandemic or the full impact that it may have on the Company’s operations and workforce, including the Company’s research and clinical trials and its ability to raise capital, which in turn could have an adverse impact on the Company’s business, financial condition and results of operation. |
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CAN-FITE BIOPHARMA LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S dollars in thousands (except for share and per share data)
| NOTE 1:- | GENERAL (Cont.) |
| d. | On June 28, 2021, the Company announced it signed a development and commercialization agreement with Vetbiolix, a France-based veterinary biotech company, for the development of Piclidenoson for the treatment of osteoarthritis in companion animals including dogs and cats. According to the agreement, the Company will grant Vetbiolix an exclusive option to purchase its license of Piclidenoson in the veterinary osteoarthritis market for two years from the signature date, during which time Vetbiolix will conduct proof-of-concept studies and cover all associated costs. If the studies yield positive data and Vetbiolix exercises its option to obtain the license from Can-Fite, then Vetbiolix will be obligated to pay Can-Fite an upfront payment of |
| NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES |
Basis of Presentation
These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2020. The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2020, are applied consistently in these interim consolidated financial statements.
Use of Estimates
Preparation of condensed consolidated financial statements in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) requires the use of estimates and judgments that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. These estimates form the basis for judgments we make about the carrying values of our assets and liabilities, which are not readily apparent from other sources. We base our estimates and judgments on various assumptions that we believe are reasonable under the circumstances. U.S. GAAP requires us to make estimates and judgments in several areas, including, but not limited to, those related to revenue recognition and other account receivables. These estimates are based on management's knowledge about current events and expectations about actions we may undertake in the future. Actual results could differ materially from those estimates.
Significant Accounting Policies
There have been no material changes to our significant accounting policies from our Annual Report on Form 20-F for the fiscal year ended December 31, 2020.
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CAN-FITE BIOPHARMA LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S dollars in thousands (except for share and per share data)
| NOTE 3:- | UNAUDITED INTERIM FINANCIAL STATEMENTS |
The accompanying condensed consolidated balance sheet as of June 30, 2021, the condensed consolidated statements of comprehensive loss and the condensed consolidated statements of cash flows for the six months ended June 30, 2021 and 2020, as well as the condensed consolidated statement of changes in shareholders’ equity for the six months ended June 30, 2021, are unaudited.
These unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. In management’s opinion, the unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of the Company’s financial position as of June 30, 2021, as well as its results of operations and cash flows for the six months ended June 30, 2021 and 2020. The results of operations for the six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021.
| NOTE 4:- | FAIR VALUE MEASUREMENTS |
In accordance with ASC 820 “Fair Value Measurements and Disclosures”, the Company measures its short-term investment at fair value. Short-term investments are classified within Level 1 as the valuation inputs are valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. The Company’s short-term investment consists of an equity investment in a publicly traded company.
The Company’s financial assets and liabilities measured at fair value on a recurring basis, consisted of the following types of instruments as of the following dates: instruments as of the following dates:
| June 30, 2021 | ||||||||||||||||
| Fair value measurements | ||||||||||||||||
| Description | Fair value | Level 1 | Level 2 | Level 3 | ||||||||||||
| Short-term investment | $ | $ | $ | $ | ||||||||||||
| Total financial assets | $ | $ | $ | $ | ||||||||||||
| December 31, 2020 | ||||||||||||||||
| Fair value measurements | ||||||||||||||||
| Description | Fair value | Level 1 | Level 2 | Level 3 | ||||||||||||
| Short-term investment | $ | $ | $ | $ | ||||||||||||
| Total financial assets | $ | $ | $ | $ | ||||||||||||
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CAN-FITE BIOPHARMA LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S dollars in thousands (except for share and per share data)
| NOTE 5:- | CONTINGENT LIABILITIES AND COMMITMENTS |
On March 16, 2021, the Company announced it signed an exclusive distribution agreement with Switzerland-based Ewopharma for Piclidenoson in the treatment of psoriasis and Namodenoson in the treatment of liver diseases namely, hepatocellular carcinoma (HCC) the most common form of liver cancer and non-alcoholic steatohepatitis (NASH). Under the terms of the distribution agreement, Ewopharma paid Can-Fite $
Contract liabilities include amounts received from customers for which revenue has not yet been recognized. Contract liabilities amounted to $ |
| NOTE 6:- | SHAREHOLDERS’ EQUITY |
| a. | During the first quarter of 2021, |
| b. | In March 2021, the Company issued |
| c. | On April 13, 2021, the Company’s board of directors approved a grant of unlisted options exercisable into |
The fair value of the Company’s share options granted was estimated using the binomial option pricing model using the following range assumptions:
| Description | April
13, 2021 | |||
| Risk-free interest rate | % | |||
| Expected volatility | % | |||
| Dividend yield | ||||
| Contractual life | ||||
| Early Exercise Multiple (Suboptimal Factor) | ||||
| Exercise price (NIS) | ||||
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CAN-FITE BIOPHARMA LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S dollars in thousands (except for share and per share data)
| NOTE 6:- | SHAREHOLDERS’ EQUITY (CONT.) |
| d. | On April 13, 2021, the Company’s board of directors approved a grant of unlisted options exercisable into |
| e. | On June 22, 2021, the Company’s board of directors approved a grant of unlisted options exercisable into |
| NOTE 7:- | LOSS PER SHARE |
Basic loss per share is calculated based on the weighted average number of ordinary shares outstanding during each period. Diluted net loss per share is calculated based on the weighted average number of ordinary shares outstanding during each period, plus dilutive potential in accordance with ASC 260, “Earnings per Share.”
All outstanding share options and warrants for the periods ended June 30, 2021 and 2020 have been excluded from the calculation of the diluted net loss per share, because all such securities are anti-dilutive for all periods presented.
To
compute diluted loss per share for the six-month period ended June 30, 2021 and 2020, the total number of
| NOTE 8:- | SUBSEQUENT EVENTS |
| a. | On August 5, 2021, the Company’s shareholder’s approved the grant of unlisted options to the Company’s director. See also Note 6e. | |
| b. | On August 11, 2021, |
The Company also agreed to issue and sell to the investor, in a concurrent private placement, unregistered warrants to purchase up to an aggregate of |
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