Israel | Not applicable | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | ||
Identification No.) |
Kiryat Hadassah Minrav Building – Fifth Floor | ||
Jerusalem, Israel | 9112002 | |
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||
Ordinary Shares, par value NIS 0.0000769 per share | ENTX | Nasdaq Capital Market |
Large accelerated filer |
| ☐ | Accelerated filer | ☐ |
Non-Accelerated filer | ☒ | Smaller reporting company | ☒ |
Emerging growth company |
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• | Clinical development involves a lengthy and expensive process with uncertain outcomes. We may incur additional costs and experience delays in developing and commercializing or be unable to develop or commercialize our current and future product candidates; |
• | The regulatory approval processes of the U.S. Food and Drug Administration (“FDA”) and comparable foreign authorities are lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be materially harmed; |
• | Preclinical development is uncertain. Our preclinical programs may experience delays or may never advance to clinical trials, which would adversely affect our ability to obtain regulatory approvals or commercialize these programs on a timely basis or at all; |
• | Positive results from preclinical studies and early-stage clinical trials may not be predictive of future results. Initial positive results in any of our clinical trials may not be indicative of results obtained when the trial is completed or in later stage trials; |
• | The scope, progress and costs of developing our product candidates such as EB613 for Osteoporosis and EB612 or other oral peptides for Hypoparathyroidism may alter over time based on various factors such as regulatory requirements, collaboration agreements, the competitive environment and new data from pre-clinical and clinical studies; |
• | The accuracy of our estimates regarding expenses, capital requirements, the sufficiency of our cash resources and the need for additional financing; |
• | Our ability to continue as a going concern absent access to sources of liquidity; |
• | Our ability to raise additional funds or consummate strategic partnerships to offset additional required capital to pursue our business objectives, which may not be available on acceptable terms or at all. A failure to obtain this additional capital when needed, or failure to consummate strategic partnerships, could delay, limit or reduce our product development, and other operations; |
• | Even if a current or future product candidate receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success; |
• | The successful commercialization of our product candidates, if approved, will depend in part on the extent to which governmental authorities and third-party payors establish adequate coverage and reimbursement levels and pricing policies; |
• | Failure to obtain or maintain coverage and adequate reimbursement for our product candidates, if approved, could limit our ability to market those products and decrease our ability to generate revenue; |
• | If we are unable to obtain and maintain patent protection for our product candidates, or if the scope of the patent protection obtained is not sufficiently broad or robust, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our product candidates may be adversely affected; |
• |
Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain; |
• | Our reliance on third parties to conduct our clinical trials and on third-party suppliers to supply or produce our product candidates; |
• | Our interpretation of FDA feedback and guidance and how such guidance may impact our clinical development plan; |
• | Our ability to use and expand our drug delivery technology (“N-Tab™”) to additional product candidates; |
• | Our operation as a development stage company with limited operating history and a history of operating losses and our ability to fund our operations going forward; |
• | Our competitive position with respect to other products on the market or in development for the treatment of osteoporosis, |
• | Our ability to establish and maintain development and commercialization collaborations; |
• | Our ability to manufacture and supply enough material to support our clinical trials and any potential future commercial requirements; |
• | The size of any market we may target and the adoption of our product candidates, if approved, by physicians and patients; |
• | Our ability to obtain, maintain and protect our intellectual property and operate our business without infringing, misappropriating, or otherwise violating any intellectual property rights of others; |
• | Our ability to retain key personnel and recruit additional qualified personnel; |
• |
Our ability to comply with laws and regulations that currently apply or become applicable to our business in Israel, the United States and internationally; |
• | Our ability to manage |
• | The duration and intensity of the ongoing Israel-Hamas War, as well as the developing conflict with Iran and its proxies in the Middle East, and their impact on our operations and workforce, including our research and development and clinical trials. |
Page | |
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS: | |
4 | |
5 | |
6 | |
7 | |
8 |
A s s e t s | September 30, | December 31, | ||||||
CURRENT ASSETS: | 2023 | 2022 | ||||||
Cash and cash equivalents | 7,585 | 12,309 | ||||||
Accounts receivable | - | 246 | ||||||
Prepaid expenses and other current assets | 431 | 294 | ||||||
TOTAL CURRENT ASSETS | 8,016 | 12,849 | ||||||
NON-CURRENT ASSETS: | ||||||||
Property and equipment, net | 108 | 139 | ||||||
Operating lease right-of-use assets | 420 | 90 | ||||||
Deferred income taxes | 15 | 43 | ||||||
Funds in respect of employee rights upon retirement | 6 | 6 | ||||||
TOTAL NON-CURRENT ASSETS | 549 | 278 | ||||||
TOTAL ASSETS | 8,565 | 13,127 | ||||||
Liabilities and shareholders' equity | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | 564 | 17 | ||||||
Accrued expenses and other payables | 1,332 | 1,233 | ||||||
Current maturities of operating lease | 131 | 91 | ||||||
TOTAL CURRENT LIABILITIES | 2,027 | 1,341 | ||||||
NON-CURRENT LIABILITIES: | ||||||||
Operating lease liabilities | 271 | - | ||||||
Liability for employee rights upon retirement | 31 | 32 | ||||||
TOTAL NON-CURRENT LIABILITIES | 302 | 32 | ||||||
TOTAL LIABILITIES | 2,329 | 1,373 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
SHAREHOLDERS' EQUITY: | ||||||||
Ordinary Shares, NIS 0.0000769 par value: Authorized - as of September 30, 2023 and December 31, 2022, 140,010,000 shares; issued and outstanding - as of September 30, 2023 and December 31, 2022, 28,813,952 and 28,809,922 shares, respectively | * | * | ||||||
Additional paid-in capital | 108,586 | 107,210 | ||||||
Accumulated other comprehensive income | 41 | 41 | ||||||
Accumulated deficit | (102,391 | ) | (95,497 | ) | ||||
TOTAL SHAREHOLDERS' EQUITY | 6,236 | 11,754 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 8,565 | 13,127 |
A s s e t s | March 31, | December 31, | ||||||
2024 | 2023 | |||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | 9,189 | 11,019 | ||||||
Other current assets | 562 | 238 | ||||||
TOTAL CURRENT ASSETS | 9,751 | 11,257 | ||||||
NON-CURRENT ASSETS: | ||||||||
Property and equipment, net | 87 | 100 | ||||||
Operating lease right-of-use assets | 381 | 388 | ||||||
Deferred income taxes | 14 | 14 | ||||||
Funds in respect of employee rights upon retirement | 6 | 6 | ||||||
TOTAL NON-CURRENT ASSETS | 488 | 508 | ||||||
TOTAL ASSETS | 10,239 | 11,765 | ||||||
Liabilities and shareholders' equity | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | 66 | 83 | ||||||
Accrued expenses and other payables | 902 | 874 | ||||||
Current maturities of operating lease | 153 | 134 | ||||||
TOTAL CURRENT LIABILITIES | 1,121 | 1,091 | ||||||
NON-CURRENT LIABILITIES: | ||||||||
Operating lease liabilities | 224 | 256 | ||||||
Liability for employee rights upon retirement | 31 | 32 | ||||||
TOTAL NON-CURRENT LIABILITIES | 255 | 288 | ||||||
TOTAL LIABILITIES | 1,376 | 1,379 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
SHAREHOLDERS' EQUITY: | ||||||||
Ordinary Shares, NIS 0.0000769 par value: Authorized - as of March 31, 2024 and December 31, 2023, 140,010,000 shares; issued and outstanding as of March 31, 2024 and December 31, 2023, 35,526,281 and 35,476,341 shares, respectively | 1 | 1 | ||||||
Additional paid-in capital | 115,224 | 114,730 | ||||||
Accumulated other comprehensive income | 41 | 41 | ||||||
Accumulated deficit | (106,403 | ) | (104,386 | ) | ||||
TOTAL SHAREHOLDERS' EQUITY | 8,863 | 10,386 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 10,239 | 11,765 |
Nine Months Ended September 30, | Three Months Ended September 30, | Three Months Ended March 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | 2024 | 2023 | |||||||||||||||||||
REVENUES | - | 120 | - | 8 | ||||||||||||||||||||
COST OF REVENUES | - | 93 | - | 6 | ||||||||||||||||||||
GROSS PROFIT | - | 27 | - | 2 | ||||||||||||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||||||
Research and development | 3,510 | 4,497 | 1,370 | 1,413 | 735 | 931 | ||||||||||||||||||
General and administrative | 3,457 | 5,512 | 1,028 | 1,460 | 1,327 | 1,294 | ||||||||||||||||||
Other income | (39 | ) | (33 | ) | (12 | ) | (6 | ) | - | (13 | ) | |||||||||||||
TOTAL OPERATING EXPENSES | 6,928 | 9,976 | 2,386 | 2,867 | 2,062 | 2,212 | ||||||||||||||||||
OPERATING LOSS | 6,928 | 9,949 | 2,386 | 2,865 | 2,062 | 2,212 | ||||||||||||||||||
FINANCIAL EXPENSES (INCOME), NET | (63 | ) | (96 | ) | (36 | ) | 8 | |||||||||||||||||
LOSS BEFORE INCOME TAX | 6,865 | 9,853 | 2,350 | 2,873 | ||||||||||||||||||||
INCOME TAX | 29 | 183 | 29 | 194 | ||||||||||||||||||||
FINANCIAL INCOME, NET | (45 | ) | (22 | ) | ||||||||||||||||||||
NET LOSS | 6,894 | 10,036 | 2,379 | 3,067 | 2,017 | 2,190 | ||||||||||||||||||
BASIC AND DILUTED LOSS PER SHARE | 0.24 | 0.35 | 0.08 | 0.11 | ||||||||||||||||||||
LOSS PER SHARE BASIC AND DILUTED | 0.05 | 0.08 | ||||||||||||||||||||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF BASIC AND DILUTED LOSS PER SHARE | 28,812,122 | 28,807,470 | 28,813,952 | 28,809,922 | 36,735,429 | 28,809,922 |
Ordinary shares | ||||||||||||||||||||||||
Number of shares issued | Amounts | Additional paid-in capital | Accumulated other Comprehensive income | Accumulated deficit | Total | |||||||||||||||||||
BALANCE AT JANUARY 1, 2023 | 28,809,922 | * | 107,210 | 41 | (95,497 | ) | 11,754 | |||||||||||||||||
Net loss | - | - | - | - | (6,894 | ) | (6,894 | ) | ||||||||||||||||
Issuance of shares under the ATM program, net of issuance costs | 4,030 | * | 5 | - | - | 5 | ||||||||||||||||||
Share-based compensation | - | - | 1,371 | - | - | 1,371 | ||||||||||||||||||
BALANCE AT SEPTEMBER 30, 2023 | 28,813,952 | * | 108,586 | 41 | (102,391 | ) | 6,236 | |||||||||||||||||
BALANCE AT JULY 1, 2023 | 28,813,952 | * | 108,203 | 41 | (100,012 | ) | 8,232 | |||||||||||||||||
Net loss | - | - | - | - | (2,379 | ) | (2,379 | ) | ||||||||||||||||
Share-based compensation | - | - | 383 | - | - | 383 | ||||||||||||||||||
BALANCE AT SEPTEMBER 30, 2023 | 28,813,952 | * | 108,586 | 41 | (102,391 | ) | 6,236 | |||||||||||||||||
BALANCE AT JANUARY 1, 2022 | 28,804,411 | * | 104,950 | 41 | (82,426 | ) | 22,565 | |||||||||||||||||
Net loss | - | - | - | - | (10,036 | ) | (10,036 | ) | ||||||||||||||||
Exercise of options to ordinary shares | 5,511 | * | 13 | - | - | 13 | ||||||||||||||||||
Share-based compensation | - | - | 1,770 | - | - | 1,770 | ||||||||||||||||||
BALANCE AT SEPTEMBER 30, 2022 | 28,809,922 | * | 106,733 | 41 | (92,462 | ) | 14,312 | |||||||||||||||||
BALANCE AT JULY 1, 2022 | 28,809,922 | * | 106,623 | 41 | (89,395 | ) | 17,269 | |||||||||||||||||
Net loss | - | - | - | - | (3,067 | ) | (3,067 | ) | ||||||||||||||||
Exercise of options to ordinary shares | 5,511 | * | 13 | - | - | 13 | ||||||||||||||||||
Share-based compensation | - | - | 110 | - | - | 110 | ||||||||||||||||||
BALANCE AT SEPTEMBER 30, 2022 | 28,809,922 | * | 106,733 | 41 | (92,462 | ) | 14,312 |
Ordinary shares | ||||||||||||||||||||||||
Number of shares issued | Amounts | Additional paid-in capital | Accumulated other Comprehensive income | Accumulated deficit | Total | |||||||||||||||||||
BALANCE AT JANUARY 1, 2023 | 28,809,922 | * | 107,210 | 41 | (95,497 | ) | 11,754 | |||||||||||||||||
Net loss | - | - | - | - | (2,190 | ) | (2,190 | ) | ||||||||||||||||
Share-based compensation | - | - | 516 | - | - | 516 | ||||||||||||||||||
BALANCE AT MARCH 31, 2023 | 28,809,922 | * | 107,726 | 41 | (97,687 | ) | 10,080 | |||||||||||||||||
BALANCE AT JANUARY 1, 2024 | 35,476,341 | 1 | 114,730 | 41 | (104,386 | ) | 10,386 | |||||||||||||||||
Net loss | - | - | (2,017 | ) | (2,017 | ) | ||||||||||||||||||
Exercise of Warrants to ordinary shares | 29,940 | * | 30 | - | - | 30 | ||||||||||||||||||
Vested restricted share units | 20,000 | * | - | - | - | - | ||||||||||||||||||
Share-based compensation | 464 | - | - | 464 | ||||||||||||||||||||
BALANCE AT March 31, 2024 | 35,526,281 | 1 | 115,224 | 41 | (106,403 | ) | 8,863 |
Nine months ended September 30, | Three months ended March 31, | |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | 2023 | 2022 | 2024 | 2023 | ||||||||||||
Net loss | (6,894 | ) | (10,036 | ) | (2,017 | ) | (2,190 | ) | ||||||||
Adjustments required to reconcile net loss to net cash used in operating activities: | ||||||||||||||||
Depreciation | 43 | 48 | 13 | 14 | ||||||||||||
Deferred income taxes | 29 | 151 | ||||||||||||||
Share-based compensation | 1,371 | 1,770 | 464 | 516 | ||||||||||||
Finance income, net | (20 | ) | (74 | ) | (9 | ) | (3 | ) | ||||||||
Changes in operating asset and liabilities: | ||||||||||||||||
Decrease (increase) in accounts receivable | 246 | (50 | ) | |||||||||||||
Decrease in accounts receivable | - | 217 | ||||||||||||||
Increase in other current assets | (114 | ) | (380 | ) | (324 | ) | (359 | ) | ||||||||
Increase in accounts payable | 547 | 247 | ||||||||||||||
Increase (decrease) in accrued expenses and other payables | 99 | (2,149 | ) | |||||||||||||
Decrease in contract liabilities | - | (15 | ) | |||||||||||||
Increase (decrease) in accounts payable | (17 | ) | 133 | |||||||||||||
Increase in accrued expenses and other payables | 28 | 63 | ||||||||||||||
Net cash used in operating activities | (4,693 | ) | (10,488 | ) | (1,862 | ) | (1,609 | ) | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||
Funds with respect to employee rights upon retirement | - | (55 | ) | |||||||||||||
Purchase of property and equipment | (12 | ) | (44 | ) | - | (11 | ) | |||||||||
Net cash used in investing activities | (12 | ) | (99 | ) | - | (11 | ) | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||
Proceeds from issuance of shares under the ATM program, net of issuance costs | 5 | - | ||||||||||||||
Exercise of options and warrants into shares | - | 13 | ||||||||||||||
Exercise of warrants into shares | 30 | - | ||||||||||||||
Net cash provided by financing activities | 5 | 13 | 30 | - | ||||||||||||
DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED DEPOSITS | (4,700 | ) | (10,574 | ) | (1,832 | ) | (1,620 | ) | ||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED DEPOSITS AT BEGINNING OF THE PERIOD | 12,376 | 24,964 | 11,085 | 12,376 | ||||||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED DEPOSITS AT END OF THE PERIOD | 7,676 | 14,390 | 9,253 | 10,756 | ||||||||||||
Reconciliation in amounts on consolidated balance sheets: | ||||||||||||||||
Cash and cash equivalents | 7,585 | 14,323 | 9,189 | 10,691 | ||||||||||||
Restricted deposits included in other current assets | 91 | 67 | 64 | 65 | ||||||||||||
Total cash and cash equivalents and restricted deposits | 7,676 | 14,390 | 9,253 | 10,756 | ||||||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW TRANSACTIONS: | ||||||||||||||||
Interest received | 39 | - | ||||||||||||||
SUPPLEMENTARY INFORMATION ON INVESTING AND FINANCING ACTIVITIES NOT INVOLVING CASH FLOWS: | ||||||||||||||||
Operating lease right of use assets obtained in exchange for new operating lease liabilities | 449 | - | 33 | - | ||||||||||||
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||||||||||
Income taxes paid | - | 165 |
7
a. | Entera Bio Ltd. (collectively with its subsidiary, the The Company’s most advanced product The EB612 program is being developed as the first oral PTH(1-34) tablet peptide replacement therapy for | |
b. | The Company's ordinary shares, NIS 0.0000769 par value per share (“ordinary shares”), have been listed on the Nasdaq Capital Market since July 2018 under the symbol “ENTX”. |
c. | Because the Company is engaged in research and development activities, it has not derived significant income from its activities and has incurred an accumulated deficit in the amount of |
d. | In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on the Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel. These attacks resulted in thousands of deaths and injuries, and Hamas additionally kidnapped many Israeli civilians and soldiers. Following the attack, Israel’s security cabinet declared war against Hamas and commenced a military campaign against Hamas. In addition, in April 2024, Israel experienced a direct attack from Iran, involving hundreds of drones and missiles launched towards various parts of the country, mostly targeting military bases. The Israeli defense systems, aided by international allies, successfully intercepted the majority of these attacks, minimizing physical damage and casualties. Despite the effectiveness of Israel's missile defense systems, such incidents contribute to regional instability and could potentially escalate into broader conflicts with Iran and its proxies in the Middle East, affecting Israel's political and trade relations, especially with neighboring countries and global allies. The situation remains fluid, and the potential for further escalation exists. While the Company has a few employees who are in active military service, the ongoing war with Hamas and the conflict with Iran and its proxies have not, to date, materially impacted the Company’s business or operations. Furthermore, the Company does not expect any delays to any of its programs as a result of such conflicts. While R&D and management are located in Israel, other core activities including clinical, regulatory and our supply chain are not. However, the Company cannot currently predict the intensity or duration of Israel’s war against Hamas and/or the conflict with Iran and its proxies, nor can it predict how such conflicts will ultimately affect the Company’s business and operations or Israel’s economy in general. |
8
ENTERA BIO LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
a. | Basis of presentation of the financial statements These unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") for interim financial statements. Accordingly, they do not include all of the information and notes required by U.S. GAAP for annual financial statements. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the Company’s consolidated financial position as of The consolidated results for the These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company as of and for the year ended December 31, |
9
ENTERA BIO LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
NOTE 3 - SHARE-BASED COMPENSATION
b. |
Diluted loss per share |
| |
Recently issued accounting pronouncements not yet adopted In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This guidance is intended to enhance the transparency and decision-usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to disclosure regarding rate reconciliation and income taxes paid both in the United States and in foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 on a prospective basis. Early adoption is permitted, with the option to apply the standard retrospectively. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures. In November 2023, the FASB issued ASU 2023-07 “Segment Reporting: Improvements to Reportable Segment Disclosures”. This guidance expands public entities’ segment disclosures primarily by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures. | |
10
ENTERA BIO LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
1. | Changes in Share Capital: In March 2024, 29,940 warrants issued in connection with the Company’s December 2023 private placement (the “December 2023 PIPE”) were exercised for 29,940 ordinary shares for a total consideration of $30. |
2. | Share-based Compensation: |
Three months ended March 31, 2024 | ||||
Exercise price | $ | 0.60 | ||
Dividend yield | - | |||
Expected volatility | 74.28 | % | ||
Risk-free interest rate | 3.93 | % | ||
Expected life - in years | 5.3 |
September 30, | December 31, | |||||||
Prepaid expenses and other current assets: | 2023 | 2022 | ||||||
Prepaid expenses | 168 | 86 | ||||||
Other current assets | 263 | 208 | ||||||
431 | 294 |
September 30, | December 31, | |||||||
Accrued expenses and other payables: | 2023 | 2022 | ||||||
Employees and employees related | 161 | 154 | ||||||
Provision for vacation | 191 | 146 | ||||||
Accrued expenses | 980 | 933 | ||||||
1,332 | 1,233 |
a. | On January 1, 2024, an aggregate of 758,331 options to purchase ordinary shares were granted to seven non-executive members of the Board of Directors with an exercise price of $0.60 per share. The options vest in equal quarterly installments over a one-year period that began on January 1, 2024. This grant was approved by the shareholders of the Company on October 4, 2021. The fair value of the options at the date of grant was $295. The fair value of each option granted was estimated at the date of grant using the Black-Scholes option-pricing model, using the following weighted average assumptions: |
As of June 30,2023, the Company recorded the related asset and obligation at the present value of lease payments over the expected terms, discounted using the lessee’s incremental borrowing rate, which was 13.84%. The Company lease agreements do not provide a readily determinable implicit rate. Therefore, the Company estimated the incremental borrowing rate to discount the lease payments based on information available at lease commencement. |
2023 | 46 | |||
2024 | 174 | |||
2025 | 174 | |||
2026 | 83 | |||
Total future minimum lease payments | 477 | |||
Less: interest | (75 | ) | ||
Present value of operating lease liabilities | 402 |
c. | On February 15, 2024, the Company entered into a consulting agreement with an additional investor relations firm. Under the terms of the agreement, the Company agreed to issue the consultant 50,000 RSUs. The RSUs vest in five equal monthly installments over a five-month period that started on February 15, 2024. As of March 31, 2024, 10,000 RSUs had vested. The fair value of the RSUs was $52,550 using the fair value of the RSUs on the grant date, of which $30,659 was recognized as an expense during the period ended March 31, 2024. |
11
ENTERA BIO LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
|
March 31, | December 31, | |||||||
Other current assets: | 2024 | 2023 | ||||||
Prepaid expenses | 384 | 34 | ||||||
Advance income tax | 69 | 69 | ||||||
Restricted deposits | 70 | 65 | ||||||
Other | 39 | 70 | ||||||
562 | 238 |
March 31, | December 31, | |||||||
Accrued expenses and other payables: | 2024 | 2023 | ||||||
Employees and employees related | 177 | 159 | ||||||
Provision for vacation | 254 | 215 | ||||||
Accrued expenses | 471 | 500 | ||||||
902 | 874 |
1. | On September 2,2022, the Company entered into a sales agreement with Leerink Partners LLC (formerly known as SVB Securities LLC), as sales agent, to implement an ATM program under which the Company may from time to time offer and sell up to 5,000,000 ordinary shares (the “Leerink ATM Program”). During April 2024, the Company issued 214,088 ordinary shares pursuant to the Leerink ATM Program for net proceeds of $545 at a weighted average price of $2.60 per ordinary share. |
2. | In April 2024, 29,940 warrants issued in connection with the December 2023 PIPE were exercised for 29,940 ordinary shares for a total consideration of $30. |
3. | On April 19, 2024, the board of directors approved the following options grants: |
a. | options to purchase an aggregate of 768,000 ordinary shares were granted to employees, executive officers and service provider with an exercise price of $1.99 per share which was the share price on the grant date; and |
b. | options to purchase an aggregate of 500,000 ordinary shares to the Company’s Chief Executive Officer with an exercise price of $1.99 per share which was the share price on that day. This grant is subject to the shareholders' approval. These options vest over three years from the date of grant; 33.33% vest on the first anniversary of the date of grant and the remaining 66.67% of the option will vest in eight equal quarterly installments following the first anniversary of the grant date. |
In addition, the board of directors approved the grant of 209,548 RSUs to executive officers in place of cash annual bonus, of which 124,121 RSUs that were granted to the CEO are subject to the shareholders’ approval. The RSUs vest in four equal quarterly installments over one year that started on April 19, 2024. |
• | employee-related expenses, including salaries, bonuses and share-based compensation expenses for employees and service providers in the research and development function; |
• | expenses incurred in operating our laboratories including our small-scale manufacturing facility; |
• | expenses incurred under agreements with CROs, and investigative sites that conduct our clinical trials; |
• | expenses related to outsourced and contracted services, such as external laboratories, consulting and advisory services; |
• | supply, development and manufacturing costs relating to clinical trial materials; and |
• | other costs associated with pre-clinical and clinical activities. |
• | the uncertainty of the scope, rate of progress, results and cost of our clinical trials, nonclinical testing and other related activities; |
• | the cost of manufacturing clinical supplies and establishing commercial supplies of our product candidates and any products that we may develop; |
• | the number and characteristics of product candidates that we pursue; |
• | the cost, timing and outcomes of regulatory approvals; |
• | the cost and timing of establishing any sales, marketing, and distribution capabilities; and |
• | the terms and timing of any collaborative, licensing and other arrangements that we may establish, including any milestone and royalty payments thereunder. |
| Three Months Ended September 30, | Increase (Decrease) | ||||||||||||||
| 2023 | 2022 | $ | % | ||||||||||||
| (In thousands, except for percentage information) | |||||||||||||||
Revenues | $ | - | $ | 8 | $ | (8 | ) | (100 | )% | |||||||
Cost of revenues | $ | - | $ | 6 | (6 | ) | (100 | )% | ||||||||
Operating expenses: | ||||||||||||||||
Research and development expenses | $ | 1,370 | $ | 1,413 | $ | (43 | ) | (3 | )% | |||||||
General and administrative expenses | $ | 1,028 | $ | 1,460 | $ | (432 | ) | (30 | )% | |||||||
Other income | $ | (12 | ) | $ | (6 | ) | $ | (6 | ) | 100 | % | |||||
Operating loss | $ | 2,386 | $ | 2,865 | $ | (479 | ) | (17 | )% | |||||||
Financial expenses (income), net | $ | (36 | ) | $ | 8 | $ | (43 | ) | (550 | )% | ||||||
Income tax | $ | 29 | $ | 194 | $ | (166 | ) | (85 | )% | |||||||
Net loss | $ | 2,379 | $ | 3,067 | $ | (688 | ) | (22 | )% |
| Three Months Ended March 31, | Increase (Decrease) | ||||||||||||||
| 2024 | 2023 | $ | % | ||||||||||||
| (In thousands, except for percentage information) | |||||||||||||||
Operating expenses: | ||||||||||||||||
Research and development expenses | $ | 735 | $ | 931 | $ | (196 | ) | (21 | )% | |||||||
General and administrative expenses | $ | 1,327 | $ | 1,294 | $ | 33 | 2.6 | % | ||||||||
Other income | $ | - | $ | (13 | ) | $ | (13 | ) | (100 | )% | ||||||
Operating loss | $ | 2,062 | $ | 2,212 | $ | (150 | ) | (6.8 | )% | |||||||
Financial income, net | $ | (45 | ) | $ | (22 | ) | $ | 23 | 104.5 | % | ||||||
Net loss | $ | 2,017 | $ | 2,190 | $ | (173 | ) | (7.9 | )% |
| Nine Months Ended September 30, | Increase (Decrease) | ||||||||||||||
| 2023 | 2022 | $ | % | ||||||||||||
| (In thousands, except for percentage information) | |||||||||||||||
Revenues | $ | - | $ | 120 | $ | (120 | ) | (100 | )% | |||||||
Cost of revenues | $ | - | $ | 93 | (93 | ) | (100 | )% | ||||||||
Operating expenses: | ||||||||||||||||
Research and development expenses | $ | 3,510 | $ | 4,497 | $ | (987 | ) | (22 | )% | |||||||
General and administrative expenses | $ | 3,457 | $ | 5,512 | $ | (2,055 | ) | (37 | )% | |||||||
Other income | $ | (39 | ) | $ | (33 | ) | $ | (6 | ) | 18 | % | |||||
Operating loss | $ | 6,928 | $ | 9,949 | $ | (3,021 | ) | (30 | )% | |||||||
Financial income, net | $ | (63 | ) | $ | (96 | ) | $ | 34 | (34 | )% | ||||||
Income tax | $ | 29 | $ | 183 | $ | (155 | ) | (85 | )% | |||||||
Net loss | $ | 6,894 | $ | 10,036 | $ | (3,142 | ) | (31 | )% |
• | the costs, timing and outcome of clinical trials for, and regulatory review of, EB613, EB612 and any other product candidates we may develop; |
• | the costs of development activities for any other product candidates we may pursue; |
• | the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; and |
• | our ability to establish collaborations on favorable terms, if at all. |
| Nine Months Ended September 30, (unaudited) | Three Months Ended March 31, (unaudited) | ||||||||||||||
| 2023 | 2022 | 2024 | 2023 | ||||||||||||
| (In thousands) | (In thousands) | ||||||||||||||
Net Cash used in operating activities | $ | (4,693 | ) | $ | (10,488 | ) | $ | (1,862 | ) | $ | (1,609 | ) | ||||
Net Cash used in investing activities | (12 | ) | (99 | ) | - | (11 | ) | |||||||||
Net Cash provided by financing activities | 5 | 13 | 30 | - | ||||||||||||
Net decrease in cash and cash equivalents | $ | (4,700 | ) | $ | (10,574 | ) | $ | (1,832 | ) | $ | (1,620 | ) |
Exhibit No. | Description of Exhibits | |
101.INS | XBRL Instance Document. | |
101.SCH | XBRL Taxonomy Extension Schema Document. | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
ENTERA BIO LTD. | ||
Date: | /s/ Miranda Toledano | |
Miranda Toledano Chief Executive Officer | ||
(Principal Executive Officer) | ||
Date: | /s/ Dana Yaacov-Garbeli | |
Dana Yaacov-Garbeli Chief Financial Officer | ||
(Principal Financial and Accounting Officer) |