SECURITIES AND EXCHANGE COMMISSION
(Mark One)
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(Exact name of registrant as specified in its charter)
Israel | 81-3676773 |
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
Kiryat Atidim, Building 7 | |
Tel Aviv, Israel | 6158002 |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
American Depositary Shares, each representing twenty (20) ordinary shares, no par value per share | CMMB | Nasdaq Capital Market |
Ordinary shares, no par value per share | n/a | Nasdaq Capital Market* |
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
Emerging growth company | ☒ |
2 | ||
3 | ||
48 | ||
76 | ||
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77 | ||
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77 | ||
85 | ||
86 | ||
86 | ||
86 | ||
86 | ||
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87 | ||
87 | ||
93 | ||
101 | ||
103 | ||
105 | ||
106 | ||
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107 |
• | references to “Chemomab Therapeutics Ltd.”, “Chemomab,” the “Company,” “us,” “we” and “our” refer to Chemomab Therapeutics Ltd., an Israeli company and its consolidated subsidiaries; however, with respect to the presentation of financial results for historical periods that preceded the Merger (as defined below), these terms refer to the financial results of the Company’s wholly owned subsidiary, Chemomab Ltd., which was the accounting acquirer in the Merger; |
• | references to “ordinary shares,” “our shares” and similar expressions refer to the Company’s ordinary shares, no nominal (par) value; |
• | references to “ADS” refer to the American Depositary Shares listed on the Nasdaq Capital Market (“Nasdaq”) under the symbol “CMMB,” each representing twenty (20) ordinary shares; |
• | references to “dollars,” “U.S. dollars” and “$” are to United States Dollars; |
• | references to “NIS” are to New Israeli Shekels; |
• | references to the “Companies Law” are to Israel’s Companies Law, 5759-1999, as amended; |
• | references to the “SEC” are to the U.S. Securities and Exchange Commission; and |
• | references to the “Merger” refer to the merger involving Anchiano Therapeutics Ltd., or Anchiano, and Chemomab Ltd., whereby a wholly owned subsidiary of Anchiano merged with and into Chemomab Ltd., with Chemomab Ltd. surviving as a wholly owned subsidiary of Anchiano. Upon consummation of the Merger on March 16, 2021, Anchiano changed its name to “Chemomab Therapeutics Ltd.” and the business conducted by Chemomab Ltd. became primarily the business conducted by the Company. |
• | CM-101 appeared to be safe and well tolerated when administered subcutaneously. Most reported adverse events observed were mild, with one unrelated serious adverse event reported. No significant injection site reactions were reported and no anti-drug antibodies were detected. |
• | CM-101 administered subcutaneously demonstrated favorable pharmacokinetics and target engagement profiles as expected, and were similar to what the company has previously reported. |
• | CM-101-treated patients showed greater improvements than the placebo group in a number of liver fibrosis-related biomarkers, including ProC-3, ProC-4, ProC-18, TIMP-1 and ELF. |
• | A majority of CM-101-treated patients showed improvements in multiple liver fibrosis-related biomarkers—almost 60% of CM-101 patients were “multiple responders”, responding in at least three biomarkers at week 20, compared to no patients in the placebo group. |
• | CM-101-treated patients with higher CCL24 levels at baseline showed greater reductions in fibrosis-related biomarkers than patients with lower levels of CCL24 at baseline. More CM-101-treated patients with higher CCL24 levels also were “multiple responders”, responding in three or more of the fibrosis-related biomarkers, compared to patients with lower CCL24 levels at baseline. These findings further add to the growing body of evidence validating the role of CCL24 in the pathophysiology of fibrotic liver disease. |
• | A higher proportion of patients in the CM-101-treated group showed improvement in a physiologic measure of liver stiffness as compared to placebo (reduction of at least one grade of fibrosis score as assessed by the non-invasive elastography method known as FibroScan®). |
• | After completion of the study, the unblinded data showed that patients in the CM-101-treated group had higher baseline levels of fibrosis compared to placebo patients. The impact of this difference on the results, if any, is unknown. |
• | CM-101 appeared to be safe and was well tolerated when administered subcutaneously. Most reported adverse events observed were mild, with one unrelated serious adverse event reported. No significant injection site reactions were reported and no anti-drug antibodies, or ADAs, were detected. |
• | CM-101 administered subcutaneously demonstrated favorable pharmacokinetics and target engagement profiles as expected, which were similar to what the company has previously reported. |
• | CM-101-treated patients showed greater improvements than the placebo group in a number of liver fibrosis-related biomarkers, including ProC-3, ProC-4, ProC-18, TIMP-1 and ELF. |
• | A majority of CM-101-treated patients showed improvements in more than one liver fibrosis-related biomarker—almost 60% of CM-101 patients responded in at least three biomarkers at week 20, compared to no patients in the placebo group. |
• | A higher proportion of patients in the CM-101-treated group showed improvement in a physiologic measure of liver stiffness as compared to placebo (reduction of at least one grade of fibrosis score as assessed by the non-invasive elastography method known as FibroScan®). |
• | CM-101-treated patients with higher CCL24 levels at baseline showed greater reductions in fibrosis-related biomarkers than patients with lower levels. Multiple fibrosis-related biomarkers showed more pronounced reductions in CM-101-treated patients who had higher CCL24 levels at baseline than in patients with lower CCL24 baseline levels, adding to the growing body of evidence validating the role of CCL24 in the pathophysiology of fibrotic liver disease. |
• | After completion of the study, the unblinded data showed that patients in the CM-101-treated group had higher baseline levels of fibrosis compared to placebo patients. The impact of this difference on the results, if any, is unknown. |
• | Advance Chemomab’s lead product, CM-101, for the treatment of PSC and SSc, through clinical development to approval |
• | Expand Chemomab’s next generation pipeline |
• | Selectively evaluate partnership opportunities |
• | Explore opportunities for CM-101 in additional inflammatory/fibrotic indications |
• | Strengthen Chemomab’s intellectual property portfolio |
• | Human hepatic stellate cells demonstrated reduced transition to myofibroblasts following incubation of CM-101 with CCL24. |
• | Human hepatic stellate cells showed reduced motility towards CCL24 following treatment with CM-101. |
• | CM-101 demonstrated in vivo activity on liver fibrosis and cholangiocyte proliferation induced by bile duct ligation in the Sprague Dawley rat model. |
• | CM-101 (D8-a murine surrogate of CM-101) inhibits the progression of liver fibrosis and bile duct damage in a chronic cholangitis cholestasis model using the hepatobiliary toxin ANIT. |
• | CM-101 (D8) reduces bile duct epithelial cell (cholangiocyte) proliferation, collagen deposition, macrophage infiltration, liver enzymes, bile acid and circulating inflammatory monocytes in an experimental cholangitis model in MDR2 knockout mice. |
• | CM-101 reduces liver enzymes, fibrosis, collagen, and fibrotic gene expression in a TAA-induced liver fibrosis model in rats. |
• | CM-101 (D8) prevented fibrosis and inflammation in a TAA-induced liver fibrosis model in mice. |
Preclinical experiments in models of SSc
• | CM-101 reduces SSc serum-induced dermal fibroblast activation and transition to myofibroblasts and interferes with endothelial cell activation. |
• | CM-101 treatment attenuated skin fibrotic remodeling in the bleomycin (BLM)-induced dermal fibrosis mouse model. |
• | CM-101 attenuated lung fibrosis and inflammation in the bleomycin (BLM)-induced pulmonary fibrosis mouse model. |
Preclinical findings | Observation | |
Ex vivo | | |
Antibody dependent cell-cytotoxic (ADCC) and complement dependent cell-cytotoxic (CDC) activity was tested in PBMCs from healthy volunteers | | CM-101 did not have Fc-related effector functions such as ADCC and CDC |
Cytokine release was assessed in human whole blood from healthy volunteers. | | CM-101 did not induce pro-inflammatory cytokine secretion |
Tissue cross reactivity was evaluated from healthy human tissues. | | CM-101 does not bind non-specifically to healthy tissues, and therefore is expected to only bind to its target, circulating CCL24 |
In vivo | | |
GLP repeated dose 4-week toxicity study of CM-101 (IV) in mice | | 1. No obvious treatment related adverse reactions 2. No gross or microscopic pathological findings 3. No cases of treatment related mortality were observed 4. No significant elevation was seen in IL1β, IL2, IL4, IL5, IL10, GM-CSF, IFN and TNFα |
GLP repeated dose (up to 50 mg/kg) 6-month toxicity study of CM-101 (SC) in Cynomolgus Monkey | | 1. No obvious treatment related adverse reactions 2. No clinical signs or injection site reactions 3. No cases of treatment related mortality were observed 4. Blood and urine tests were found to be within normal ranges for monkeys 5. No treatment-related organ weight changes and no treatment-related necropsy findings 6. No treatment-related histopathology findings 7. Three samples from treated animals were confirmed ADA positive but there was no obvious correlation between positive ADA results and CM-101 serum concentrations or systemic exposure |
• | The trial is a randomized, double-blind, placebo-controlled study that will enroll 45 SSc patients. |
• | To be eligible for the study, patients must manifest two key characteristics: the presence of clinically active disease, either dermatologic or pulmonary, and higher serum levels of circulating CCL24. |
• | Thirty patients will be randomized to treatment with CM-101 and 15 will be randomized to placebo. |
• | Of the patients on active treatment, approximately half will have limited SSc, and half will have diffuse cutaneous disease. |
• | The study includes a 24-week double blind period during which patients assigned to active treatment will receive CM-101 at a dose of 10 mg/kg, via intravenous infusion, every three weeks. |
• | Following the double-blind period, patients will enter a 24-week open label treatment period, where all patients will receive CM-101 at a dose of 10 mg/kg via intravenous infusion every three weeks. |
• | All patients enrolled will undergo a skin biopsy at baseline and again after the double-blind treatment period, along with multiple clinical assessments of skin, vascular and pulmonary function. |
• | The primary outcome measure for the trial will be demonstration of the safety and tolerability of treatment with CM-101. |
• | All other outcome measures will be principally assessed as changes from baseline to the end of the double-blind treatment period. |
• | Inflammatory cytokines (such a CCL2, IL6 and CXCL10), vascular and growth factor-related biomarkers (such as VEGF and PDGF), pulmonary-related biomarkers (such as KL-6, SPD and CCL18), and fibrogenesis and extracellular matrix biomarkers (collagens, MMPs and ELF score). |
• | Inflammatory, fibrotic and target expression markers in skin biopsies, including but not limited to CCL24 and CCR3 expression levels. |
• | Pharmacokinetics and target engagement of CM-101. |
• | Monitoring for the presence of any potential anti-drug antibodies during the study. |
Competition
• | PSC |
• | SSc |
• | The Company will be required to pay TASMC non-refundable and non-creditable milestone payments of up to (i) $300,000 upon the submission of an NDA, BLA or equivalent for each of the licensed products to the FDA and to equivalent European and Asian foreign regulatory agencies, and (ii) $600,000 upon the grant by the FDA or equivalent European and/or Asian regulatory agencies of their marketing approval for each licensed product; |
• | In the event of an “exit,” as such term is defined therein, the Company must pay TASMC an exit fee of 1% of the transaction consideration (which shall be capped at $3 million); |
• | In the event the Company sublicenses a licensed product, the Company must pay TASMC a sublicense fee of 10% of all attributed income, in addition to a low-single digit percentage tiered royalty payment of our earned royalties. |
• | Completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s Good Laboratory Practice, or GLP, regulations; | |
• | Submission to the FDA of an Investigational New Drug application, or IND, which must become effective before human clinical studies may begin; | |
• | Approval by an Institutional Review Board, or IRB, at each clinical site before each study may be initiated; | |
• | Performance of adequate and well-controlled human clinical studies in accordance with Good Clinical Practice, or GCP requirements to establish the safety and efficacy of the proposed drug product for each indication; | |
• | Completion of all manufacturing requirements to ensure robust manufacturing process, and product quality and safety as per Good Manufacturing Practice, or cGMP guidelines; | |
• | Completion of non-clinical reproductive studies, as applicable, prior to late stage clinical studies and NDA or Biologics License Application, or BLA, submission; | |
• | Development of an appropriate pediatric plan for clinical testing or exclusion, pre- or post-approval, as applicable; | |
• | Submission to the FDA of an NDA or BLA; | |
• | Satisfactory completion of an FDA advisory committee review, if applicable; | |
• | Satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP requirements and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; | |
• | Satisfactory completion of FDA audits of clinical study sites to assure compliance with GCPs and the integrity of the clinical data; | |
• | Payment of user fees and securing FDA approval of the NDA; | |
• | FDA review and approval of an NDA or BLA; and | |
• | Compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategies, or REMS, and the potential requirement to conduct post-approval studies. |
• | Phase 1: The drug or biologic is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness. For some products for severe or life-threatening diseases, especially if the product may be too toxic to administer to healthy humans, the initial clinical trials may be conducted in individuals having a specific disease for which use the tested product is indicated. | |
• | Phase 2: The drug or biologic is administered is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage. | |
• | Phase 3: The drug or biologic is administered to an expanded patient population, generally at geographically dispersed clinical study sites, in well-controlled clinical studies to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product. |
• | Phase 4: Phase 4 clinical trials are studies required of, or agreed to by, a sponsor that are conducted after the FDA has approved a product for marketing. These studies are used to gain additional experience from the treatment of patients in the intended therapeutic indication and to document a clinical benefit in the case of drugs approved under accelerated approval regulations. If the FDA approves a product while a company has ongoing clinical trials that were not necessary for approval, a company may be able to use the data from these clinical trials to meet all or part of any Phase 4 clinical trial requirement. Failure to promptly conduct Phase 4 clinical trials where necessary could result in withdrawal of approval for products approved under accelerated approval regulations. |
• | Analytical studies demonstrating that the proposed biosimilar product is highly similar to the approved product notwithstanding minor differences in clinically inactive components; |
• | Animal studies (including the assessment of toxicity); and |
• | A clinical trial or trials (including the assessment of immunogenicity and pharmacokinetic or pharmacodynamic) sufficient to demonstrate safety, purity and potency in one or more conditions for which the reference product is licensed and intended to be used. |
• | The proposed biosimilar product and reference product utilize the same mechanism of action for the condition(s) of use prescribed, recommended or suggested in the proposed labeling, but only to the extent the mechanism(s) of action are known for the reference product; |
• | The condition or conditions of use prescribed, recommended or suggested in the labeling for the proposed biosimilar product have been previously approved for the reference product; |
• | The route of administration, the dosage form and the strength of the proposed biosimilar product are the same as those for the reference product; and |
• | The facility in which the biological product is manufactured, processed, packed or held meets standards designed to assure that the biological product continues to be safe, pure and potent. |
• | The proposed product is biosimilar to the reference product; |
• | The proposed product is expected to produce the same clinical result as the reference product in any given patient; and |
• | For a product that is administered more than once to an individual, the risk to the patient in terms of safety or diminished efficacy of alternating or switching between the biosimilar and the reference product is no greater than the risk of using the reference product without such alternation or switch. |
• | Restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; |
• | Fines, warning letters or holds on post-approval clinical studies; |
• | Refusal of the FDA to approve pending NDAs or BLAs or supplements to approved NDAs or BLAs, or suspension or revocation of product approvals; |
• | Product seizure or detention, or refusal to permit the import or export of products; and |
• | Injunctions or the imposition of civil or criminal penalties. |
• | The federal Anti-Kickback Statute, or AKS, which makes it illegal for any person, including a prescription drug manufacturer (or a party acting on its behalf) to knowingly and willfully solicit, receive, offer or pay any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, that is intended to induce or reward, referrals including the purchase recommendation, order or prescription of a particular drug for which payment may be made under a federal healthcare program, such as the Medicare and Medicaid programs. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act, or FCA; |
• | The federal civil and criminal false claims laws, including the FCA, which can be enforced through “qui tam” or “whistleblower” actions, and civil monetary penalty laws, which impose criminal and civil penalties against individuals or entities for, among other things, knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid, or other federal health care programs that are false or fraudulent; knowingly making or causing a false statement material to a false or fraudulent claim or an obligation to pay or transmit money or property to the federal government; or knowingly concealing or knowingly and improperly avoiding or decreasing such an obligation. Similar to the AKS and Stark Law, a person or entity does not need to have actual knowledge of these statutes or specific intent to violate them in order to have committed a violation; |
• | The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; |
• | HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the creation, use, receipt, maintenance or disclosure of individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information; |
• | The federal Physician Payments Sunshine Act, created under Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively, the ACA, and its implementing regulations, which require manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the Centers for Medicare and Medicaid Services, or CMS, under the Open Payments Program, information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician healthcare professionals (such as physician assistants and nurse practitioners, among others), and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and |
• | Analogous state and foreign laws and regulations, such as state and foreign anti-kickback, physician self-referral prohibitions, false claims, consumer protection and unfair competition laws which may apply to pharmaceutical business practices, including but not limited to, research, distribution, sales and marketing arrangements as well as submitting claims involving healthcare items or services reimbursed by any third-party payor, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government that otherwise restricts payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to file reports with states regarding pricing and marketing information, such as the tracking and reporting of gifts, compensations and other remuneration and items of value provided to healthcare professionals and entities; state and local laws requiring the registration of pharmaceutical sales representatives; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. |
• | the costs and timing for potential additional clinical trials in order to gain possible regulatory approval for CM-101and our other product candidates; |
• | the market price of Chemomab’s ADSs and the availability and cost of additional equity capital from existing and potential new investors; |
• | Chemomab’s ability to retain the listing of its ADSs on the Nasdaq Capital Market; |
• | general economic and industry conditions affecting the availability and cost of capital, including as a result of deteriorating market conditions due to investor concerns regarding inflation and continued hostilities between Russia and Ukraine; |
• | Chemomab’s ability to control costs associated with its operations; |
• | the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; and |
• | the terms and conditions of our existing collaborative and licensing agreements. |
• | the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of Chemomab’s clinical studies; | |
• | obtaining regulatory authorizations to commence a trial or consensus with regulatory authorities on trial’s design; | |
• | reaching an agreement on acceptable terms with prospective clinical research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; | |
• | obtaining IRB approval at each site, or Independent Ethics Committee, or IEC, approval at sites outside the United States; | |
• | imposition of a clinical hold by regulatory authorities, including as a result of unforeseen safety issues or side effects or failure of trial sites to adhere to regulatory requirements or follow trial protocols; | |
• | clinical studies may show the product candidates to be less effective than expected (e.g., a clinical study could fail to meet its primary endpoint(s)) or to have unacceptable side effects or toxicities; | |
• | failure to establish clinical endpoints that applicable regulatory authorities would consider clinically meaningful; | |
• | the occurrence of serious adverse events in trials of the same class of agents conducted by other companies; | |
• | adding a sufficient number of clinical study sites; | |
• | manufacturing sufficient quantities of product candidate with sufficient quality for use in clinical studies; | |
• | having patients complete a trial or return for post-treatment follow-up; | |
• | recruiting suitable patients to participate in a trial in a timely manner and in sufficient numbers; | |
• | a facility manufacturing Chemomab’s product candidates or any of their components being ordered by the FDA or comparable foreign regulatory authorities to temporarily or permanently shut down due to violations of current good manufacturing practice, or cGMP, regulations or other applicable requirements, or infections or cross-contaminations of product candidates in the manufacturing process; |
• | third-party clinical investigators losing the licenses or permits necessary to perform Chemomab’s clinical studies, not performing its clinical studies on its anticipated schedule or consistent with the clinical study protocol, GCP, or other regulatory requirements; | |
• | third-party contractors not performing data collection or analysis in a timely or accurate manner; | |
• | manufacturing costs, formulation issues, pricing or reimbursement issues, or other factors that make a product candidate uneconomical; or | |
• | the proprietary rights of others and their competing products and technologies that may prevent Chemomab’s product candidates from being commercialized. |
• | regulators, IRBs, or IECs may not authorize Chemomab or its investigators to commence a clinical study or conduct a clinical study at a prospective trial site; | |
• | the FDA or other comparable regulatory authorities may disagree with Chemomab’s clinical study design, including with respect to dosing levels administered in its planned clinical studies, which may delay or prevent Chemomab from initiating its clinical studies with its originally intended trial design; | |
• | Chemomab may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites and prospective CROs, which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; |
• | the number of subjects required for clinical studies of any product candidates may be larger than Chemomab anticipates or subjects may drop out of these clinical studies or fail to return for post-treatment follow-up at a higher rate than it anticipates; | |
• | Chemomab’s third-party contractors may fail to comply with regulatory requirements or meet its contractual obligations to Chemomab in a timely manner, or at all, or may deviate from the clinical study protocol or drop out of the trial, which may require that Chemomab add new clinical study sites or investigators; | |
• | due to the impact of the COVID-19 pandemic, or other emerging public health threats, Chemomab has experienced, and may continue to experience, delays and interruptions to clinical studies, it may experience delays or interruptions to its manufacturing supply chain, or it could suffer delays in reaching, or it may fail to reach, agreement on acceptable terms with third-party service providers on whom it relies; | |
• | additional delays and interruptions to Chemomab’s clinical studies could extend the duration of the trials and increase the overall costs to finish the trials as its fixed costs are not substantially reduced during delays; | |
• | Chemomab may elect to, or regulators, IRBs, Data Safety Monitoring Boards or ethics committees may require that it or its investigators, suspend or terminate clinical research or trials for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; | |
• | Chemomab may not have the financial resources available to begin and complete the planned trials, or the cost of clinical studies of any product candidates may be greater than it anticipates; and | |
• | the supply or quality of Chemomab’s product candidates or other materials necessary to conduct clinical studies of its product candidates may be insufficient or inadequate to initiate or complete a given clinical study. |
• | regulatory authorities may withdraw approvals of such product; | |
• | regulatory authorities may require additional warnings on the label, such as a “black box” warning or contraindication; |
• | additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any component thereof; | |
• | Chemomab may be required to implement a Risk Evaluation and Mitigation Strategy, or REMS, or create a medication guide outlining the risks of such side effects for distribution to patients; |
• | Chemomab could be sued and held liable for harm caused to patients; | |
• | the product may become less competitive; and | |
• | Chemomab’s reputation may suffer. |
• | the patient eligibility and exclusion criteria defined in the protocol; | |
• | the need to receive study drug via an IV infusion; |
• | the size of the patient population required for analysis of the trial’s primary endpoints and the process for identifying patients; | |
• | the willingness or availability of patients to participate in Chemomab’s trials (including due to fears of contracting COVID-19); |
• | the proximity of patients to trial sites; | |
• | the design of the trial; |
• | Chemomab’s ability to recruit clinical study investigators with the appropriate competencies and experience; | |
• | clinicians’ and patients’ perceptions as to the potential advantages and risks of the product candidate being studied with respect to other available therapies, including any new products that may be approved for the indications Chemomab is investigating; | |
• | the availability of competing commercially available therapies and other competing product candidates’ clinical studies; |
• | Chemomab’s ability to obtain and maintain patient informed consents; and | |
• | the risk that patients enrolled in clinical studies will drop out of the trials before completion. |
• | the diversion of healthcare resources away from the conduct of clinical study matters to focus on pandemic concerns, including the attention of infectious disease physicians serving as Chemomab’s clinical study investigators, hospitals serving as Chemomab’s clinical study sites and hospital staff supporting the conduct of its clinical studies; | |
• | the inability of patients to come to hospitals to participate in Chemomab’s trials, which may force Chemomab to conduct its trials in patients’ homes, rendering the trials more difficult and costly to conduct; | |
• | limitations on travel that interrupt key trial activities, such as clinical study site initiations and monitoring; and | |
• | employee furlough days that delay necessary interactions with local regulators, ethics committees and other important agencies and contractors. |
• | Chemomab’s inability to design such product candidates with the pharmacological properties that it desires or attractive pharmacokinetics; or |
• | potential product candidates may, on further study, be shown to have harmful side effects or other characteristics that indicate that they are unlikely to be medicines that will receive marketing approval and achieve market acceptance. |
• | The competitive landscape for in-licensing or acquiring assets in the biopharmaceutical sector is intense with several companies employing this growth and diversification strategy. | |
• | Even if appropriate assets are identified, there can be no assurance that a potential transaction can be consummated between the parties. | |
• | If a transaction is concluded on acceptable terms, there can be assurance that the assets in-licensed or acquired will be successful in preclinical and subsequent clinical development. | |
• | The Company will likely need to raise additional capital to close any transaction of significance. As such, there can be no assurance that a fundraising effort will be successful and if successful, it could result in dilution to current shareholders. |
• | the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of Chemomab’s clinical studies; | |
• | Chemomab may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication; | |
• | serious and unexpected drug-related side effects experienced by participants in Chemomab’s clinical studies or by individuals using drugs similar to its product candidates, or other products containing the active ingredient in Chemomab’s product candidates; | |
• | negative or ambiguous results from Chemomab’s clinical studies or results that may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval; |
• | the population studied in the clinical study may not be sufficiently broad or representative to assure efficacy and safety in the full population for which Chemomab seeks approval; | |
• | Chemomab may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; | |
• | the FDA or comparable foreign regulatory authorities may disagree with Chemomab’s interpretation of data from preclinical studies or clinical trials; | |
• | the data collected from clinical studies of Chemomab’s product candidates may not be acceptable or sufficient to support the submission of an NDA or other submission or to obtain regulatory approval in the United States or elsewhere, and Chemomab may be required to conduct additional clinical studies; | |
• | the FDA’s or the applicable foreign regulatory agency’s disagreement regarding the formulation, labeling and/or the specifications of Chemomab’s product candidates; | |
• | the FDA or comparable foreign regulatory authorities may fail to approve or find deficiencies with the manufacturing processes or facilities of third-party manufacturers with which Chemomab contracts for clinical and commercial supplies; and |
• | the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering Chemomab’s clinical data insufficient for approval. |
• | restrictions on manufacturing such products; | |
• | restrictions on the labeling or marketing of products; | |
• | restrictions on product manufacturing, distribution or use; |
• | requirements to conduct post-marketing studies or clinical trials; | |
• | warning letters or untitled letters; | |
• | withdrawal of the products from the market; |
• | refusal to approve pending applications or supplements to approved applications that Chemomab submits; |
• | recall of products; |
• | fines, restitution or disgorgement of profits or revenues; | |
• | suspension or withdrawal of marketing approvals; | |
• | refusal to permit the import or export of Chemomab’s products; |
• | product seizure; or |
• | injunctions or the imposition of civil or criminal penalties. |
• | Chemomab’s available capital resources or capital constraints it experiences; | |
• | the rate of progress, costs and results of Chemomab’s clinical studies and research and development activities, including the extent of scheduling conflicts with participating clinicians and collaborators; | |
• | Chemomab’s ability to identify and enroll patients who meet clinical study eligibility criteria; | |
• | Chemomab’s receipt of authorizations by the FDA and comparable foreign regulatory authorities, and the timing thereof; | |
• | other actions, decisions or rules issued by regulators; |
• | Chemomab’s ability to access sufficient, reliable and affordable supplies of materials used in the manufacture of its product candidates; | |
• | Chemomab’s ability to manufacture and supply clinical study materials to its clinical sites on a timely basis; | |
• | the severity, duration and impact of the COVID-19 pandemic; | |
• | the efforts of Chemomab’s collaborators with respect to the commercialization of its products, if any; and | |
• | the securing of, costs related to, and timing issues associated with, commercial product manufacturing as well as sales and marketing activities. |
• | the efficacy and potential advantages compared to alternative treatments; | |
• | effectiveness of sales and marketing efforts; |
• | the cost of treatment with respect to alternative treatments, including any similar generic treatments; | |
• | Chemomab’s ability to offer its products for sale at competitive prices; | |
• | the convenience and ease of administration compared to alternative treatments; | |
• | the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; | |
• | the strength of marketing and distribution support; | |
• | the timing of market introduction of competitive products; | |
• | the availability of third-party coverage and adequate reimbursement; | |
• | product labeling or product insert requirements of the FDA, EMA or other regulatory authorities, including any limitations on warnings contained in a product’s approved labeling; | |
• | the prevalence and severity of any side effects; and | |
• | any restrictions on the use of Chemomab’ product together with other medications. |
• | Chemomab’s inability to recruit, train and retain adequate numbers of effective sales and marketing personnel; | |
• | the inability of sales personnel to obtain access to physicians or attain adequate numbers of physicians to prescribe Chemomab’s products; and | |
• | unforeseen costs and expenses associated with creating an independent sales and marketing organization. |
• | multiple, conflicting and changing laws and regulations, such as privacy regulations, tax laws, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses; | |
• | failure by Chemomab to obtain and maintain regulatory approvals for the use of its products in various countries; | |
• | additional potentially relevant third-party patent rights; | |
• | complexities and difficulties in obtaining protection and enforcing Chemomab’s intellectual property; | |
• | difficulties in staffing and managing foreign operations; | |
• | complexities associated with managing multiple payor reimbursement regimes, government payors or patient self-pay systems; | |
• | limits in Chemomab’s ability to penetrate international markets; | |
• | financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for Chemomab’s products and exposure to foreign currency exchange rate fluctuations; | |
• | natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade and other business restrictions; | |
• | certain expenses including, among others, expenses for travel, translation and insurance; and | |
• | regulatory and compliance risks that relate to maintaining accurate information and control over sales and activities that may fall within the purview of the United States Foreign Corrupt Practices Act, its books and records provisions, or its anti-bribery provisions. |
Period | Total Number of ADSs Purchased | Average Price Paid per Share | Total Number of ADSs Purchased as Part of Publicly Announced Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs(1) | ||||||||||||
November 16, 2022 (1) | 582,023 | $ | 2.0848 | 582,023 | $ | 1,218,000 | ||||||||||
Total | 582,023 | 582,023 |
• | expenses incurred under agreements with clinical research organizations and contract manufacturing organizations, as well as investigative sites and consultants that conduct our clinical trials, preclinical studies and other scientific development services; |
• | manufacturing scale-up expenses and the cost of acquiring and manufacturing preclinical and clinical trial materials; |
• | employee-related expenses, including salaries, related benefits, travel and share-based compensation expenses for employees engaged in research and development functions, as well as external costs, such as fees paid to outside consultants engaged in such activities; |
• | license maintenance fees and milestone fees incurred in connection with various license agreements; |
• | costs related to compliance with regulatory requirements; and |
• | depreciation and other expenses. |
Year ended December 31, | ||||||||
2022 | 2021 | |||||||
(in thousands) | ||||||||
Operating Expenses: | ||||||||
Research and development | $ | 16,977 | $ | 6,334 | ||||
General and administrative | 11,556 | 6,033 | ||||||
Total operating expenses | 28,533 | 12,367 | ||||||
Financing (income) expense, net | (353 | ) | 111 | |||||
Loss before taxes | 28,180 | 12,478 | ||||||
Taxes on income (benefit) | (534 | ) | — | |||||
Net loss | $ | 27,646 | $ | 12,478 |
Year ended December 31, | Increase/(decrease) | |||||||||||||||
2022 | 2021 | $ | % | |||||||||||||
(in thousands) | ||||||||||||||||
Net cash used in operating activities | $ | (20,370 | ) | $ | (12,374 | ) | $ | (7,996 | ) | 65 | % | |||||
Net cash provided by (used in) investing activities | 19,533 | (45,186 | ) | 64,719 | (143 | )% | ||||||||||
Net cash provided by (used in) financing activities | (808 | ) | 61,074 | (61,882 | ) | (101 | )% | |||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | (1,645 | ) | $ | 3,514 | $ | (5,159 | ) | (147 | )% |
● | the progress and costs of our preclinical and clinical trials and other research and development activities; |
● | the scope, prioritization and number of our preclinical and clinical trials and other research and development programs; |
● | the amount of revenues and contributions we receive under future licensing, collaboration, development and commercialization arrangements with respect to our product candidates; |
● | the costs of development and expansion of our operational infrastructure; |
● | the costs and timing of obtaining regulatory approval for one or more of our product candidates; |
● | our ability, or that of our collaborators, to achieve development milestones, marketing approval and other events or developments under potential future licensing agreements; |
● | the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights; |
● | the costs and timing of securing manufacturing arrangements for clinical or commercial production; |
● | the costs of contracting with third parties to provide sales and marketing capabilities for us or establishing such capabilities ourselves; |
● | the costs of acquiring or undertaking development and commercialization efforts for any future products, product candidates or technology; |
● | the magnitude of our general and administrative expenses; and |
● | any additional costs that we may incur under future in- and out-licensing arrangements relating to one or more of our product candidates. |
• | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; |
• | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management; and |
• | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
Name | Age | Position | ||
Executive Officers: | ||||
Dale Pfost | 65 | Chairman of the Board, Chief Executive Officer | ||
Donald Marvin | 70 | Chief Financial Officer, Executive Vice President and Chief Operating Officer | ||
Adi Mor | 41 | Director, Chief Scientific Officer | ||
Matthew Frankel | 54 | Chief Medical Officer | ||
Non-Employee Directors: | ||||
Nissim Darvish†(2)(3) | 57 | Director | ||
Alan Moses†(1) | 74 | Director | ||
Claude Nicaise†(1) | 69 | Director | ||
Neil Cohen†(2)(3) | 58 | Director | ||
Jill Quigley†(1) | 47 | Director |
(1) | Member of Audit Committee |
(2) | Member of Compensation Committee |
(3) | Member of Corporate Governance and Nominating Committee |
• | Class I consists of Nissim Darvish and Jill Quigley, each with a term expiring at the 2025 annual meeting of shareholders. | |
• | Class II consists of Neil Cohen and Claude Nicaise, each with a term expiring at the 2023 annual meeting of shareholders. | |
• | Class III consists of Adi Mor, Alan Moses and Dale Pfost, each with a term expiring at the 2024 annual meeting of shareholders. |
Name and Principal Position | Year | Salary (1) ($) | Bonus (2) ($) | Option Awards (3) ($) | All Other Compensation (4) ($) | Total ($) | ||||||||||||||||
Dale Pfost | 2021 | 182,557 | - | 300,000 | 22,868 | 505,425 | ||||||||||||||||
Chief Executive Officer and Chairman (5) | 2022 | 600,000 | 300,000 | 1,500,000 | 75,160 | 2,475,160 | ||||||||||||||||
Adi Mor | 2021 | 248,547 | 167,000 | 8,000 | 64,453 | 488,000 | ||||||||||||||||
Chief Scientific Officer, Director and Previous Chief Executive Officer (6) | 2022 | 298,470 | 120,000 | - | 16,926 | 435,396 | ||||||||||||||||
Donald Marvin | 2021 | 88,276 | - | 102,390 | 11,590 | 202,256 | ||||||||||||||||
Chief Financial Officer, Executive Vice President and Chief Operating Officer (7) | 2022 | 460,000 | 207,000 | 660,252 | 60,397 | 1,387,649 | ||||||||||||||||
Sigal Fattal | 2021 | 127,050 | 122,000 | 616,000 | 8,952 | 874,002 | ||||||||||||||||
Previous Interim Chief Financial Officer (8) |
Option awards | ||||||||||||
Name | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercsiable | Option exercise price ($) | Option expiration date | ||||||||
Dale Pfost, Chief Executive Officer and Chairman of the Board | 133,977 | 325,376(1) | 10.05 | October 25, 2031 | ||||||||
Adi Mor, Chief Scientific Officer, Director and Previous Chief Executive Officer | 131,698 | - | 1.49 | March 15, 2028 | ||||||||
Donald Marvin, Chief Financial Officer, Executive Vice President and Chief Operating Officer | 53,320 | 143,555(2) | 9.77 | November 8, 2031 |
Name | Fees earned or paid in cash ($) | Option awards ($) | Total ($) | |||||||||
Nissim Darvish | 47,000 | 76,000 | (1) | 123,000 | ||||||||
Jill Quigley | 23,000 | 15,000 | (2) | 38,000 | ||||||||
Alan Moses | 43,000 | 76,000 | (3) | 119,000 | ||||||||
Claude Nicaise | 47,000 | 76,000 | (4) | 123,000 | ||||||||
Neil Cohen | 47,000 | 76,000 | (5) | 123,000 |
Option awards | |||||||||||||
Name | Number of ADSs underlying unexercised options (#) exercisable | Number of ADSs underlying unexercised options (#) unexercsiable | Option exercise price ($) | Option expiration date | |||||||||
Nissim Darvish | 10,123 | - | 0.80 | October 27, 2026 | |||||||||
Nissim Darvish | 6,932 | 4,952 | 27.26 | April 19, 2031 | |||||||||
Nissim Darvish | - | 6,820 | 3.53 | March 7, 2032 | |||||||||
Alan Moses | 6,932 | 4,952 | 27.26 | April 19, 2031 | |||||||||
Alan Moses | - | 6,820 | 3.53 | March 7, 2032 | |||||||||
Claude Nicaise | 6,932 | 4,952 | 27.26 | April 19, 2031 | |||||||||
Claude Nicaise | - | 6,820 | 3.53 | March 7, 2032 | |||||||||
Neil Cohen | 515 | 173 | 13.20 | July 16, 2030 | |||||||||
Neil Cohen | 6,932 | 4,952 | 27.26 | April 19, 2031 | |||||||||
Neil Cohen | - | 6,820 | 3.53 | March 7, 2032 | |||||||||
Jill Quigley | 2,273 | 11,367 | 3.25 | June 16, 2032 |
• | each person who is known by us to own beneficially more than 5% of our ordinary shares; |
• | each director; |
• | each executive officer; and |
• | all of our directors and executive officers collectively. |
NAME OF BENEFICIAL OWNER | Total Beneficial Ownership (ADSs) | Percentage of ADSs Beneficially Owned† | ||||||
5% and Greater Shareholders | ||||||||
OrbiMed Israel (1) | 2,270,091 | 20.5 | % | |||||
The Centillion Fund(2) | 661,370 | 6.0 | % | |||||
Rivendell Investments 2017-9(3) | 1,131,563 | 10.2 | % | |||||
Kobi George(4) | 747,445 | 6.7 | % | |||||
Apeiron Group(5) | 770,388 | 6.9 | % | |||||
Directors and Executive Officers | ||||||||
Dale Pfost (6) | 174,757 | 1.6 | % | |||||
Donald Marvin (7) | 75,828 | * | % | |||||
Adi Mor (8) | 747,445 | 6.7 | % | |||||
Neil Cohen (9) | 25,702 | * | ||||||
Nissim Darvish (10) | 26,395 | * | ||||||
Alan Moses (11) | 15,072 | * | ||||||
Claude Nicaise (12) | 15,072 | * | ||||||
Jill Quigley (13) | 3,788 | * | ||||||
Matthew Frankel | - | - | ||||||
All current executive officers and directors as a group (9 persons) | 1,084,059 | 9.40 | % |
(1) | Pursuant to a Schedule 13D/A filed with the SEC by OrbiMed Israel BioFund GP Limited Partnership (“OrbiMed BioFund”) and OrbiMed Israel GP Ltd. (“OrbiMed GP”, and together with OrbiMed BioFund, “OrbiMed Israel”) on January 5, 2023, such amount consists of (i) 2,241,274 ADSs and (ii) 28,817 ADSs issuable upon the exercise of warrants to purchase ADSs. OrbiMed GP, a company that acts as general partner of certain limited partnerships, is the general partner of OrbiMed BioFund, which is the general partner of OrbiMed Israel Partners Limited Partnership, which is the entity that holds the foregoing securities. The address of OrbiMed Israel is 89 Medinat HaYehudim St., Build E, 11th Floor, Herzliya 46766 Israel. |
(2) | The address of Centillion Fund, Inc. is 10 Manoel Street, Castries, Saint Lucia. |
(3) | Represents 1,108,509 ADSs, representing 22,170,180 ordinary shares, held by Rivendell Investments 2017-9 LLC, or Rivendell, as reported by Rivendell on Schedule 13G filed with the SEC on March 26, 2021, and 23,054 ADSs, representing 461,080 Ordinary Shares, issuable upon the exercise of warrants. Rivendell is the shareholder of record. Peter Thiel is the beneficial owner of Rivendell and has sole voting and investment power over the securities held by Rivendell. The address of Rivendell is 1209 Orange Street, Wilmington, Delaware 19801. |
(4) | Consists of (i) 257,247 ADSs owned directly by Dr. George, (ii) 324,775 ADSs owned by Dr. Adi Mor (Dr. George’s spouse), (iii) 33,725 options to purchase 33,725 ADSs issued directly to Dr. George, issuable upon the exercise of options, and (iv) 131,698 options to purchase 131,698 ADSs, issued to Dr. Mor, (Dr. George’s spouse), as reported by Dr. Adi Mor on Schedule 13D/A filed with the SEC on November 17, 2022. |
(5) | The Apeiron Group consists of (i) Apeiron SICAV Ltd. - Presight Capital Fund One, of which owns 438,993 ADSs, (ii) Apeiron Presight Capital Fund II, LP, of which owns 288,170 ADSs and 28,817 ADSs issuable upon the exercise of warrants and (iii) Apeiron Investment Group Ltd., of which owns 14,408 ADSs issuable upon the exercise of warrants. Each of Fabian Hansen and Christian Angermayer may be deemed to share voting and investment power with respect to the ADSs held by the Apeiron Group. |
(6) | Includes 2,500 ADSs and 172,257ADSs issuable upon the exercise of options within 60 days of the date hereof as reported by Dr. Dale Pfost on Form 4 filed with the SEC on March 15, 2022. |
(7) | Includes 2,000 ADSs and 73,828ADSs issuable upon the exercise of options within 60 days of the date hereof as reported by Mr. Donald Marvin on Form 4 filed with the SEC on June 21, 2022. |
(8) | Consists of (i) 324,775 ADSs owned directly by Dr. Mor, (ii) 257,247 ADSs owned by Dr. George, (Dr. Mor’s spouse), (iii) 131,698 ADSs issued to Dr. Mor, issuable upon the exercise of options within 60 days of the date hereof, and (iv) 33,725 options to purchase 33,725 ADSs issued to Dr. George, (Dr. Mor’s spouse) issuable upon the exercise of options within 60 days of the date hereof, as reported by Dr. Adi Mor on Schedule 13D/A filed with the SEC on November 17, 2022. |
(9) | Includes 10,000 ADSs, and 15,702 ADSs issuable upon the exercise of options within 60 days of the date hereof, as reported by Mr. Neil Cohen on Form 4 filed with the SEC on November 11, 2022. |
(10) | Includes 1,200 ADSs, and 25,195 ADSs issuable upon the exercise of options within 60 days of the date hereof, as reported by Dr. Nissim Darvish on Form 4 filed with the SEC on March 14, 2022. |
(11) | Represents 15,072 ADSs issuable upon the exercise of options within 60 days of the date hereof, as reported by Dr. Alan Moses on Form 4 filed with the SEC on March 9, 2022. |
(12) | Represents 15,072 ADSs issuable upon the exercise of options within 60 days of the date hereof, as reported by Dr. Claude Nicaise on Form 4 filed with the SEC on March 9, 2022. |
(13) | Represents 3,788 ADSs issuable upon the exercise of options within 60 days of the date hereof, as reported by Ms. Jill Quigley on Form 4 filed with the SEC on June 16, 2022. |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
(a) | (b) | (c) | ||||||||||
Equity compensation plans approved by security holders | 1,350,163 | $ | 7.65 | 107,755 | ||||||||
Equity compensation plans not approved by security holders | - | - | - | |||||||||
Total | 1,350,163 | $ | 7.65 | 107,755 |
• | The amounts involved exceeded or will exceed$120,000; and |
• | A director, executive officer, holder of more than 5% of the outstanding share capital of the Company, or any member of such person’s immediate family had or will have a direct or indirect material interest. |
Year Ended December 31, | ||||||||
2022 | 2021 | |||||||
Audit Fees | 223 | 173 | ||||||
Tax Fees | 30 | 29 | ||||||
All Other Fees | - | - | ||||||
Total | 253 | 202 |
Exhibit No. | Description |
101.INS | Inline XBRL Instance Document |
101.SCH | Inline XBRL Taxonomy Extension Schema Document |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
CHEMOMAB THERAPEUTICS LTD. | ||
Date: March 20, 2023 | By: | /s/ Dale Pfost |
Dale Pfost Chief Executive Officer |
Signature | Title | Date | ||
/s/ Dale Pfost | Chief Executive Officer and Chairman of the Board | March 20, 2023 | ||
Dale Pfost | (Principal Executive Officer) | |||
/s/ Donald Marvin | Chief Financial Officer, Executive Vice President and Chief Operating Officer | March 20, 2023 | ||
Donald Marvin | (Principal Financial and Accounting Officer) | |||
/s/ Adi Mor | Director, Chief Scientific Officer | March 20, 2023 | ||
Adi Mor | ||||
/s/ Nissim Darvish | Director | March 20, 2023 | ||
Nissim Darvish | ||||
/s/ Jill Quigley | Director | March 20, 2023 | ||
Jill Quigley | ||||
/s/ Alan Moses | Director | March 20, 2023 | ||
Alan Moses | ||||
/s/ Claude Nicaise | Director | March 20, 2023 | ||
Claude Nicaise | ||||
/s/ Neil Cohen | Director | March 20, 2023 | ||
Neil Cohen |
Chemomab Therapeutics Ltd. and its subsidiaries Consolidated Financial Statements As of December 31, 2022 |
Page | |
(PCAOB ID 1057) | F - 2 |
F - 3 | |
F - 4 | |
F - 5 | |
F - 6 | |
F - 7 |
Chemomab Therapeutics Ltd. and its subsidiaries |
Consolidated Balance Sheets as of |
In USD thousands (except share and per share amounts) |
Note | December 31, 2022 | December 31, 2021 | |||||||||
Assets | |||||||||||
| |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | 3 | 13,519 | 15,186 | ||||||||
Short-term bank deposit | 26,374 | 45,975 | |||||||||
Restricted cash | 77 | - | |||||||||
Other receivables and prepaid expenses | 4 | 1,766 | 1,527 | ||||||||
| |||||||||||
Total current assets | 41,736 | 62,688 | |||||||||
| |||||||||||
Non-current assets | |||||||||||
Restricted cash | - | 55 | |||||||||
Long-term prepaid expenses | 733 | 908 | |||||||||
Property and equipment, net | 5 | 367 | 357 | ||||||||
Operating lease right-of-use assets | 6 | 227 | 345 | ||||||||
| |||||||||||
Total non-current assets | 1,327 | 1,665 | |||||||||
| |||||||||||
Total assets | 43,063 | 64,353 | |||||||||
| |||||||||||
Current liabilities | |||||||||||
Trade payables | 1,688 | 1,336 | |||||||||
Accrued expenses | 3,378 | 555 | |||||||||
Employee and related expenses | 1,560 | 653 | |||||||||
Operating lease liabilities | 6 | 123 | 106 | ||||||||
| |||||||||||
Total current liabilities | 6,749 | 2,650 | |||||||||
| |||||||||||
Non-current liabilities | |||||||||||
Non-current operating lease liabilities | 6 | 91 | 237 | ||||||||
| |||||||||||
Total non-current liabilities | 91 | 237 | |||||||||
| |||||||||||
Commitments and contingent liabilities | 7 | ||||||||||
| |||||||||||
Total liabilities | 6,840 | 2,887 | |||||||||
| |||||||||||
Shareholders' equity | 8 | ||||||||||
| |||||||||||
Ordinary Shares no par value - Authorized: 650,000,000 shares as of December 31, 2022 and 2021; | |||||||||||
Issued and outstanding: 232,636,700 Ordinary shares at December 31, 2022 and 228,090,300 Ordinary shares at December 31, 2021 | - | - | |||||||||
Treasury share at cost (11,640,460 shares as of December 31, 2022) | (1,218 | ) | - | ||||||||
Additional paid-in capital | 101,260 | 97,639 | |||||||||
Accumulated deficit | (63,819 | ) | (36,173 | ) | |||||||
| |||||||||||
Total shareholders’ equity | 36,223 | 61,466 | |||||||||
Total liabilities and shareholders’ equity | 43,063 | 64,353 |
_____________________ _____________________
Chief Executive Officer Chief Financial Officer
Date of approval of the financial statements: February 20, 2023
The accompanying notes are an integral part of the consolidated financial statements.
F - 3
Chemomab Therapeutics Ltd. and its subsidiaries |
Consolidated Statements of Operations for the year ended |
In USD thousands (except share and per share amounts) |
Note | December 31, 2022 | December 31, 2021 | |||||||||
Operating expenses | |||||||||||
| |||||||||||
Research and development | 9 | 16,977 | 6,334 | ||||||||
| |||||||||||
General and administrative | 10 | 11,556 | 6,033 | ||||||||
| |||||||||||
Total operating expenses | 28,533 | 12,367 | |||||||||
Financing (income) expenses, net | (353) | 111 | |||||||||
Loss before taxes | 28,180 | 12,478 | |||||||||
Taxes on income (benefit) | 11 | (534 | ) | - |
| ||||||
| |||||||||||
Net loss for the year | 27,646 | 12,478 | |||||||||
| |||||||||||
Basic and diluted loss per Ordinary Share | 13 | 0.121 | 0.060 | ||||||||
| |||||||||||
Weighted average number of Ordinary Shares outstanding, basic, and diluted | 13 | 227,589,288 | 207,468,650 |
The accompanying notes are an integral part of the consolidated financial statements.
F - 4
Chemomab Therapeutics Ltd. and its subsidiaries |
Consolidated Statements of Changes in Equity |
In USD thousands (except share amounts) |
|
|
|
|
|
|
| ||||||||||||||||||||||
Ordinary Shares | Treasury | Additional | Accumulated Deficit | Total Shareholders' | ||||||||||||||||||||||||
Number | USD | Number | USD | USD | USD | USD | ||||||||||||||||||||||
Balance as of January 1, 2021 | 9,274,838 | - | - | - | 34,497 | (23,695 | ) | 10,802 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Share-based compensation | - | - | - | - | 2,019 | - | 2,019 | |||||||||||||||||||||
Effect of reverse capitalization transaction | 152,299,702 | - | - | - | 2,476 | - | 2,476 | |||||||||||||||||||||
Issuance of shares and warrants, net of issuance costs | 66,381,520 | - | - | - | 58,637 | - | 58,637 | |||||||||||||||||||||
Exercise of options | 134,240 | - | - | - | 10 | - | 10 | |||||||||||||||||||||
Net loss for the year | - | - | - | - | - | (12,478 | ) | (12,478 | ) | |||||||||||||||||||
Balance as of December 31, 2021 | 228,090,300 | - | - | - | 97,639 | (36,173 | ) | 61,466 | ||||||||||||||||||||
Balance as of January 1, 2022 | 228,090,300 | - | - | - | 97,639 | (36,173 | ) | 61,466 | ||||||||||||||||||||
Share-based compensation | - | - | - | - | 3,211 | - | 3,211 | |||||||||||||||||||||
Issuance of shares, net of issuance costs | 2,576,400 | - | - | - | 267 | - | 267 | |||||||||||||||||||||
Exercise of options | 1,970,000 | - | - | - | 143 | - | 143 | |||||||||||||||||||||
Treasury share at cost | - | - | (11,640,460 | ) | (1,218 | ) | - | - | (1,218 | ) | ||||||||||||||||||
Net loss for the year | - | - | - | - | - | (27,646 | ) | (27,646 | ) | |||||||||||||||||||
Balance as of December 31, 2022 | 232,636,700 | - | (11,640,460 | ) | (1,218 | ) | 101,260 | (63,819 | ) | 36,223 |
F - 5
Chemomab Therapeutics Ltd. and its subsidiaries |
Statements of Cash flows for the year ended |
In USD thousands |
December 31, 2022 | December 31, 2021 | |||||||
Cash flows from operating activities | ||||||||
Net loss for the year | (27,646 | ) | (12,478 | ) | ||||
| ||||||||
Adjustments for operating activities: | ||||||||
Depreciation | 58 | 34 | ||||||
Share-based compensation | 3,211 | 2,019 | ||||||
Change in other receivables and prepaid expenses | (64 | ) | (2,058 | ) | ||||
Change in trade payables | 352 | 1,175 | ||||||
Change in accrued expenses | 2,823 |
| (1,279 | ) | ||||
Change in employees and related expenses | 907 | 215 | ||||||
Change in operating leases | (11 | ) | (2 | ) | ||||
Net cash used in operating activities | (20,370 | ) | (12,374 | ) | ||||
| ||||||||
Cash flows from investing activities | ||||||||
Investment in deposits | 19,601 | (45,951 | ) | |||||
Long-term lease deposit | - | 4 | ||||||
Sale of asset held for sale | - | 1,000 | ||||||
Purchase of property and equipment | (68 | ) | (239 | ) | ||||
Net cash provided by (used in) investing activities | 19,533 | (45,186 | ) | |||||
| ||||||||
Cash flows from financing activities | ||||||||
Cash acquired in Merger | - | 2,427 | ||||||
Exercise of options | 143 | 10 | ||||||
Treasury share at cost | (1,218 | ) | - | |||||
Issuance of shares and warrants, net of issuance costs | 267 | 58,637 | ||||||
Net cash provided by (used in) financing activities | (808 | ) | 61,074 | |||||
| ||||||||
Change in cash, cash equivalents and restricted cash | (1,645 | ) | 3,514 |
| ||||
| ||||||||
Cash, cash equivalents and restricted cash at beginning of the year | 15,241 | 11,727 | ||||||
| ||||||||
Cash, cash equivalents and restricted cash at end of the year | 13,596 | 15,241 | ||||||
| ||||||||
Supplementary cash flows information: | ||||||||
A. Cash paid and received during the year for: | ||||||||
Income taxes received | 351 | - | ||||||
Income taxes paid | (5 | ) | - | |||||
Interest received | 972 | 74 | ||||||
B. Significant non- cash transaction: | ||||||||
Right-of-use asset recognized with corresponding lease liability | 17 | 345 | ||||||
Liabilities assumed, net of non-cash assets received in Merger | - | 49 |
The accompanying notes are an integral part of the consolidated financial statements.
F - 6
Chemomab Therapeutics Ltd. and its subsidiaries |
Notes to the Financial Statements as at December 31, 2022 |
|
Note 1 - General
1.Chemomab Therapeutics Ltd. (hereinafter - "the Company") is an Israeli-based company incorporated under the laws of the State of Israel in September 2011. The Company’s registered office is located in Kiryat Atidim, Tel Aviv, Israel.
The Company is a clinical-stage biotech company discovering and developing innovative therapeutics for conditions with high-unmet medical need that involve inflammation and fibrosis.
The wholly owned subsidiaries of the Company are: Chemomab Ltd. ("Chemomab"), Chemomab Therapeutics Israel Ltd. and Chemomab Therapeutics Inc.
2.The Company currently has no products approved for sale. The Company’s operations are funded primarily by its Shareholders. The Company has incurred operating losses in each year since its inception and does not expect to generate significant revenue unless and until it obtains marketing approval for its products. Continuation of the Company’s development programs depend on its future ability to raise sources of financing.
3.Since January 2020, the COVID-19 pandemic has dramatically expanded into a worldwide pandemic, creating macro-economic uncertainty and disruption in the business and financial markets. Many countries around the world, including Israel, had taken measures designated to limit the continued spread of the COVID-19 pandemic, including the closure of workplaces, restricting travel, prohibiting assembling, closing international borders and quarantining populated areas. The Company's clinical trial sites have been affected by the COVID-19 pandemic, and as a result, commencement of the enrollment in our clinical trials of CM-101 in PSC was delayed, and the enrollment rate has been, and is still, affected as well. As a result, The Company expanded its patient recruiting efforts to additional territories. In addition, after enrollment in these trials, patients might still drop out because of possible COVID-19 implications. Based on management’s assessment, the extent to which the lingering effects of the COVID-19 pandemic will further impact the Company's operations will depend on future developments. These developments, which are highly uncertain and cannot be predicted with confidence,including the duration and severity of the impact on patient enrollment following the attenuation of the outbreak The Company is carefully monitoring the impacts arising from the COVID-19 pandemic and will adjust activities accordingly.
4.On December 14, 2020, the Company (formerly known as Anchiano Therapeutics Ltd.) entered into an Agreement and Plan of Merger (the "Merger" and “Merger Agreement”) with Chemomab Ltd., an Israeli limited company, and CMB Acquisition Ltd., an Israeli limited company and a wholly owned subsidiary of the Company (“Merger Sub”). On March 16, 2021, (the “Effective Time”), the Company consummated the Merger pursuant to the Merger Agreement Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into Chemomab Ltd., with Chemomab Ltd. surviving the Merger as the Company's wholly owned subsidiary. In connection with the Merger, on March 16, 2021, the Company changed its name from “Anchiano Therapeutics Ltd.” To “Chemomab Therapeutics Ltd" and the business conducted by Chemomab Ltd. became primarily the business conducted by the Company.
At the Effective Time(a) each Chemomab Ltd. ordinary share outstanding immediately prior to the Effective Time was converted solely into number of American Depository Shares equal to the exchange ratio described in the Merger Agreement, and each outstanding Chemomab Ltd. option was assumed by the Company, based on the same exchange ratio.
F - 7
Chemomab Therapeutics Ltd. and its subsidiaries
|
Notes to the Financial Statements as at December 31, 2022 |
Note 1 - General (cont’d)
4. (cont'd)
For accounting purposes, Chemomab Ltd. is considered to have acquired the Company based upon the terms of the Merger as well as other factors. The Merger has been accounted for as an asset acquisition (reverse recapitalization transaction) rather than a business combination, as the assets acquired, and the liabilities assumed by Chemomab Ltd. do not meet the definition of a business under U.S. GAAP. The net assets acquired in connection with the Merger were recorded at their estimated acquisition date fair market value as of March 16, 2021, the date of completion of the Merger.
The exchange ratio was calculated by a formula that was determined through arms-length negotiations between the Company and Chemomab Ltd. The combined Company assumed all of the outstanding options of Chemomab Ltd., vested and not vested, under the Chemomab Share Incentive Plan (the “2015 Plan”), with such options representing the right to purchase a number of ADSs equal to approximately 12.86 multiplied by the number of Chemomab Ltd. ordinary shares previously represented by such options.
The following table summarizes the net assets acquired based on their estimated fair values as of March 16, 2021, immediately prior to completion of the Merger (in USD thousands):
Cash and cash equivalents | 2,427 | |||
Asset held for sale | 1,000 | |||
Prepaid and other assets | 236 | |||
Accrued liabilities | (1,187 | ) | ||
Net acquired assets | 2,476 |
F - 8
Chemomab Therapeutics Ltd. and its subsidiaries
|
Notes to the Financial Statements as at December 31, 2022 |
Note 2 - Summary of Significant Accounting Policies
A.Basis of Preparation
The financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S GAAP”).
B.Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
C.Foreign currency
The currency of the primary economic environment in which the operations of the Company are conducted is the U.S. dollar (“dollar” or “$”), thus; the dollar is the functional currency of the Company.
The transactions and balances of the Company denominated in U.S. dollars are presented at their original amounts as the U.S. dollar is the currency of the primary economic environment in which the Company has operated and expects to continue to operate in the foreseeable future.
Monetary assets and liabilities denominated in a non-U.S. dollar currency are translated using the current exchange rate and nonmonetary assets and liabilities and capital accounts denominated in a non-U.S. dollar currency are translated using historical exchange rates.
Statements of operations accounts denominated in a non-U.S. dollar currency are translated using the exchange rates in effect on the transaction dates, except for depreciation, which is translated using historical exchange rate.
D.Cash and cash equivalents
Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at the date acquired.
E.Restricted cash
Restricted cash is primarily invested in highly liquid deposits. These deposits were used to secure office rent payments.
F.Property and equipment
Property and equipment are stated at cost less accumulated depreciation. Maintenance and repair expenses are charged to operation as incurred. Depreciation is calculated on the straight-line method based on the estimated useful lives of the assets and commences once the assets are ready for their intended use.
Annual rates at depreciation are as follows:
% | ||||
Computers | 33 | |||
Laboratory equipment | 10 | |||
Furniture and equipment | 7 | |||
Leasehold improvement - over the shorter of the lease term or the estimated useful life of the improvement |
F - 9
Chemomab Therapeutics Ltd. and its subsidiaries
|
Notes to the Financial Statements as at December 31, 2022 |
Note 2 - Summary of Significant Accounting Policies (cont’d)
G.Impairment of long-lived assets
The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property and Equipment”, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less selling costs. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.
H.Research and Development
Research and development costs are charged to operations as incurred. Most of the research and development expenses are for subcontractors and wages.
I.Income taxes
The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the income taxes expense.
The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50 percent likely of being realized.
J.Fair value of financial instruments
ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework for measuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price.
F - 10
Chemomab Therapeutics Ltd. and its subsidiaries
|
Notes to the Financial Statements as at December 31, 2022 |
Note 2 - Summary of Significant Accounting Policies (cont’d)
J.Fair value of financial instruments (cont’d)
In addition, the fair value of assets and liabilities should include consideration of non-performance risk, which for the liabilities described below includes the Company’s own credit risk.
As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data or active market data of similar or identical assets or liabilities.
Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
The carrying amounts of cash and cash equivalents trade payables, other receivables and accrued expenses approximate their fair value due to the short-term maturity of such instruments. The fair value of long-term restricted deposits and restricted cash also approximates their carrying value, since they bear interest at rates close to the prevailing market rates. None of the Company’s non- financial assets or liabilities are recorded at fair value on a non-recurring basis. No transfers between levels have occurred during the periods presented.
K.Share-based compensation
The Company accounts for share-based compensation as an expense in the financial statements based on ASC 718. All awards are equity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach to recognize compensation cost over the vesting period. The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that is vested at that date.
The fair value for the Company’s stock options granted to employees, consultants and directors was estimated using Black-Scholes option-pricing model at the grant date, using the inputs detailed in Note 8(C).
The Company has historically not paid dividends and has no foreseeable plans to pay dividends.
L.Government-sponsored research and development
Chemomab records grants received from the office of the Israel Innovation Authority (the “IIA”) as a liability, if it is probable that the Chemomab will have to repay the grants received. If it is not probable that the grants will be repaid, Chemomab records the grants as a reduction to research and development expenses.
F - 11
Chemomab Therapeutics Ltd. and its subsidiaries
|
Notes to the Financial Statements as at December 31, 2022 |
Note 2 - Summary of Significant Accounting Policies (cont’d)
M.Severance pay
Pursuant to Section 14 of the Severance Compensation Law, 1963 ("Section 14"), all employees of the Company are entitled only to monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf with insurance companies. Upon release of the policy to the employee, no additional liability exists between the parties regarding the matter of severance pay and no additional payments shall be made by the Company to the employee. This plan has been accounted for as a defined contribution plan. Severance costs amounted to approximately $142 thousand and $116 thousand for the year ended December 31, 2022 and 2021, respectively.
N.Concentrations of credit risk:
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents.
Cash and cash equivalents and short- term deposits are invested in banks. Management believes that the financial institutions that hold the Company’s investments are financially sound and, accordingly, minimal credit risk exists with respect to these investments.
The Company have no off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements.
O.Leases
Under Topic 842, the Company determines if an arrangement is a lease at inception. Right-of-use (ROU) assets and lease liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company's incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be 5% and 5.2% in 2022 and 2021, respectively. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. When determining the probability of exercising such options, the Company considers contract-based, asset-based, entity-based, and market-based factors. For leases agreements, the Company has elected the practical expedient to account for the lease and non-lease maintenance components as a single lease component. Therefore, for those leases, the lease payments used to measure the lease liability include all the fixed consideration in the contract. The Company's lease agreements generally do not contain any residual value guarantees or restrictive covenants.
For operating leases, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
ROU assets for operating leases are periodically reduced by impairment losses. The Company uses the long-lived assets impairment guidance in ASC Subtopic 360-10, Property, Plant, and Equipment – Overall, to determine whether an ROU asset is impaired, and if so, the amount of the impairment loss to recognize. See Note 2(G).
F - 12
Chemomab Therapeutics Ltd. and its subsidiaries
|
Notes to the Financial Statements as at December 31, 2022 |
Note 2 - Summary of Significant Accounting Policies (cont’d)
P.Principles of consolidation
The consolidated financial statements include the accounts of the Company and its Subsidiaries. Intercompany balances and transactions have been eliminated in consolidation.
Q.Earnings per ordinary share
Basic earnings per ordinary share is calculated using only weighted average ordinary shares outstanding. Diluted earnings per share, if relevant, gives effect to dilutive potential ordinary shares outstanding during the year. Such dilutive shares consist of incremental shares, using the treasury stock method, from the assumed exercise of share options.
Note 3 - Cash and Cash Equivalents
December 31, | December 31, | |||||||
2022 | 2021 | |||||||
USD thousands | USD thousands | |||||||
In USD | 10,663 | 10,720 | ||||||
In NIS | 2,756 | 1,116 | ||||||
In other currencies | 100 | 3,350 | ||||||
| ||||||||
13,519 | 15,186 |
Note 4 - Other Receivables and Prepaid Expenses
December 31, | December 31, | |||||||
2022 | 2021 | |||||||
USD thousands | USD thousands | |||||||
Government institutions | 459 | 179 | ||||||
Prepaid expenses | 1,307 | 1,348 | ||||||
| ||||||||
1,766 | 1,527 |
F - 13
Chemomab Therapeutics Ltd. and its subsidiaries
|
Notes to the Financial Statements as at December 31, 2022 |
Note 5 - Property and Equipment, Net
December 31, | December 31, | |||||||
2022 | 2021 | |||||||
USD thousands | USD thousands | |||||||
Cost: | ||||||||
Computers | 70 | 43 | ||||||
Furniture and equipment | 33 | 27 | ||||||
Laboratory equipment | 399 | 364 | ||||||
Website development | 14 | 14 | ||||||
Leasehold improvements | 16 | 16 | ||||||
| 532 | 464 | ||||||
Less - accumulated depreciation | (165 | ) | (107 | ) | ||||
| ||||||||
| 367 | 357 |
Note 6 - Leases
On May 10, 2020, Chemomab entered into an office and lab space lease agreement (hereinafter – “The Agreement” .(According to the Agreement, Chemomab rented a space in Atidim Park, Tel-Aviv for a period of three years, through May 2023. Chemomab was granted an option to extend the lease term by additional three years.
On October 24, 2021, Chemomab signed an amendment to the Agreement ("The Amendment"). According to the Amendment, On December 12, 2021 Chemomab returned the previous office and lab space to the property owner and rented a larger space in Atidim Park Tel-Aviv, for a term of 3 years, through October 2024. In addition, Chemomab was granted an option to extend the lease term by additional three years. The annual rent and management fees are approximately $122 thousand. Pursuant to the Amendment, the bank guarantee issued in 2020 was canceled and a substitute bank guarantee of approximately $77 thousand was issued to the property owner during 2022.
The above operating leases are included in “Operating lease right-of-use assets” on the Company’s Consolidated Balance sheets as of December 31, 2022 and 2021 and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligations to pay lease payments are included in the current liabilities as “Operating lease liabilities” and in the non-current liabilities as “Non-current operating lease liabilities” on the Company’s Consolidated Balance sheets as of December 31, 2022 and 2021. Based on the present value of the lease payments for the remaining lease term of the Company’s existing lease agreement, the Company recognized operating right-of-use assets and operating lease liabilities of approximately $345 thousand on December 12, 2021.
During the years ended December 31, 2022 and 2021, the Company recognized an increase in right of use assets of $17 thousand and $345 thousand, respectively.
As of December 31, 2022, and 2021 operating right-of-use asset was $227 thousand and $345 thousand, respectively. The operating lease liabilities were $214 thousand and $343 thousand, respectively.
F - 14
Chemomab Therapeutics Ltd. and its subsidiaries
|
Notes to the Financial Statements as at December 31, 2022 |
Note 6 - Leases (cont’d)
As most of the Chemomab’s leases do not provide an implicit rate, Chemomab uses its incremental borrowing rate based on the information available at the commencement date of each lease in determining the present value of lease payments. Chemomab’s incremental borrowing rate is a hypothetical rate based on its estimation of what its credit rating would be the rate was 5% in 2022 and 5.2% in 2021.
Maturities of lease liabilities under noncancellable leases as of December 31, 2022, are as follows: (in thousands):
2023 | 126 | |||
2024 | 93 | |||
Total future minimum lease payments | 219 | |||
Less imputed interest: | (5 | ) | ||
Present value of operating lease liabilities | 214 |
Note 7 - Commitments and Contingent Liabilities
A.Exclusive License Agreement (hereinafter- “the License Agreement”)
In December 2011, Chemomab entered into a License Agreement with the Medical Research, Infrastructure, Health Services Fund of the Tel-Aviv Souraski Medical Center (“Fund”), pursuant to which it was granted with an exclusive license to certain inventions (as defined in the License Agreement) including patents, knowhow and products and the right to sublicense to third parties the rights granted, pursuant to and subject to certain terms and limitation fully set in the License Agreement.
Chemomab has agreed to pay the Fund a non-refundable and non-creditable sublicense fees as a percentage of all Attributed Income (as such term defined in the License Agreement), and shall further pay the Fund royalties from sales made by sublicensee;
(i)Royalties in percentage of the Net sales or Service Income (as defined in the License Agreement), subject to certain additional terms set forth therein.
In addition, with respect to each Licensed Product (as defined therein), Chemomab has agreed to pay the Fund the following non-refundable, non-creditable amounts:
(a)$100 thousand upon submission of a New Drug Application (“NDA”), Biological License Application (“BLA”) or equivalent for each Licensed Product to the United States Food and Drug Administration (“FDA”), $100 thousand upon submission of similar application for each Licensed Product to an equivalent foreign regulatory agency in Europe and one hundred thousand dollars upon submission of similar application for each Licensed Product to an equivalent foreign regulatory agency in Asia. Payment in the aggregate shall not be more than $300 thousand per each Licensed Product, provided that for each jurisdiction, payment shall be made only once;
(b)$200 thousand upon the grant of FDA or equivalent agency marketing approval in Europe and/or Asia for each Licensed Product. Payment in the aggregate shall not be more than $600 thousand per each Licensed Product, provided that for each jurisdiction, payment shall be made only once.
As of December 31, 2022 no payments were made to the Fund.
F - 15
Chemomab Therapeutics Ltd. and its subsidiaries
|
Notes to the Financial Statements as at December 31, 2022 |
Note 7 - Commitments and Contingent Liabilities (cont’d)
A.Exclusive License Agreement (hereinafter- “the License Agreement”) (cont’d)
In addition to the payments described above, upon the occurrence of either (i) closing of a public offering of the ordinary shares of Chemomab; or (ii) a Change of Control Transaction, Chemomab shall pay the Fund a cash payment equal to one percent (1%) of the proceeds raised by Chemomab in its initial public offering, or 1% of the consideration received by Chemomab or its shareholders at the closing of a Change of Control Transaction (after deduction of amounts paid as liquidation preference to the shareholders of Chemomab on account of their investment in Chemomab, if any), but in any event not more than $3,000 thousand.
Chemomab partially financed its research and development expenditures under programs sponsored by the Israel Innovation Authority (“IIA”) for the support of certain research and development activities conducted in Israel.
In return for the IIA’s participation, Chemomab is committed to pay royalties at rate of 3% of sales of the developed product (linked to U.S. dollar), up to 100% of the amount of grants received (100% plus interest at LIBOR). In addition, the IIA may impose certain conditions to transfer technology or development out of Israel.
Chemomab did not receive any grants from the IIA in the years ended December 31, 2022, and 2021.
Since Chemomab ’s incorporation through December 31, 2022 Chemomab received $1,227 thousand from the IIA, which were recognized as a reduction of research and development expenses.
As of December 31, 2022, Chemomab has no commitment for royalties payable.
B.In June 2015, Chemomab entered into a license agreement with subcontractor (“the Subcontractor”), under which the Subcontractor granted to Chemomab certain licenses to use proprietary rights of the subcontractor, materials and know how in the techniques and use of the same, for purposes of research and development of Chemomab 's product CM-101, as well as commercialization thereof. Further to the agreement, the Subcontractor also provides manufacturing services of intermediates and active pharmaceutical ingredients. According to the related manufacturing agreement, the manufacturing of the product is carried out by the Subcontractor in accordance with Chemomab's specifications and timeline. From time to time, Chemomab and the Subcontractor have been signing additional agreements for additional manufacturing and final process lock of the product for clinical use Under the agreement, Chemomab is also obligated to pay the Subcontractor royalties determined as a percentage of net sales of each licensee product.
During 2022 and 2021, Chemomab recorded expenses related to the above agreements in the amounts of $5,222 thousand and $2,590 thousand, respectively. The expenses were recorded under research and development expenses.
F - 16
Chemomab Therapeutics Ltd. and its subsidiaries
|
Notes to the Financial Statements as at December 31, 2022 |
Note 7 - Commitments and Contingent Liabilities (cont’d)
C.As of December 31, 2022, the bank imposed restriction on a bank deposit in the amount of $77 thousand for the purpose of secure lease payments under an office lease agreement.
D.During 2022, the Israeli tax authority ("ITA”) notified the Company that it had initiated a routine VAT audit to include tax years 2017 through 2022. The ITA raised several claims, mainly in respect with the recoverability of VAT with respect to Merger Agreement related expenses and the classification of the Company as a holding company. On July 2022, the ITA proposed a settlement, which the Company rejected. As a result, the ITA issued assessments in the aggregate amount of $1,046 thousand. The Company filed an appeal against the ITA’s assessments. The Company has recorded an appropriate provision which considers inherent uncertainty of these matters and the judicial process. Therefore, the outcome may differ from the estimated liability recorded by the Company during the period.
Note 8 - Share Capital
A.Right attached to shares
Ordinary shares
All of the issued and outstanding ordinary shares of the Company are duly authorized, validly issued, fully paid and non-assessable. The ordinary shares are not redeemable, and each ordinary share is entitled to one vote. The holders of the ordinary shares have the right to vote and participate in shareholders' meetings, the right to receive profits, and the right to participate in the accumulated earnings when the Company is dissolved.
1.Voting
The holders of ordinary shares are entitled to vote on all matters submitted to shareholders for a vote.
2.Dividends
The holders of the ordinary shares are entitled to receive dividends, when and as declared by the Board of Directors, and out of funds legally available.
Since its inception, the Company has not declared any dividends.
F - 17
Chemomab Therapeutics Ltd. and its subsidiaries
|
Notes to the Financial Statements as at December 31, 2022 |
Note 8 - Share Capital (cont’d)
B.Financing rounds
1.In connection with the Merger, on March 15, 2021, the Company entered into Securities Purchase Agreements with certain purchasers, pursuant to which the Company agreed to sell approximately $45.5 million of its American Depositary Shares (ADSs) in a private placement transaction, (or "The Private Placement"). The Private Placement closed on March 22, 2021, at which time the Company sold to the purchasers 2,619,270 ADSs together with warrants to purchase up to 261,929 ADSs at an exercise price of $17.35 per ADS. The warrants will expire five years from the date of issuance, and if exercised in full, will provide to the Company proceeds of approximately $4.5 million. 20 Ordinary Shares are equal to 1 American Depositary Share (ADS).
2.On April 30, 2021, the Company entered into an At the Market Offering Agreement (the "ATM Agreement") with Cantor Fitzgerald & Co., ("Cantor"). According to the ATM Agreement, the Company may offer and sell, from time to time, its ADSs having an aggregate offering price of up to $75 million through Cantor or the ATM Agreement. From April 30, 2021, through December 31, 2022, the Company issued 699,806 ADSs at an average price of $22.75 per ADS under the ATM Agreement, resulting in gross proceeds of $15,917 thousand.
3.On April 25, 2022, the Company filed a prospectus supplement with the SEC for the issuance and sale of up to $18,125,000 of its ADSs in connection with the reactivation of the ATM Facility and pursuant to General Instruction I.B.6 of Form S-3, which, subject to certain exceptions, limits the amount of securities the Company is able to offer and sell under such registration statement to one-third of our unaffiliated public float. During the year ended December 31, 2022, the Company issued 130,505 ADSs at an average price of $2.11 per ADS under the ATM Agreement, resulting in gross proceeds of $275 thousand.
4.On September 19, 2022, the Company entered into a share purchase agreement (the “Repurchase Arrangement”) with Dr. Adi Mor, co-founder of Chemomab Ltd., Chief Scientific Officer and a director of the Company and Professor Kobi George, co-founder of Chemomab Ltd. (together with Dr. Adi Mor, the “Co-Founders”), whereby the Company agreed, subject to the requisite court approval required under Section 303(a) of the Israeli Companies Law, 5759-1999 (the “Companies Law”), which the Company received on November 14, 2022, to repurchase up to 582,023 ADSs owned by the Co-Founders, for consideration not to exceed an aggregate amount of $2,500,000, depending on the market price of the ADSs at the time of any repurchase. Accordingly, on November 16, 2022, the company repurchased the entire amount of 582,023 ADSs from the Co-Founders at a weighted average price of $2.0848 and for total consideration of approximately $1,218 thousand.
The Company accounted for the repurchased shares as treasury share in accordance with ASC 505-30, "Treasury Stock".
F - 18
Chemomab Therapeutics Ltd. and its subsidiaries
|
Notes to the Financial Statements as at December 31, 2022 |
Note 8 - Share Capital (cont’d)
C.Share-based compensation
(1)Share-based compensation plan:
The Company maintains (i) the 2011 Share Option Plan (the “2011 Plan”), (ii) the 2017 Equity-Based Incentive Plan (the “2017 Plan”) and (iii) the Chemomab 2015 Share Incentive Plan (the “2015 Plan”), which was assumed by the Company from Chemomab upon the effectiveness of the Merger. At that time, outstanding options under the 2015 Plan became exercisable for such number of ADSs of the Company as was determined based on the exchange ratio in the Merger Agreement, with a reciprocal adjustment to exercise price.
As of December 31, 2022, a total of 28,443,060 of our Ordinary Shares (equal to 1,422,153 of ADSs) were reserved for issuance under the 2015 Plan, of which 3,445,520 Ordinary Shares (equal to 172,276 ADSs) had been issued pursuant to previous exercises options, and 23,460,740 Ordinary Shares (equal to 1,173,037 ADSs) were issuable under outstanding options. Of such outstanding options, options to purchase 12,400,720 Ordinary Shares (equal to 620,036 ADSs) had vested and were exercisable as of that date, with a weighted average exercise price of $0.30 per Ordinary Share (or $5.96 per ADS). During the year ended December 31, 2022, options to purchase 1,240,120 Ordinary Shares (equal to 62,006 ADS) were canceled.
As of December 31, 2022, a total of 12,511,620 of our Ordinary Shares (equal to 625,581 ADSs) were reserved for issuance under the 2017 Plan, of which 11,730,800 Ordinary Shares (equal to 586,540 ADSs) were issuable under outstanding options. Of such outstanding options, options to purchase 427,540 Ordinary Shares (equal to 21,377 ADSs) had vested and were exercisable as of that date, with a weighted average exercise price of $0.35 per Ordinary Share (or $6.98 per ADS). During the year ended December 31, 2022 no options were canceled.
(2)The expenses that were recognized in the consolidated statements of operations for services received from employees and service providers are as follows:
Year ended | Year ended | |||||||
December 31, | December 31, | |||||||
2022 | 2021 | |||||||
USD thousands | USD thousands | |||||||
Research and development | 448 | 137 | ||||||
General and administrative | 2,763 | 1,882 | ||||||
| ||||||||
Total share-based compensation expenses | 3,211 | 2,019 |
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Chemomab Therapeutics Ltd. and its subsidiaries
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Notes to the Financial Statements as at December 31, 2022 |
Note 8 - Share Capital (cont’d)
(3)The number and weighted average exercise price of options are as follows:
Weighted average exercise price | Number of options | Weighted average remaining contractual life (in years) | Weighted average exercise price | Number of options | Weighted average remaining contractual life (in years) | |||||||||||||||||||
2022 | 2022 | 2022 | 2021 | 2021 | 2021 | |||||||||||||||||||
Outstanding at January 1 | 0.38 | 27,003,260 | 8.12 | 0.07 | 10,455,580 | 7.8 | ||||||||||||||||||
Acquired in Merger | - | - | - | 609,535 | - | |||||||||||||||||||
Exercised | 0.07 | (1,970,000 | ) | - | 0.08 | (134,220 | ) | - | ||||||||||||||||
Forfeited | 0.32 | (1,240,120 | ) | - | 1.25 | (1,712,275 | ) | - | ||||||||||||||||
Granted | 0.16 | 11,398,400 | 7.8 | 0.62 | 17,784,640 | 9.79 | ||||||||||||||||||
| ||||||||||||||||||||||||
Outstanding at December 31 | 0.33 | 35,191,540 | 7.42 | 0.38 | 27,003,260 | 8.12 |
(4)Fair value measurement:
The fair value of the options is measured at the grant date using the Black-Scholes Option pricing model and the assumptions used to calculate the fair value of the options are as follows:
2022 grants | |||||
Weighted average share price (in U.S. dollar)(a) | 0.16 | ||||
Exercise price (in U.S. dollar) | 0.10-0.257 | ||||
Expected life of options (in years)(b) | 5.51-6.28 | ||||
Expected volatility(c) | 83.69%-84.31% | ||||
Risk-free interest rate(d) | 1.75%-4.14% | ||||
Dividend yield | 0% |
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Chemomab Therapeutics Ltd. and its subsidiaries
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Notes to the Financial Statements as at December 31, 2022 |
Note 8 - Share Capital (cont’d)
C.Share-based compensation (cont’d)
4. (cont'd)
(a)The weighted average share price is based on the Company’s Ordinary Share valuation as at the grant date.
(b)Expected life for the periods presented was determined according to the simplified method since, at the date of grant, the Company did not have enough history to make an estimate. This method effectively assumes that exercise occurs over the period from vesting until expiration, and therefore the expected term is the midpoint between the service period and the contractual term of the award. The simplified method is applicable to service conditions and for performance conditions that are probable of achievement. If meeting the performance condition is not probable, the Company will use the awards’ contractual term if the service period is implied, or the simplified method, if the service period is explicitly stated.
(c)Expected volatility is based on historical volatility over the most recent period commensurate with the expected term of the option. As the Company has a short trading history for its ordinary shares, when the Company's trading period is shorter than the expected term, the expected volatility is derived from the average historical share volatilities of several unrelated public companies within the Company’s industry that the Company considers to be comparable to its own business over a period equivalent to the option’s expected term.
(d)The risk-free rate for the expected term of the options is based on the Black-Scholes option-pricing model on the yields of U.S. Treasury securities with maturities appropriate for the expected term of employee share option awards.
Note 9 - Research and Development
Year ended | Year ended | |||||||
December 31, | December 31, | |||||||
2022 | 2021 | |||||||
USD thousands | USD thousands | |||||||
Consultants and subcontractors | 13,052 | 3,894 | ||||||
Salaries and related expenses | 2,867 | 1,789 | ||||||
Rent and maintenance | 245 | 114 | ||||||
Share-based compensation | 448 | 137 | ||||||
Other expenses | 365 | 400 | ||||||
16,977 | 6,334 |
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Chemomab Therapeutics Ltd. and its subsidiaries
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Notes to the Financial Statements as at December 31, 2022 |
Note 10 - General and Administrative
Year ended | Year ended | |||||||
December 31, | December 31, | |||||||
2022 | 2021 | |||||||
USD thousands | USD thousands | |||||||
Salaries and related expenses | 3,435 | 943 | ||||||
Professional services | 2,596 | 1,695 | ||||||
Share-based compensation | 2,763 | 1,882 | ||||||
Fees to Directors | 231 | 244 | ||||||
Insurance | 1,084 | 1,024 | ||||||
Rent and maintenance | 24 | 29 | ||||||
Other expenses | 1,423 | 216 | ||||||
11,556 | 6,033 |
Note 11 - Income Taxes
A.Tax rates
Ordinary taxable income in Israel is subject to a corporate tax rate of 23%.
The Company’s US subsidiary, Chemomab Therapeutics Inc. ("Chemomab Inc.) is taxed separately under the U.S. tax laws.
Chemomab Inc. is subject to a federal flat tax rate of 21% and state tax as applicable.
Capital gain is subject to capital gain tax according to the corporate tax rate in the year the assets are sold.
B.Tax assessments
As of December 31, 2022, the Company’s tax reports through December 31, 2017 are considered closed to audit inspections by the Israeli Tax Authority (“ITA”) due to statute of limitation rules effective in Israel.
The Company has not yet been assessed by the ITA since inception.
C.Losses for tax purposes carried forward to future years
As of December 31, 2022, the Company and its subsidiaries had approximately $159 million (approximately $143 million as of December 31, 2021) of net operating loss carryforwards which are available to reduce future taxable income with no limitation on the period of use.
On March 27, 2020 and December 27, 2020, the President of the United States signed and enacted into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Consolidated Appropriations Act, 2021 (CAA). Among other provisions, the CARES Act and the CAA provide relief to U.S. federal corporate taxpayers through temporary adjustments to net operating loss rules, changes to limitations on interest expense deductibility, and the acceleration of available refunds for minimum tax credit carryforwards. The CARES Act also includes provisions for a carryback of any net operating loss (NOL) arising in a taxable year beginning after December 31, 2017, and before January 1, 2021, to each of the five taxable years preceding the taxable year in which the loss arises (carryback period).
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Chemomab Therapeutics Ltd. and its subsidiaries
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Notes to the Financial Statements as at December 31, 2022 |
Note 11 - Income Taxes (cont’d)
C.Losses for tax purposes carried forward to future years (cont'd)
Chemomab Therapeutics Inc., a wholly owned subsidiary of the Company, filed an application with the US Internal Revenue Service to carryback net operating losses. Chemomab Therapeutics Inc received $351 thousand in December 2022 on account of 2016 and 2017 and expects to receive the remainder $183 thousand in 2023. Accordingly, a tax benefit in the total amount of $534 thousand was recorded in the Company’s statement of operations during 2022.
D.Deferred taxes
In respect of:
December 31, | December 31, | |||||||
2022 | 2021 | |||||||
USD thousands | USD thousands | |||||||
Net operating loss carry-forwards | 36,550 | 33,396 | ||||||
Share-based compensation expense | 1,774 | 1,147 | ||||||
Research and development costs | 2,858 | 1,449 | ||||||
Other | 13 | 38 | ||||||
Gross deferred tax assets | 41,195 | 36,030 | ||||||
Less - Valuation allowance | (41,195 | ) | (36,030) | |||||
| ||||||||
Net deferred tax assets | - | - |
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. A valuation allowance is provided when it is more likely than not that the deferred tax assets will not be realized.
The Company has established a valuation allowance to offset deferred tax assets on December 31, 2022 and 2021 due to the uncertainty of realizing future tax benefits from its net operating loss carryforwards and other deferred tax assets. The net change in the total valuation allowance for the year ended at December 31, 2022 was an increase of approximately $5.2 million.
E.Roll forward of valuation allowance
Balance at January 1, 2021 | $ | 6,200 | ||
Currency transaction loss | 2,425 | |||
Tax assets acquired through merger | 24,535 | |||
Income tax expense | 2,870 | |||
Balance at December 31, 2021 | $ | 36,030 | ||
Currency transaction Income | (1,316 | ) | ||
Income tax expense | 6,481 | |||
Balance at December 31, 2022 | $ | 41,195 |
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Chemomab Therapeutics Ltd. and its subsidiaries
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Notes to the Financial Statements as at December 31, 2022 |
Note 11 - Income Taxes (cont’d)
F.Reconciliation of theoretical income tax expense to actual income tax expense
A reconciliation of the Company’s theoretical income tax expense to actual income tax expense is as follows:
December 31, | December 31, | |||||||
2022 | 2021 | |||||||
USD thousands | USD thousands | |||||||
Loss before income taxes | (28,180 | ) | (12,478 | ) | ||||
Statutory tax rate | 23 | % | 23 | % | ||||
Theoretical tax benefit | (6,481 | ) | (2,870 | ) | ||||
| ||||||||
Change in temporary differences for which deferred taxes were not recognized | (1,696 | ) | (1,332 | ) | ||||
Tax rate differential | 20 | (101 | ) | |||||
Non-deductible expenses | 744 | 239 | ||||||
Losses and other items for which a valuation allowance was provided or benefit from loss carryforwards | 6,879 | 4,064 | ||||||
Actual income tax expense (Benefit) | (534 | ) | - |
G.Accounting for uncertainty in income taxes
For the year ended December 31, 2022, the Company did not have any unrecognized tax benefits and does not expect that the amount of unrecognized tax benefits will change significantly within the next 12 months. The Company’s accounting policy is to accrue interest and penalties related to unrecognized tax benefits as a component of income tax expense.
Note 12 - Related Parties Balances and Transactions
A.Balances with Related Parties:
The following Related Party payables are included in the consolidated Balance Sheets:
December 31, | December 31, | |||||||
2022 | 2021 | |||||||
USD thousands | USD thousands | |||||||
Employee and related expenses | 891 | 278 | ||||||
Accrued expenses | 58 | 72 | ||||||
| ||||||||
949 | 350 |
|
On September 19, 2022, the Company entered into a share purchase agreement with the Company's Co- Founders, see Note 8B(4).
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Chemomab Therapeutics Ltd. and its subsidiaries
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Notes to the Financial Statements as at December 31, 2022 |
Note 12 - Related Parties Balances and Transactions (cont'd)
B.Transactions with Related Parties:
The following transactions with related parties are included in the consolidated Statements of Operations:
Year ended | Year ended | |||||||
December 31, | December 31, | |||||||
2022 | 2021 | |||||||
USD thousands | USD thousands | |||||||
Salaries and related expenses | 2,409 | 1,255 | ||||||
Share-based payments | 2,466 | 1,775 | ||||||
Professional Services | 231 | 244 | ||||||
Research and development | 36 | 36 | ||||||
| ||||||||
5,142 | 3,310 |
Note 13 - Net Loss Per Share Attributable to Ordinary Shareholders
Basic net loss per share is computed by dividing the net loss available to common stockholders by the weighted-average number of ordinary shares outstanding. Diluted net loss per share is computed similarly to basic net loss per share except that the denominator is increased to include the number of additional ordinary shares that would have been outstanding if the potential ordinary shares had been issued and if the additional ordinary shares of were dilutive. Diluted net loss per share is the same as basic net loss per share of ordinary share, as the effect of potentially dilutive securities is antidilutive.
The following table sets forth the computation of basic and diluted net loss per share attributable to ordinary shareholders for the periods presented:
Year ended | Year ended | |||||||
December 31 | December 31 | |||||||
2022 | 2021 | |||||||
In USD thousands, except share and per share data | ||||||||
Numerator: | ||||||||
Net loss | 27,646 | 12,478 | ||||||
| ||||||||
Denominator: | ||||||||
Weighted-average number of ordinary shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted | 227,589,288 | 207,468,650 | ||||||
| ||||||||
Net loss per share attributable to ordinary shareholders, basic and diluted | 0.121 | 0.060 |
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Chemomab Therapeutics Ltd. and its subsidiaries
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Notes to the Financial Statements as at December 31, 2022 |
Note 13 - Net Loss Per Share Attributable to Ordinary Shareholders (Cont'd)
The potential number of ordinary shares that were excluded from the computation of diluted net loss per share attributable to ordinary shareholders for the periods presented since including them would have been anti-dilutive are as follows:
Year ended | Year ended | |||||||
December 31 | December 31 | |||||||
2022 | 2021 | |||||||
Number of shares | ||||||||
Outstanding options to purchase ordinary shares | 35,191,540 | 27,003,260 |
Note 14 - Subsequent Events
On January 13, 2023 the Company filed with the SEC a registration statement on form S-1 for the issuance and sale of up to $20,000,000 of its ADSs.
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