Exhibit 99.2
KAMADA LTD.
CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2014
TABLE OF CONTENTS
Page | |
2 | |
3 | |
4-6 | |
7-8 | |
9-13 |
KAMADA LTD. |
CONSOLIDATED BALANCE SHEETS
As of June 30, | As of December 31, | |||||||||||
2014 | 2013 | 2013 | ||||||||||
Unaudited | Audited | |||||||||||
In thousands | ||||||||||||
Current Assets | ||||||||||||
Cash and cash equivalents | $ | 25,083 | $ | 73,403 | $ | 59,110 | ||||||
Short-term investments | 42,603 | 9,152 | 15,067 | |||||||||
Trade receivables, net | 15,215 | 12,340 | 17,882 | |||||||||
Other accounts receivables | 2,299 | 1,400 | 3,694 | |||||||||
Inventories | 23,871 | 23,901 | 21,933 | |||||||||
109,071 | 120,196 | 117,686 | ||||||||||
Non-Current Assets | ||||||||||||
Long-term inventories | - | 165 | - | |||||||||
Property, plant and equipment, net | 21,668 | 19,993 | 21,443 | |||||||||
Other long-term assets | 160 | 193 | 250 | |||||||||
21,828 | 20,351 | 21,693 | ||||||||||
130,899 | 140,547 | 139,379 | ||||||||||
Current Liabilities | ||||||||||||
Short term credit and Current maturities of convertible debentures | 8,798 | 5,534 | 8,718 | |||||||||
Trade payables | 15,942 | 9,098 | 14,093 | |||||||||
Other accounts payables | 4,510 | 5,481 | 4,313 | |||||||||
Deferred revenues | 5,264 | 8,596 | 5,454 | |||||||||
34,514 | 28,709 | 32,578 | ||||||||||
Non-Current Liabilities | ||||||||||||
Convertible debentures | 8,039 | 19,930 | 7,498 | |||||||||
Employee benefit liabilities, net | 834 | 770 | 827 | |||||||||
Deferred revenues | 6,867 | 10,149 | 8,506 | |||||||||
15,740 | 30,849 | 16,831 | ||||||||||
Equity | ||||||||||||
Share capital | 9,203 | 8,983 | 9,201 | |||||||||
Share premium | 157,212 | 148,655 | 157,100 | |||||||||
Conversion option in convertible debentures | 2,217 | 3,794 | 2,218 | |||||||||
Capital reserve due to translation to presentation currency | (3,490 | ) | (3,490 | ) | (3,490 | ) | ||||||
Capital reserve from hedges | 54 | 121 | 156 | |||||||||
Capital reserve from available for sale financial assets | 93 | - | (27 | ) | ||||||||
Capital reserve from share-based payments | 7,217 | 4,903 | 5,189 | |||||||||
Capital reserve from employee benefits | (129 | ) | (141 | ) | (129 | ) | ||||||
Accumulated deficit | (91,732 | ) | (81,836 | ) | (80,248 | ) | ||||||
80,645 | 80,989 | 89,970 | ||||||||||
$ | 130,899 | $ | 140,547 | $ | 139,379 |
The accompanying Notes are an integral part of the Consolidated Financial Statements.
2
KAMADA LTD.
Consolidated Statements of Comprehensive Income (loss)
Six months period ended June 30, | Three months period ended June 30, | Year ended December 31 | ||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2013 | ||||||||||||||||
Unaudited | Audited | |||||||||||||||||||
Thousands of US dollar (Except for per-share income (loss) data) | ||||||||||||||||||||
Revenues from proprietary products | $ | 16,142 | $ | 19,957 | $ | 8,721 | $ | 11,897 | $ | 50,658 | ||||||||||
Revenues from distribution | 12,842 | 8,754 | 7,076 | 4,218 | 19,965 | |||||||||||||||
Total revenues | 28,984 | 28,711 | 15,797 | 16,115 | 70,623 | |||||||||||||||
Cost of revenues from proprietary products | 14,706 | 9,682 | 9,703 | 5,121 | 27,104 | |||||||||||||||
Cost of revenues from distribution | 11,082 | 7,412 | 6,160 | 3,573 | 17,112 | |||||||||||||||
Total cost of revenues | 25,788 | 17,094 | 15,863 | 8,694 | 44,216 | |||||||||||||||
Gross profit (loss) | 3,196 | 11,617 | (66 | ) | 7,421 | 26,407 | ||||||||||||||
Research and development expenses | 8,433 | 6,334 | 5,068 | 2,604 | 12,745 | |||||||||||||||
Selling and marketing expenses | 1,366 | 963 | 719 | 450 | 2,100 | |||||||||||||||
General and administrative expenses | 3,994 | 3,975 | 2,037 | 2,719 | 7,862 | |||||||||||||||
Operating income (loss) | (10,597 | ) | 345 | (7,890 | ) | 1,648 | 3,700 | |||||||||||||
Financial income | 421 | 165 | 179 | 79 | 289 | |||||||||||||||
Income (expense) in respect of currency exchange and translation differences and derivatives instruments, net | 136 | (70 | ) | 97 | (132 | ) | (369 | ) | ||||||||||||
Financial expense | (1,410 | ) | (1,549 | ) | (737 | ) | (693 | ) | (3,153 | ) | ||||||||||
Income (loss) before taxes on income | (11,450 | ) | (1,109 | ) | (8,351 | ) | 902 | 467 | ||||||||||||
Taxes on income | 34 | 36 | 11 | 12 | 24 | |||||||||||||||
Net Income (loss) | (11,484 | ) | (1,145 | ) | (8,362 | ) | 890 | 443 | ||||||||||||
Other Comprehensive Income (loss): | ||||||||||||||||||||
Items that may be reclassified to profit or loss in subsequent periods: | ||||||||||||||||||||
Net gain (loss) on available for sale financial assets | 120 | - | 81 | - | (27 | ) | ||||||||||||||
Net loss on cash flow hedge | (102 | ) | (108 | ) | (33 | ) | (67 | ) | (73 | ) | ||||||||||
Items that will not be reclassified to profit or loss in subsequent periods: | ||||||||||||||||||||
Actuarial net gain of defined benefit plans | - | - | - | - | 12 | |||||||||||||||
Total comprehensive income (loss) | $ | (11,466 | ) | $ | (1,253 | ) | $ | (8,314 | ) | $ | 823 | $ | 355 | |||||||
Income (loss) per share attributable to equity holders of the Company: | ||||||||||||||||||||
Basic income (loss) per share | $ | (0.32 | ) | $ | (0.04 | ) | $ | (0.23 | ) | $ | (0.03 | ) | $ | 0.01 | ||||||
Diluted income (loss) per share | $ | (0.32 | ) | $ | (0.04 | ) | $ | (0.23 | ) | $ | (0.03 | ) | $ | 0.01 |
The accompanying Notes are an integral part of the Consolidated Financial Statements.
3
Share Capital | Share premium | Conversion option in convertible debentures | Capital reserve from available for sale financial assets | Capital reserve due to translation to presentation currency | Capital reserve from hedges | Capital reserve from share-based payments | Capital reserve from employee benefits | Accumulated deficit | Total equity | |||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2014 | $ | 9,201 | $ | 157,100 | $ | 2,218 | $ | (27 | ) | $ | (3,490 | ) | $ | 156 | $ | 5,189 | $ | (129 | ) | $ | (80,248 | ) | $ | 89,970 | ||||||||||||||||
Net loss | - | - | - | - | - | - | - | - | (11,484 | ) | (11,484 | ) | ||||||||||||||||||||||||||||
Other comprehensive income (loss) | - | - | - | 120 | - | (102 | ) | - | - | - | 18 | |||||||||||||||||||||||||||||
Total comprehensive income (loss) | - | - | - | 120 | - | (102 | ) | - | - | (11,484 | ) | (11,466 | ) | |||||||||||||||||||||||||||
Exercise of options into shares, net | 2 | 104 | - | - | - | - | (67 | ) | - | - | 39 | |||||||||||||||||||||||||||||
Conversion of convertible debentures into shares | * | ) | 8 | (1 | ) | - | - | - | - | - | - | 7 | ||||||||||||||||||||||||||||
Cost of share-based payment | - | - | - | - | - | - | 2,095 | - | - | 2,095 | ||||||||||||||||||||||||||||||
Balance as of June 30, 2014 | $ | 9,203 | $ | 157,212 | $ | 2,217 | $ | 93 | $ | (3,490 | ) | $ | 54 | $ | 7,217 | $ | (129 | ) | $ | (91,732 | ) | $ | 80,645 |
Share Capital | Share premium | Conversion option in convertible debentures | Capital reserve due to translation to presentation currency | Capital reserve from hedges | Capital reserve from share-based payments | Capital reserve from employee benefits | Accumulated deficit | Total equity | ||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2013 | $ | 7,204 | $ | 96,874 | $ | 3,794 | $ | (3,490 | ) | $ | 229 | $ | 4,614 | $ | (141 | ) | $ | (80,691 | ) | $ | 28,393 | |||||||||||||||
Net loss | - | - | - | - | - | - | - | (1,145 | ) | (1,145 | ) | |||||||||||||||||||||||||
Other comprehensive loss | - | - | - | - | (108 | ) | - | - | - | (108 | ) | |||||||||||||||||||||||||
Total comprehensive loss | - | - | - | - | (108 | ) | - | - | (1,145 | ) | (1,253 | ) | ||||||||||||||||||||||||
Issuance of ordinary shares, net of issuance costs | 1,749 | 51,115 | - | - | - | - | - | - | 52,864 | |||||||||||||||||||||||||||
Exercise of options into shares, net | 30 | 662 | - | - | - | (360 | ) | - | - | 332 | ||||||||||||||||||||||||||
Conversion of convertible debentures into shares | 4 | * | ) | - | - | - | - | - | - | 4 | ||||||||||||||||||||||||||
Cost of share-based payment | - | - | - | - | - | 649 | - | - | 649 | |||||||||||||||||||||||||||
Balance as of June 30, 2013 | $ | 8,983 | $ | 148,655 | $ | 3,794 | $ | (3,490 | ) | $ | 121 | $ | 4,903 | $ | (141 | ) | $ | (81,836 | ) | $ | 80,989 |
*) Represents an amount lower than $ 1
The accompanying Notes are an integral part of the Consolidated Financial Statements.
4
KAMADA LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share Capital | Share premium | Conversion option in convertible debentures | Capital reserve from available for sale financial assets | Capital reserve due to translation to presentation currency | Capital reserve from hedges | Capital reserve from share-based payments | Capital reserve from employee benefits | Accumulated deficit | Total equity | |||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||||||
Balance as of April 1, 2014 | $ | 9,201 | $ | 157,117 | $ | 2,217 | $ | 12 | $ | (3,490 | ) | $ | 87 | $ | 6,266 | $ | (129 | ) | $ | (83,370 | ) | $ | 87,911 | |||||||||||||||||
Net loss | - | - | - | - | - | - | - | - | (8,362 | ) | (8,362 | ) | ||||||||||||||||||||||||||||
Other comprehensive income (loss) | - | - | - | 81 | - | (33 | ) | - | - | - | 48 | |||||||||||||||||||||||||||||
Total comprehensive income (loss) | - | - | - | 81 | - | (33 | ) | - | - | (8,362 | ) | (8,314 | ) | |||||||||||||||||||||||||||
Exercise of options into shares, net | 2 | 95 | - | - | - | - | (58 | ) | - | - | 39 | |||||||||||||||||||||||||||||
Cost of share-based payment | - | - | - | - | - | - | 1,009 | - | - | 1,009 | ||||||||||||||||||||||||||||||
Balance as of June 30, 2014 | $ | 9,203 | $ | 157,212 | $ | 2,217 | $ | 93 | $ | (3,490 | ) | $ | 54 | $ | 7,217 | $ | (129 | ) | $ | (91,732 | ) | $ | 80,645 |
Share Capital | Share premium | Conversion option in convertible debentures | Capital reserve due to translation to presentation currency | Capital reserve from hedges | Capital reserve from share-based payments | Capital reserve from employee benefits | Accumulated deficit | Total equity | ||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||
Balance as of April 1, 2013 | $ | 7,220 | $ | 97,185 | $ | 3,794 | $ | (3,490 | ) | $ | 188 | $ | 4,696 | $ | (141 | ) | $ | (82,726 | ) | $ | 26,726 | |||||||||||||||
Net income | - | - | - | - | - | - | - | 890 | 890 | |||||||||||||||||||||||||||
Other comprehensive income (loss) | - | - | - | - | (67 | ) | - | - | - | (67 | ) | |||||||||||||||||||||||||
Total comprehensive income (loss) | - | - | - | - | (67 | ) | - | - | 890 | 823 | ||||||||||||||||||||||||||
Issuance of ordinary shares, net of issuance costs | 1,749 | 51,115 | - | - | - | - | - | - | 52,864 | |||||||||||||||||||||||||||
Exercise of options into shares, net | 14 | 351 | - | - | - | (229 | ) | - | - | 136 | ||||||||||||||||||||||||||
Conversion of convertible debentures into shares | * | ) | 4 | * | ) | - | - | - | - | - | 4 | |||||||||||||||||||||||||
Cost of share-based payment | - | - | - | - | - | 436 | - | - | 436 | |||||||||||||||||||||||||||
Balance as of June 30, 2013 | $ | 8,983 | $ | 148,655 | $ | 3,794 | $ | (3,490 | ) | $ | 121 | $ | 4,903 | $ | (141 | ) | $ | (81,836 | ) | $ | 80,989 |
*) Represents an amount lower than $ 1
The accompanying Notes are an integral part of the Consolidated Financial Statements.
5
KAMADA LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share Capital | Share premium | Conversion option in convertible debentures | Capital reserve from available for sale financial assets | Capital reserve due to translation to presentation currency | Capital reserve from hedges | Capital reserve from share-based payments | Capital reserve from employee benefits | Accumulated deficit | Total equity | |||||||||||||||||||||||||||||||
Audited | ||||||||||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2013 | $ | 7,204 | $ | 96,874 | $ | 3,794 | $ | - | $ | (3,490 | ) | $ | 229 | $ | 4,614 | $ | (141 | ) | $ | (80,691 | ) | $ | 28,393 | |||||||||||||||||
Net income | - | - | - | - | - | - | - | - | 443 | 443 | ||||||||||||||||||||||||||||||
Other comprehensive income (loss) | - | - | - | (27 | ) | - | (73 | ) | - | 12 | - | (88 | ) | |||||||||||||||||||||||||||
Total comprehensive income (loss) | - | - | - | (27 | ) | - | (73 | ) | - | 12 | 443 | 355 | ||||||||||||||||||||||||||||
Exercise of warrants and options into shares | 62 | 1,275 | - | - | - | - | (752 | ) | - | - | 585 | |||||||||||||||||||||||||||||
Issuance of ordinary shares, net of issuance costs | 1,749 | 51,053 | - | - | - | - | - | - | - | 52,802 | ||||||||||||||||||||||||||||||
Conversion of convertible debentures into shares | 186 | 7,898 | (1,576 | ) | - | - | - | - | - | - | 6,508 | |||||||||||||||||||||||||||||
Cost of share-based payment | - | - | - | - | - | - | 1,327 | - | - | 1,327 | ||||||||||||||||||||||||||||||
Balance as of December 31, 2013 | $ | 9,201 | $ | 157,100 | $ | 2,218 | $ | (27 | ) | $ | (3,490 | ) | $ | 156 | $ | 5,189 | $ | (129 | ) | $ | (80,248 | ) | $ | 89,970 |
The accompanying Notes are an integral part of the Consolidated Financial Statements.
6
KAMADA LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months period Ended June 30, | Three months period Ended June 30, | Year Ended December 31, | ||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2013 | ||||||||||||||||
Unaudited | Audited | |||||||||||||||||||
Thousands of US dollar | ||||||||||||||||||||
Cash Flows from Operating Activities | ||||||||||||||||||||
Net income (loss) | $ | (11,484 | ) | $ | (1,145 | ) | $ | (8,362 | ) | $ | 890 | $ | 443 | |||||||
Adjustments to reconcile loss to net cash provided by (used in) operating activities: | ||||||||||||||||||||
Adjustments to the profit or loss items: | ||||||||||||||||||||
Depreciation and amortization | 1,315 | 1,515 | 652 | 692 | 3,001 | |||||||||||||||
Finance expenses, net | 853 | 1,454 | 461 | 747 | 3,233 | |||||||||||||||
Cost of share-based payment | 2,095 | 649 | 1,009 | 436 | 1,327 | |||||||||||||||
Loss from sale of fixed assets | - | 67 | - | 67 | 24 | |||||||||||||||
Taxes on income | 34 | 36 | 11 | 12 | 73 | |||||||||||||||
Change in employee benefit liabilities, net | 7 | 52 | 33 | 32 | 121 | |||||||||||||||
4,304 | 3,773 | 2,166 | 1,986 | 7,779 | ||||||||||||||||
Changes in asset and liability items: | ||||||||||||||||||||
Decrease (increase) in trade receivables | 2,764 | 1,743 | (2,472 | ) | (3,097 | ) | (3,445 | ) | ||||||||||||
Decrease (increase) in other accounts receivables | 530 | 207 | 770 | 649 | (444 | ) | ||||||||||||||
Decrease (increase) in inventories and long-term inventories | (1,938 | ) | (3,315 | ) | 4,743 | (85 | ) | (1,182 | ) | |||||||||||
Decrease (increase) in deferred expenses | 814 | 28 | 255 | 139 | (1,231 | ) | ||||||||||||||
Increase (decrease) in trade payables | 1,898 | (3,178 | ) | (342 | ) | (3,716 | ) | 1,579 | ||||||||||||
Increase (decrease) in other accounts payables | 196 | 960 | 759 | 1,190 | 264 | |||||||||||||||
Decrease in deferred revenues | (1,829 | ) | (1,485 | ) | (983 | ) | (1,351 | ) | (6,270 | ) | ||||||||||
2,435 | (5,040 | ) | 2,730 | (6,271 | ) | (10,729 | ) | |||||||||||||
Cash paid and received during the period for: | ||||||||||||||||||||
Interest paid | (602 | ) | (1,062 | ) | (301 | ) | (527 | ) | (1,968 | ) | ||||||||||
Interest received | 132 | 195 | 38 | 112 | 663 | |||||||||||||||
Taxes paid | (64 | ) | (54 | ) | (4 | ) | (23 | ) | (42 | ) | ||||||||||
(534 | ) | (921 | ) | (267 | ) | (438 | ) | (1,347 | ) | |||||||||||
Net cash used in operating activities | $ | (5,279 | ) | $ | (3,333 | ) | $ | (3,733 | ) | $ | (3,833 | ) | $ | (3,854 | ) |
7
KAMADA LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months period Ended June 30, | Three months period Ended June 30, | Year Ended December 31, | ||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2013 | ||||||||||||||||
Unaudited | Audited | |||||||||||||||||||
Thousands of US dollar | ||||||||||||||||||||
Cash Flows from Investing Activities | ||||||||||||||||||||
Short-term investments | $ | (26,784 | ) | $ | 7,848 | $ | (3,352 | ) | $ | 1,279 | $ | 1,732 | ||||||||
Purchase of property and equipment | (1,535 | ) | (2,747 | ) | (919 | ) | (1,473 | ) | (5,643 | ) | ||||||||||
Proceeds from sale of equipment | - | 3 | - | 3 | 8 | |||||||||||||||
Net cash provided by (used in) investing activities | (28,319 | ) | 5,104 | (4,271 | ) | (191 | ) | (3,903 | ) | |||||||||||
Cash Flows from Financing Activities | ||||||||||||||||||||
Exercise of options into shares | 39 | 309 | 39 | 136 | 562 | |||||||||||||||
Proceeds from issuance of ordinary shares, net | - | 53,958 | - | 54,479 | 52,953 | |||||||||||||||
Short term credit from bank and others, net | - | (6 | ) | - | (6 | ) | (12 | ) | ||||||||||||
Repayment of convertible debentures | - | - | - | - | (4,295 | ) | ||||||||||||||
Net cash provided by financing activities | 39 | 54,261 | 39 | 54,609 | 49,208 | |||||||||||||||
Exchange differences on balances of cash and cash equivalent | (468 | ) | 505 | (266 | ) | 177 | 793 | |||||||||||||
Increase (decrease) in cash and cash equivalents | (34,024 | ) | 56,537 | (8,231 | ) | 50,762 | 42,244 | |||||||||||||
Cash and cash equivalents at the beginning of the period | 59,110 | 16,866 | 33,314 | 22,641 | 16,866 | |||||||||||||||
Cash and cash equivalents at the end of the period | $ | 25,083 | $ | 73,403 | $ | 25,083 | $ | 73,403 | $ | 59,110 | ||||||||||
Significant non-cash transactions | ||||||||||||||||||||
Purchase of property, equipment and intangible assets on credit | $ | - | $ | - | $ | - | $ | - | $ | 151 | ||||||||||
Exercise of options presented as liability | $ | - | $ | 23 | $ | - | $ | - | $ | 23 | ||||||||||
Exercise of convertible debentures into shares | $ | 7 | $ | - | $ | - | $ | - | $ | 6,508 | ||||||||||
Issuance expenses accrued in other accounts payables | $ | - | $ | 1,094 | $ | - | $ | 994 | $ | - |
The accompanying Notes are an integral part of the Consolidated Financial Statements.
8
Note 1:- | General |
These Financial Statements have been prepared in a condensed format as of June 30, 2014 and for the six months then ended ("interim consolidated financial statements").
These financial statements should be read in conjunction with the Company's annual financial statements as of December 31, 2013 and for the year then ended and the accompanying notes ("annual consolidated financial statements").
Note 2:- Significant Accounting Policies
Basis of preparation of the interim consolidated financial statements:
The interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for the preparation of financial statements for interim periods, as prescribed in IAS 34, "Interim Financial Reporting".
Note 3:- Disclosure of new standards in the period prior to their adoption
a. | IFRS 15 – Revenues from contracts with customers IFRS 15 ("the Standard") was issued by the IASB in May 2014. |
The Standard replaces IAS 18 Revenue, IAS 11 Construction Contracts, IFRIC 13 Customer Loyalty Programs, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfers of Assets from Customers and SIC 31 Revenue - Barter Transactions Involving Advertising Services.
The Standard establishes a five-step model that will apply to revenues earned from contracts with customers:
Step 1 - Identifying the contract(s) with a customer, including treatment for combining contracts and contract modifications.
Step 2 - Identifying the separate performance obligations in the contract.
Step 3 - Determining the transaction price, including treatment for variable consideration, significant finance component, non-cash consideration and consideration payable to the customer.
Step 4 - Allocating the transaction price to the separate performance obligations, on a relative stand-alone selling price basis by using observable information if available or estimates.
Step 5 - Recognizing revenue when the entity satisfies a performance obligation, distinguishing between satisfying a performance obligation at a point in time or over time.
In addition the Standard specifies how to account for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract.
The Standard will apply to annual periods beginning on or after 1 January 2017. Early adoption is permitted. The Standard permits a modified retrospective approach according to which the Standard will be applied to existing contracts beginning with the current period and no restatement of the comparative periods will be required, as long as comparative disclosures under the Standard are included.
9
KAMADA LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3:- Disclosure of new standards in the period prior to their adoption (Cont.)
The Company is evaluating the possible effects of the Standard but currently in unable to assess its impact, if any, on the financial statements.
b. | Amendments to IAS 16 and IAS 38 - Acceptable Methods of Depreciation and Amortisation |
On May 2014 the IASB issued amendments to IAS 16 and IAS 38 ("the Amendments") that relate to revenue-based depreciation and amortization.
The Amendments determine that revenue-based depreciation of an asset is inappropriate, because such revenues usually represent more factors than just the economic benefits that are consumed through use of the asset.
Revenue-based amortization of intangible assets can be implemented when the rights embodied in that intangible asset are expressed as a measure of revenue or when it can be demonstrated that revenue and the consumption of economic benefits are highly correlated.
The amendments will apply prospectively from January 1, 2016. Early adoption is permitted.
Note 4:- Operating Segments
a. | General: The Company has two operating segments, as follows: |
Proprietary Products | - | Medicine development, manufacture and sale of plasma-derived therapeutics products. |
Distribution | - | Distribution of drugs in Israel manufacture by other companies for clinical uses, most of which are produced from plasma or its derivatives products. |
b. | Reporting on operating segments: |
Proprietary Products | Distribution | Total | ||||||||||
Unaudited | ||||||||||||
Six months period ended June 30, 2014 | ||||||||||||
Revenues | $ | 16,142 | $ | 12,842 | $ | 28,984 | ||||||
Gross profit | $ | 1,436 | $ | 1,760 | 3,196 | |||||||
Unallocated corporate expenses | (13,793 | ) | ||||||||||
Finance expenses, net | (853 | ) | ||||||||||
Loss before taxes on income | $ | (11,450 | ) |
10
KAMADA LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 4:- | Operating Segments (Cont.) |
Proprietary Products | Distribution | Total | ||||||||||
Unaudited | ||||||||||||
Six months period ended June 30, 2013 | ||||||||||||
Revenues | $ | 19,957 | $ | 8,754 | $ | 28,711 | ||||||
Gross profit | $ | 10,275 | $ | 1,342 | 11,617 | |||||||
Unallocated corporate expenses | (11,272 | ) | ||||||||||
Finance expenses, net | (1,454 | ) | ||||||||||
Loss before taxes on income | $ | (1,109 | ) |
Proprietary Products | Distribution | Total | ||||||||||
Unaudited | ||||||||||||
Three months period ended June 30, 2014 | ||||||||||||
Revenues | $ | 8,721 | $ | 7,076 | $ | 15,797 | ||||||
Gross profit (loss) | $ | (982 | ) | $ | 916 | (66 | ) | |||||
Unallocated corporate expenses | (7,824 | ) | ||||||||||
Finance expenses, net | (461 | ) | ||||||||||
Loss before taxes on income | $ | (8,351 | ) |
Proprietary Products | Distribution | Total | ||||||||||
Unaudited | ||||||||||||
Three months period ended June 30, 2013 | ||||||||||||
Revenues | $ | 11,897 | $ | 4,218 | $ | 16,115 | ||||||
Gross profit | $ | 6,776 | $ | 645 | 7,421 | |||||||
Unallocated corporate expenses | (5,773 | ) | ||||||||||
Finance expenses, net | (746 | ) | ||||||||||
Profit before taxes on income | $ | 902 |
Proprietary Products | Distribution | Total | ||||||||||
In thousands | ||||||||||||
Audited | ||||||||||||
Year Ended December 31, 2013 | ||||||||||||
Revenues | $ | 50,658 | $ | 19,965 | $ | 70,623 | ||||||
Gross profit | $ | 23,554 | $ | 2,853 | $ | 26,407 | ||||||
Unallocated corporate expenses | (22,707 | ) | ||||||||||
Finance expenses, net | (3,233 | ) | ||||||||||
Income before taxes on income | $ | 467 |
11
KAMADA LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 5:- | Financial Instruments |
a. | Classification of financial instruments by fair value hierarchy Financial assets measured at fair value |
Level 1 | Level 2 | |||||||
In thousands | ||||||||
June 30, 2014 | ||||||||
Derivatives instruments qualified for hedging | $ | - | $ | 72 | ||||
Marketable securities at fair value through profit or loss: | ||||||||
Equity shares | 833 | - | ||||||
Mutual funds | 2,379 | - | ||||||
Exchange traded notes | 78 | - | ||||||
Debt securities (corporate and government) | 10,972 | - | ||||||
14,262 | 72 | |||||||
Available for sale debt securities (corporate and government) | $ | - | $ | 28,341 | ||||
$ | 14,262 | $ | 28,413 | |||||
Level 1 | Level 2 | |||||||
In thousands | ||||||||
June 30, 2013 | ||||||||
Derivatives instruments qualified for hedging | $ | - | $ | 183 | ||||
Marketable Securities (Mutual funds) at fair value through profit or loss | 4,294 | - | ||||||
$ | 4,294 | $ | 183 | |||||
December 31, 2013 | ||||||||
Derivatives instruments qualified for hedging | $ | - | $ | 208 | ||||
Marketable securities at fair value through profit or loss: | ||||||||
Equity shares | 237 | - | ||||||
Mutual funds | 469 | - | ||||||
Exchange traded notes | 308 | - | ||||||
Debt securities (corporate and government) | 4,678 | - | ||||||
5,692 | 208 | |||||||
Available for sale debt securities (corporate and government) | $ | - | $ | 9,375 | ||||
$ | 5,692 | $ | 9,583 |
12
KAMADA LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 5:- | Financial Instruments (Cont.) |
Liabilities for which fair values are disclosed
Level 1 | ||||
In thousands | ||||
June 30, 2014 | ||||
Convertible debentures | $ | 18,528 | ||
June 30, 2013 | ||||
Convertible debentures | $ | 35,235 | ||
December 31, 2013 | ||||
Convertible debentures | $ | 24,637 |
b. | During the six months ended on June 30, 2014 there was no transfer due to the fair value measurement of any financial instrument from Level 1 to Level 2, and furthermore, there were no transfers to or from Level 3 due to the fair value measurement of any financial instrument. |
Note 6:- | Significant events during the period |
a. | The Company has undertaken certain activities to increase the production capacity of its manufacturing facility in Beit Kama. A request for approval of these adjustments from the FDA was filed. In March 2013 the FDA responded to this request by requesting additional data prior to its approval of the new manufacturing process. The Company received the approval by the FDA on July 23, 2014 .During the second quarter of 2014 an inventory in the amount of $3.0 million, produced using the improved manufacturing process, was written off due to a short shelf life of the inventory and reevaluation by the Company of the fair value of such inventory. |
b. | On January 28, 2014, General Meeting of Shareholders of the Company approved the grant of 180,000 options to the Company’s directors and the grant of 150,000 options for the Company’s chief executive officer exercisable into 330,000 ordinary shares at an exercise price of NIS 56.94. The fair value of the options was estimated at $1.8 million. The Shareholders also approved an increase in CEO monthly fixed salary to NIS 93,000 or $26,793. |
c. | On January 29, 2014 the company incorporated a subsidiary registered under the laws of England and Wales named "Kamada Biopharma Limited". |
13