Exhibit 99.1
BIOBLAST PHARMA LTD.
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
AS OF JUNE 30, 2015
U.S. DOLLARS IN THOUSANDS
UNAUDITED
INDEX
| | Page |
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| Consolidated Balance Sheets | 2 |
| | |
| ConsolidatedStatements of Operations | 3 |
| | |
| ConsolidatedStatements of Changes in Shareholders’ Equity | 4 |
| | |
| ConsolidatedStatements of Cash Flows | 5 |
| | |
| Notes to ConsolidatedInterim Financial Statements | 6 - 9 |
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CONSOLIDATEDBALANCE SHEETS
U.S. dollars in thousands, except share and per share data
| | | June 30, | | | December 31, | |
| | | 2015 | | | 2014 | |
| | | (unaudited) | | | | |
| ASSETS | | | | | | | | |
| | | | | | | | | |
| CURRENT ASSETS: | | | | | | | | |
| Cash and cash equivalents | | $ | 9,122 | | | $ | 10,583 | |
| Short-term bank deposits | | | 17,106 | | | | 22,028 | |
| Receivables and prepaid expenses | | | 585 | | | | 274 | |
| | | | | | | | | |
| Total current assets | | | 26,813 | | | | 32,885 | |
| | | | | | | | | |
| LONG-TERM ASSETS: | | | | | | | | |
| | | | | | | | | |
| Long-term deposit | | | 11 | | | | 9 | |
| Property and equipment, net | | | 75 | | | | 60 | |
| | | | | | | | | |
| Total long-term assets | | | 86 | | | | 69 | |
| | | | | | | | | |
| TOTAL ASSETS | | $ | 26,899 | | | $ | 32,954 | |
| | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
| | | | | | | | | |
| CURRENT LIABILITIES: | | | | | | | | |
| Trade payables | | $ | 761 | | | $ | 1,285 | |
| Other accounts payable | | | 975 | | | | 995 | |
| | | | | | | | | |
| Total current liabilities | | | 1,736 | | | | 2,280 | |
| | | | | | | | | |
| LONG TERM LIABILITIES: | | | | | | | | |
| Accrued severance pay | | | 32 | | | | - | |
| | | | | | | | | |
| Total long term liabilities | | | 32 | | | | - | |
| | | | | | | | | |
| SHAREHOLDERS’ EQUITY: | | | | | | | | |
Ordinary shares of NIS 0.01 par value -
50,000,000 shares authorized at June 30, 2015 and December 31, 2014; 14,230,480 issued and outstanding shares at June 30, 2015 and December 31, 2014. | | | 39 | | | | 39 | |
| Additional paid- in capital | | | 40,499 | | | | 39,057 | |
| Accumulated deficit | | | (15,407 | ) | | | (8,422 | ) |
| | | | | | | | | |
| Total shareholders’ equity | | | 25,131 | | | | 30,674 | |
| | | | | | | | | |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | $ | 26,899 | | | $ | 32,954 | |
The accompanying notes are an integral part of the consolidated interim financial statements.
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except share and per share data
| | | Six Months Ended | |
| | | June 30, | |
| | | 2015 | | | 2014 | |
| | | (unaudited) | | | | |
| | | | | | | |
| Research and development | | $ | 4,094 | | | $ | 1,163 | |
| General and administrative | | | 2,962 | | | | 590 | |
| Total operating expenses | | | 7,056 | | | | 1,753 | |
| | | | | | | | | |
| Financial (income) expenses, net | | | (76 | ) | | | 6 | |
| | | | | | | | | |
| Loss before taxes on income | | | 6,980 | | | | 1,759 | |
| | | | | | | | | |
| Tax on income | | | 5 | | | | - | |
| | | | | | | | | |
| Net loss attributable to holders of Ordinary shares | | $ | 6,985 | | | $ | 1,759 | |
| Net basic and diluted loss per share | | $ | 0.49 | | | $ | 0.16 | |
| Weighted average number of Ordinary shares used in computing basic and diluted net loss per share | | | 14,230,480 | | | | 10,873,973 | |
The accompanying notes are an integral part of the consolidated interim financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
U.S. dollars in thousands, except share data
| | | Ordinary shares | | | Additional paid-in | | | Accumulated | | | Total shareholders’ | |
| | | Number | | | Amount | | | capital | | | deficit | | | equity | |
| | | | | | | | | | | | | | | | |
| Balance as of December 31, 2013 | | | 9,182,867 | | | $ | 24 | | | $ | 1,551 | | | $ | (1,400 | ) | | $ | 175 | |
| | | | | | | | | | | | | | | | | | | | | |
| Issuance of Ordinary shares, net ($0.95 per share) | | | 1,065,076 | | | | 3 | | | | 1,009 | | | | - | | | | 1,012 | |
| Issuance of Ordinary shares upon private placement, net ($6.07 per share) | | | 782,537 | | | | 3 | | | | 4,365 | | | | - | | | | 4,368 | |
| Issuance of Ordinary shares upon initial public offering, net ($11 per share) | | | 3,200,000 | | | | 9 | | | | 31,396 | | | | - | | | | 31,405 | |
| Share based compensation | | | - | | | | - | | | | 736 | | | | - | | | | 736 | |
| Net loss | | | - | | | | - | | | | - | | | | (7,022 | ) | | | (7,022 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Balance as of December 31, 2014 | | | 14,230,480 | | | | 39 | | | | 39,057 | | | | (8,422 | ) | | | 30,674 | |
| | | | | | | | | | | | | | | | | | | | | |
| Share based compensation | | | - | | | | - | | | | 1,442 | | | | - | | | | 1,442 | |
| Net loss | | | - | | | | - | | | | - | | | | (6,985 | ) | | | (6,985 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Balance as of June 30, 2015 (unaudited) | | | 14,230,480 | | | $ | 39 | | | $ | 40,499 | | | $ | (15,407 | ) | | $ | 25,131 | |
The accompanying notes are an integral part of the consolidated interim financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
| | | Six Months Ended | |
| | | June 30, | |
| | | 2015 | | | 2014 | |
| | | (unaudited) | | | (unaudited) | |
| Cash flow from operating activities: | | | | | | | | |
| Net loss | | $ | (6,985 | ) | | $ | (1,759 | ) |
| Adjustments to reconcile net income to net cash used in operating activities: | | | | | | | | |
| Depreciation | | | 6 | | | | 1 | |
| Stock based compensation | | | 1,442 | | | | 14 | |
| Interest on short term deposit | | | (78 | ) | | | - | |
| Change in operating assets and liabilities: | | | | | | | | |
| Receivables and prepaid expenses | | | (311 | ) | | | (115 | ) |
| Long-term deposit | | | (2 | ) | | | 3 | |
| Trade payables | | | (524 | ) | | | 231 | |
| Other accounts payable | | | (20 | ) | | | 353 | |
| Accrued severance pay | | | 32 | | | | - | |
| Net cash used in operating activities | | | (6,440 | ) | | | (1,272 | ) |
| | | | | | | | | |
| Cash flow from investing activities: | | | | | | | | |
| | | | | | | | | |
| Investment in short-term bank deposits | | | 5,000 | | | | - | |
| Purchase of property and equipment | | | (21 | ) | | | (29 | ) |
| Net cash provided by (used in) investing activities | | | 4,979 | | | | (29 | ) |
| | | | | | | | | |
| Cash flow from financing activities: | | | | | | | | |
| | | | | | | | | |
| Issuance of shares, net | | | - | | | | 5,371 | |
| Deferred issuance expenses | | | - | | | | (97 | ) |
| Net cash provided by financing activities | | | - | | | | 5,274 | |
| | | | | | | | | |
| Increase (decrease) in cash and cash equivalents | | | (1,461 | ) | | | 3,973 | |
| | | | | | | | | |
| Cash and cash equivalents at the beginning of the period | | | 10,583 | | | | 270 | |
| | | | | | | | | |
| Cash and cash equivalents at the end of the period | | $ | 9,122 | | | $ | 4,243 | |
The accompanying notes are an integral part of the consolidated interim financial statements.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
U.S. dollars in thousands, except share data
| a. | BioBlast Pharma Ltd. (the “Company”) was incorporated in Israel and commenced its operations on January 22, 2012. The Company is a clinical-stage biotechnology company committed to developing clinically meaningful therapies for patients with rare and ultra-rare genetic diseases. The Company is rapidly building a diverse portfolio of product candidates with the potential to address unmet medical needs for incurable diseases. The Company’s platforms are based on deep understanding of the disease-causing biological processes, and potentially offer solutions for several diseases that share the same biological pathology. The Company seeks to identify therapeutic platforms that offer solutions for several diseases that share a common pathophysiological mechanism. The Company’s objective is to conduct additional clinical trials for its drugs (the “Drugs”) and, if those trials are successful, seek marketing approval from the U.S. Food and Drug Administration (the “FDA”) and other worldwide regulatory bodies. |
| b. | The Company is engaged in the research and development of products in the biopharmaceutical field, has not generated revenue from the sale of any product, and does not expect to generate significant revenue unless and until the obtaining of marketing approval, and commercializing its Drugs. The Company has incurred losses in the amount of $6,985 during the six months ended June 30, 2015. |
| NOTE 2:- | UNAUDITED INTERIM FINANCIAL STATEMENTS |
The accompanying unaudited consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited consolidated interim financial statements should be read in conjunction with the 2014 annual financial statements and the notes thereto.
Operating results for the six months period ended June 30, 2015, are not necessarily indicative of the results that may be expected for the year ended December 31, 2015.
| NOTE 3:- | SIGNIFICANT ACCOUNTING POLICIES |
The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2014 are applied consistently in these financial statements. For further information, refer to the financial statements as of December 31, 2014.
The preparation of the consolidated interim financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company’s management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the dates of the consolidated interim financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
U.S. dollars in thousands, except share data
| NOTE 4:- | CONTINGENT LIABILITIES AND COMMITMENTS |
| a. | The Company is engaged in an operating lease agreement for its office facilities until June 2017. Future minimum non-cancelable rental payments under the operating lease are $219. The rent expenses for the six months ended June 30, 2015 amounted to $58. |
The Company has provided bank guarantees in the amount of $26.5 as security for the performance of its lease agreement.
| b. | The Company entered into a new operating lease agreement for its vehicles until 2018. Future minimum non-cancelable rental payments under the lease are $10. The rent expenses for the six month ended June 30, 2015 amounted to $31. |
| (i) | The Company entered into a Research and Exclusive License Agreement with Yissum Research Development Company of the Hebrew University in Jerusalem Ltd., for the use, development and commercialization of TAT-MTS-Protein for protein replacement in mitochondrial diseases. The consideration to Yissum is composed of a tiered low single digit royalties on net sales and a sublicense fee that will not exceed the mid-high ten to twenty percent range of the sublicense consideration, but, if the sublicense arises from the sales of a product, the sublicense fee shall not be less than a low single digit percent of the gross sales of such product. |
| (ii) | The Company entered into an Exclusive License Agreement with Ramot at Tel Aviv University Ltd. for the use, development and commercialization of its read-through platform. The consideration to Ramot is composed of a tiered low single digit royalties on net sales and a sublicense fee that will not exceed the high five to ten percent range of the sublicense consideration |
| NOTE 5:- | SHAREHOLDERS’ EQUITY |
| a. | 2013 Incentive option plan: |
In December 2013, the Company authorized through its 2013 incentive option plan (the “2013 Plan”) the grant of options to officers, directors, advisors, management and other key employees. The options granted have a graded vesting schedule of generally four years and expire ten years after the grant date.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
U.S. dollars in thousands, except share data
| NOTE 5:- | SHAREHOLDERS’ EQUITY (Cont.) |
A summary of the Company’s options activity (for employees and directors) under the 2013 Plan is as follows:
| | | Six months ended June 30, 2015 | |
| | | Number of options | | | Weighted average exercise price | |
| | | | | | | |
| Outstanding at beginning of period | | | 783,332 | | | $ | 4.47 | |
| Granted | | | 522,067 | | | | 8.41 | |
| Forfeited | | | (1,500 | ) | | | (7.17 | ) |
| | | | | | | | | |
| Outstanding at end of period | | | 1,303,899 | | | | 6.06 | |
| | | | | | | | | |
| Vested and expected to vest | | | 1,303,899 | | | | 6.06 | |
| | | | | | | | | |
| Options exercisable at the end of the period | | | 616,285 | | | $ | 3.56 | |
As of June 30, 2015, the weighted-average remaining contractual term of the outstanding and exercisable options is 8.67 years; the aggregated intrinsic value of the outstanding and exercisable options is $2,930 As of June 30, 2015, the unrecognized compensation cost is $2,228 to be recognized through 2019.
| b. | Options granted to service providers: |
The Company granted options to certain service providers and accounted for these options in accordance with ASC 505-50, “Equity-Based payment to non-employees”.
The outstanding options granted to the Company’s service providers are as follows:
| Grant date | | Number of options *) | | Exercise price | | Expiration date |
| | | | | | | |
| December 2, 2014 | | 20,000 | | $ 7.78 | | December 2, 2024 |
*) All options were fully vested on the grant date.
The share based expense recognized in the consolidated interim financial statements is as follows:
| | | Six months ended June 30, | |
| | | 2015 | | | 2014 | |
| | | (unaudited) | | | (unaudited) | |
| | | | | | | |
| Research and development | | $ | 151 | | | $ | - | |
| General and administrative | | | 1,291 | | | | 14 | |
| | | | | | | | | |
| | | $ | 1,442 | | | $ | 14 | |
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
U.S. dollars in thousands, except share data
| NOTE 6:- | RELATED PARTY BALANCES AND TRANSACTIONS |
| a. | Balances with related parties: |
| | | June 30, 2015 | | | December 31, 2014 | |
| | | (unaudited) | | | | |
| | | | | | | |
| Trade payable | | $ | 1 | | | $ | 2 | |
| | | | | | | | | |
| Other accounts payable | | $ | 88 | | | $ | 123 | |
| b. | Related parties’ expenses: |
| | | Six months ended June 30, | |
| | | 2015 | | | 2014 | |
| | | (unaudited) | | | (unaudited) | |
| Amounts charged to: | | | | | | | | |
| | | | | | | | | |
| Research and development | | $ | 162 | | | $ | 49 | |
| | | | | | | | | |
| General and administrative | | $ | 105 | | | $ | 82 | |
| NOTE 7:- | FINANCIAL (INCOME) EXPENSES, NET |
| | | Six months ended June 30, | |
| | | 2015 | | | 2014 | |
| | | (unaudited) | | | (unaudited) | |
| | | | | | | |
| Financial expenses: | | | | | | | | |
| Bank fees | | $ | 5 | | | $ | 3 | |
| Exchange rate | | | 18 | | | | 3 | |
| | | | | | | | | |
| | | | 23 | | | | 6 | |
| Financial income: | | | | | | | | |
| Interest income | | | (99 | ) | | �� | - | |
| | | | | | | | | |
| | | | (99 | ) | | | - | |
| | | | | | | | | |
| Financial (income) expenses, net: | | $ | (76 | ) | | $ | 6 | |
| NOTE 8:- | SUBSEQUENTS EVENTS |
Subsequent to June 30, 2015, the Company granted 1,022,061 options to its employees in a weighted average exercise price of $5.04.
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