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F-2 | |
F-3 | |
F-4 | |
F-5 | |
F-6 - F-11 |
As of June 30, | As of December 31, | |||||||
2023 | 2022 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 5,138 | $ | 4,096 | ||||
Short term deposit | 1,014 | 6,085 | ||||||
Restricted cash | 10 | 10 | ||||||
Prepaid clinical trial expenses and deferred clinical trial costs | 1,962 | 1,728 | ||||||
Prepaid expenses and other current assets | 154 | 365 | ||||||
Total current assets | 8,278 | 12,284 | ||||||
Property and equipment, net | 38 | 44 | ||||||
Total assets | $ | 8,316 | $ | 12,328 | ||||
Liabilities and shareholders’ equity | ||||||||
Current liabilities: | ||||||||
Trade payables | $ | 70 | $ | 209 | ||||
Employees and related liabilities | 501 | 499 | ||||||
Accrued expenses | 525 | 356 | ||||||
Total current liabilities | 1,096 | 1,064 | ||||||
Non-current liabilities: | ||||||||
Provision for uncertain tax positions | 247 | 243 | ||||||
Total non-current liabilities | 247 | 243 | ||||||
Total liabilities | 1,343 | 1,307 | ||||||
Commitments (Note 6) | ||||||||
Shareholders’ equity: | ||||||||
Ordinary shares, NIS 0.3 par value; Authorized: 5,000,000 shares as of June 30, 2023, 2,666,667 as of December 31, 2022; Issued and outstanding: 1,090,452 and 1,081,755 shares as of June 30, 2023 and December 31, 2022, respectively.(*) | 94 | 94 | ||||||
Additional paid-in capital | 43,887 | 43,446 | ||||||
Accumulated deficit | (37,008 | ) | (32,519 | ) | ||||
Total shareholders’ equity | 6,973 | 11,021 | ||||||
Total liabilities and shareholders’ equity | $ | 8,316 | $ | 12,328 |
F - 2
For the Six Months Ended June 30, | |||||||||||
Note | 2023 | 2022 | |||||||||
Operating expenses: | |||||||||||
Research and development expenses | $ | (2,700 | ) | $ | (1,423 | ) | |||||
General and administrative expenses | (1,968 | ) | (2,094 | ) | |||||||
Operating loss | (4,668 | ) | (3,517 | ) | |||||||
Financial income, net | 7 | 179 | - | ||||||||
Net loss and comprehensive loss | $ | (4,489 | ) | $ | (3,517 | ) | |||||
Basic and diluted net loss per share(*) | 5 | $ | (4.12 | ) | $ | (3.25 | ) | ||||
Weighted average number of shares of Ordinary Shares used in computing basic and diluted net loss per share | 1,090,452 | 1,081,755 |
F - 3
Ordinary shares(**) | Additional paid-in capital | Accumulated deficit | Total shareholders’ equity | |||||||||||||||||
Number | Amount | |||||||||||||||||||
Balance as of January 1, 2022 | 1,066,544 | $ | 94 | $ | 41,715 | $ | (23,727 | ) | $ | 18,082 | ||||||||||
Share-based compensation to employees and directors | - | - | 430 | - | 430 | |||||||||||||||
Share-based compensation to service providers | - | - | 206 | - | 206 | |||||||||||||||
Share issuance to service providers | 15,211 | * | * | |||||||||||||||||
Net loss and comprehensive loss | - | - | - | (3,517 | ) | (3,517 | ) | |||||||||||||
Balance as of June 30, 2022 | 1,081,755 | $ | 94 | $ | 42,351 | $ | (27,244 | ) | $ | 15,201 | ||||||||||
Balance as of January 1, 2023 | 1,081,755 | $ | 94 | $ | 43,446 | $ | (32,519 | ) | $ | 11,021 | ||||||||||
Share-based compensation to employees and directors | - | - | 441 | - | 441 | |||||||||||||||
Share issuance to service providers | 8,697 | * | - | - | * | |||||||||||||||
Net loss and comprehensive loss | - | - | (4,489 | ) | (4,489 | ) | ||||||||||||||
Balance as of June 30, 2023 | 1,090,452 | $ | 94 | $ | 43,887 | $ | (37,008 | ) | $ | 6,973 |
F - 4
For the Six Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Cash flows from operating activities | ||||||||
Net loss | $ | (4,489 | ) | $ | (3,517 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation | 6 | 2 | ||||||
Exchange rate differences on cash, cash equivalents and restricted cash | 3 | - | ||||||
Share-based compensation to employees and directors | 441 | 430 | ||||||
Share-based compensation to service providers | - | 206 | ||||||
Interest income, net | 71 | - | ||||||
Change in: | ||||||||
Other current assets | (23 | ) | 384 | |||||
Trade payables | (139 | ) | 76 | |||||
Other accounts payable | 175 | (280 | ) | |||||
Net cash used in operating activities | (3,955 | ) | (2,699 | ) | ||||
Cash flows from investing activities | ||||||||
Purchase of property and equipment | - | (3 | ) | |||||
Purchase of short-term deposit | (1,000 | ) | - | |||||
Proceeds from short term deposit | 6,000 | - | ||||||
Net cash provided by investing activities | 5,000 | (3 | ) | |||||
Cash flows from financing activities | ||||||||
Net cash provided by financing activities | - | - | ||||||
Effect of Exchange rate changes on cash, cash equivalents and restricted cash | (3 | ) | - | |||||
Change in cash, cash equivalents and restricted cash | 1,042 | (2,702 | ) | |||||
Cash, cash equivalents and restricted cash at the beginning of the period | 4,106 | 16,571 | ||||||
Cash, cash equivalents and restricted cash at the end of the period | $ | 5,148 | $ | 13,869 |
As of June 30, | ||||||||
2023 | 2022 | |||||||
Cash and cash equivalents | $ | 5,138 | $ | 13,845 | ||||
Restricted cash | 10 | 24 | ||||||
Total cash, cash equivalents and restricted cash | $ | 5,148 | $ | 13,869 |
F - 5
PAINREFORM LTD.
NOTE 1: GENERAL
a. | PainReform Ltd. ("the Company") was incorporated and started business operations in November 2007. The Company is a clinical stage specialty pharmaceutical company focused on the reformulation of established therapeutics. The Company’s proprietary extended-release drug-delivery system is designed to provide an extended period of post-surgical pain relief without the need for repeated dose administration while reducing the potential need for the use of opiates. |
b. | Liquidity |
c. | The Company’s supplier of the API (active pharmaceutical ingredient) has received a deficiency notice from the FDA related to its Drug Master File (DMF). The DMF is the file on record with FDA representing the manufacturing process and facility for the production of the API. As a result, the second part of Phase 3 trial is expected to commence once the FDA completes the review of the information provided by the supplier to the FDA and the deficiency notice has been resolved. None of the issues raised relate to the Company’s PRF-110 product. |
F - 6
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 1: GENERAL (Cont.)
d. | The Company reports its financial results in U.S. dollars. A portion of research, development, general and administrative expenses of our Israeli operations are incurred in New Israeli Shekel ("NIS"). As a result, the Company is exposed to exchange rate risks that may materially and adversely affect our financial results. If the NIS appreciates against the U.S. dollar, or if the value of the NIS declines against the U.S. dollar, at a time when the rate of inflation in the cost of Israeli goods and services exceeds the rate of decline in the relative value of the NIS, then the U.S. dollar-denominated cost of our operations in Israel would increase and our results of operations could be materially and adversely affected. Inflation in Israel compounds the adverse impact of a devaluation of the NIS against the U.S. dollar by further increasing the amount of our Israeli expenses. Israeli inflation may also (in the future) outweigh the positive effect of any appreciation of the U.S. dollar relative to the NIS, if and to the extent that, it outpaces or precedes such appreciation. The Israeli rate of inflation did not have a material adverse effect on our financial condition during the six months ended June 30, 2023 and 2022, respectively. Given our general lack of currency hedging arrangements to protect us from fluctuations in the exchange rates of the NIS in relation to the U.S. dollar (and/or from inflation of such non-U.S. currencies), the Company may be exposed to material adverse effects from such movements. the Company cannot predict any future trends in the rate of inflation in Israel or the rate of devaluation (if any) of the U.S. dollar against the NIS. |
e. | In June 2023, the Company effected a reverse share split of its shares at the ratio of 1-for-10 (Note 4d) |
f. | U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the military conflict between Russia and Ukraine. The conflict in Ukraine could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets. Any of the abovementioned factors could affect our business, prospects, financial condition, and operating results. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict. |
F - 7
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
a. | Warrants and warrants units |
Type | Issuance Date | Number of warrants | Exercise price(**) | Exercisable through |
August 2019 warrants | August 22, 2019 | 205,268 | $67.2 (*) | August 22, 2024 |
December 2019 warrants | December 9, 2019 | 92,321 | $67.2 (*) | December 8, 2024 |
Warrants 2019 Convertible Notes to placement agent | December 9, 2019 | 55,785 | $67.2 (*) | December 8, 2024 |
Warrants to underwriters | September 3, 2020 | 125,000 | $100.0 | September 1, 2025 |
Warrants to underwriters | October 5, 2020 | 375,000 | $88.0 | September 3, 2025 |
IPO warrants | September 3, 2020 | 2,812,170 | $88.0 | September 3, 2025 |
PIPE warrants | March 11, 2021 | 232,500 | $46.0 | September 10, 2026 |
Warrants to PIPE placement agent | March 11,2021 | 52,173 | $50.6 | March 8, 2026 |
TOTAL | 3,950,217 |
F - 8
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
b. | Share-based compensation: |
1. | The 2008 Plan: |
Number of options(*) | Weighted average exercise price(*) | Weighted average remaining contractual life | ||||||||||
Options outstanding as of December 31, 2022 | 15,388 | $ | 2.40 | 1.25 | ||||||||
Options granted | - | - | - | |||||||||
Options exercised | - | - | - | |||||||||
Options forfeited | - | - | - | |||||||||
Options outstanding as of June 30, 2023 | 15,388 | $ | 2.40 | 0.75 | ||||||||
Options exercisable as of June 30, 2023 | 15,388 | $ | 2.40 | 0.75 |
2. | The 2019 Plan: |
Number of options(*) | Weighted average exercise price(*) | Weighted average remaining contractual life | ||||||||||
Options outstanding as of December 31, 2022 | 133,994 | $ | 14.4 | 9.39 | ||||||||
Options granted | 54,000 | 5.89 | 9.95 | |||||||||
Options exercised | - | - | - | |||||||||
Options forfeited | - | - | - | |||||||||
Options outstanding as of June 30, 2023 | 187,994 | $ | 11.94 | 9.20 | ||||||||
Options exercisable as of June 30, 2023 | 116,416 | $ | 13.19 | 9.05 |
F - 9
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
c. | In April 2022, the Company issued 15,211 shares to a consultant pursuant to an agreement signed in August 2020. Since August 2020, until December 31, 2022, the Company has recognized $822 as share-based compensation expense related to the shares issued to the consultant. In May 2022, the company’s Board of Directors approved an additional grant of 8,697 shares, During 2022, the company recognized $67 as share-based compensation expense. In February 2023, the Company issued 8,697 Ordinary Shares par value NIS 0.3, to the consultant in connection with the second grant. |
d. | In June 2023, the Company effected a reverse share split of its shares at the ratio of 1-for-10, such that each ten (10) Ordinary Shares, par value NIS 0.03 per share, were consolidated into one (1) Ordinary Share, par value NIS 0.30. As a result of rounding of fractional shares as part of the split, 18,338 shares were added, bringing the Company’s total outstanding shares on a post-split basis to 1,090,452. All related share and per share data have been retroactively applied to the financial statements and their related notes for all periods presented |
F - 10
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
Six Months ended June 30, | ||||||||
2023 | 2022 | |||||||
Bank fees | (8 | ) | (7 | ) | ||||
Interest income | 190 | - | ||||||
Exchange rate differences | (3 | ) | 7 | |||||
Total financial income, net | $ | 179 | $ | - |
- | On July 14, 2023, the Company sold to a certain institutional investor an aggregate of 117,930 Ordinary Shares in a registered direct offering at a purchase price of $9.00 per share, and pre-funded warrants to purchase up to 183,300 Ordinary Shares at a purchase price of $8.999, resulting in gross proceeds of approximately $2.7 million. In addition, the Company issued to the investor unregistered warrants to purchase up to an aggregate of 301,230 Ordinary Shares in a concurrent private placement. The warrants are immediately exercisable and will expire five years from the issuance date at an exercise price of $9.00 per Ordinary Share, subject to adjustment as set forth therein. The warrants may be exercised on a cashless basis if at the time of exercise thereof, there is no effective registration statement registering the Ordinary Shares underlying the warrants. The Company paid an aggregate of $176.2 in placement agent fees and reimbursed the placement agent’s actual out-of-pocket expenses up to $50.0. The net proceeds from the transaction were $2.3 million. The pre-funded warrants to purchase up to 183,300 ordinary shares were exercised in full. |
- | On July 18, 2023, the Company sold to a certain institutional investor an aggregate of 145,000 Ordinary Shares in a registered direct offering at a purchase price of $9.00 per share, and pre-funded warrants to purchase up to 21,666 Ordinary Shares at a purchase price of $8.999, resulting in gross proceeds of approximately $1.5 million. In addition, the Company issued to the investor unregistered warrants to purchase up to an aggregate of 166,666 Ordinary Shares in a concurrent private placement. The warrants are immediately exercisable and will expire five years from the issuance date at an exercise price of $9.00 per Ordinary Share, subject to adjustment as set forth therein. The warrants may be exercised on a cashless basis if at the time of exercise thereof, there is no effective registration statement registering the Ordinary Shares underlying the warrants. The Company paid an aggregate of $97.5 in placement agent fees and reimbursed the placement agent’s actual out-of-pocket expenses up to $30.0. The net proceeds from the transaction were $1.3 million. The pre-funded warrants to purchase up to 21,666 ordinary shares were exercised in full. |