CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) AS OF JUNE 30, 2023
Published on August 24, 2023
Exhibit 99.2
COLLPLANT BIOTECHNOLOGIES LTD.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
AS OF JUNE 30, 2023
COLLPLANT BIOTECHNOLOGIES LTD.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
AS OF JUNE 30, 2023
TABLE OF CONTENTS
| Page | |
| CONDENSED CONSOLIDATED FINANCIAL STATEMENTS: | |
| Condensed Consolidated Balance Sheets | F-2 - F-3 |
| Condensed Statements of Operations | F-4 |
| Condensed Consolidated Statements of Shareholder’s Equity | F-5 - F-6 |
| Condensed Consolidated Statements of Cash Flows | F-7 - F-8 |
| Notes to Condensed Consolidated Financial Statements | F-9 - F-16 |
___________________
___________________________
___________________
F-1
COLLPLANT BIOTECHNOLOGIES LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Restricted deposit | ||||||||
| Trade receivables | ||||||||
| Inventories | ||||||||
| Other accounts receivable and prepaid expenses | ||||||||
| Total current assets | ||||||||
| Non-current assets: | ||||||||
| Restricted deposit | ||||||||
| Operating lease right-of-use assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
F-2
COLLPLANT BIOTECHNOLOGIES LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Liabilities and shareholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Trade payables | $ | $ | ||||||
| Operating lease liabilities | ||||||||
| Accrued liabilities and other | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities: | ||||||||
| Operating lease liabilities | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Shareholders’ Equity: | ||||||||
| Ordinary shares, NIS |
||||||||
| Additional paid in capital | ||||||||
| Currency translation differences | ( |
) | ( |
) | ||||
| Accumulated deficit | ( |
) | ( |
) | ||||
| Total shareholders’ equity | ||||||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-3
COLLPLANT BIOTECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
| Six months ended June 30 |
Three months ended June 30 |
|||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross Profit | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | ||||||||||||||||
| General, administrative and marketing | ||||||||||||||||
| Operating income (loss) | ( |
) | ( |
) | ||||||||||||
| Financial income (expenses), net | ( |
) | ( |
) | ( |
) | ||||||||||
| Net income (loss) for the period | $ | $ | ( |
) | $ | $ | ( |
) | ||||||||
| Basic net income (loss) per ordinary share | $ | $ | ( |
) | $ | $ | ( |
) | ||||||||
| Diluted net income (loss) per ordinary share | $ | $ | ( |
) | $ | $ | ( |
) | ||||||||
| Weighted average ordinary shares outstanding used in computation of basic net income (loss) per share | ||||||||||||||||
| Weighted average ordinary shares outstanding used in computation of diluted net income (loss) per share | ||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-4
COLLPLANT BIOTECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS SHAREHOLDERS’ EQUITY
(U.S. dollars in thousands, except share data)
(Unaudited)
| Ordinary shares | Additional | Currency | ||||||||||||||||||||||
| Number of shares |
Amounts | paid-in capital |
translation differences |
Accumulated deficit |
Total | |||||||||||||||||||
| BALANCE AT DECEMBER 31, 2021 | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
| Exercise of options | ||||||||||||||||||||||||
| Exercise of warrants | ||||||||||||||||||||||||
| Share-based compensation | - | |||||||||||||||||||||||
| Net loss | - | ( |
) | ( |
) | |||||||||||||||||||
| BALANCE AT JUNE 30, 2022 | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
| BALANCE AT DECEMBER 31, 2022 | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
| Exercise of options | ||||||||||||||||||||||||
| Exercise of warrants | ||||||||||||||||||||||||
| Share-based compensation | - | |||||||||||||||||||||||
| Net income | - | |||||||||||||||||||||||
| BALANCE AT JUNE 30, 2023 | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
F-5
COLLPLANT BIOTECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(U.S. dollars in thousands, except share data)
(Unaudited)
| Ordinary shares | Additional | Currency | ||||||||||||||||||||||
| Number of shares |
Amounts | paid-in capital |
translation differences |
Accumulated deficit |
Total | |||||||||||||||||||
| BALANCE AT MARCH 31, 2022 | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
| Share-based compensation | ||||||||||||||||||||||||
| Net loss | - | ( |
) | ( |
) | |||||||||||||||||||
| BALANCE AT JUNE 30, 2022 | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
| BALANCE AT MARCH 31, 2023 | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
| Exercise of options | ||||||||||||||||||||||||
| Share-based compensation | - | |||||||||||||||||||||||
| Net income | - | |||||||||||||||||||||||
| BALANCE AT JUNE 30, 2023 | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-6
COLLPLANT BIOTECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
(Unaudited)
| Six months ended June 30, |
||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Income (loss) | $ | $ | ( |
) | ||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||||||||
| Depreciation and amortization | ||||||||
| Interest from Short term deposits | ( |
) | ||||||
| Interest from restricted deposits | ||||||||
| Share-based compensation to employees and consultants | ||||||||
| Exchange differences on cash and cash equivalents | ||||||||
| Changes in operating asset and liability items: | ||||||||
| Decrease (increase) in trade receivables | ( |
) | ||||||
| Increase in inventories | ( |
) | ( |
) | ||||
| Increase in other accounts receivable and prepaid expenses | ( |
) | ( |
) | ||||
| Decrease in operating right of use assets | ||||||||
| Decrease in trade payables | ( |
) | ( |
) | ||||
| Decrease in lease liabilities | ( |
) | ( |
) | ||||
| Decrease in accrued liabilities and other payables | ( |
) | ( |
) | ||||
| Decrease in deferred revenues | ( |
) | ||||||
| Net cash used in operating activities | ( |
) | ( |
) | ||||
| Cash flows from investing activities: | ||||||||
| Capitalization of intangible assets | ( |
) | ||||||
| Purchase of property and equipment | ( |
) | ( |
) | ||||
| Repayment of a short-term cash deposits | ||||||||
| Investment in short term cash deposits and restricted deposits | ( |
) | ( |
) | ||||
| Net cash provided by (used in) investing activities | ( |
) | ||||||
| Cash flows from financing activities: | ||||||||
| Exercise of options and warrants into shares | ||||||||
| Net cash provided by financing activities | ||||||||
| Exchange differences on cash and cash equivalents, restricted cash and restricted deposits | ( |
) | ( |
) | ||||
| Net increase (decrease) in cash and cash equivalents, restricted cash and restricted deposits | ( |
) | ||||||
| Cash and cash equivalents, restricted cash and restricted deposits at the beginning of the period | ||||||||
| Cash and cash equivalents, restricted cash and restricted deposits at the end of the period | $ | $ | ||||||
F-7
COLLPLANT BIOTECHNOLOGIES LTD.
APPENDICES TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
(Unaudited)
| Six months ended June 30, |
||||||||
| 2023 | 2022 | |||||||
| Appendix to the statement of cash flows | ||||||||
| A. Supplementary information on investing and financing activities not involving cash flows: | ||||||||
| Right of use assets recognized with corresponding lease liabilities | ||||||||
| Capitalization of Share-based compensation to inventory | ||||||||
| B. Reconciliation of Cash, cash equivalents and restricted cash at the end of the period | ||||||||
| Cash and cash equivalents | ||||||||
| Restricted cash | ||||||||
| Restricted deposits (including long term) | ||||||||
| Total cash and cash equivalents, restricted cash and restricted deposits | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-8
COLLPLANT BIOTECHNOLOGIES
LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(U.S. dollars in thousands, except share and per share amounts)
(Unaudited)
Note 1 - NATURE OF OPERATIONS:
CollPlant Biotechnologies Ltd. (the “Company”) is a regenerative and aesthetic medicine company focused on 3D bioprinting of tissues and organs and medical aesthetics. The Company’s products are based on its recombinant human collagen (rhCollagen) produced with its proprietary plant based technology. These products address indications for the diverse fields of tissue repair, aesthetics, and organ manufacturing.
The Company’s revenues include income from business collaborators and from sales of (i) BioInk products for the development of 3D bioprinting of organs and tissues, (ii) rhCollagen for the medical aesthetics market, and (iii) rhCollagen-based products for tendinopathy and wound healing.
The Company operates through its wholly-owned subsidiary, CollPlant Ltd. (“CollPlant”). In November 2021 CollPlant established CollPlant Inc., a wholly owned subsidiary in the United States. As of June 30, 2023, CollPlant Inc. has not commenced operation.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:
| a. | Basis of presentation |
The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information. Accordingly, they do not contain all information and notes required by US GAAP for annual financial statements. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, which include normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented.
These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual financial statements for the year ended December 31, 2022, as filed in the 20-F on March 29, 2023.
The Company’s interim period results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. The significant accounting policies applied in the annual consolidated financial statements of the Company as of December 31, 2022, contained in the Company’s Annual Report have been applied consistently in these unaudited condensed consolidated financial statements.
| b. | Use of estimates in the preparation of financial statements |
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. Actual results may differ from those estimates.
F-9
COLLPLANT BIOTECHNOLOGIES LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(U.S. dollars in thousands, except share and per share amounts)
(Unaudited)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continue):
| c. | Principles of consolidation |
The consolidated financial statements include the accounts of CollPlant Biotechnologies Ltd. and its wholly-owned subsidiary, CollPlant Ltd. Intercompany balances and transactions have been eliminated upon consolidation.
| d. | Fair value measurement |
The carrying amount of the cash and cash equivalents, restricted deposits, trade receivable, trade payables, accrued expenses and other liabilities approximates their fair value.
| e. | Income (loss) per share |
Basic income (loss) per share is computed
on the basis of the net income (loss), for the period divided by the weighted average number of ordinary shares outstanding during the
period. Diluted income (loss) per share is based upon the weighted average number of ordinary shares and of ordinary shares equivalents
outstanding when dilutive.
| Six months ended June 30, |
Three months ended June 30, |
|||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Numerator: | ||||||||||||||||
| Net income (loss) | $ | $ | ( |
) | $ | $ | ( |
) | ||||||||
| Denominator: | ||||||||||||||||
| Basic weighted-average ordinary shares outstanding | ||||||||||||||||
| Effect of share-based compensation | ||||||||||||||||
| Diluted weighted average ordinary shares outstanding | ||||||||||||||||
| Basic net income (loss) per share | $ | $ | ( |
) | $ | $ | ( |
) | ||||||||
| Diluted net income (loss) per share | $ | $ | ( |
) | $ | $ | ( |
) | ||||||||
F-10
COLLPLANT BIOTECHNOLOGIES LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(U.S. dollars in thousands, except share and per share amounts)
(Unaudited)
NOTE 3 - INVENTORY:
| a. |
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Work in progress | $ | $ | ||||||
| Finished goods’ | ||||||||
| Total inventory | $ | $ | ||||||
| b. | During the six and three months period ended June 30, 2023,
the Company recorded approximately $ |
During the six and three months period
ended June 30, 2022, the Company recorded approximately $
NOTE 4 - SHARE CAPITAL:
| a. | Changes in share capital |
| ● | In 2022, three U.S investors exercised |
| ● | On February 23, 2023, Ami Sagi exercised |
| b. | Share- based compensation |
| 1) | Option plan |
Under the Company’s Share Ownership and Option Plan (2010), or
the 2010 Plan, employees, directors and consultants of the Company may be granted options, each exercisable into one ordinary share of
the Company of NIS
F-11
COLLPLANT BIOTECHNOLOGIES LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(U.S. dollars in thousands, except share and per share amounts)
(Unaudited)
NOTE 4 - SHARE CAPITAL (continue):
| Options grants |
Options granted under the 2010 Plan:
| Six months ended June 30, 2023 | ||||||||||||
| Number of options granted | Exercise price range |
Vesting period |
Expiration | |||||||||
| Employees | $ |
|
|
|||||||||
| Six months ended June 30, 2022 | ||||||||||||
| Number of options granted | Exercise price range |
Vesting period range |
Expiration | |||||||||
| Employees | $ |
|
|
|||||||||
| Directors | $ |
|
|
|||||||||
The fair value of options granted during
the six months ended June 30, 2023, and 2022 was $
| Six months ended June 30 |
||||||||
| 2023 | 2022 | |||||||
| Value of ordinary share | $ | $ | ||||||
| Dividend yield | % | % | ||||||
| Expected volatility | % | % | ||||||
| Risk-free interest rate | % | % | ||||||
| Expected term | ||||||||
F-12
COLLPLANT BIOTECHNOLOGIES LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(U.S. dollars in thousands, except share and per share amounts)
(Unaudited)
NOTE 4 - SHARE CAPITAL (continue):
| Number of options |
Weighted average exercise price |
|||||||
| Options outstanding at the beginning of the period | $ | |||||||
| Granted | ||||||||
| Exercised | ( |
) | ||||||
| Forfeited or expired | ( |
) | ||||||
| Options outstanding at the end of the period | $ | |||||||
| Options exercisable at the end of the period | $ | |||||||
The following table summarizes the number of options granted to consultants under the Option Plan for the six months period ended June 30, 2023:
| Number of options |
Weighted average exercise price |
|||||||
| Options outstanding at the beginning of the period | $ | |||||||
| Granted | ||||||||
| Exercised | ( |
) | ||||||
| Forfeited or expired | ||||||||
| Options outstanding at the end of the period | $ | |||||||
| Options exercisable at the end of the period | $ | |||||||
| 3) |
| Six months ended June 30 |
Three months ended June 30 |
|||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Cost of revenue | $ | $ | $ | $ | ||||||||||||
| Research and development | ||||||||||||||||
| General, administrative and marketing | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
F-13
COLLPLANT BIOTECHNOLOGIES LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(U.S. dollars in thousands, except share and per share amounts)
(Unaudited)
NOTE 5 - Development, Exclusivity and Option Products Agreement
On February 5, 2021, CollPlant entered into a Development, Exclusivity and Option Products Agreement (the “Development Agreement”) with AbbVie, pursuant to which CollPlant and AbbVie will collaborate in the development and commercialization of dermal and soft tissue filler products for the medical aesthetics market, using CollPlant rhCollagen technology and AbbVie’s technology.
Pursuant to the Development Agreement, CollPlant agreed to undertake projects for the development of an aseptic process for sterile rhCollagen that meets or exceeds certain specifications as set forth in the Development Agreement. CollPlant has successfully completed the development of the aseptic process and is producing and supplying sterile rhCollagen.
Pursuant to the Development Agreement, CollPlant granted to AbbVie and certain of its affiliates, worldwide exclusive rights to use its rhCollagen in combination with AbbVie proprietary technologies, for the production and commercialization of dermal and soft tissue filler products, or the Exclusive Products.
The Development Agreement provides that
with respect to the Exclusive Products CollPlant shall be entitled to receive up to $
In June 2023, the Company announced the achievement of a milestone
with respect to the clinical phase dermal filler product. According to the Development Agreement, the milestone achievement triggered
a $
F-14
COLLPLANT BIOTECHNOLOGIES LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(U.S. dollars in thousands, except share and per share amounts)
(Unaudited)
NOTE 6 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION
| a. |
| Six months ended June 30, |
Three months ended June 30, |
|||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenues from milestones (See note 5) | $ | $ | - | $ | $ | - | ||||||||||
| Revenues from the sales of goods | ||||||||||||||||
| Total revenues | $ | $ | $ | $ | ||||||||||||
| b. |
| Six months ended June 30, |
Three months ended June 30, |
|||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| United states and Canada | $ | $ | $ | $ | ||||||||||||
| Europe and others | $ | |||||||||||||||
| Total revenues | $ | $ | $ | $ | ||||||||||||
| c. | Revenue recognized in the reporting period that was included
in the deferred revenues balance at the beginning of the period is $ |
F-15
COLLPLANT BIOTECHNOLOGIES LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(U.S. dollars in thousands, except share and per share amounts)
(Unaudited)
NOTE 6 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (continue):
| d. | Major customers |
| Six
months ended June 30, |
Three
months ended June 30, |
|||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Customer A | $ | $ | ) | $ | $ | |
||||||||||
| Customer B | $ | ) | $ | $ | ) | $ | ||||||||||
| Customer C | $ | ) | $ | $ | ) | $ | ) | |||||||||
| *) |
NOTE 7 - SUBSEQUENT EVENTS
| a. | On August 23, 2023, the board of directors approved the grant of an aggregate of |
| b. | On August 23, 2023, the board of directors approved repricing of outstanding
options to purchase an aggregate of |
F-16