EX-99.2 3 exhibit_99-2.htm EXHIBIT 99.2 exhibit_99-2.htm
Exhibit 99.2


KAMADA LTD.

CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2015
 
TABLE OF CONTENTS

 

 
 
 

 
 
KAMADA LTD.
CONSOLIDATED BALANCE SHEETS

   
As of
September 30,
    
As of
December 31,
  
   
2015
    
2014
    
2014
  
   
Unaudited
    
Audited
  
   
In thousands
  
Current Assets
                  
Cash and cash equivalents
   $ 5,787     $ 18,071     $ 14,546  
Short-term investments
     36,473       42,207       37,350  
Trade receivables, net
     14,847       16,408       17,514  
Other accounts  receivables
     3,112       2,078       2,359  
Inventories
     26,811       25,549       25,423  
                         
      87,030       104,313       97,192  
                         
Non-Current Assets
             -          
Property, plant and equipment, net
     21,303       21,780       21,769  
Other long-term assets
     97       143       179  
                         
      21,400       21,923       21,948  
                         
      108,430       126,236       119,140  
Current Liabilities
                        
    Short term credit and Current maturities of convertible debentures
     7,710       8,186       7,492  
Trade payables
     16,833       15,740       16,530  
Other accounts payables
     3,866       3,898       4,045  
Deferred revenues
     1,822       3,627       2,919  
                         
      30,231       31,451       30,986  
                         
Non-Current Liabilities
                        
Convertible debentures
     -       7,711       -  
Employee benefit liabilities, net
     613       7,590       722  
Deferred revenues
     6,469       890       7,015  
                         
      7,082       16,191       7,737  
Equity
                        
Share capital
     9,320       9,206       9,208  
Share premium
     161,091       157,278       158,417  
Conversion option in convertible debentures
     1,147       2,217       1,147  
Capital reserve due to translation to presentation currency
     (3,490 )     (3,490 )     (3,490 )
Capital reserve from hedges
     (49 )     (55 )     (116 )
Capital reserve from available for sale  financial assets
     121       42       10  
Capital reserve from share-based payments
     8,777       8,154       8,783  
Capital reserve from employee benefits
     (81 )     (129 )     (81 )
Accumulated deficit
     (105,719 )     (94,629 )     (93,461 )
                         
      71,117       78,594       80,417  
                         
    $ 108,430     $ 126,236     $ 119,140  

The accompanying Notes are an integral part of the Consolidated Financial Statements.

 
2
 
 
KAMADA LTD.
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
 
   
For the nine months period Ended
September 30,
    
For the three months period Ended
September 30,
    
Year ended
December 31
  
   
2015
    
2014
    
2015
    
2014
    
2014
  
   
Unaudited
    
Audited
  
   
Thousands of US dollar (Except for per-share income (loss) data)
  
                               
Revenues from proprietary products
   $ 25,434     $ 25,285     $ 9,553     $  9,143     $ 44,389  
Revenues from distribution
     18,811       20,849       6,516       8,007       26,676  
                                         
Total revenues
     44,245       46,134       16,069       17,150       71,065  
                                         
Cost of revenues from proprietary products
     19,819       20,445       6,889       5,739       32,617  
Cost of revenues from distribution
     16,686       18,118       5,472       7,036       23,406  
                                         
Total cost of revenues
     36,505       38,563       12,361       12,775       56,023  
                                         
Gross profit (loss)
     7,740       7,571       3,708       4,375       15,042  
                                         
Research and development expenses
     12,105       12,613       5,047       4,180       16,030  
Selling and marketing expenses
     2,693       2,041       950       675       2,898  
General and administrative expenses
     5,159       6,011       1,722       2,017       7,593  
                                         
Operating loss
     (12,217 )     (13,094 )     (4,011 )     (2,497 )     (11,479 )
                                         
Financial income
     363       *361       63       *199       *404  
Income in respect of currency exchange and translation differences and derivatives instruments, net
     420       92       (341 )     (44 )     -  
Financial expense
     (824 )     *(1,670 )     (333 )     *(519 )     *(2,086 )
Income (loss) before  taxes on income
     (12,258 )     (14,311 )     (4,622 )     (2,861 )     (13,161 )
Taxes on income
     -       70       -       36       52  
Net loss
     (12,258 )     (14,381 )     (4,622 )     (2,897 )     (13,213 )
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
     111       69       72       (51 )     37  
Net gain (loss) on cash flow hedge
     67       (211 )     (183 )     (109 )     (272 )
Items that will not be reclassified to profit or loss in subsequent periods:
                                        
Actuarial net gain of defined benefit plans
     -       -       -       -       48  
Total comprehensive loss
   $ (12,080 )   $ (14,523 )   $ (4,733 )   $ (3,057 )   $ (13,400 )
                                         
Loss per share attributable to equity holders of the Company:
                                        
Basic loss per share
   $ (0.34 )   $ (0.41 )   $ (0.13 )   $ (0.09 )   $ (0.37 )
                                         
Diluted loss per share
   $ (0.34 )   $ (0.41 )   $ (0.13 )   $ (0.09 )   $ (0.37 )

*Reclassified
 
The accompanying Notes are an integral part of the Consolidated Financial Statements.
 
 
3
 
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 January 1, 2015
   $ 9,208     $ 158,417     $ 1,147     $ 10     $ (3,490 )   $ (116 )   $ 8,783     $ (81 )   $ (93,461 )   $ 80,417  
Net loss
     -       -       -       -       -       -       -       -       (12,258 )     (12,258 )
Other comprehensive income (loss)
     -       -       -       111       -       67       -       -       -       178  
Total comprehensive income (loss)
     -       -       -       111       -       67       -       -       (12,258 )     (12,080 )
Exercise of options into shares, net
     112       2,674       -       -       -       -       (1,533 )     -       -       1,253  
Cost of share-based payment
     -       -       -       -       -       -       1,527       -       -       1,527  
Balance as of  September  30, 2015
   $ 9,320     $ 161,091     $ 1,147     $ 121     $ (3,490 )   $ (49 )   $ 8,777     $ (81 )   $ (105,719 )   $ 71,117  

   
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
     -       -       -       -       -       -       -       -       (14,381 )     (14,381 )
Other comprehensive income (loss)
     -       -       -       69       -       (211 )     -       -       -       (142 )
Total comprehensive income (loss)
     -       -       -       69       -       (211 )     -       -       (14,381 )     (14,523 )
Exercise of options into shares, net
     5       170       -       -       -       -       (110 )     -       -       65  
Conversion of convertible debentures into shares
     *)       8       (1 )     -       -       -       -       -       -       7  
Cost of share-based payment
     -       -       -       -       -       -       3,075       -       -       3,075  
Balance as of   September  30, 2014
   $ 9,206     $ 157,278     $ 2,217     $ 42     $ (3,490 )   $ (55 )   $ 8,154     $ (129 )   $ (94,629 )   $ 78,594  

*) 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  July 1, 2015
   $ 9,312     $ 160,927     $ 1,147     $ 49     $ (3,490 )   $ 134     $ 8,362     $ (81 )   $ (101,097 )   $ 75,263  
Net loss
     -       -       -       -       -       -       -       -       (4,622 )     (4,622 )
Other comprehensive income (loss)
     -       -       -       72       -       (183 )     -       -       -       (111 )
Total comprehensive income (loss)
     -       -       -       72       -       (183 )     -       -       (4,622 )     (4,733 )
Exercise of options into shares, net
     8       164       -       -       -       -       (83 )     -               89  
Cost of share-based payment
     -       -       -       -       -       -       498       -               498  
Balance as of September 30, 2015
   $ 9,320     $ 161,091     $ 1,147     $ 121     $ (3,490 )   $ (49 )   $ 8,777     $ (81 )   $ (105,719 )   $ 71,117  
 
   
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  July 1, 2014
   $ 9,203     $ 157,212     $ 2,217     $ 93     $ (3,490 )   $ 54     $ 7,217     $ (129 )   $ (91,732 )   $ 80,645  
Net loss
     -       -       -       -       -       -       -       -       (2,897 )     (2,897 )
Other comprehensive income (loss)
     -       -       -       (51 )     -       (109 )     -       -       -       (160 )
Total comprehensive income (loss)
     -       -       -       (51 )     -       (109 )     -       -       (2,897 )     (3,057 )
Exercise of options into shares, net
     3       66       -       -       -       -       (43 )     -       -       26  
Cost of share-based payment
     -       -       -       -       -       -       980       -       -       980  
Balance as of September 30, 2014
   $ 9,206     $ 157,278     $ 2,217     $ 42     $ (3,490 )   $ (55 )   $ 8,154     $ (129 )   $ (94,629 )   $ 78,594  
 
*) 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
    
Warrants
    
Conversion
option in
 convertible
debentures
    
Available
 for sale
 reserve
    
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
  
      In thousands  
    Balance as of December 31, 2013
   $ 9,201     $ 157,100     $ -     $ 2,218     $ (27 )   $ (3,490 )   $ 156     $ 5,189     $ (129 )   $ (80,248 )   $ 89,970  
Net loss
     -       -       -       -       -       -       -       -       -       (13,213 )     (13,213 )
Other comprehensive income (loss)
     -       -       -       -       37       -       (272 )     -       48       -       (187 )
Total comprehensive income (loss)
     -       -       -       -       37       -       (272 )     -       48       (13,213 )     (13,400 )
Exercise of options into shares
     7       238       -       -       -       -       -       (157 )     -       -       88  
Conversion of convertible debentures into shares
     *)       9       -       (1 )     -       -       -       -       -       -       8  
Expiration of conversion option on convertible debentures
     -       1,070       -       (1,070 )     -       -       -       -       -       -       -  
Cost of share-based payment
     -       -       -       -       -       -       -       3,751       -       -       3,751  
Balance as of December 31, 2014
   $ 9,208     $ 158,417     $ -     $ 1,147     $ 10     $ (3,490 )   $ (116 )   $ 8,783     $ (81 )   $ (93,461 )   $ 80,417  

*) Represents an amount lower than $ 1
The accompanying Notes are an integral part of the Consolidated Financial Statements.
 
 
6
 
KAMADA LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS
 
   
For the nine months period Ended
September 30,
    
For the three months period Ended
September 30,
      Year Ended
December 31,
  
     2015      2014      2015      2014      2014  
    Unaudited    
Audited
  
    Thousands of US dollar  
                               
Cash Flows from Operating Activities
                              
                               
Net loss
   $ (12,258 )   $ (14,381 )   $ (4,622 )   $ (2,897 )   $ (13,213 )
                                         
Adjustments to reconcile loss to net cash provided by (used in) operating activities:
                                        
                                         
Adjustments to the profit or loss items:
                                        
                                         
Depreciation and amortization
     2,438       2,041       866       726       2,788  
Finance expenses (income), net
     41       1,217       611       364       1,682  
Cost of share-based payment
     1,527       3,075       498       980       3,751  
Loss from sale of fixed assets
     -       -       -       -       52  
Taxes on income
     -       70       -       36       (2 )
Change in employee benefit liabilities, net
     (109 )     63       (80 )     56       (57 )
                                         
      3,897       6,466       1,895       2,162       8,214  
Changes in asset and liability items:
                                        
                                         
Decrease (increase) in trade receivables
     2,563       2,177       352       (587 )     (869 )
Decrease  (increase) in other accounts receivables
     360       295       862       (235 )     (50 )
Decrease (increase) in inventories and long-term inventories
     (1,388 )     (3,616 )     (2,026 )     (1,678 )     (3,490 )
Decrease (increase) in deferred expenses
     (1,129 )     1,226       271       412       1,209  
Increase (decrease)  in trade payables
     643       1,110       2,104       (788 )     3,261  
Increase (decrease) in other accounts payables
     (103 )     (686 )     481       (882 )     (344 )
Increase  in deferred revenues
     (1,643 )     (2,472 )     (396 )     (643 )     (4,026 )
                                         
      (697 )     (1,966 )     1,648       (4,401 )     (4,309 )
    Cash paid and received during the period for:
                                        
Interest paid
     (362 )     (963 )     (119 )     (361 )     (1,210 )
Interest received
     912       385       318       253       758  
Taxes paid
     (47 )     (158 )     (- )     (94 )     (158 )
                                         
      503       (736 )     199       (202 )     (610 )
                                         
Net cash used in operating activities
   $ (8,555 )   $ (10,617 )   $ (880 )   $ (5,338 )   $ (9,918 )

 
7
 

KAMADA LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS
 
   
For the nine months period Ended
September 30,
    
For the three months period Ended
September 30,
    
Year Ended
December 31,
  
     2015      2014      2015      2014      2014  
   
Unaudited
     Audited  
    Thousands of US dollar  
Cash Flows from Investing Activities
                              
Short-term investments
   $ 641       (26,624 )   $ 616       160     $ (23,746 )
Purchase of property and equipment
     (1,932 )     (2,356 )     (600 )     (821 )     (3,076 )
Proceeds from sale of property and equipment
     -       -       -       -       3  
                                         
Net cash used in investing activities
     (1,291 )     (28,980 )     16       (661 )     (26,819 )
                                         
Cash Flows from Financing Activities
                                        
Exercise of options into shares
     1,254       65       89       26       88  
Repayment of convertible debentures
     -       -       -       -       (7,728 )
              -               -       -  
Net cash provided (used in) by financing activities
     1,254       65       89       26       (7,640 )
                                         
Exchange differences on balances of cash and cash equivalent
     (167 )     (1,507 )     (245 )     (1,039 )     (187 )
                                         
Decrease in cash and cash equivalents
     (8,759 )     (41,039 )     (1,020 )     (7,012 )     (44,564 )
                                         
Cash and cash equivalents at the beginning of the period
     14,546       59,110       6,807       25,083     $ 59,110  
                                         
Cash and cash equivalents at the end of the period
   $ 5,787     $ 18,071     $ 5,787     $ 18,071     $ 14,546  
                                         
Significant non-cash transactions
                                        
Exercise of convertible debentures into shares
   $ -     $ 7     $ -     $ -     $ -  
 
The accompanying Notes are an integral part of the Consolidated Financial Statements.

 
8
 
 
KAMADA LTD.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
Note 1:-
General

These Financial Statements have been prepared in a condensed format as of September 30, 2015 and for the period of nine and three 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, 2014 and for the year then ended and the accompanying notes ("annual consolidated financial statements").
 
Note 2:-
Significant Accounting Policies

 
a.
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:-
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
  
Nine months period ended September 30, 2015
                  
                   
Revenues
   $ 25,434     $ 18,811     $ 44,245  
                         
Gross profit
   $ 5,615     $ 2,125       7,740  
                         
Unallocated corporate expenses
                     (19,957 )
Finance expenses, net
                     (41 )
                         
Loss before taxes on income
                   $ (12,258 )

 
9
 


 
KAMADA LTD.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
Note 3:-
Operating Segments (Cont.)

   
Proprietary Products
    
Distribution
    
Total
  
   
Unaudited
  
Nine months period ended September 30, 2014
                  
                   
Revenues
   $ 25,285     $ 20,849     $ 46,134  
                         
Gross profit
   $ 4,840     $ 2,731       7,571  
                         
Unallocated corporate expenses
                     (20,665 )
Finance expenses, net
                     (1,217 )
                         
Loss before taxes on income
                   $ (14,311 )

   
Proprietary Products
    
Distribution
    
Total
  
   
Unaudited
  
Three months period ended September 30, 2015
                  
                   
Revenues
   $ 9,553     $ 6,516     $ 16,069  
                         
Gross profit
   $ 2,664     $ 1,044       3,708  
                         
Unallocated corporate expenses
                     (7,719 )
Finance expenses,, net
                     (611 )
Loss before taxes on income
                   $ (4,622 )

   
Proprietary Products
    
Distribution
    
Total
  
   
Unaudited
  
Three months period ended September 30, 2014
                  
                   
Revenues
   $ 9,143     $ 8,007     $ 17,150  
                         
Gross profit (loss)
   $ 3,404     $ 971       4,375  
                         
Unallocated corporate expenses
                     (6,872 )
Finance expenses, net
                     (364 )
                         
Loss before taxes on income
                   $ (2,861 )

   
Proprietary Products
    
Distribution
    
Total
  
   
In thousands
  
   
Audited
  
                   
Year Ended December 31, 2014
                  
                   
Revenues
   $ 44,389     $ 26,676     $ 71,065  
                         
Gross profit
   $ 11,772     $ 3,270     $ 15,042  
                         
Unallocated corporate expenses
                     (26,521 )
Finance expenses, net
                     (1,682 )
                         
 Loss before taxes on income
                   $ (13,161 )
 
 
10
 


 
KAMADA LTD.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
Note  4:-
Financial Instruments

 
a.
Classification of financial instruments by fair value hierarchy
 
Financial assets (liabilities) measured at fair value

   
Level 1
    
Level 2
  
   
In thousands
  
September 30, 2015
            
Derivatives instruments qualified for hedging
   $ -     $ (57 )
Marketable securities at fair value through profit or loss:
                
   Equity shares
     535       -  
   Mutual funds
     1,272       -  
   Exchange traded notes
     21       -  
   Debt securities (corporate and government)
     7,040       -  
                 
Available for sale debt securities (corporate and government)
   $ -     $ 27,605  
                 
    $ 8,868     $ 27,548  
September 30, 2014
                
Derivatives instruments qualified for hedging
   $ -     $ 44  
Marketable securities at fair value through profit or loss:
                
   Equity shares
     850       -  
   Mutual funds
     2,228       -  
   Exchange traded notes
     76       -  
   Debt securities (corporate and government)
     10,265       -  
      13,419       44  
                 
Available for sale debt securities (corporate and government)
   $ -     $ 28,789  
                 
    $ 13,419     $ 28,833  
                 
December 31, 2014
                
                 
Marketable securities at fair value through profit or loss:
                
   Equity shares
   $ 587       -  
   Mutual funds
     577       -  
   Exchange traded notes
     46       -  
   Debt securities (corporate and government)
     7,610       -  
      8,820        -  
                 
Available for sale debt securities (corporate and government)
   $ -     $ 28,530  
                 
    $ 8,820     $ 28,530  

 
11
 
 

 
KAMADA LTD.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
Note  4:-
Financial Instruments (Cont.)
 
Liabilities for which fair values are disclosed


   
Level 1
  
   
In thousands
  
September 30, 2015
      
    Convertible debentures
   $ 7,748  
         
September 30, 2014
        
    Convertible debentures
   $ 16,863  
         
December 31, 2014
        
    Convertible debentures
   $ 8,065  

 
 
b. 
During the nine months ended on September 30, 2015 there were no transfers 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 5:-
Significant  Events  during the period

 
a.
On April 26, 2015 the Company's Compensation Committee approved an increase of the pool of shares allocated for grant under the 2011 option plan by 500,000 shares.

 
b.
On April 27, 2015 the Company's Board of Directors approved the grant, for no consideration, of 504,075 options to employees, management and directors of the Company, exercisable into ordinary shares at an exercise price of NIS 17.84 for employees and NIS 18.73 for management and directors (also refer to note 5.c below). The fair value of the options was $1.2 million.
 
 
c.
On June 30, 2015, General Meeting of Shareholders of the Company approved the grant of 25,000 options to the Company’s directors and the grant of 120,000 options for the new Company’s Chief Executive Officer, exercisable into 145,000 ordinary shares at an exercise price of NIS 18.73 per option.The fair value of the options was estimated at $0.2 million. In addition, the General Meeting of Shareholders of the Company approved the terms of engagement of Mr. Amir London as the Chief Executive Officer, effective as of July 1, 2015 and the terms of engagement of Mr. David Tsur as our Active Deputy Chairman, effective as of July 1, 2015.


 
12
 

 
KAMADA LTD.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
Note 6:-
Subsequent Events

 
a.
On October 16, 2015, the Company and Baxalta amended the distribution agreement extend the period of minimum purchases of Glassia to eight years until 2018 and to increase to a minimum of $240 million compared with a minimum of $110 million in the original agreement executed in 2010 and a minimum of $191 million in the September 2014 extension of that agreement.
 
In addition, the Company reports that the supply of Glassia to Baxalta has been extended through 2018 and that the transition to royalty payments for Glassia produced by Baxalta is not expected to begin before 2019.

13