exhibit_2.htm


	December 31,			September 30,
	2014			2015
	in USD thousands
Assets
CURRENT ASSETS
Cash and cash equivalents		5,790			5,320
Short-term bank deposits		28,890			45,387
Prepaid expenses		221			186
Other receivables		257			992
Total current assets		35,158			51,885

NON-CURRENT ASSETS
Restricted deposits		166			-
Long-term prepaid expenses		49			56
Property and equipment, net		721			2,962
Intangible assets, net		117			128
Total non-current assets		1,053			3,146
Total assets		36,211			55,031

Liabilities and equity
CURRENT LIABILITIES
Current maturities of long-term bank loan		-			93
Accounts payable and accruals:
Trade		1,654			2,349
Other		1,252			1,148
Total current liabilities		2,906			3,590
NON-CURRENT LIABILITIES
Long-term bank loan, net of current maturities		-			366
Warrants		1,500			404
Total non-current liabilities		1,500			770
COMMITMENTS AND CONTINGENT LIABILITIES
Total liabilities		4,406			4,360

EQUITY
Ordinary shares		1,055			1,450
Share premium		167,331			195,950
Other reserves		(1,416	)		(1,416	)
Capital reserve		9,800			10,400
Accumulated deficit		(144,965	)		(155,713	)
Total equity		31,805			50,671
Total liabilities and equity		36,211			55,031

	Three months ended September 30,						Nine months ended September 30,
	2014			2015			2014			2015
	in USD thousands						in USD thousands
RESEARCH AND DEVELOPMENT EXPENSES, NET		(2,975	)		(2,576	)		(8,486	)		(8,678	)
SALES AND MARKETING EXPENSES		(305	)		(265	)		(957	)		(824	)
GENERAL AND ADMINISTRATIVE EXPENSES		(791	)		(762	)		(2,615	)		(2,594	)
OPERATING LOSS		(4,071	)		(3,603	)		(12,058	)		(12,096	)
NON-OPERATING INCOME, NET		1,380			1,983			3,346			1,096
FINANCIAL INCOME		1,991			85			2,216			363
FINANCIAL EXPENSES		-			(91	)		(386	)		(111	)
NET LOSS		(700	)		(1,626	)		(6,883	)		(10,748	)
OTHER COMPREHENSIVE LOSS:
CURRENCY TRANSLATION DIFFERENCES		(2,027	)		-			(1,739	)		-
COMPREHENSIVE LOSS		(2,727	)		(1,626	)		(8,622	)		(10,748	)

	in USD					in USD
LOSS PER ORDINARY SHARE - BASIC AND DILUTED		(0.02	)	(0.03	)		(0.22	)	(0.21	)

WEIGHTED AVERAGE NUMBER OF SHARES USED IN CALCULATION OF LOSS PER ORDINARY SHARE		34,115,051		54,632,788			31,725,364		50,306,892

	Ordinary		Share		Other			Capital			Accumulated
	shares		premium		reserves			reserve			deficit			Total
	in USD thousands
BALANCE AT JANUARY 1, 2014		640		134,390		1,418			9,163			(133,889	)		11,722
CHANGES FOR NINE MONTHS ENDED SEPTEMBER 30, 2014:
Issuance of share capital , net		287		22,628		-			-			-			22,915
Employee stock options exercised		-		22		-			(22	)		-			-
Employee stock options forfeited and expired		-		396		-			(396	)		-			-
Share-based compensation		-		-		-			781			-			781
Other comprehensive loss		-		-		(1,739	)		-			-			(1,739	)
Loss for the period		-		-		-			-			(6,883	)		(6,883	)
BALANCE AT SEPTEMBER 30, 2014		927		157,436		(321	)		9,526			(140,772	)		26,796

	Ordinary		Share		Other			Capital			Accumulated
	shares		premium		reserves			reserve			deficit			Total
	in USD thousands
BALANCE AT JANUARY 1, 2015		1,055		167,331		(1,416	)		9,800			(144,965	)		31,805
CHANGES FOR NINE MONTHS ENDED SEPTEMBER 30, 2015:
Issuance of share capital , net		395		28,449		-			-			-			28,844
Employee stock options forfeited and expired		-		170		-			(170	)		-			-
Share-based compensation		-		-		-			770			-			770
Comprehensive loss for the period		-		-		-			-			(10,748	)		(10,748	)
BALANCE AT SEPTEMBER 30, 2015		1,450		195,950		(1,416	)		10,400			(155,713	)		50,671

	Nine months ended September 30,
	2014			2015
	in USD thousands

CASH FLOWS - OPERATING ACTIVITIES
Comprehensive loss for the period		(6,883	)		(10,748	)
Adjustments required to reflect net cash used in operating activities (see appendix below)		(4,094	)		(232	)
Net cash used in operating activities		(10,977	)		(10,980	)

CASH FLOWS - INVESTING ACTIVITIES
Investments in short-term deposits		(40,045	)		(51,262	)
Maturities of short-term deposits		24,584			34,878
Maturities of restricted deposits		-			166
Purchase of property and equipment		(156	)		(2,466	)
Purchase of intangible assets		(3	)		(22	)
Net cash used in investing activities		(15,620	)		(18,706	)

CASH FLOWS - FINANCING ACTIVITIES
Issuances of share capital, net		22,612			28,844
Proceeds of bank loan		-			467
Repayments of bank loan		-			(8	)
Net cash provided by financing activities		22,612			29,303

DECREASE IN CASH AND CASH EQUIVALENTS		(3,985	)		(383	)
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD		8,899			5,790
EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS		(211	)		(87	)
CASH AND CASH EQUIVALENTS - END OF PERIOD		4,703			5,320

	Nine months ended September 30,
	2014			2015
	in USD thousands


Adjustments required to reflect net cash used in operating activities:
Income and expenses not involving cash flows:
Depreciation and amortization		211			322
Long-term prepaid expenses		10			(7	)
Interest on restricted deposits		(11	)		-
Interest and exchange rate differences on short-term deposits		(1,609	)		(113	)
Share-based compensation		781			770
Exchange differences on cash and cash equivalents		(220	)		87
Gain on adjustment of warrants to fair value		(3,693	)		(1,096	)
Commitment fee paid by issuance of share capital		303			-
		(4,228	)		(37	)

Changes in operating asset and liability items:
Decrease (increase) in trade accounts receivable and other receivables		365			(700	)
Increase (decrease) in accounts payable and accruals		(231	)		505
		134			(195	)
		(4,094	)		(232	)

Supplementary information on investing activities not involving cash flows:
Property and equipment acquired on supplier trade credit		-			228

Supplementary information on interest received in cash		51			105

General

BioLineRx Ltd. (“BioLineRx”), headquartered in Modi’in, Israel, was incorporated and commenced operations in April 2003.

Since incorporation, BioLineRx and its consolidated entities (collectively, the “Company”) have been engaged in the development of therapeutics, from pre-clinical-stage development to advanced clinical trials, for a wide range of medical needs.

In February 2007, BioLineRx listed its securities on the Tel Aviv Stock Exchange (“TASE”) and they have been traded on the TASE since that time. Since July 2011, BioLineRx’s American Depositary Shares (“ADSs”) have also been traded on the NASDAQ Capital Market.

The Company has been engaged in drug development since its incorporation. Although the Company has generated significant revenues from a number of out-licensing transactions, the Company cannot determine with reasonable certainty when and if it will have sustainable profits.

Change in functional and reporting currency

Effective January 1, 2015, the Company changed its functional currency to the U.S. dollar (“dollar”, “USD” or “$”) from the New Israeli Shekel (“NIS”). This change was based on an assessment by Company management that the dollar is the primary currency of the economic environment in which the Company operates. Accordingly, the functional and reporting currency of the Company in these financial statements is the U.S. dollar.

In determining the appropriate functional currency to be used, the Company followed the guidance in International Accounting Standard (IAS) 21, which states that economic factors relating to sales, costs and expenses, financing activities and cash flows, as well as other potential factors, should be considered both individually and collectively. In this regard, a significant element in the Company’s decision to effect the functional currency change resulted from the strategic collaboration agreement that it entered into with Novartis in December 2014, which will be managed solely in dollars. In addition, the Company expects a significant increase in expenses denominated in dollars relating to advanced clinical trials. These changes, as well as the fact that the Company’s principal source of financing is the U.S. capital market, and all of the Company’s budgeting and planning is conducted solely in dollars, led to the decision to make the change in functional currency as of January 1, 2015, as indicated above.

Change in functional and reporting currency (cont.)

In effecting the change in functional currency to the dollar, as of January 1, 2015, all assets and liabilities of the Company were translated using the current rate method, using the dollar exchange rate as of December 31, 2014, and equity was translated using historical exchange rates at the relevant transaction dates. The resulting amounts translated into dollars for non-monetary items have been treated as their historical cost. Translation differences resulting from the change in functional currency have been reported as a component of shareholders' equity.

For presentation purposes, comparative figures in these financial statements have been translated into dollars on the following basis: (i) assets and liabilities have been translated using the exchange rate prevailing at December 31, 2014; (ii) the statement of comprehensive loss has been translated at the average exchange rate for the reporting period; and (iii) the results of translation differences have been recorded as “currency translation differences” within other comprehensive income (loss).

Reverse split of ordinary shares

In June 2015, BioLineRx effected a 1:10 reverse split of its ordinary shares. All share and per share amounts in these financial statements have been retroactively adjusted to reflect the reverse split as if it had been effected prior to the earliest financial statement period included herein. Following the reverse split, one ordinary share traded on the TASE is equivalent to one ADS traded on NASDAQ (prior to the split, the ratio of ordinary shares to ADSs was 10:1). In connection with the reverse split, shareholders also approved an increase in BioLineRx’s authorized share capital to 150,000,000 ordinary shares, NIS 0.10 par value each.

Approval of financial statements

The condensed consolidated interim financial statements of the Company as of September 30, 2015, and for the three and nine months ended September 30, 2015, were approved by the Board of Directors on November 16, 2015, and signed on its behalf by the Chairman of the Board, the Chief Executive Officer and the Chief Financial and Operating Officer.

The Company’s condensed consolidated interim financial statements as of September 30, 2015 and for the three and nine months then ended (the “interim financial statements”) have been prepared in accordance with International Accounting Standard No. 34, “Interim Financial Reporting” (“IAS 34”). These interim financial statements, which are unaudited, do not include all disclosures necessary for a complete presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. The condensed consolidated interim 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 their accompanying notes, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”). The results of operations for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the entire fiscal year or for any other interim period.

The accounting policies and calculation methods applied in the preparation of the interim financial statements are consistent with those applied in the preparation of the annual financial statements as of December 31, 2014 and for the year then ended, other than the change in functional and reporting currency, as described above.

Underwritten public offerings of American Depositary Shares

In March 2014, the Company completed an underwritten public offering of 9,660,000 ADSs at a public offering price of $2.50 per ADS. The offering raised a total of $24.2 million, with net proceeds of approximately $22.3 million, after deducting fees and expenses.

In March 2015, the Company completed an underwritten public offering of 14,375,000 ADSs at a public offering price of $2.00 per ADS. The offering raised a total of $28.8 million, with net proceeds of approximately $26.4 million, after deducting fees and expenses.

Share purchase agreement with Lincoln Park Capital

In May 2014, BioLineRx and Lincoln Park Capital Fund (“LPC”), entered into a $20 million purchase agreement, together with a registration rights agreement, whereby LPC agreed to purchase, from time to time, up to $20 million of BioLineRx’s ADSs, subject to certain limitations, during the 36-month term of the purchase agreement. During the nine months ended September 30, 2015, BioLineRx sold a total of 1,129,469 ADSs to LPC for aggregate gross proceeds of $2,433,000. In connection with these issuances, a total of 28,237 ADSs was issued to LPC as a commitment fee and a total of $49,000 was paid to Oberon Securities as a finder’s fee.

On a cumulative basis, from the effective date of the purchase agreement through the approval date of these financial statements, BioLineRx has sold a total of 1,136,351 ADSs to LPC for aggregate gross proceeds of $2,443,000. In connection with these issuances, a total of 28,409 ADSs was issued to LPC as a commitment fee and a total of $49,000 was paid to Oberon Securities as a finder’s fee.

	Number of ordinary shares
	December 31,		September 30,
	2014		2015

Authorized share capital		75,000,000		150,000,000

Issued and paid-up share capital		39,115,051		54,647,757

	In NIS/USD
	December 31,		September 30,
	2014		2015

Authorized share capital (in NIS)		7,500,000		15,000,000

Issued and paid-up share capital (in NIS)		3,911,505		5,464,776

Issued and paid-up share capital (in USD)		1,054,851		1,450,030

		Page
Statements of consolidated financial position		1
Statements of consolidated comprehensive loss		2
Statements of changes in equity		3
Consolidated cash flow statements		4-5
Notes to consolidated financial statements		6-9