EX-99.1 2 ex99_1.htm EXHIBIT 99.1
Exhibit 99.1

GAMIDA CELL LTD. AND ITS SUBSIDIARY

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2019

U.S. DOLLARS IN THOUSANDS

UNAUDITED

INDEX

 
Page
   
Review of Interim Consolidated Financial Statements
2
   
Interim Consolidated Statements of Financial Position
3 - 4
   
Interim Consolidated Statements of Comprehensive Loss
5
   
Interim Consolidated Statements of Changes in Equity
6 – 7
   
Interim Consolidated Statements of Cash Flows
8 – 9
   
Notes to Interim Consolidated Financial Statements
10 - 16



AUDITORS' REVIEW REPORT

To the shareholders of

GAMIDA CELL LTD.

Introduction

We have reviewed the accompanying financial information of Gamida Cell Ltd. and its subsidiary ("the Company"), which comprises the interim consolidated statements of financial position as of March 31, 2019 and 2018 and the related interim consolidated statements of comprehensive loss, changes in equity and cash flows for the three months periods ended March 31, 2019 and 2018. The Company's board of directors and management are responsible for the preparation and presentation of interim financial information for these periods in accordance with IAS 34, "Interim Financial Reporting". Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of review

We conducted our review in accordance with Review Standard of the American Institute of Certified Public Accountants in the United States, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards in Israel and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with IAS 34.

We draw attention to Note 1c to the interim consolidated financial statements.  As discussed in this note, the Company has recurring losses from operations and has accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1c. The interim consolidated financial statements do not include any adjustments to the carrying amounts and classifications of assets and liabilities that would result if the Company was unable to continue as a going concern.

Tel-Aviv, Israel
KOST FORER GABBAY & KASIERER
May 6, 2019
A Member of Ernst & Young Global

- 2 -
GAMIDA CELL LTD. AND ITS SUBSIDIARY

INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
U.S. dollars in thousands

   
March 31,
    
December 31,
  
   
2019
    
2018
    
2018
  
   
Unaudited
        
                   
ASSETS
                  
                   
CURRENT ASSETS:
                  
                   
Cash and cash equivalents
  
$
43,749
    
$
25,931
    
$
40,272
  
Available-for-sale financial assets
    
6,507
      
9,679
      
20,417
  
Prepaid expenses and other current assets
    
684
      
887
      
1,502
  
                         
Total current assets
    
50,940
      
36,497
      
62,191
  
                         
NON-CURRENT ASSETS:
                        
Property and equipment, net
    
2,782
      
1,122
      
2,311
  
Right-of-use assets
    
6,668
      
-
      
-
  
Other assets
    
657
      
355
      
662
  
                         
Total non-current assets
    
10,107
      
1,477
      
2,973
  
                         
Total assets
  
$
61,047
    
$
37,974
    
$
65,164
  

The accompanying notes are an integral part of the interim consolidated financial statements.

- 3 -
GAMIDA CELL LTD. AND ITS SUBSIDIARY

INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
U.S. dollars in thousands (except share and per share data)

   
March 31,
    
December 31,
  
   
2019
    
2018
    
2018
  
   
Unaudited
        
                   
LIABILITIES AND EQUITY
                  
                   
CURRENT LIABILITIES:
                  
Trade payables
  
$
1,341
    
$
852
    
$
1,985
  
Employees and payroll accruals
    
2,580
      
-
      
2,888
  
Current maturities of lease liabilities
    
2,156
      
-
      
-
  
Accrued expenses and other payables
    
1,739
      
2,446
      
1,832
  
                         
Total current liabilities
    
7,816
      
3,298
      
6,705
  
                         
NON-CURRENT LIABILITIES:
                        
Liabilities presented at fair value
    
25,031
      
10,700
      
24,049
  
Employee benefit liabilities, net
    
276
      
184
      
183
  
Lease Liabilities
    
4,671
      
-
      
-
  
Liability to Israel Innovation Authority (IIA)
    
10,108
      
7,432
      
9,540
  
                         
Total non-current liabilities
    
40,086
      
18,316
      
33,772
  
                         
SHAREHOLDERS' EQUITY:
                        
Share capital -
                        
Ordinary shares of NIS 0.01 par value - Authorized: 100,000,000 shares at March 31, 2019 (unaudited) and December 31, 2018 and 23,277,000 shares at March 31,2018 (unaudited); Issued and outstanding: 25,140,048 and 24,930,736 shares at March 31, 2019 (unaudited) and December 31, 2018 respectivly, and 689,898 shares at March 31, 2018 (unaudited);
    
68
      
2
      
67
  
Preferred shares of NIS 0.01 par value - Authorized: 0 shares at March 31, 2019 (unaudited) and December 31, 2018 and 16,723,000 shares at March 31, 2018 (unaudited); Issued and outstanding: 0 shares at March 31, 2019 (unaudited) and December 31, 2018 and 14,154,743 shares at March 31, 2018 (unaudited);
    
-
      
38
      
-
  
Share premium
    
197,967
      
140,155
      
193,953
  
Capital reserve due to actuarial gains
    
(160
)
    
(79
)
    
(77
)
Available-for-sale reserve
    
(10
)
    
(83
)
    
(43
)
Accumulated deficit
    
(184,720
)
    
(123,673
)
    
(169,213
)
                         
Total shareholders' equity
    
13,145
      
16,360
      
24,687
  
                         
Total liabilities and shareholders' equity
  
$
61,047
    
$
37,974
    
$
65,164
  

The accompanying notes are an integral part of the interim consolidated financial statements.

May 6, 2019
        
Date of approval of the
  
Julian Adams
  
Shai Lankry
financial statements
  
Director and CEO
  
Chief  Financial Officer

- 4 -
GAMIDA CELL LTD. AND ITS SUBSIDIARY

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
U.S. dollars in thousands (except share and per share data)

   
Three months ended
March 31,
    
Year ended
December 31,
  
   
2019
    
2018
    
2018
  
   
Unaudited
        
Operating expenses:
                  
Research and development, net
  
$
7,283
    
$
5,060
    
$
22,045
  
General and administrative
    
3,813
      
1,653
      
11,599
  
                         
Operating loss
    
11,096
      
6,713
      
33,644
  
                         
Finance expenses
    
4,734
      
974
      
20,259
  
Finance income
    
(349
)
    
(296
)
    
(1,042
)
                         
Loss before taxes on income
    
15,481
      
7,391
      
52,861
  
Taxes on income
    
26
      
-
      
70
  
                         
Net loss
    
15,507
      
7,391
      
52,931
  
                         
Other comprehensive loss:
                        
                         
Items that will be reclassified subsequently to profit or loss:
                        
Actuarial net loss of defined benefit plans
    
83
      
-
      
(2
)
Changes in the fair value of available for sale financial assets
    
(33
)
    
49
      
9
  
                         
Total comprehensive loss
    
15,557
      
7,440
      
52,938
  
                         
Net loss per share:
                        
Basic and diluted net loss per share
    
0.62
      
10.78
      
10.53
  
                         
Weighted average number of ordinary shares used in computing basic and diluted net loss per share
    
25,038,261
      
689,898
      
5,025,213
  

The accompanying notes are an integral part of the interim consolidated financial statements.

- 5 -
GAMIDA CELL LTD. AND ITS SUBSIDIARY

INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
U.S. dollars in thousands (except share and per share data)

   
Ordinary shares
    
Preferred shares
    
Share
    
Available for
sale
reserve
    
Capital
reserve due
to actuarial
    
Accumulated
    
Total
  
   
Number
    
Amount
    
Number
    
Amount
    
Premium
    
Amount
    
losses
    
deficit
    
equity
  
                                                       
Balance as of January 1, 2019
    
24,930,736
    
$
67
      
-
    
$
-
    
$
193,953
    
$
(43
)
  
$
(77
)
  
$
(169,213
)
  
$
24,687
  
                                                                         
Net loss
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(15,507
)
    
(15,507
)
Other comprehensive loss
    
-
      
-
      
-
      
-
      
-
      
33
      
(83
)
    
-
      
(50
)
                                                                         
Total comprehensive loss
    
-
      
-
      
-
      
-
      
-
      
33
      
(83
)
    
(15,507
)
    
(15,557
)
Exercise of warrants
    
209,312
      
1
      
-
      
-
      
2,923
      
-
      
-
      
-
      
2,924
  
Share-based compensation
    
-
      
-
      
-
      
-
      
1,091
      
-
      
-
      
-
      
1,091
  
                                                                         
Balance as of March 31, 2019 (unaudited)
    
25,140,048
    
$
68
      
-
    
$
-
    
$
197,967
    
$
(10
)
  
$
(160
)
  
$
(184,720
)
  
$
13,145
  

   
Ordinary shares
    
Preferred shares
    
Share
    
Available for
sale
reserve
    
Capital
reserve due
to actuarial
    
Accumulated
    
Total
  
   
Number
    
Amount
    
Number
    
Amount
    
Premium
    
Amount
    
losses
    
deficit
    
equity
  
                                                       
Balance as of January 1, 2018
    
689,898
    
$
2
      
14,154,743
    
$
38
    
$
139,311
    
$
(34
)
  
$
(79
)
  
$
(116,282
)
  
$
22,956
  
                                                                         
Net loss
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(7,391
)
    
(7,391
)
Other comprehensive loss
    
-
      
-
      
-
      
-
      
-
      
(49
)
    
-
      
-
      
(49
)
                                                                         
Total comprehensive loss
    
-
      
-
      
-
      
-
      
-
      
(49
)
    
-
      
(7,391
)
    
(7,440
)
Share-based compensation
    
-
      
-
      
-
      
-
      
844
      
-
      
-
      
-
      
844
  
                                                                         
Balance as of March 31, 2018 (unaudited)
    
689,898
    
$
2
      
14,154,743
    
$
38
    
$
140,155
    
$
(83
)
  
$
(79
)
  
$
(123,673
)
    
16,360
  

- 6 -
GAMIDA CELL LTD. AND ITS SUBSIDIARY

INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
U.S. dollars in thousands (except share and per share data)

   
Ordinary shares
    
Preferred shares
    
Share
    
Available for
sale
reserve
    
Capital
reserve due to
actuarial
    
Accumulated
    
Total
  
   
Number
    
Amount
    
Number
    
Amount
    
Premium
    
Amount
    
losses
    
deficit
    
equity
  
                                                       
Balance as of January 1, 2018
    
689,898
    
$
2
      
14,154,743
    
$
38
      
139,311
    
$
(34
)
  
$
(79
)
  
$
(116,282
)
  
$
22,956
  
                                                                         
Net loss
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(52,931
)
    
(52,931
)
Other comprehensive loss
    
-
      
-
      
-
      
-
      
-
      
(9
)
    
2
      
-
      
(7
)
                                                                         
Total comprehensive loss
    
-
      
-
      
-
      
-
      
-
      
(9
)
    
2
      
(52,931
)
    
(52,938
)
                                                                         
Issuance of additional preferred shares following Anti-dilution Protection
    
-
      
-
      
3,134,546
      
8
      
(8
)
    
-
      
-
      
-
      
-
  
Exercise of options
    
9,692
      
-
      
-
      
-
      
2
      
-
      
-
      
-
      
2
  
Conversion of preferred shares
    
17,289,289
      
46
      
(17,289,289
)
    
(46
)
    
-
      
-
      
-
      
-
      
-
  
Issuance of ordinary shares in initial public offering, net of issuance expenses in an amount of $5,947
    
6,648,368
      
18
      
-
      
-
      
47,223
      
-
      
-
      
-
      
47,241
  
Exercise of warrants
    
293,489
      
1
      
-
      
-
      
3,850
      
-
      
-
      
-
      
3,851
  
Share-based compensation
    
-
      
-
      
-
      
-
      
3,575
      
-
      
-
      
-
      
3,575
  
                                                                         
Balance as of December 31, 2018
    
24,930,736
    
$
67
      
-
    
$
-
      
193,953
    
$
(43
)
  
$
(77
)
  
$
(169,213
)
  
$
24,687
  

The accompanying notes are an integral part of the interim consolidated financial statements.

- 7 -
GAMIDA CELL LTD. AND ITS SUBSIDIARY

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

   
Three months ended
March 31,
    
Year ended
December 31,
  
   
2019
    
2018
    
2018
  
   
Unaudited
        
                   
Cash flows from operating activities:
                  
                   
Net loss
  
$
(15,507
)
  
$
(7,391
)
  
$
(52,931
)
Adjustments to reconcile net loss to net cash used in operating activities:
                        
                         
Adjustments to the profit or loss items:
                        
                         
Depreciation of property, plant and equipment and right-of-use assets
    
542
      
49
      
269
  
Financial income, net
    
(191
)
    
-
      
(858
)
Cost of share-based compensation
    
1,091
      
844
      
3,575
  
Change in employee benefit liabilities, net
    
11
      
(16
)
    
(15
)
Interest received
    
-
      
(13
)
    
-
  
Amortization of premium on available-for-sale financial asses
    
50
      
81
      
272
  
Revaluation of financial derivatives
    
3,907
      
400
      
17,600
  
Revaluation of liability to IIA
    
568
      
412
      
2,037
  
                         
     
5,978
      
1,757
      
22,880
  
Changes in asset and liability items:
                        
                         
Increase in prepaid expenses and other current assets and other assets
    
409
      
100
      
942
  
Decrease in trade payables
    
(844
)
    
(1,538
)
    
(405
)
Increase - in accrued expenses and other payables
    
21
      
260
      
2,296
  
                         
     
(414
)
    
(1,178
)
    
2,833
  
                         
Cash received during the period for:
                        
                         
Interest received
    
521
      
13
      
792
  
Interest paid
    
(28
)
    
-
      
-
  
                         
Net cash used in operating activities
    
(9,450
)
    
(6,799
)
    
(26,426
)
                         
Cash flows from investing activities:
                        
                         
Purchase of property and equipment
    
(350
)
    
(231
)
    
(1,645
)
Purchase of of available-for-sale financial assets
    
-
      
-
      
(10,905
)
Proceed from sale of available-for-sale financial assets
    
13,893
      
4,984
      
4,949
  
Proceeds from bank deposits
    
-
      
5,000
      
5,000
  
Investment in restricted bank deposits
    
-
      
-
      
(150
)
                         
Net cash provided by (used in) investing activities
  
13,543
      
9,753
      
(2,751
)

The accompanying notes are an integral part of the interim consolidated financial statements.

- 8 -
GAMIDA CELL LTD. AND ITS SUBSIDIARY

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

   
Three months ended
March 31
    
Year ended
December 31,
  
   
2019
    
2018
    
2018
  
   
Unaudited
        
                   
Cash flows from financing activities:
                  
                   
Receipt of grants from the IIA
  
-
    
1,652
    
612
  
Proceeds from initial public offering, net
    
(238
)
    
-
      
47,479
  
Payment of lease liabilities
    
(440
)
    
-
      
-
  
Exercise of options
    
-
      
-
      
2
  
                         
Net cash (used in) provided by financing activities
    
(678
)
    
1,652
      
48,093
  
                         
Exchange differences on balances of cash and cash equivalents
    
62
      
-
      
31
  
                         
Increase in cash and cash equivalents
    
3,477
      
4,606
      
18,947
  
Cash and cash equivalents at beginning of period
    
40,272
      
21,325
      
21,325
  
                         
Cash and cash equivalents at end of  period
  
$
43,749
    
$
25,931
    
$
40,272
  
                         
Supplemental disclosure of non-cash financing activities:
                        
                         
Significant non-cash transactions:
                        
                         
IIA liability for grants to be received
  
$
-
    
$
130
    
$
-
  
                         
Exercise of warrants liabilities to equity
  
$
2,924
    
$
-
    
$
3,851
  
                         
Purchase of property, plant and equipment on credit
  
$
199
    
$
-
    
$
-
  
                         
Issuance expenses on credit
  
$
-
    
$
-
    
$
238
  

The accompanying notes are an integral part of the interim consolidated financial statements.

- 9 -
GAMIDA CELL LTD. AND ITS SUBSIDIARY

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands

NOTE 1:-
GENERAL

 
a.
Gamida Cell Ltd. (the "Company"), founded in 1998, is a clinical-stage biopharmaceutical company that develops novel curative treatments for orphan indications, including hematologicalmalignancies and rare genetic diseases using stem cells and Natural Killer (NK) cells.


b.
The Company uses its proprietary platform NAM technology to expand in culture, highly functional cells derived from umbilical cord blood or peripheral blood, while enhancing the potential therapeutic efficacy of these cells.

The lead product candidate, Omidubicel (formally know as NiCord®), is currently developed in a pivotal registration phase III clinical study to treat patients with high-risk hematological malignancies (blood cancers) such as leukemia or lymphoma who are indicated to receive a donor derived (allogeneic) bone marrow transplantation. BMT transplantation with a graft derived from bone marrow or peripheral blood cells of a matched donor is currently the standard of care treatment for many of these patients, but there is a significant unmet need for patients who cannot find a fully matched donor. Omidubicel is designed as a universal bone marrow donor graft which can be available to all patients in need.

Omidubicel was granted a Breakthrough Therapy designation from the FDA and an orphan drug designation in the US and in Europe.

In December 2017, the Company presented at the ASH annual meeting final results from the phase I/II trial evaluating Omidubicel. The study met its primary endpoint, demonstrating rapid neutrophil engraftment with manageable side effects.

In addition to hematologic malignancies, the Company pursuing the development of Omidubicel for the treatment of bone marrow failure disorders. Omidubicel is currently being evaluated in a Phase 1/2 clinical trial sponsored by the National Institutes of Health in patients with severe aplastic anemia, a rare, life-threatening hematological disorder.

Beyond Omidubicel, the Company develops another product candidate, GDA-201 (formally known as NAM-NK), for innate immunotherapy of expanded natural killer, or NK, cells, to be used in combination with standard-of-care therapeutic antibodies. NK cells have potent anti-tumor properties and have the advantage over other oncology cell therapies of not requiring genetic matching, potentially enabling NK cells to serve as a universal donor-based therapy when combined with certain antibodies A phase I/II investigator initiated study to treat patients with B cell lymphoma and multiple myeloma is enrolling patients.


 c.
The Company is devoting substantially all of its efforts toward research and development activities. In the course of such activities, the Company has sustained operating losses and expects such losses to continue in the foreseeable future. The Company's accumulated deficit as of March 31, 2019 is $184,720 and negative cash flows from operating activities during the period is $9,450. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The interim consolidated financial statements do not include any adjustments to the carrying amounts and classifications of assets and liabilities that would result if the Company was unable to continue as a going concern. The Company requires additional financing in order to continue to fund its current operations and pay existing and future liabilities.

- 10 -
GAMIDA CELL LTD. AND ITS SUBSIDIARY

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands

NOTE 1:-
GENERAL (Cont.)

 
d.
Definitions:

In these financial statements:

 
The Company
-
Gamida Cell Ltd. and its subsidiary
       
 
Subsidiary
  
Gamida Cell Inc. Incorporated in 2000 and intended to focus on sales and marketing upon product approval.
       
 
Related Parties
-
As defined in IAS 24
       
 
Dollar
-
U.S. dollar

NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES


a.
The accompanying unaudited interim consolidated financial statements for the three months periods ended March 31, 2019 and 2018 have been prepared in accordance with IAS 34 "Interim Financial Reporting" for interim financial information.

The interim consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Company's annual consolidated financial statements as of December 31, 2018 and their accompanying disclosures.

The interim consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 31, 2019.


 b.
The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the company's annual consolidated financial statements for the year ended December 31, 2018, except for the adoption of new standards effective as of January 1, 2019. The Company has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

- 11 -
GAMIDA CELL LTD. AND ITS SUBSIDIARY

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands

NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES (Cont.)


c.
IFRS 16 Leases:

The Company applies, for the first time, IFRS 16 Leases . As required by IAS 34, the nature and effect of these changes are disclosed below.

The Company adopted IFRS 16 using the modified retrospective method of adoption with the date of initial application of January 1, 2019. Under this method, the standard is applied retrospectively with the cumulative effect of initially applying the standard recognised at the date of initial application. The Company elected to use the transition practical expedient allowing the standard to be applied only to contracts that were previously identified as leases applying IAS 17 and IFRIC 4 at the date of initial application. The Company also elected to use the recognition exemptions for lease contracts that, at the commencement date, have a lease term of 12 months or less and do not contain a purchase option (‘short-term leases’), and lease contracts for which the underlying asset is of low value (‘low-value assets’).

The Company has a number of lease contracts, mainly leases of an office building and a production plant. Before the adoption of IFRS 16, the Company classified each of its leases (as lessee) at the inception date as an operating lease. The leased property was not capitalized and the lease payments were recognized as rent expense in profit or loss on a straight-line basis over the lease term. Any prepaid rent and accrued rent were recognized under prepaid expenses and other current assets and accrued expenses and other payables, respectively.

Upon adoption of IFRS 16, the Company applied a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The standard provides specific transition requirements and practical expedients, which has been applied by the Company.

- 12 -
GAMIDA CELL LTD. AND ITS SUBSIDIARY

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands

NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES (Cont.)

The Company recognized right-of-use assets and lease liabilities for those leases previously classified as operating leases, except for short-term leases and leases of low-value assets. The right-of-use assets for most leases were recognised based on the carrying amount as if the standard had always been applied, apart from the use of incremental borrowing rate at the date of initial application. In some leases, the right-of-use assets were recognised based on the amount equal to the lease liabilities, adjusted for any related prepaid and accrued lease payments previously recognized. Lease liabilities were recognized based on the present value of the remaining lease payments, discounted using the incremental borrowing rate at the date of initial application.

Based on the foregoing, as at January 1, 2019:


 •
Right-of-use assets of $7,106 were recognized and presented separately in the statement of financial position.

•
Additional lease liabilities of $7,032 were recognized and presented separately in the statement of financial position .

•
Prepaid expenses and other current assets of $256 and accrued expenses and other payables of $182 related to previous operating leases were derecognized.

Set out below, are the carrying amounts of the Company’s right-of-use assets and lease liabilities and the movements during the period:

   
Right-of-use assets
    
Lease liabilities
  
   
Offices and labs
    
Vechicles
    
Production Plant
    
Total
        
As of January 1, 2019
  
$
2,104
    
$
291
    
$
4,711
    
$
7,106
    
$
7,032
  
Depreciation expenses
    
(292
)
    
(32
)
    
(140
)
    
(464
)
    
-
  
Interest expenses
    
-
      
-
      
-
      
-
      
237
  
Re-measurement
    
-
      
-
      
26
      
26
      
26
  
Payments
    
-
      
-
      
-
      
-
      
(468
)
                                         
As of March 31, 2019
  
$
1,812
    
$
259
    
$
4,597
    
$
6,668
    
$
6,827
  

The lease liabilities as of January 1, 2019 reconcilliation to the operating lease commitments as of December 31, 2018 are as follows:

Operating lease commitments as of December 31, 2018
  
$
7,441
  
Weighted average incremental borrowing rate as of January 1, 2019 (%)
    
1.42
  
Discounted operating lease commitments of January 1, 2019
    
7,032
  
Lease liabilities as of January 1, 2019
  
$
7,032
  

- 13 -
GAMIDA CELL LTD. AND ITS SUBSIDIARY

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands

NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Set out below are the new accounting policies of the Company upon adoption of IFRS 16, which have been applied from the date of initial application:


 a.
Right-of-use assets

The Company recognizes right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Company is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of- use assets are subject to impairment.


 b.
Lease liabilities

At the commencement date of the lease, the Company recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including insubstance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating a lease, if the lease term reflects the Company exercising the option to terminate.The variable lease payments that do not depend on an index or a rate are recognized as expense in the periodon which the event or condition that triggers the payment occurs.

NOTE 3:-
SHARE-BASED PAYMENT

The total compensation cost related to all of the Company's equity-based awards, recognized during the presented periods was comprised as follows:

   
Three months ended
March 31,
    
Year ended
December 31,
  
   
2019
    
2018
    
2018
  
   
Unaudited
        
                   
Research and development
  
$
229
    
$
482
    
$
705
  
General and administrative
    
862
      
362
      
2,870
  
                         
   
$
1,091
    
$
844
    
$
3,575
  

The Company estimates the fair value of stock options granted using the Binominal option-pricing model. The option-pricing model requires a number of assumptions, of which the most significant are the expected stock price volatility and the expected option term.

- 14 -
GAMIDA CELL LTD. AND ITS SUBSIDIARY

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands

NOTE 3:-
SHARE-BASED PAYMENT (cont.)

Expected volatility was calculated based upon historical volatilities of similar entities in the related sector index. The expected term of the options granted is derived from output of the option valuation model and represents the period of time that options granted are expected to be outstanding. The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term. The Company has historically not paid dividends and has no foreseeable plans to pay dividends.

The following table lists the inputs to the binomial model used for the fair value measurement of equity-settled share options for the above plan for the following periods:

Based on the above inputs, the fair value of the options was determined at $10.50 - $11.01 at the grant dates during 2019.

   
Three months ended
March 31,
    
December 31,
  
   
2019
    
2018
    
2018
  
   
Unaudited
    
Audited
  
                   
Dividend yield (%)
    
0
      
0
      
0
  
Expected volatility of the share prices (%)
    
76%-80
%
    
88%-94
%
    
93%-95
%
Risk-free interest rate (%)
    
2.51-2.70
      
2.17-2.89
      
2.63-2.88
  

Movement during the periods:

   
Three months ended
March 31,
    
Year ended
December 31,
  
   
2019
    
2018
    
2018
  
   
Number of
options
    
Weighted
average
exercise
price
    
Number of
options
    
Weighted
average
exercise
price
    
Number of
options
    
Weighted
 average
exercise
price
  
         
USD
          
USD
          
USD
  
                                     
Outstanding at beginning of period
    
3,197,616
      
3.07
      
2,467,023
      
2.28
      
2,467,023
      
2.28
  
Granted during the period
    
544,800
      
10.93
      
-
      
-
      
751,977
      
5.60
  
Expired during the period
    
-
      
-
      
-
      
-
      
(2,000
)
    
6.00
  
Exercised during the period
    
-
      
-
      
-
      
-
      
(9,692
)
    
0.25
  
Forfeited during the period
    
-
      
-
      
(9,692
)
    
0.25
      
(9,692
)
    
0.25
  
                                                 
Share options outstanding at end of period
    
3,742,416
      
3.63
      
2,457,331
      
2.27
      
3,197,616
      
3.07
  
                                                 
Share options exercisable at end of period
    
1,755,342
      
1.37
      
1,428,275
      
0.74
      
1,705,256
      
1.21
  

As of March 31, 2019, there are $7,851 of total unrecognized cost related to non-vested share based compensation that are expected to be recognized over a period of up to 4 years.

- 15 -
GAMIDA CELL LTD. AND ITS SUBSIDIARY

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands

NOTE 4:-
LIABILITIES PRESENTED AT FAIR VALUE

 
a.
Warrants to purchase Company's shares:

The Company measured the fair value of the warrants by using Option Pricing Method utilized in a Black- Scholes simulation model. The option-pricing model requires a number of assumptions, of which the most significant are the expected stock price volatility and the expected time until liquidation. Expected volatility was calculated based upon historical volatilities of similar entities in the related sector index. The expected time until liquidation is the period in which liquidation event will occurred subject to the Company's expectations. The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term. The Company has historically not paid dividends and has no foreseeable plans to pay dividends.

   
Three months ended
March 31,
    
December 31,
  
   
2019
    
2018
    
2018
  
   
Unaudited
    
Audited
  
                   
Risk-free interest rate
    
2.21
%
    
2.3
%
    
2.52
%
Expected volatility
    
82
%
    
90
%
    
80
%
Expected life (in years)
    
3.25
      
2.25-3
      
3.5
  
Expected dividend yield
    
0
      
0
      
0
  


b.
Changes in the fair value of warrants classified as Level 3 in the fair value hierarchy:

   
Fair value of
financial
derivatives
  
       
Balance at December 31, 2018
  
$
24,048
  
         
Exercise of warrants
    
(2,924
)
         
Revaluation of financial derivatives
    
3,907
  
         
Balance at March 31, 2019
  
$
25,031
  


- 16 -