Chemomab Therapeutics(CMMB) - 2023 Q2 - Quarterly Report

Condensed Consolidated Interim Financial Statements This section presents Chemomab Therapeutics' financial position, operational performance, equity changes, and cash flows for the interim period, along with explanatory notes on its business, accounting policies, and contingencies Condensed Consolidated Balance Sheets As of June 30, 2023, total assets decreased to $28.8 million from $43.1 million, with shareholders' equity declining to $22.0 million Balance Sheet Summary (in USD thousands) | Financial Item | June 30, 2023 (Unaudited) | December 31, 2022 (Audited) | | :--- | :--- | :--- | | Cash and cash equivalents | 10,382 | 13,519 | | Short term bank deposits | 16,207 | 26,374 | | Total Assets | 28,849 | 43,063 | | Total current liabilities | 6,825 | 6,749 | | Total Liabilities | 6,858 | 6,840 | | Accumulated deficit | (80,542) | (63,819) | | Total Shareholders' Equity | 21,991 | 36,223 | - The number of issued and outstanding Ordinary Shares increased from 232,636,700 as of December 31, 2022, to 248,058,700 as of June 30, 2023[17] Condensed Consolidated Statements of Operations For the six months ended June 30, 2023, net loss increased to $16.7 million from $11.3 million in 2022, driven by higher research and development expenses Statement of Operations Highlights (in USD thousands) | Metric | Six months Ended June 30, 2023 | Six months Ended June 30, 2022 | | :--- | :--- | :--- | | Research and development | 11,907 | 5,659 | | General and administrative | 5,337 | 5,915 | | Total operating expenses | 17,244 | 11,574 | | Net loss for the period | 16,723 | 11,294 | | Basic and diluted loss per Share | 0.076 | 0.050 | - For the three months ended June 30, 2023, the net loss was $8.0 million, compared to a net loss of $6.2 million for the same period in 2022[6] Condensed Consolidated Statements of Changes in Equity Shareholders' equity decreased from $36.2 million to $22.0 million by June 30, 2023, primarily due to net loss, partially offset by share issuance Changes in Shareholders' Equity (Six months ended June 30, 2023, in USD thousands) | Description | Amount | | :--- | :--- | | Balance as of January 1, 2023 | 36,223 | | Net loss for the period | (16,723) | | Share-based compensation | 1,123 | | Issuance of shares, net | 1,368 | | Balance as of June 30, 2023 | 21,991 | - For the six months ended June 30, 2022, total shareholders' equity decreased from $61.5 million to $51.8 million[21] Condensed Consolidated Statements of Cash Flows Net cash used in operating activities increased to $14.7 million for the six months ended June 30, 2023, while investing activities provided $10.2 million Cash Flow Summary (Six months ended June 30, in USD thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | (14,672) | (9,412) | | Net cash provided by investing activities | 10,164 | 4,109 | | Net cash provided by financing activities | 1,368 | 22 | | Change in cash, cash equivalents and restricted cash | (3,140) | (5,281) | | Cash, cash equivalents and restricted cash at end of period | 10,456 | 9,960 | Notes to the Condensed Consolidated Interim Financial Statements These notes provide context on the company's operations, accounting policies, contingencies, and liquidity outlook through December 2024 Note 1 - General This note outlines the company's clinical-stage status, funding reliance, liquidity outlook, executive changes, and ATM share issuance activities - The company is a clinical-stage biotech focused on developing therapeutics for conditions involving inflammation and fibrosis, with no products approved for sale and operations funded by shareholders[57][13] - Management believes existing liquidity as of June 30, 2023, will fund operations through December 31, 2024, with potential for cost reductions to extend this runway[13] - On June 1, 2023, Dr. Adi Mor was appointed CEO and Sigal Fattal CFO, replacing previous executives, with a $1.11 million provision for severance payments recorded[42] - Through June 30, 2023, the company issued 1,470,906 ADSs under its At the Market (ATM) Agreement, generating gross proceeds of $17.3 million[28] Note 2 - Basis of Presentation and Significant Accounting Policies This note details the unaudited nature of the financial statements, adherence to U.S. GAAP and SEC regulations, and consistency of accounting policies - The condensed interim consolidated financial statements are unaudited and prepared in accordance with U.S. GAAP and SEC regulations for interim reporting[43] - Preparation of these financial statements requires management to make estimates and assumptions that could differ materially from actual results[59] - There have been no changes to the company's significant accounting policies since the Annual Report for the year ended December 31, 2022[43] Note 3 - Contingencies This note addresses the ongoing VAT audit by the Israeli Tax Authority, including the company's appeal against the assessment - The Israeli Tax Authority (ITA) initiated a routine VAT audit for tax years 2017-2020, raising claims regarding the recoverability of VAT on merger-related expenses[30] - The company rejected an ITA settlement offer, received an assessment, and appealed it in November 2022, with the final outcome remaining uncertain despite a provision recorded in 2022[30]