Evogene Ltd 6-K, filed Sep 7, 2022
Evogene Ltd. (EVGN)
6-K
2022-09-07
For: 2022-06-30
View Original
Added on
April 05, 2026
About this 6-K
Evogene Ltd filed this 6-K on September 7, 2022.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of September 2022
Commission File Number: 001-36187
(Translation of Registrant’s Name into English)
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
CONTENTS
This Report of Foreign Private Issuer on Form 6-K ,or Form 6-K, is being furnished by Evogene Ltd., or Evogene, to the Securities and Exchange Commission, or SEC, for the sole purpose of: (i) furnishing, as Exhibit 99.1 to this Form 6-K, unaudited condensed consolidated financial statements of Evogene as of and for the six-month period ended June 30, 2022; and (ii) furnishing, as Exhibit 99.2 to this Form 6-K, Management’s Discussion and Analysis of Financial Condition and Results of Operations, which discusses and analyzes Evogene’s financial condition and results of operations as of and for the six-month period ended June 30, 2022 .
Exhibits 99.1 and 99.2 to this Form 6-K are incorporated by reference in the registration statements on Form F-3 (SEC File No. 333-253300), and Form S-8 (SEC File Nos. 333-193788, 333-201443, 333-203856 and 333-259215) of Evogene, and will be a part thereof from the date on which this Form 6-K is submitted, to the extent not superseded by documents or reports subsequently filed or furnished.
EXHIBIT INDEX
|
Exhibit No.
|
Description
|
|
101
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Interim Statements of Financial Position, (ii) Consolidated Interim Statements of Profit or Loss, (iii) Consolidated Interim Statements of Changes in Equity; (iv) Consolidated Interim Statements of Cash Flows, and (v) Notes to Interim Consolidated Financial Statements.
|
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
Date: September 7, 2022 |
EVOGENE LTD.
(Registrant) By: /s/ Yaron Eldad Yaron Eldad Chief Financial Officer |
Exhibit 99.1
EVOGENE LTD. AND ITS SUBSIDIARIES
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2022
U.S. DOLLARS IN THOUSANDS
UNAUDITED
INDEX
Page | |
F - 2 | |
F - 3 | |
F - 4 | |
F - 5 - F - 6 | |
F - 7 - F - 15 |
CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
U.S. dollars in thousands (except share and per share data)
|
June 30,
|
December 31,
|
|||||||
|
2022
|
2021
|
|||||||
|
Unaudited
|
Audited
|
|||||||
|
CURRENT ASSETS:
|
||||||||
|
Cash and cash equivalents
|
$
|
|
$
|
|
||||
|
Short-term bank deposits |
|
|||||||
|
Marketable securities
|
|
|
||||||
|
Trade receivables
|
|
|
||||||
|
Inventories |
|
|||||||
|
Other receivables and prepaid expenses
|
|
|
||||||
|
|
|
|||||||
|
LONG-TERM ASSETS:
|
||||||||
|
Long-term deposits
|
|
|
||||||
|
Right-of-use-assets
|
|
|
||||||
|
Property, plant and equipment, net
|
|
|
||||||
|
Intangible assets, net
|
|
|
||||||
|
|
|
|||||||
|
$
|
|
$
|
|
|||||
|
CURRENT LIABILITIES:
|
||||||||
|
Trade payables
|
$
|
|
$
|
|
||||
|
Employees and payroll accruals
|
|
|
||||||
|
Lease liability
|
|
|
||||||
|
Liabilities in respect of government grants
|
|
|
||||||
|
Deferred revenues and other advances
|
|
|
||||||
|
Other payables
|
|
|
||||||
|
|
|
|||||||
|
LONG-TERM LIABILITIES:
|
||||||||
|
Lease liability
|
|
|
||||||
|
Liabilities in respect of government grants
|
|
|
||||||
|
|
|
|||||||
|
SHAREHOLDERS' EQUITY:
|
||||||||
|
Ordinary shares of NIS
Authorized –
shares as of June 30, 2022 and
|
|
|
||||||
|
Share premium and other capital reserve
|
|
|
||||||
|
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||
|
Equity attributable to equity holders of the Company
|
|
|
||||||
|
Non-controlling interests
|
|
|
||||||
|
Total equity
|
|
|
||||||
|
$
|
|
$
|
|
|||||
The accompanying notes are an integral part of the consolidated financial statements.
F - 2
U.S. dollars in thousands
|
Six months ended
June 30,
|
||||||||
|
2022
|
2021
|
|||||||
|
Unaudited
|
||||||||
|
Revenues
|
$
|
|
$
|
|
||||
|
Cost of revenues
|
|
|
||||||
|
Gross profit
|
|
|
||||||
|
Operating expenses:
|
||||||||
|
Research and development, net
|
|
|
||||||
|
Business development
|
|
|
||||||
|
General and administrative
|
|
|
||||||
|
Total operating expenses
|
|
|
||||||
|
Operating loss
|
(
|
)
|
(
|
)
|
||||
|
Financing income
|
|
|
||||||
|
Financing expenses
|
(
|
)
|
(
|
)
|
||||
|
Financing expenses, net
|
(
|
)
|
(
|
) | ||||
|
Loss before taxes on income
|
(
|
)
|
(
|
)
|
||||
|
Taxes on income
|
|
|
||||||
|
Loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
Attributable to:
|
||||||||
|
Equity holders of the Company
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
Non-controlling interests
|
(
|
)
|
(
|
)
|
||||
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
|
Basic and diluted loss per share, attributable to equity holders of the Company
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
Weighted average number of ordinary shares used in computing basic and diluted loss per share
|
|
|
||||||
The accompanying notes are an integral part of the consolidated financial statements.
F - 3
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
U.S. dollars in thousands
|
Attributable to equity holders of the Company
|
||||||||||||||||||||||||
|
Share
capital
|
Share premium
and other
capital reserves
|
Accumulated
deficit
|
Total
|
Non-
controlling
interests
|
Total
equity
|
|||||||||||||||||||
|
Unaudited
|
||||||||||||||||||||||||
|
Balance as of January 1, 2021
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
|||||||||||
|
Loss
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||
|
Issuance of ordinary shares |
|
|
|
|
|
|
||||||||||||||||||
|
Exercise of pre-funded warrants |
|
|
|
|
|
|
||||||||||||||||||
|
Forfeiture of non-controlling interests regarding share-based compensation
|
|
|
|
|
( |
) |
|
|||||||||||||||||
|
Benefit to non-controlling interests regarding share-based compensation
|
|
(
|
)
|
|
(
|
)
|
|
|
||||||||||||||||
|
Exercise of options |
|
|
|
|
|
|
||||||||||||||||||
|
Share-based compensation
|
|
|
|
|
|
|
||||||||||||||||||
|
Balance as of June 30, 2021
|
$
|
|
$ |
|
$
|
(
|
)
|
$ |
|
$
|
|
$ |
|
|||||||||||
|
Attributable to equity holders of the Company
|
||||||||||||||||||||||||
|
Share
capital
|
Share premium
and other
capital reserves
|
Accumulated
deficit
|
Total
|
Non-
controlling
interests
|
Total
equity
|
|||||||||||||||||||
|
Unaudited
|
||||||||||||||||||||||||
|
Balance as of January 1, 2022
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
|||||||||||
|
Loss
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||
|
Forfeiture of non-controlling interests regarding share-based compensation
|
|
|
|
|
( |
) |
|
|||||||||||||||||
|
Benefit to non-controlling interests regarding share-based compensation
|
|
( |
) |
|
( |
) |
|
|
||||||||||||||||
| Exercise of subsidiary options | ) | ) | ) | ) | ||||||||||||||||||||
|
Exercise of options |
|
|
|
|
|
|
||||||||||||||||||
|
Restricted stock units (“RSUs”) vested |
) | ) | ||||||||||||||||||||||
|
Share-based compensation
|
|
|
|
|
|
|
||||||||||||||||||
|
Balance as of June 30, 2022
|
$
|
|
$ |
|
$
|
(
|
)
|
$ |
|
$
|
|
$ |
|
|||||||||||
*) Represents an amount lower than $1.
F - 4
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
|
Six months ended
June 30,
|
||||||||
|
2022
|
2021
|
|||||||
|
Unaudited
|
||||||||
|
Cash flows from operating activities
|
||||||||
|
Loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
Adjustments to reconcile loss to net cash used in operating activities:
|
||||||||
|
Adjustments to the profit or loss items:
|
||||||||
|
Depreciation
|
|
|
||||||
|
Amortization of intangible assets
|
|
|
||||||
|
Share-based compensation
|
|
|
||||||
|
Net financing expenses (income) |
|
( |
) | |||||
|
Decrease in accrued bank interest |
||||||||
|
Pre-funded warrants issuance expenses
|
|
|
||||||
|
Taxes on income
|
|
|
||||||
|
|
|
|||||||
|
Changes in asset and liability items:
|
||||||||
|
Decrease in trade receivables
|
|
|
||||||
|
Decrease in other receivables
|
|
|
||||||
|
Increase in inventories |
( |
) | ||||||
|
Increase (decrease) in trade payables
|
(
|
) |
|
|
||||
|
Decrease in employees and payroll accruals
|
(
|
)
|
(
|
)
|
||||
|
Decrease in other payables
|
(
|
)
|
(
|
)
|
||||
|
Decrease in deferred revenues and other advances
|
(
|
)
|
(
|
) | ||||
|
(
|
) |
|
|
|||||
|
Cash received (paid) during the period for:
|
||||||||
|
Interest received
|
|
|
||||||
|
Interest paid
|
(
|
)
|
(
|
)
|
||||
|
Taxes paid
|
(
|
)
|
(
|
)
|
||||
|
Net cash used in operating activities
|
$
|
(
|
)
|
$
|
(
|
)
|
||
The accompanying notes are an integral part of the consolidated financial statements.
F - 5
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
|
Six months ended
June 30,
|
||||||||
|
2022
|
2021
|
|||||||
|
Unaudited
|
||||||||
|
Cash flows from investing activities:
|
||||||||
|
Purchase of property, plant and equipment
|
(
|
)
|
(
|
)
|
||||
|
Proceeds from sale of marketable securities
|
|
|
||||||
|
Purchase of marketable securities
|
(
|
)
|
(
|
) | ||||
|
Withdrawal from bank deposits
|
|
|
||||||
|
Net cash provided by (used in) investing activities
|
$
|
|
|
$
|
(
|
) | ||
|
Cash flows from financing activities:
|
||||||||
|
Proceeds from issuance of ordinary shares, net of issuance expenses
|
|
|
||||||
|
Proceeds from exercise of options
|
|
|
||||||
|
Repayment of lease liability
|
(
|
)
|
(
|
)
|
||||
|
Proceeds from government grants
|
|
|
||||||
|
Repayment of government grants
|
(
|
)
|
(
|
)
|
||||
|
Net cash provided by (used in) financing activities
|
(
|
) |
|
|
||||
|
Exchange rate differences - cash and cash equivalent balances
|
(
|
)
|
(
|
) | ||||
|
Decrease in cash and cash equivalents
|
(
|
)
|
(
|
)
|
||||
|
Cash and cash equivalents, beginning of the period
|
|
|
||||||
|
Cash and cash equivalents, end of the period
|
$
|
|
$
|
|
||||
|
Significant non-cash activities
|
||||||||
|
Acquisition of property, plant and equipment
|
$
|
|
$
|
|
||||
|
Increase of right-of-use asset recognized with corresponding lease liability
|
$
|
|
$
|
|
||||
|
Exercise of pre-funded warrants |
$ |
$ |
||||||
The accompanying notes are an integral part of the consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 1: -GENERAL
| a. |
Evogene Ltd. (“Evogene” and together with its subsidiaries, the “Company”) was founded on October 10, 1999, as Agro Leads Ltd., a division of Compugen Ltd. In 2002, the Company was spun-off as an independent corporation under the laws of the State of Israel, and changed its name to Evogene Ltd.
|
The Company is a leading computational biology company focused on revolutionizing product discovery and development in multiple life-science based industries, including human health, and agriculture through the use of its broadly applicable Computational Predictive Biology (“CPB”) platform. The CPB platform, incorporating a deep understanding of biology leveraged through the power of Big Data and Artificial Intelligence, has been designed to computationally discover and uniquely guide the development of life-science products based on microbes, small molecules and genetic elements. Utilizing the CPB platform, Evogene and its subsidiaries are now advancing product pipelines for human microbiome-based therapeutics through Biomica Ltd., medical cannabis through Canonic Ltd., ag-biologicals through Lavie Bio Ltd., ag-chemicals through AgPlenus Ltd., and ag-solutions for castor oil production through Casterra Ag Ltd.
The Company has a history of losses and incurred operating losses of $16,062 and $13,705 during the six months periods ended June 30, 2022 and 2021, respectively.
Furthermore, the Company intends to continue to finance its operating activities by raising capital and seeking collaborations with multinational companies in the industry.
The Company's management and board of directors are of the opinion that the Company’s current financial resources will be sufficient to continue the development of the Company's products in the foreseeable future.
| b. |
The Company principally derives its revenues from collaboration arrangements. See Note 3. For revenues from major customers see Note 7d.
|
| c. |
The Company has the following subsidiaries: Casterra Ag Ltd. (formerly Evofuel Ltd.), Evogene Inc., Biomica Ltd., AgPlenus Ltd., AgPlenus Inc., Lavie Bio Ltd., Lavie Bio Inc., Lavie Bio Tech Inc., Taxon Biosciences, Inc. and Canonic Ltd.
|
Casterra Ag Ltd. was incorporated on January 1, 2012 and is currently focusing on the development of improved castor bean seeds for industrial uses.
Evogene Inc. was incorporated in Delaware, United States on September 22, 2006. From 2015 to 2019, Evogene Inc. was engaged in research and development in the field of insect control and located in the Bio-Research and Development Growth (BRDG) Park, in St. Louis, Missouri, United States.
Biomica Ltd. was incorporated on March 2, 2017, with the mission of discovering and developing human microbiome-based therapeutics.
AgPlenus Ltd. was incorporated on June 10, 2018, with the mission to design effective and sustainable crop protection ag-chemicals products by leveraging predictive biology.
On August 27, 2020, AgPlenus Ltd. incorporated a wholly owned U.S. subsidiary, AgPlenus Inc.
F - 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 1: - GENERAL (Cont.)
Lavie Bio Ltd. was incorporated on January 21, 2019, with the mission to improve food quality and sustainability through the introduction of microbiome-based ag-biologicals products. In 2019, Lavie Bio Ltd. incorporated two wholly owned subsidiaries, Lavie Bio Inc., located in the Bio-Research and Development Growth (BRDG) Park, in St. Louis, Missouri, United States, and Lavie Bio Tech Inc. Lavie Bio Tech Inc. wholly owns as a subsidiary Taxon Biosciences, Inc. (see item d below).
Canonic Ltd. was incorporated on March 25, 2019, with the mission to develop next-generation medical cannabis products.
| d. |
On August 6, 2019, Corteva Inc. (“Corteva”) invested in the Company's agriculture biologicals subsidiary, Lavie Bio Ltd., which included a cash investment of $
|
| e. |
On September 2, 2020, the Company issued
|
| f. |
On January 2021, the Company entered into a Controlled Equity Offering Sales Agreement (the “January 2021 Sales Agreement”). In January and February 2021, pursuant to the January 2021 Sales Agreement, in an “at the market” (“ATM”) offering, the Company issued an aggregate of
|
On February 19, 2021, the Company entered into a new Controlled Equity Offering Sales Agreement, having an aggregate offering price of up to $50,000 , pursuant to which the Company issued 726,832 ordinary shares during April through September 2021, in an ATM offering, with a weighted average selling price of $3.64 per share, resulting in gross proceeds of approximately $2,600 .
| g. |
The Company’s subsidiaries and divisions are split into three operating segments: (1) Agriculture - Evogene seed traits division, Lavie Bio Ltd. and Ag Plenus Ltd.; (2) Human – Biomica Ltd. and Canonic Ltd.; and (3) Industrial – Casterra Ag Ltd. (see also Note 7).
|
| h. |
The duration, scope and effects of the ongoing COVID-19 pandemic, government and other third-party responses to it, and the related macroeconomic effects, and the extent of its impact on the Company’s operational and financial performance will depend on certain developments. The Company considered the impact of COVID-19 on the estimates and assumptions and determined that there were no material adverse impacts on the consolidated financial statements for the period ended June 30, 2022. As events continue to evolve and additional information becomes available, the Company’s estimates and assumptions may change in future periods.
|
F - 8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 2: -SIGNIFICANT ACCOUNTING POLICIES
|
Basis of preparation of the interim consolidated financial statements:
|
|
|
The interim consolidated financial statements for the six months ended June 30, 2022 have been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting.”
The accompanying unaudited interim financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2021, included in the Company’s Annual Report on Form 20-F filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2022.
The accompanying consolidated balance sheet as of June 30, 2022, the consolidated statements of profit or loss, the statement of changes in shareholders’ equity and the consolidated statements of cash flows for the six months ended June 30, 2022 and 2021 are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and applicable rules and regulations of the SEC regarding interim financial reporting. In management’s opinion, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of the Company’s financial position as of June 30, 2022, as well as its results of operations and cash flows for the six months ended June 30, 2022 and 2021. The results of operations for the six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.
The significant accounting policies applied in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the 2021 annual consolidated financial statements.
|
| NOTE 3: -COLLABORATION AND RESEARCH AGREEMENTS- |
During the six months ended June 30, 2022, the Company did not enter into any new collaboration agreements which amount to 10 % or more of its total revenues for the period.
NOTE 4: -MARKETABLE SECURITIES
|
June 30,
2022
|
December 31,
2021
|
|||||||
|
Unaudited
|
Audited
|
|||||||
|
Financial assets measured at fair value through profit or loss:
|
||||||||
|
Corporate bonds and government treasury notes – Level 1
|
|
|
||||||
|
$
|
|
$
|
|
|||||
During 2022 and 2021, there were no transfers due to the fair value measurement of any financial instrument to or from Levels 1, 2 and 3.
F - 9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 5: -LIABILITIES IN RESPECT OF GOVERNMENT GRANTS
|
June 30,
2022
|
December 31,
2021
|
|||||||
|
Unaudited
|
Audited
|
|||||||
|
Balance at January 1,
|
$
|
|
$
|
|
||||
|
Grants received
|
|
|
||||||
|
Royalties paid
|
(
|
)
|
(
|
)
|
||||
|
Amounts recorded in profit or loss
|
|
|
(
|
) | ||||
|
$
|
|
$
|
|
|||||
The Company received research and development grants from the Israel Innovation Authority (“IIA”) and undertook to pay royalties of 3% of revenues derived from research and development projects that were financed by the IIA, of up to 100 % of the grants received. As of June 30, 2022, the Company received grants amounting to $8,710 (including accrued interest), of which $3,516 were repaid to date.
NOTE 6: -SHARE- BASED COMPENSATION
| a. |
Expenses recognized in the financial statements:
|
The expense recognized in the Company's financial statements for services provided by employees and service-providers is as follows:
|
Six months ended
June 30,
|
||||||||
|
2022
|
2021
|
|||||||
|
Unaudited
|
||||||||
|
Share-based compensation - Attributable to equity holders of the Company
|
$
|
|
$
|
|
||||
|
Share-based compensation - Attributable to non-controlling interests
|
|
|
||||||
|
|
$ |
|
$ | |||||
Evogene Ltd. maintains two share option and equity incentive plans: the Evogene Ltd. 2013 Share Option Plan and the Evogene Ltd. 2021 Share Incentive Plan. All such option and incentive plans provide for the grant of options to purchase the Company's ordinary shares and generally expire 10 years from the grant date.
F - 10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 6: -SHARE- BASED COMPENSATION (Cont.)
| b. |
Evogene Ltd. share-based payment plan for employees, directors and consultants:
|
During the six months ended June 30, 2022 and 2021, the board of directors of Evogene Ltd. approved to grant its employees, directors and consultants an aggregate of
| c. |
Evogene Ltd. share options activity:
|
The following table summarizes the number of share options, the weighted average exercise price, and the changes under to options under the applicable plans to employees, consultants and directors of Evogene Ltd. as of June 30, 2022 and June 30, 2021 and during the periods then ended:
|
2022
|
2021
|
|||||||||||||||
|
Number of
options
|
Weighted
average exercise
prices ($)
|
Number of
options
|
Weighted
average exercise
prices ($)
|
|||||||||||||
|
Outstanding on January 1,
|
|
|
|
|
||||||||||||
|
Granted
|
|
|
|
|
||||||||||||
|
Exercised
|
(
|
)
|
|
(
|
) |
|
||||||||||
|
Forfeited
|
(
|
)
|
|
(
|
)
|
|
||||||||||
|
Outstanding on June 30,
|
|
|
|
|
||||||||||||
|
Exercisable at June 30,
|
|
|
|
|
||||||||||||
|
|
d. |
Evogene Ltd. RSUs activity:
The 2021 Plan also provides for the grant of restricted shares and RSUs. During the six months ended June 30, 2022, the board of directors of the Company approved to grant its employees, consultants and directors an aggregate of
|
The following table summarizes the number of RSUs, the weighted average grant date and the changes to RSUs under the 2021 Plan to employees, consultants and directors of the Company as of June 30, 2022 and during the period then ended:
|
|
Number of RSUs |
Weighted average grant date fair value |
||||||
|
|
||||||||
|
Outstanding on January 1, 2022 |
|
|
||||||
|
Granted |
|
|
||||||
|
Vested |
( |
) |
|
|||||
|
Forfeited |
( |
) |
|
|||||
|
|
||||||||
|
Outstanding on June 30, 2022 |
|
|
F - 11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 6: -SHARE- BASED COMPENSATION (Cont.)
| e. |
The Company's subsidiaries maintain share option and incentive plans with similar terms and conditions. During the six months ended June 30, 2022 and 2021, the Company's subsidiaries approved to grant their employees, directors and consultants |
|
|
The following table summarizes the number of share options, the weighted average exercise price, and the changes to options under the subsidiary option plans to employees, consultants and directors of the Company's subsidiaries as of June 30, 2022 and June 30, 2021 and during the periods then ended:
|
|
2022
|
2021
|
|||||||||||||||
|
Number
of options
|
Weighted
average exercise
prices ($)
|
Number
of options
|
Weighted
average exercise
prices ($)
|
|||||||||||||
|
Outstanding on January 1,
|
|
|
|
|
||||||||||||
|
Granted
|
|
|
|
|
||||||||||||
|
Exercised
|
(
|
) |
|
|
|
|||||||||||
|
Forfeited
|
(
|
)
|
|
(
|
)
|
|
||||||||||
|
Outstanding on June 30,
|
|
|
|
|
||||||||||||
|
Exercisable at June 30,
|
|
|
|
|
||||||||||||
| f. |
The total compensation cost related to all of the Company's equity-based awards, recognized during the presented periods was comprised as follows:
|
|
Six months ended
June 30,
|
||||||||
|
2022
|
2021
|
|||||||
|
Unaudited
|
||||||||
|
Research and development, net |
$
|
|
$
|
|
||||
|
Business development |
|
|
||||||
|
General and administrative |
||||||||
|
$
|
|
$
|
|
|||||
F - 12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 7: -OPERATING SEGMENTS
| a. |
General:
|
The Company operates in three segments, Agriculture, Industry and Human. The Agriculture segment consists of the parent company, Evogene, and two of Evogene’s subsidiaries, Lavie Bio Ltd. and AgPlenus Ltd. The Human segment consists of Evogene’s subsidiaries, Biomica Ltd. and Canonic Ltd. The Industry segment consists of Evogene’s subsidiary Casterra Ag Ltd. The segments were determined on the basis of information considered by the Chief Operating Decision-Maker (“CODM”) for purposes of decision-making on the allocation of resources and evaluation of performance. The following Company's segments are engaged in business activities for which they earn revenues and incur expenses, their results are reviewed by the CODM and discrete financial information is available:
|
Agriculture segment
|
-
|
Develops seed traits, ag-chemical products, and ag-biological products to improve plant performance.
|
|
Industry segment
|
-
|
Develops improved castor bean seeds to serve as a feedstock source for other industrial uses.
|
|
Human segment
|
-
|
Discovery and development of human microbiome-based therapeutics and cannabis activity.
|
|
Unallocated
|
-
|
Other corporate expenses and general development of enabling technologies for optimization.
|
Each segment’s performance is determined based on operating loss reported in the financial statements. The results of a segment reported to the CODM include items attributed directly to a segment, as well as other items, which are indirectly attributed using reasonable assumptions and exclude share-based compensation charges as they are not considered in the internal operating plans and measurement of the segment’s financial performance.
| b. |
The following table presents the Company’s revenues and operating loss by segments:
|
|
Agriculture
|
Industry
|
Human
|
Unallocated
|
Total
|
||||||||||||||||
|
Unaudited
|
||||||||||||||||||||
|
For the six months ended June 30, 2022
|
||||||||||||||||||||
|
Revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
|
Operating loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||
|
Net financing expense
|
$
|
(
|
)
|
|||||||||||||||||
|
Loss before taxes on income
|
$
|
(
|
)
|
|||||||||||||||||
F - 13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 7: -OPERATING SEGMENTS (Cont.)
| c. |
The following table presents the Company’s revenues and operating loss by segments: |
|
Agriculture
|
Industry
|
Human
|
Unallocated
|
Total
|
||||||||||||||||
|
Unaudited
|
||||||||||||||||||||
|
For the six months ended June 30, 2021
|
||||||||||||||||||||
|
Revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
|
Operating loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||
|
Net financing expenses
|
$
|
(
|
) | |||||||||||||||||
|
Loss before taxes on income
|
$
|
(
|
)
|
|||||||||||||||||
| d. |
Major customers:
|
Detailed below are revenues from major customers each of whom amounts to 10% or more, of total revenues. The revenues from major customers detailed below were recorded in the Agriculture segment:
|
Six months ended
June 30,
|
||||||||
|
2022 |
2021
|
|||||||
|
Unaudited
|
||||||||
|
Customer A (subsidiary shareholder)
|
|
%
|
|
%
|
||||
|
Customer B
|
|
|
|
% | ||||
|
Customer C |
% | % | ||||||
|
Customer D |
% | |||||||
|
Customer E |
% | |||||||
| e. |
Geographical information:
|
Revenues based on the location of the customers, are as follows:
|
Six months ended
June 30,
|
||||||||
|
2022
|
2021
|
|||||||
|
Unaudited
|
||||||||
|
United States
|
|
%
|
|
%
|
||||
|
Israel
|
|
%
|
|
%
|
||||
|
Brazil
|
|
|
|
%
|
||||
|
|
%
|
|
%
|
|||||
F - 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 7: -OPERATING SEGMENTS (Cont.)
The carrying amounts of non-current assets (property, plant and equipment property and intangible assets) in Evogene’s country of domicile (Israel) and in the United States based on the location of the assets, are as follows:
|
June 30,
2022
|
December 31,
2021
|
|||||||
|
Unaudited
|
Audited
|
|||||||
|
United States
|
|
%
|
|
%
|
||||
|
Israel
|
|
%
|
|
%
|
||||
|
|
%
|
|
%
|
|||||
NOTE 8: -SUBSEQUENT EVENT
On August 11, 2022, Lavie Bio Ltd. entered into a multi-year, strategic, collaboration agreement with ICL Group (“collaboration agreement”). As part of the collaboration agreement, ICL made a $10 million investment in Lavie Bio Ltd. under a SAFE (simple agreement for future equity). The investment amount will be allocated to a multi-year collaboration focused on developing novel bio-stimulant products to enrich fertilizer efficiency.
F - 15
Exhibit 99.2
Management’s Discussion and Analysis of Financial Condition and Results of Operation
The following discussion and analysis of our financial condition and results of operations provides information that we believe to be relevant to an
assessment and understanding of our results of operations and financial condition for the periods described. This discussion should be read in conjunction with our consolidated interim financial statements and the notes to the financial
statements, which are included in this Report on Form 6-K. In addition, this information should also be read in conjunction with the information contained in our Annual Report on Form 20-F for the year ended December 31, 2021, filed with the
Securities and Exchange Commission, or SEC, on March 31, 2022, or the Annual Report, including the consolidated annual financial statements as of December 31, 2021, and their accompanying notes included therein, and the information under “Item 5.
Operating and Financial Review and Prospects.”
Forward Looking Statements
This Report on Form 6-K contains historical information and forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 with respect
to the business, financial condition and results of operations of Evogene. Forward-looking statements can be identified based on our use of forward-looking words such as “believe,” “expect,” “intend,” “plan,” “may,” “should,” “anticipate,”
“could,” “might,” “seek,” “target,” “will,” “project,” “forecast,” “continue” or their negatives or variations of these words or other comparable words, or by the fact that these statements do not relate strictly to historical matters.
Forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently
subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ
materially from the activities and results anticipated in forward-looking statements.
We believe that our forward-looking statements are reasonable; however, these statements are only current predictions and are subject to known and unknown risks, uncertainties
and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. We describe and/or refer to many of these
risks in greater detail under the heading “Risk Factors” in our Annual Report.
All forward-looking statements contained in this Report on Form 6-K speak only as of the date of this document and are expressly qualified in their entirety as described herein
and by the cautionary statements contained within the “Risk Factors” section of the Annual Report. We do not undertake to update or revise forward-looking statements to reflect events or circumstances that arise after the date on which such
statements are made or to reflect the occurrence of unanticipated events, except as required by law. In evaluating forward-looking statements, you should consider these risks and uncertainties and not place undue reliance on our forward-looking
statements.
The terms “Evogene,” “we,” “us,” “our,” “our company” and “the company” in this Report on Form 6-K refer to Evogene Ltd. and its consolidated subsidiaries, consisting of Ag
Plenus Ltd., Biomica Ltd., Canonic Ltd., Casterra Ag Ltd., Evogene Inc., Lavie Bio Ltd., and their consolidated subsidiaries, unless the context otherwise requires.
General
Evogene is a computational biology company aiming to revolutionize the development of life-science based products by utilizing cutting edge technologies to increase probability
of success while reducing development time and cost. Evogene established three unique technological engines - MicroBoost AI, ChemPass AI and GeneRator AI – leveraging Big Data and Artificial Intelligence and incorporating deep multidisciplinary
understanding in life sciences. Each technological engine is focused on the discovery and development of products based on one of the following core components: microbes (MicroBoost AI), small molecules (ChemPass AI), and genetic elements
(GeneRator AI). Evogene uses its technological engines to develop products through subsidiaries and with strategic partners. Currently, Evogene’s main subsidiaries utilize the technological engines to develop human microbiome-based therapeutics
by Biomica Ltd., medical cannabis products by Canonic Ltd., ag-chemicals by Ag Plenus Ltd. and ag-biologicals by Lavie Bio Ltd.
The impact of the COVID-19 pandemic on Evogene’s operations during the period ended June 30, 2022 has been minimal. There were no material adverse impacts on the consolidated
financial statements for the period ended June 30, 2022. The duration, scope and effects of the ongoing COVID-19 pandemic, government and other third-party responses to it, the related macroeconomic effects, and the extent of its impact on the
Company’s operational and financial performance will depend on future developments. As events continue to evolve and additional information becomes available, the Company’s estimates and assumptions may change in future periods.
Recent Developments
On July 11, 2022, we announced that our subsidiary, Biomica Ltd. successfully enrolled a first patient in its Phase I Study of Microbiome-Based Immuno-Oncology Drug.
On July 26, 2022, Biomica Ltd. announced that it had dosed the first patient in its Phase I study of its Microbiome-Based Immuno-Oncology Drug.
On August 16, 2022, we announced that our subsidiary, Lavie Bio Ltd., and ICL Group Ltd., or ICL, entered into a strategic collaboration to develop novel bio-stimulant products. As part of the
collaboration, a subsidiary of ICL will invest $10 million in Lavie Bio Ltd.
Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021
Revenues
Our total revenues of $0.5 million for the six-month period ended June 30, 2022 remained stable as compared to the six-month period ended June 30, 2021.
Cost of Revenues
Cost of revenues of $0.4 million for the six-month period ended June 30, 2022 remained stable as compared to the six-month period ended June 30, 2021. Cost of revenues were
primarily due to the initial sales of Lavie Bio Ltd.’s Thrivus product (previously branded as Result) and sales of Canonic Ltd.’s products in the Israeli market.
Gross Profit
Gross profit of $0.1 million for the six-month period ended June 30, 2022 remained stable as compared to the six-month period ended June 30, 2021.
Operating Expenses
Research and Development Expenses, Net. Research and development expenses, net increased by $1.7 million, or 18%, to $11.0 million for
the six-month period ended June 30, 2022, from $9.3 million for the six-month period ended June 30, 2021. This increase is mainly attributable to Biomica Ltd.’s ongoing phase I trial of its first-in-human proof-of-concept study in its
immuno-oncology program and to Lavie Bio Ltd.'s activities supporting the production and commercialization of its Thrivus product.
Business Development Expenses. Business development expenses increased by $0.7 million, or 58%, to $1.9 million for the six-month
period ended June 30, 2022, from $1.2 million for the six-month period ended June 30, 2021. This increase is mainly due to recruitment of business development personnel supporting the commercialization activities of Evogene’s subsidiaries.
General and Administrative Expenses. General and administrative expenses increased slightly by $0.1 million, or 3%, to $3.3 million for
the six-month period ended June 30, 2022, from $3.2 million for the six-month period ended June 30, 2021. The increase in general and administrative expenses is mainly attributed to an increase in salary and benefits related costs.
- 2 -
Financing Income and Expenses
Financing Income. Financing income decreased slightly to $0.5 million for the six-month period ended June 30, 2022 from $0.6 million
for the six-month period ended June 30, 2021. Financing income primarily consists of (a) exchange rate differences between the U.S. dollar and the New Israeli Shekel, as well as (b) interest income.
Financing Expenses. Financing expenses increased by $2.3 million, or 256%, to $3.2 million for the six-month period ended June 30,
2022, from $0.9 million for the six-month period ended June 30, 2021. This increase was mainly due to exchange rate differences between the U.S. dollar and the New Israeli Shekel and the decrease in value of marketable securities.
Taxes on Income
For the six-month periods ended June 30, 2022 and 2021, we recorded insignificant amounts for taxes on income in Israel due to advances on excess expenses and an
insignificant amount of taxes with respect to Ag Plenus Inc. and Lavie Bio Inc.
Loss
The amount of our overall loss increased by $4.9 million, or 35%, to $18.9 million for the six-month period ended June 30, 2022, from $14.0 million for the six-month
period ended June 30, 2021. The increase reflects the cumulative effect of all the above-described line items from our consolidated interim statements of profit or loss.
Liquidity and Capital Resources
Our working capital requirements generally reflect the growth in our business and have historically been provided by cash raised from our investors, payments from our
collaborators and government grants. As of June 30, 2022, we had cash and cash equivalents and marketable securities of $35.3 million and working capital of $32.2 million, which is calculated by subtracting our current liabilities from our current
assets. As of June 30, 2022 we had $4.4 million of outstanding long-term indebtedness related to government grants.
On January 14, 2021 and February 19, 2021, we entered into Controlled Equity OfferingSM Sales Agreements, or the January Sales Agreement and February Sales
Agreement, respectively, with Cantor Fitzgerald & Co., or the Agent, pursuant to which the Company could offer and sell, from time to time, its ordinary shares, through the Agent in an “at-the-market”, or ATM, offering, as defined in Rule
415(a)(4) promulgated under the Securities Act of 1933, as amended, for an aggregate offering price of up to $28.0 million and $50.0 million, respectively. In February 2021, we completed the sales of ordinary shares under the January Sales
Agreement and issued 3,803,594 ordinary shares, with a weighted average selling price of $7.36 per share, resulting in gross proceeds of approximately $28 million. Subsequently, we entered into the February Sales Agreement. As of June 30, 2022,
we had sold 726,832 ordinary shares under the February Sales Agreement, with a weighted average selling price of $3.64 per share, resulting in gross proceeds of approximately $2.6 million. We are not obligated to make any sales of ordinary shares
under the February Sales Agreement and no assurance can be given that we will sell any additional ordinary shares under such agreement, or, if we do, as to the price or number of such shares that we will sell or the dates on which any such sales
will take place.
On February 19, 2021, we filed a shelf registration statement on Form F-3 with the SEC under which we may offer and sell from time to time in one or more offerings, our
ordinary shares, rights, warrants and units having an aggregate offering price of up to $200 million. This amount included up to $50 million in connection with the February Sales Agreement. We may seek additional capital or strategic
considerations, even if we believe we have sufficient funds for our current or future operating plans.
On August 16, 2022, as noted above, we announced the entrance into a multi-year, strategic, collaboration agreement between ICL and Lavie Bio Ltd. As part of the
collaboration, ICL will make a $10 million investment in Lavie Bio Ltd. under a SAFE (simple agreement for future equity). The collaboration will focus on developing novel bio-stimulant products to enrich fertilizer efficiency.
- 3 -
We expect that our sources of liquidity for the remainder of 2022 will include proceeds raised from the public offering of our ordinary shares under the February Sales
Agreement and the exercise of options, proceeds from collaboration agreements, revenues from the selling of medical cannabis products, revenues from selling the Thrivus product, cash held in our bank accounts and marketable securities, proceeds
from grants and financing transactions.
In the future, we may use cash to effecting M&A transactions in order to achieve inorganic growth in our different segments of operation. We believe that our existing cash
as of June 30, 2022 will be sufficient to meet our projected cash requirements for at least 12 months. Nevertheless, in order to accelerate our subsidiaries growth and to strengthen their position as independent companies, we may engage in
discussions of potential fundraisings at the subsidiary level. For example, on August 16, 2022, we announced that ICL invested $10 million in Lavie Bio Ltd. as part of a strategic collaboration.
Although we have sufficient cash, cash equivalents and marketable securities that we believe will enable us to fund our operations during the next 12-month period at our
current level of annual expenditures, our ability to fund our capital needs depends on our ongoing ability to generate cash from existing and future collaborations, our revenues, and from our ability to raise additional funds. To the extent that
existing cash, cash equivalents and marketable securities are insufficient to fund our future activities, we may need to raise additional funding through debt and equity financing. Additional funds may not be available when we need them on terms
that are acceptable to us, or at all.
If adequate funds are not available to us on a timely basis, we may be required to delay, limit, scale back or cease our research and development activities, establishment and
maintenance of sales and marketing capabilities or other activities that may be necessary to commercialize our product candidates.
Cash Flows
The following table presents the major components of net cash flows used in or provided by (as applicable) operating, investing and financing activities for the periods
presented. For a discussion of our net cash flows for the year ended December 31, 2021, please see “Item 5. Operating and Financial Review and Prospects— B. Liquidity and Capital Resources— Cash Flows” in our Annual Report:
|
Six Months Ended June 30,
|
||||||||
|
|
2022
|
2021
|
||||||
|
|
(U.S. dollars, in thousands)
|
|||||||
|
Net cash used in operating activities
|
$
|
(14,365
|
)
|
$
|
(10,824
|
)
|
||
|
Net cash provided (used in) by investing activities
|
13,743
|
(20,991
|
)
|
|||||
|
Net cash provided by (used in) financing activities
|
(469
|
)
|
28,426
|
|||||
|
Exchange rate differences - cash and cash equivalents
|
(2,367
|
)
|
(85
|
)
|
||||
|
Decrease in cash and cash equivalents
|
$
|
(3,458
|
)
|
$
|
(3,474
|
)
|
||
Cash Used in Operating Activities
Cash used in operating activities for the six-month period ended June 30, 2022 was $14.4 million and primarily reflects our overall loss of $18.9 million. The cash used in
operating activities was reduced mainly by the elimination of certain non-cash items that were taken into account in calculating, and that increased, our overall loss, including $3.1 million of net financing expenses, $0.7 million of depreciation
expenses, $0.8 million of share-based compensation expenses and $0.6 million amortization of intangible assets.
Cash used in operating activities for the six-month period ended June 30, 2021 was $10.8 million and primarily reflects our overall loss of $14.0 million. The cash used in
operating activities was reduced mainly by the elimination of certain non-cash items that were taken into account in calculating, and that increased, our overall loss, including $0.7 million of depreciation expenses, $1.1 million of share-based
compensation expenses and $0.5 million amortization of intangible assets, and by the movement in balance sheet items, that were taken into account in the calculations, including a decrease in other receivables and prepaid expenses of $1.0
million.
- 4 -
Cash Used in Investing Activities
Cash provided in investing activities was $13.7 million for the six-month period ended June 30, 2022. That primarily reflects $11.5 million of net cash provided by the proceeds
from sale of marketable securities and $3.0 million of cash provided from withdrawal from bank deposits, partially offset by $0.7 million of cash used for the purchase of property, plant and equipment.
Cash used in investing activities was $21.0 million for the six-month period ended June 30, 2021. That primarily reflects $20.6 million of net cash used for the purchase of
marketable securities and $0.4 million of cash used for the purchase of property, plant and equipment.
Cash Provided by Financing Activities
Cash used in financing activities was $0.5 million for the six-month period ended June 30, 2022, which was primarily attributable to $0.5 million repayment of operating lease
liability.
Cash provided by financing activities was $28.4 million for the six-month period ended June 30, 2021, which was primarily attributable to $27.9 million from the issuance of
ordinary shares raised under the January Sales Agreement and the February Sales Agreement, net of issuance expenses, $0.5 million of proceeds from the exercise of options and $0.4 million from the proceeds of government grants, net, partially
offset by $0.3 million for the repayment of operating lease liability.
Government Grants
During the six months ended June 30, 2022 we received governmental grants in the amount of $0.03 million
and repaid $0.01 million in respect of refundable projects. For a discussion of our existing government grants related to our research and development efforts, please see “Item 5. Operating and Financial Review and Prospects— B. Liquidity
and Capital Resources— Government Grants” in our Annual Report.
Trend Information
D&O insurance
In recent years we experienced an increase in the cost we incur for procuring D&O liability insurance, resulting from a general increase in the cost of D&O liability
insurance for smaller, dual-listed public companies such as us. This general increase has been tied to perceived heightened levels of risk for D&O insurers. Insurers have been increasing their level of compensation, in the form of premiums,
which they believe have not been commensurate with the risk being taken by them. In parallel, there has been an increase in the amounts of the deductibles payable by public companies in situations in which an insurable event occurs. If this trend
continues, it will increase our operational expenses and have a negative effect on our financial results.
Exchange rate
A significant portion of our expenses is denominated in currencies other than the U.S. dollar. The Company is therefore subject to non-U.S. currency risks and non-U.S. exchange
exposure, especially the NIS. Exchange rates can be volatile and a substantial change of foreign currencies against the U.S. dollar could increase or reduce the Company’s expenses and net loss and impact the comparability of results from period to
period. The appreciation of the U.S. dollar against the NIS was 12.5% and 1.4% in the six-month periods ended June 30, 2022 and 2021, respectively. For example, for the six-month period ended June 30, 2022, assuming a 10% devaluation of the U.S.
dollar against the NIS, we would have experienced a decrease in our net loss of approximately $1.0 million, while assuming a 10% appreciation of the U.S. dollar against the NIS, we would experience an increase in our net loss of approximately $1.0
million.
Other than as described immediately above or disclosed elsewhere in our Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events during our
current fiscal year that are reasonably likely to have a material effect on our net revenue, income, profitability, liquidity or capital resources, or that would cause the financial information included in our Annual Report to be not necessarily
indicative of our future operating results or financial condition.
Critical Accounting Policies
The preparation of financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, obligations, income and expenses during the
reporting periods. A comprehensive discussion of our critical accounting policies is included in “Item 5. Operating and Financial Review and Prospects” section in our Annual Report.
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