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
Under the Securities Exchange Act of 1934
For
the Month of July 2015
001-13248
(Commission File Number)
SCIVAC
THERAPEUTICS INC.
(Exact
name of Registrant as specified in its charter)
Gad
Feinstein Rd.
POB
580
Rehovot,
Israel 7610303
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under cover
Form 20-F or Form 40-F.
Form
20-F [X] 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): ____
On
July 9, 2015, SciVac Therapeutics Inc., formerly Levon Resources Ltd. (the “Company”), announced
the completion of its reverse takeover transaction (the “Transaction”), pursuant to which the
Company acquired all of the issued and outstanding securities of SciVac Ltd., an Israeli corporation (“SciVac”),
in exchange for 517,514,016 common shares of the Company (the “Common Shares”), resulting in
the former SciVac securityholders holding 68.4% of the issued and outstanding Common Shares and the Company’s shareholders
immediately prior to consummation of the Transaction controlling the remaining 31.6%. The Company’s shareholders
immediately prior to the effective time of the Transaction received, in exchange for each common share of the Company then held,
one Common Share, and 0.5 of a common share of Levon Resources Ltd., formerly 1027949 B.C. Ltd. (“Spinco”).
The Transaction was conducted by way of a plan of arrangement under Section 288 of the Business Corporations Act (British Columbia),
which was approved by the Supreme Court of British Columbia (the “Court”) on June 4, 2015. The
Transaction became effective at 12:01 a.m. on July 9, 2015. On completion of the Transaction, the Company changed its name from
Levon Resources Ltd. to SciVac Therapeutics Inc. and reconstituted its board of directors and senior management team. Following
the completion of the Transaction, the Company will operate the business of SciVac, and Spinco will operate the Company’s
former business. Additional details of the Transaction are contained in the Notice of Change In Corporate Structure, which
is furnished as Exhibit 99.1 to this Report on Form 6-K and is incorporated herein by reference.
Additionally,
our Common Shares, which had been quoted on the OTCQX under the symbol “LVNVF”, are now quoted on the OTCQX under
the symbol “SVACF”.
SciVac’s
unaudited interim consolidated financial statements for the three-month period ended March 31, 2015 are furnished as Exhibit 99.2
to this Report on Form 6-K and are incorporated herein by reference.
Exhibit
Index
| Exhibit
No. |
|
Description |
| |
|
|
| 99.1 |
|
Notice
of Change In Corporate Structure |
| |
|
|
| 99.2 |
|
SciVac
Ltd. Unaudited Consolidated Financial Statements for the Three Months Ended March 31, 2015 |
SIGNATURES
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.
| |
SciVac Therapeutics Inc. |
| |
|
|
| Date:
July 17, 2015 |
By: |
/s/
Dr. Curtis Lockshin |
| |
|
Dr.
Curtis Lockshin |
| |
|
Chief
Executive Officer |
Exhibit
99.1
NOTICE
OF CHANGE IN CORPORATE STRUCTURE
Pursuant
to Section 4.9 of National Instrument 51-102
| Item
1: |
Names
of the Parties to the Transaction |
SciVac
Therapeutics Inc. (the “Company”), formerly Levon Resources Ltd. (“Levon”)
SciVac
Ltd. (“SciVac”)
Levon
Resources Ltd., formerly 1027949 B.C. Ltd. (“Spinco”)
| Item
2: |
Description
of the Transaction |
On
July 9, 2015, the Company announced the completion of its reverse takeover transaction (the “Transaction”),
pursuant to which the Company acquired all of the issued and outstanding securities of SciVac in exchange for 517,514,016 common
shares (the “Common Shares”) of the Company, resulting in the former SciVac securityholders holding 68.4% of
the issued and outstanding Common Shares and the Levon shareholders immediately prior to the effective time of the arrangement
controlling the remaining 31.6%. Levon shareholders immediately prior to the effective time of the arrangement received, in exchange
for each common share of Levon held, one Common Share, and 0.5 of a common share of Spinco. The Transaction was conducted by way
of a plan of arrangement under Section 288 of the Business Corporations Act (British Columbia), which was approved by the
Supreme Court of British Columbia on June 4, 2015. The Transaction became effective at 12:01 a.m. on July 9, 2015. On completion
of the Transaction, the Company changed its name from Levon Resources Ltd. to SciVac Therapeutics Inc. and reconstituted its board
of directors and senior management team. Following the completion of the Transaction, the Company will operate the business of
SciVac, and Spinco will operate the business of Levon.
| Item
3: |
Effective
Date of the Transaction |
July
9, 2015.
| Item
4: |
Names
of Each Party that ceased to be a Reporting Issuer Subsequent to the Transaction and Each Continuing Entity |
The
Company and Spinco will be reporting issuers in all of the provinces of Canada, except for Quebec, following the completion of
the Transaction. SciVac is not a reporting issuer.
| Item
5: |
Date
of the Reporting Issuer’s First Financial Year-End Subsequent to the Transaction |
December
31, 2015.
| Item
6: |
Periods
of the Interim and Annual Financial Statements Required to be filed for the Reporting Issuer’s first financial year
following the Transaction |
| |
(a) |
Unaudited
interim financial statements of SciVac for the three months ended March 31, 2015, with comparative figures for the three months
ended March 31, 2014; |
| |
|
|
| |
(b) |
Unaudited interim
financial statements of SciVac for the three and six months ended June 30, 2015, with comparative figures for the three and
six months ended June 30, 2014; |
| |
|
|
| |
(c) |
Unaudited consolidated
interim financial statements of Levon for the three months ended June 30, 2015, with comparative figures for the three months
ended June 30, 2014; |
| |
|
|
| |
(d) |
Unaudited consolidated
interim financial statements of the Company for the three and nine months ended September 30, 2015, with comparative figures
for the three and nine months ended September 30, 2014; and |
| |
|
|
| |
(e) |
Audited consolidated
financial statements of the Company for the financial year ended December 31, 2015, with comparative figures for the year
ended December 31, 2014. |
| Item
7: |
Documents
filed under NI 51-102 that describe the Transactions |
The
following additional information relating to the Transaction has been filed on SEDAR:
| a. |
Arrangement
Agreement between SciVac, Levon and Spinco dated March 19, 2015, filed on March 26, 2015; |
| |
|
| b. |
Press
release of Levon dated March 20, 2015 announcing the signing of the Arrangement Agreement, filed on March 20, 2015; |
| |
|
| c. |
Material
Change Report dated March 26, 2015 announcing the signing of the Arrangement Agreement, filed on March 26, 2015; |
| |
|
| d. |
Notice
of Meeting to the shareholders of Levon dated April 9, 2015, as amended on April 29, 2015, filed on April 9, 2015 and April
29, 2015, respectively; |
| |
|
| e. |
Press
release of Levon dated April 29, 2015 related to the meeting of the shareholders of Levon, filed on April 29, 2015; |
| |
|
| f. |
Levon
management information circular dated May 1, 2015, filed on May 8, 2015; |
| |
|
| g. |
Press
release of Levon related to an additional independent director of the Company appointed on completion of the Transaction dated
May 26, 2015, filed on May 26, 2015; |
| |
|
| h. |
Press
release of Levon providing an update with respect to the closing of the Transaction dated May 29, 2015, filed on May 29, 2015; |
| |
|
| i. |
Press
release of Levon announcing approval by shareholders of Levon of the Transaction dated June 3, 2015, filed on June 3, 2015;
|
| |
|
| j. |
Press
release of Levon announcing the final order granted by the Supreme Court of British Columbia dated June 4, 2015, filed on
June 4, 2015; |
| |
|
| k. |
Press
release of Levon announcing the Toronto Stock Exchange’s conditional approval for the listing of the Common Shares dated
July 2, 2015, filed on July 2, 2015; |
| |
|
| l. |
Press
release of Levon providing an update with respect to the Transaction dated July 7, 2015, filed on July 7, 2015; and |
| |
|
| m. |
Press
release of the Company announcing the completion of the Transaction dated July 9, 2015, filed on July 9, 2015. |
DATED
July 17, 2015.
Exhibit
99.2
Interim
Consolidated Financial Statements
(unaudited)
SciVac
Ltd.
March
31, 2015
SciVac
Ltd.
Interim
Consolidated Financial Statements
(unaudited)
March
31, 2015
INDEX
| |
Page |
| |
|
| Interim
Consolidated Statements of Financial Position |
3 |
| |
|
| Interim
Consolidated Statements of Loss and Comprehensive Loss |
4 |
| |
|
| Interim
Consolidated Statements of Changes in Equity |
5 |
| |
|
| Interim
Consolidated Statements of Cash Flows |
6 |
| |
|
| Notes
to Interim Consolidated Financial Statements |
7-13 |
-
- - - - - - - - -
SciVac
Ltd.
Interim
consolidated statements of loss and comprehensive loss (unaudited)
U.S.
dollars in thousands
| | |
Notes | | |
As
of
March 31, 2015 | | |
As of
December 31, 2014 | |
| | |
| | |
| | |
| |
| CURRENT ASSETS: | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | |
| Cash
and cash equivalents | |
| | | |
$ | 303 | | |
$ | 393 | |
| Trade
accounts receivable | |
| | | |
| 168 | | |
| 322 | |
| Inventory | |
| 3 | | |
| 1,763 | | |
| 1,831 | |
| Other
current assets | |
| | | |
| 525 | | |
| 480 | |
| | |
| | | |
| | | |
| | |
| Total
current assets | |
| | | |
| 2,759 | | |
| 3,026 | |
| | |
| | | |
| | | |
| | |
| NON-CURRENT ASSETS: | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | |
| Long-term
deposits | |
| | | |
| 96 | | |
| 96 | |
| Property
and equipment | |
| 4 | | |
| 1,700 | | |
| 1,725 | |
| Intangible
assets | |
| 5 | | |
| 424 | | |
| 454 | |
| | |
| | | |
| | | |
| | |
| TOTAL
ASSETS | |
| | | |
$ | 4,979 | | |
$ | 5,301 | |
| | |
| | | |
| | | |
| | |
| LIABILITIES
AND EQUITY | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | |
| CURRENT
LIABILITIES | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | |
| Trade accounts payable | |
| | | |
$ | 441 | | |
$ | 445 | |
| Deferred revenues | |
| 7 | | |
| 1,708 | | |
| 1,704 | |
| Other current liabilities | |
| 6 | | |
| 1,065 | | |
| 930 | |
| | |
| | | |
| | | |
| | |
| Total
current liabilities | |
| | | |
| 3,214 | | |
| 3,079 | |
| | |
| | | |
| | | |
| | |
| NON-CURRENT
LIABILITIES | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | |
| Liabilities
for severance pay, net | |
| | | |
| 32 | | |
| 30 | |
| Related
parties | |
| 7 | | |
| 10,814 | | |
| 9,779 | |
| Deferred
revenues | |
| 7 | | |
| 1,678 | | |
| 1,826 | |
| | |
| | | |
| | | |
| | |
| TOTAL
LIABILITIES | |
| | | |
| 15,738 | | |
| 14,714 | |
| | |
| | | |
| | | |
| | |
| EQUITY | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | |
| Share capital | |
| 8 | | |
| - | | |
| - | |
| Additional
paid-in capital | |
| | | |
| 47,303 | | |
| 47,115 | |
| OCI
reserves | |
| | | |
| (646 | ) | |
| (948 | ) |
| Accumulated
deficit | |
| | | |
| (57,416 | ) | |
| (55,580 | ) |
| | |
| | | |
| | | |
| | |
| Total
equity | |
| | | |
| (10,759 | ) | |
| (9,413 | ) |
| | |
| | | |
| | | |
| | |
| TOTAL
LIABILITIES AND EQUITY | |
| | | |
$ | 4,979 | | |
$ | 5,301 | |
See
accompanying notes
These interim
consolidated financial statements were approved on July 17, 2015 by:
| “Dr.
Curtis Lockshin” (signed) |
|
“James
J. Martin” (signed) |
| Dr. Curtis Lockshin,
CEO and Director |
|
James J. Martin,
CFO |
The accompanying notes are an
integral part of these consolidated interim financial statements.
SciVac
Ltd.
Interim
consolidated statements of loss and comprehensive loss (unaudited)
U.S.
dollars in thousands, except share and per share information
| | |
Three months ended March 31, | |
| | |
2015 | | |
2014 | |
| | |
| | |
| |
| Revenues | |
$ | 423 | | |
$ | 903 | |
| Cost of revenues | |
| 750 | | |
| 1016 | |
| Gross profit (loss) | |
| (327 | ) | |
| (113 | ) |
| | |
| | | |
| | |
| General, administrative and selling | |
| 738 | | |
| 691 | |
| Research and development | |
| 115 | | |
| 123 | |
| Other income | |
| - | | |
| - | |
| Operating loss | |
| (1,180 | ) | |
| (927 | ) |
| | |
| | | |
| | |
| Financial expenses | |
| 718 | | |
| 186 | |
| | |
| | | |
| | |
| Loss before tax | |
| (1,898 | ) | |
| (1,113 | ) |
| | |
| | | |
| | |
| Income tax benefit | |
| 62 | | |
| 67 | |
| Net loss for the period | |
$ | (1,836 | ) | |
$ | (1,046 | ) |
| | |
| | | |
| | |
| OTHER COMPREHENSIVE INCOME | |
| | | |
| | |
| | |
| | | |
| | |
| Items that will not be reclassified subsequently to profit or loss: | |
| | | |
| | |
| | |
| | | |
| | |
| Exchange differences resulting from translating the financial statements to the presentation currency | |
| 302 | | |
| 21 | |
| | |
| | | |
| | |
| Total other comprehensive income for the period | |
| 302 | | |
| 21 | |
| | |
| | | |
| | |
| TOTAL COMPREHENSIVE LOSS FOR THE PERIOD | |
$ | (1,534 | ) | |
$ | (1,025 | ) |
| | |
| | | |
| | |
| Basic and diluted net loss per share
| |
$ | (1,478 | ) | |
$ | (941 | ) |
| | |
| | | |
| | |
| Weighted average number of shares outstanding | |
| 1,242 | | |
| 1,112 | |
See
accompanying notes
The
accompanying notes are an integral part of these consolidated interim financial statements.
SciVac
Ltd
Interim
consolidated statements of changes in equity (unaudited)
U.S. dollars
in thousands, except share information
| | |
Number of common shares | | |
Share capital | | |
Additional paid- in capital | | |
OCI reserves | | |
Accumulated deficit | | |
Total Equity | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| BALANCE AS OF DECEMBER 31, 2014 | |
| 1,242 | | |
$ | *) | | |
| 47,115 | $ | |
$ | (948 | ) | |
$ | (55,580 | ) | |
$ | (9,413 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Capital contribution in respect of related party loans, net of taxes | |
| | | |
| | | |
| 188 | | |
| | | |
| | | |
| 188 | |
| Loss for the period | |
| | | |
| | | |
| | | |
| | | |
| (1,836 | ) | |
| (1,836 | ) |
| Other comprehensive loss for the period | |
| | | |
| | | |
| | | |
| 302 | | |
| | | |
| 302 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| BALANCE AS OF MARCH 31, 2015 | |
| 1,242 | | |
| *) | | |
| 47,303 | | |
| (646 | ) | |
| (57,416 | ) | |
| (10,759 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| BALANCE AS OF DECEMBER 31, 2013 | |
| 1,112 | | |
| *) | | |
| 21,256 | | |
| (1,969 | ) | |
| (49,908 | ) | |
| (30,621 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Conversion of capital notes to equity | |
| | | |
| *) | | |
| 23,972 | | |
| | | |
| | | |
| 23,972 | |
| Capital contribution in respect of related party loans, net of taxes | |
| | | |
| | | |
| 202 | | |
| | | |
| | | |
| 202 | |
| Loss for the period | |
| | | |
| | | |
| | | |
| | | |
| (1,046 | ) | |
| (1,046 | ) |
| Other comprehensive income for the period | |
| | | |
| | | |
| | | |
| 21 | | |
| | | |
| 21 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| BALANCE AS OF MARCH 31, 2014 | |
| 1,112 | | |
$ | *) | | |
$ | 45,430 | | |
$ | (1,948 | ) | |
$ | (50,954 | ) | |
$ | (7,472 | ) |
*)
represents amount lower than $1
See
accompanying notes
The
accompanying notes are an integral part of these consolidated interim financial statements.
SciVac
Ltd.
Interim consolidated statements of cash flows
(unaudited)
U.S.
dollars in thousands
| | |
Three Months ended March 31, | |
| | |
2015 | | |
2014 | |
| | |
| | |
| |
| CASH FLOWS FROM OPERATING ACTIVITIES | |
| | | |
| | |
| | |
| | | |
| | |
| Net loss for the period | |
$ | (1,836 | ) | |
$ | (1,046 | ) |
| | |
| | | |
| | |
| Income and expenses items not involving cash flows | |
| | | |
| | |
| Depreciation and amortization | |
| 113 | | |
| 92 | |
| Deemed interest on related party loans | |
| 222 | | |
| 96 | |
| Increase (decrease) in accrued severance pay, net | |
| 3 | | |
| (1 | ) |
| | |
| 339 | | |
| 187 | |
| | |
| | | |
| | |
| Change in non-cash working capital, net (Note 8) | |
| 546 | | |
| 88 | |
| | |
| | | |
| | |
| Net cash used in operating activities | |
| (951 | ) | |
| (771 | ) |
| | |
| | | |
| | |
| CASH FLOWS FROM INVESTING ACTIVITIES | |
| | | |
| | |
| | |
| | | |
| | |
| Purchase of property and equipment | |
| (110 | ) | |
| (164 | ) |
| Increase in restricted deposits and short-term deposits, net | |
| 23 | | |
| - | |
| | |
| | | |
| | |
| Net cash used
in by investing activities | |
| (87 | ) | |
| (164 | ) |
| | |
| | | |
| | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |
| | | |
| | |
| | |
| | | |
| | |
| Line of credit | |
| - | | |
| (34 | ) |
| Loan from related parties | |
| 950 | | |
| 1,085 | |
| | |
| | | |
| | |
| Net cash provided
by financing activities | |
| 950 | | |
| 1051 | |
| | |
| | | |
| | |
| Increase (decrease) in cash and cash
equivalents | |
| (88 | ) | |
| 116 | |
| | |
| | | |
| | |
| Cash and cash equivalents at the beginning of the period | |
$ | 393 | | |
$ | 2 | |
| | |
| | | |
| | |
| Change in cash accounts held in foreign currency | |
$ | (2 | ) | |
$ | 5 | |
| | |
| | | |
| | |
| Cash and cash equivalents at the end of the period | |
$ | 303 | | |
$ | 123 | |
See
accompanying notes
Cash flow
information – Note 9
The accompanying
notes are an integral part of these consolidated interim financial statements.
SciVac
Ltd.
Notes to
interim consolidated financial statements (unaudited)
March 31,
2015 with 2014 comparatives
U.S.
dollars in thousands
Note
1 – Nature of operations and going concern
| a) |
SciVac
Ltd. (“SciVac” or “the Company”) was incorporated in Israel and commenced operations on April 18,
2005. The Company is a biopharmaceutical company that develops, manufactures and markets recombinant human health care biotechnology
derived products. The Company’s current product is a 3rd generation Hepatitis B vaccine from thawing of working cell
bank. |
Until
February 14, 2012, the Company was a wholly-owned subsidiary of Scigen Ltd. (a Singapore entity) (“SciGen Singapore”).
On February 14, 2012, SciGen Singapore sold its shares in SciVac to a new shareholder, FDS Pharma LLP (“FDS”) and
FDS also acquired the Company’s debt owed to SciGen Singapore and certain technology for a total consideration of $2,000.
Pursuant
to the Share and Debt Purchase agreement (“SDPA”), on October 16, 2012, FDS sold 45% of the Company, to Opko Holdings
Israel Ltd. (“OPKO Israel”). On January 1, 2014, OPKO Israel transferred its holdings in SciVac (556 common shares)
to OPKO Health Inc. (“OPKO Health”).
On
November 5, 2014, SciVac’s board of directors authorized the formation of a wholly owned subsidiary in the United States
(“SciVac US”). The Articles of formation of SciVac USA LLC were filed on November 26, 2014.
The
Company’s registered and principal office is located at POB 580, Rehovot, Israel.
| b) |
On
November 11, 2014, the Company entered into a term sheet with Levon Resources Ltd. (“Levon”), a Company incorporated
in Canada. |
Further
to the Levon Term Sheet on March 20, 2015, the Company entered into an Arrangement Agreement (“Arrangement Agreement”)
with Levon and 1027949 B.C. Ltd. (“Spinco”), whereby upon closing (i) Levon will transfer and assign the assets and
liabilities listed in the Arrangement Agreement (except for cash of CAD$ 27 million) to Spinco; (ii) Levon’s current shareholders
will hold shares of Spinco as well as an aggregate number of shares of Levon equal to 31.6% on an issued and outstanding basis;
(iii) the Company’s current shareholders will transfer their holdings in the Company to Levon and the Company will become
a wholly owned subsidiary of Levon; and (iv) the Company’s current shareholders will be issued such number of shares of
Levon representing 68.4% of Levon on an issued and outstanding basis.
The
Arrangement Agreement was approved by the Board as well as the shareholders of the Company on March 19, 2015. and completed on
July 9, 2015 (Note 10). Concurrently, Levon changed its name to SciVac Therapeutics Inc.
| c) |
The
Company has a limited operating history and faces a number of risks, among them: uncertainties regarding demand and market
acceptance of the Company’s products, reliance on major customers, the effects of technological changes, competition,
and the nature of the Company’s distribution channels. |
The
Company anticipates that it will continue to incur significant operating costs and losses in connection with the development of
its products and with increased business development efforts.
The
Company has an accumulated deficit of $ 57,416 as of March 31, 2015 and negative cash flows from operating activities of $ 951
for the three months ended March 31, 2015. The Company does not have sufficient resources to carry out its principal activities
without financial support from its shareholders and it is dependent upon future and continuous financing from its shareholders.
These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability
to continue as a going concern.
The
financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts
or the amounts and classification of liabilities that might result from the outcome of this uncertainty.
SciVac
Ltd.
Notes to
interim consolidated financial statements (unaudited)
March 31,
2015 with 2014 comparatives
U.S. dollars
in thousands
Note
2 – Significant accounting policies
These
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 in compliance with International Accounting
Standard (“IAS”) 34 Interim Financial Reporting. The notes presented in these interim consolidated financial
statements include only significant events and transactions occurring since our last fiscal year end and are not fully inclusive
of all matters required to be disclosed in our annual audited consolidated financial statements. Accordingly, these interim consolidated
financial statements should be read in conjunction with our most recent annual audited consolidated financial statements, for
the year ended December 31, 2014.
We
have consistently applied the same accounting policies for all periods presented in these interim consolidated financial statements
as those used in our audited consolidated financial statements for the year ended December 31, 2014.
These
interim consolidated financial statements have been prepared under the historical cost convention, except for certain financial
assets and liabilities that are measured at fair value. The currency of the primary economic environment in which the Company’s
operations are conducted is the Israeli New Shekel (“NIS”) which is determined to be its functional currency. The
Company’s results and financial position are translated into its presentation currency, the U.S. dollar.
| c) | New
standards, interpretations and amendments |
New
and revised IFRSs in issue but not yet effective
| ● |
IFRS
9 Financial Instruments |
In July
2014, the IASB issued the final and complete version of IFRS 9, Financial Instruments, which replaces IAS 39, Financial
Instruments: Recognition and Measurement. IFRS 9 mainly focuses on the classification and measurement of financial assets
and it applies to all assets in the scope of IAS 39.
IFRS 9 is
to be applied for annual periods beginning on January 1, 2018. Early adoption is permitted.
The
Company believes that the amendments to IFRS 9 are not expected to have a material impact on its consolidated financial statements.
| ● |
IFRS
15 Revenue from Contracts with Customers |
In May 2014,
IFRS 15 was issued which establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts
with customers. IFRS 15 will supersede the current revenue recognition guidance including IAS 18 Revenue, IAS 11 Construction
Contracts and the related Interpretations when it becomes effective.
The core
principle of IFRS 15 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers
in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
Specifically, the Standard introduces a 5-step approach to revenue recognition:
| ● |
Step
1: Identify the contract(s) with a customer |
| |
|
| ● |
Step
2: Identify the performance obligations in the contract |
| |
|
| ● |
Step
3: Determine the transaction price |
| |
|
| ● |
Step
4: Allocate the transaction price to the performance obligations in the contract |
| |
|
| ● |
Step
5: Recognize revenue when (or as) the entity satisfies a performance obligation |
SciVac
Ltd.
Notes to
interim consolidated financial statements (unaudited)
March 31,
2015 with 2014 comparatives
U.S. dollars
in thousands
Under IFRS
15, an entity recognizes revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the goods
or services underlying the particular performance obligation is transferred to the customer. Far more prescriptive guidance has
been added in IFRS 15 to deal with specific scenarios. Furthermore, extensive disclosures are required by IFRS 15.
The
Company has yet to determine if the implementation of IFRS15 will result in a significant impact on its financial statements.
Note
3 – Inventory
| | |
As of
March 31, 2015 | | |
As of
December 31, 2014 | |
| | |
| | |
| |
| Finished goods | |
| 108 | | |
| 62 | |
| Work-in-process | |
| 596 | | |
| 632 | |
| Raw materials | |
| 1,059 | | |
| 1,137 | |
| | |
| 1,763 | | |
| 1,831 | |
Note
4 – Property and equipment
| | |
Furniture
and office
equipment | | |
Machinery
and equipment | | |
Computer
equipment | | |
Leasehold
improvements | | |
Total | |
| As of March 31, 2015 | |
| | | |
| | | |
| | | |
| | | |
| | |
| Cost: | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance as of 1/1/15 | |
| 41 | | |
| 752 | | |
| 70 | | |
| 1,751 | | |
| 2,614 | |
| Additions | |
| | | |
| 108 | | |
| 5 | | |
| 1 | | |
| 114 | |
| Balance as of 31/3/15 | |
| 41 | | |
| 860 | | |
| 75 | | |
| 1752 | | |
| 2,728 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Accumulated depreciation: | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance as of 1/1/15 | |
| (7 | ) | |
| (148 | ) | |
| (30 | ) | |
| (585 | ) | |
| (770 | ) |
| Depreciation current period | |
| (1 | ) | |
| (27 | ) | |
| (6 | ) | |
| (67 | ) | |
| (101 | ) |
| Balance as of 31/3/15 | |
| (8 | ) | |
| (175 | ) | |
| (36 | ) | |
| (652 | ) | |
| (871 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net balance as of 31/3/15 | |
| 33 | | |
| 685 | | |
| 39 | | |
| 1,100 | | |
| 1,857 | |
| Currency translation adjustments | |
| | | |
| | | |
| | | |
| | | |
| (157 | ) |
| Net balance after translation adjustments | |
| | | |
| | | |
| | | |
| | | |
| 1,700 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| As of December 31, 2014 | |
| | | |
| | | |
| | | |
| | | |
| | |
| Cost: | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance as of 1/1/14 | |
| 33 | | |
| 229 | | |
| 39 | | |
| 1,395 | | |
| 1,696 | |
| Additions | |
| 8 | | |
| 523 | | |
| 31 | | |
| 356 | | |
| 918 | |
| Balance as of 31/12/14 | |
| 41 | | |
| 752 | | |
| 70 | | |
| 1,751 | | |
| 2,614 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Accumulated depreciation: | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance as of 1/1/14 | |
| (4 | ) | |
| (87 | ) | |
| (12 | ) | |
| (337 | ) | |
| (440 | ) |
| Depreciation for the year | |
| (3 | ) | |
| (61 | ) | |
| (18 | ) | |
| (248 | ) | |
| (330 | ) |
| Balance as of 31/12/14 | |
| (7 | ) | |
| (148 | ) | |
| (30 | ) | |
| (585 | ) | |
| (770 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net balance as of 31/12/14 | |
| 34 | | |
| 604 | | |
| 40 | | |
| 1,166 | | |
| 1,844 | |
| Currency translation adjustments | |
| | | |
| | | |
| | | |
| | | |
| (119 | ) |
| Net balance after translation adjustments | |
| | | |
| | | |
| | | |
| | | |
| 1,725 | |
SciVac
Ltd.
Notes to
interim consolidated financial statements (unaudited)
March 31,
2015 with 2014 comparatives
U.S.
dollars in thousands
Note
5 – Intangible assets
| | |
As of
March 31, 2015 | | |
As of
December 31, 2014 | |
| | |
| | |
| |
| Cost: | |
| 554 | | |
| 567 | |
| License | |
| 89 | | |
| 91 | |
| Intellectual property | |
| 643 | | |
| 658 | |
| | |
| | | |
| | |
| Less - accumulated amortization | |
| (219 | ) | |
| (204 | ) |
| | |
| | | |
| | |
| Net book value | |
| 424 | | |
| 454 | |
Note
6 – Other current liabilities
| | |
As of
March 31, 2015 | | |
As of
December 31, 2014 | |
| | |
| | |
| |
| Accrued expenses | |
| 855 | | |
| 354 | |
| Employees and payroll accruals | |
| - | | |
| 312 | |
| Government authorities | |
| 210 | | |
| 264 | |
| | |
| 1,065 | | |
| 930 | |
Note
7 – Related parties
a) Transactions with related parties
| | |
Three months ended March 31, | |
| | |
2015 | | |
2014 | |
| Revenue | |
| 312 | | |
| 573 | |
| Financial expenses | |
| 370 | | |
| 96 | |
b) Balances with related parties
| | |
As of
March 31, 2015 | | |
As of
December 31, 2014 | |
| Loans | |
| 10,281 | | |
| 9,265 | |
| Capital Note | |
| 533 | | |
| 514 | |
| Short- term deferred revenue | |
| 1,708 | | |
| 1,704 | |
| Long- term deferred revenue | |
| 1,678 | | |
| 1,826 | |
SciVac
Ltd.
Notes to
interim consolidated financial statements (unaudited)
March 31,
2015 with 2014 comparatives
U.S.
dollars in thousands
c) Related
details
| i. |
In
the three months ended March 31, 2015, the Company received loans from its shareholders and their affiliates in the amount
of approximately $950. These loans either bear no interest or bear interest at the rate of 4.5% per annum. The loans are repayable
within one year from date of receipt but are automatically extended for an additional year unless otherwise agreed between
the parties. The Company calculated the fair value of the deemed interest on these loans in the amount of $700 which was recorded
as deduction of the loan amount (to be expensed over the term of the loan) and a corresponding increase in equity. |
| |
|
| ii. |
Pursuant
to the Share and Debt Purchase Agreement dated June 5, 2012, by and between the Company, FDS, OPKO Israel, Opko Cayman and
OPKO Health (the “SDPA”), on October 16, 2012, OPKO Israel acquired 45% stock ownership in the Company from FDS
and OPKO Inc. acquired half of the debt that the Company owes FDS. On October 16, 2012, the Company also entered into an Assignment
and Assumption Agreement with FDS and SciGen Singapore (the “Assignment and Assumption Agreement”), the Company
acquired the rights to the license from FDS and therefore assumed all of FDS’s obligations vis-à-vis SciGen Singapore
under (a) the License Agreement between SciGen Singapore and Savient Pharmaceuticals Inc. (“Savient”), and (b)
the Assignment Agreement between FDS and SciGen Singapore dated February 14, 2012 (the “Assignment Agreement”).
The License Agreement was assigned by Savient to Ferring International Center S.A. (“Ferring”) on July 18, 2005.
Included among these obligations is the requirement to pay SciGen Singapore the sum of $1,500 in addition to the $150 already
remitted to SciGen Singapore by FDS. The FV of the license as determined by an independent appraiser was $578 and the difference
($1072) between the FV and the amount paid to Sci Gen on behalf of FDS was accounted for as a reduction of equity. |
| |
|
| iii. |
As
part of the SDPA, the Company and SciGen Singapore entered into a Pledge Agreement and a Debenture-Floating Charge, both a
fixed charge and a floating charge were recorded on the Company’s assets until the entire $1,500 has been remitted to
SciGen Singapore. The payment was completed during 2013. |
| |
|
| |
Until
February 14, 2012 the related party loan was linked to the Singapore Dollar. This loan was converted into a capital note and
issued to FDS on June 12, 2012 and upon the closing of the SDPA, the Company cancelled such capital note and replaced it with
capital notes in the amount of $1,207 and NIS 59,979 thousands ($15,419) to each of FDS and OPKO Inc. In addition, the Company
undertook remission of $75 to each of FDS and OPKO Israel, in order to repay the amount already remitted by FDS to Ferring
under the License Agreement. Since the capital notes with the related parties do not include any interest, the Company calculated
the fair value of the deemed interest (approximately $ 13,000 net of income taxes, and reflected it as a discount from the
capital notes (to be expensed over the term of the capital notes) with a corresponding credit to additional paid-in capital. |
| |
|
| |
On
January 1, 2014 (a) OPKO Israel transferred its 556 common shares of SciVac to OPKO Health; (b) OPKO Cayman assigned the capital
notes issued to it to OPKO Health. |
| |
|
| iv. |
On
January 1, 2014 the capital notes held by FDS and OPKO Health in the total amount of $2,414 and NIS 119,958 thousands (carrying
amount of $23,972) were converted into additional paid-in capital. |
| |
|
| v. |
On
November 15, 2012, the Company entered into separate loan agreements with each of FDS and OPKO Inc. (the “Lenders”),
pursuant to which each of the Lenders remitted a loan in the amount of $300 due on November 14, 2013. The loans repayment
date is automatically extended, each time for one additional year. The loans bear interest at a rate of 7% per annum. |
SciVac
Ltd.
Notes to
interim consolidated financial statements (unaudited)
March 31,
2015 with 2014 comparatives
U.S.
dollars in thousands
| vi. |
The
Company entered into two agreements with Open Joint Stock Company (“OJSC Pharmsynthez”), an affiliated entity
of FDS: |
| |
● |
Exclusive
Distribution Agreement between OJSC Pharmsynthez and the Company, dated December 29, 2014. |
| |
|
|
| |
● |
Material
Transfer Agreement between the Company, Pharmsynthez OSO and Ferring, dated April 14, 2014. |
| vii. |
On
June 19, 2014, the Company entered into a Share Purchase and Loan Agreement with HS Contrarian Investments, LLC (“Contrarian”)
and Greenstone Capital, LLC (“Greenstone”), pursuant to which each of Contrarian and Greenstone purchased 56 common
shares of the Company and received a capital note in the amount of $500 each bearing no interest. The repayment date has not
yet been determined but it will not be prior to five years from the date of the capital note of the consideration received
$471 was allocated to capital notes using an effective rate of approximately 15%. The balance of $529 was credited to equity.
Following this agreement, the current shareholders of the Company are OPKO Health, FDS, Contrarian and Greenstone. Each of
OPKO Health and FDS hold approximately 45% of the Company on a fully diluted basis and each of Contrarian and Greenstone hold
approximately 5%. |
Note
8 – Share capital
The
Company is authorized to issue 100,000 common shares with a par value of NIS 1. On June 30, 2015, the shareholders of the Company
approved a 1:100 share split such that following the share split the authorized share capital of the Company consists of NIS 100,000
(One Hundred Thousand New Israeli Shekels) divided into 10,000,000 (Ten Million) common shares with a par value of NIS 0.01.
Note
9 – Cash flow information
Change
in non-cash working capital
| | |
Three Months ended 31 March | |
| | |
2015 | | |
2014 | |
| Increase in trade account receivable | |
| 148 | | |
| 280 | |
| Decrease in inventory | |
| 27 | | |
| 31 | |
| Increase in other current assets | |
| (79 | ) | |
| (251 | ) |
| Decrease (increase) in other long-term assets | |
| (2 | ) | |
| 18 | |
| Increase (decrease) in related parties | |
| 357 | | |
| (457 | ) |
| Increase (decrease) in trade account payable | |
| 2 | | |
| 151 | |
| Increase (decrease) in other current liabilities | |
| (108 | ) | |
| 316 | |
| Increase in deferred revenues | |
| 201 | | |
| - | |
| | |
| 546 | | |
| 88 | |
Non-cash
transactions
Capital
contribution in respect of related party loans (net of income taxes) in the amount of $188 and $202 for the three months ended
March 31, 2015 and 2014, respectively.
SciVac
Ltd.
Notes to
interim consolidated financial statements (unaudited)
March 31,
2015 with 2014 comparatives
U.S.
dollars in thousands
Note
10 – Subsequent events
| a) |
The
Company received loans from or on behalf of OPKO Health on April 30, May 21, 2015 and June 29, 2015, in the amounts of $450,
$425 and $200, respectively. The loans bear interest of 4.5% per annum. The loans are due one year from date of remittance
but are automatically extended, each time for one additional year, unless otherwise agreed in writing by the parties. |
| |
|
| b) |
On
April 20, 2015, the Company entered into a license agreement (the “CLS License Agreement”) with CLS Therapeutics
Limited, a Guernsey company (“CLS”), pursuant to which, CLS has granted to SciVac, effective as of the completion
of the Arrangement (the “Effective Time”), an exclusive, worldwide, perpetual and fully paid-up license (including
the right to sublicense) to all of CLS’ patents, know-how and related improvements with respect to the Deoxyribonuclease
enzyme (“DNASE”), including the exclusive right to research, develop, manufacture, have manufactured, use, sell,
offer for sale, import, export, market and distribute products with respect to DNASE for all indications, including, without
limitation, the prevention and treatment of graft-versus-host disease (“GVHD”) using the DNASE technology (collectively,
the “Licensed Technology”). |
Pursuant
to the CLS License Agreement, SciVac agreed to issue to CLS a number of common shares of SciVac, which, at the Effective Time,
will become immediately exchangeable pursuant to the Arrangement for common shares of Levon which will result in approximately
19.5% of Levon immediately following completion of the Arrangement.
SciVac
may terminate the CLS License Agreement at any time by providing CLS 30 days’ notice. The CLS License Agreement is not otherwise
terminable by either party, other than in the case of an uncured material breach by the other party, the granting of a winding-up
order in respect of the other party or upon certain events of bankruptcy or insolvency. The CLS License Agreement additionally
includes certain customary confidentiality and indemnification provisions.
| c) |
On
June 30, 2015 and On July 8, 2015, FDS entered into two separate share purchase agreements whereby it transferred a total
of 36,472 common shares of the Company (post-split, see Note 8 above). |
| |
|
| d) |
On
July 8, 2015, the Board authorized the issuance of 10,348 common shares to various advisors for services provided to the Company’s
shareholders in connection with the Arrangement Agreement. |
| |
|
| e) |
On
July 9, 2015, the transaction as contemplated under the Arrangement Agreement (Note 1(b)) was consummated. As part of this
transaction, except for the following loans remitted by OPKO Health, all loans plus the accrued interest thereon were assigned
to Levon. The following loans were not assigned: $400, $450, $425 and $200 remitted on March 24, 2015, April 30, 2015, May
21, 2015 and June 29, 2015, respectively. In addition the outstanding capital notes were assigned to Levon. See Note 7(c)(vii). |