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 August 2019

Commission File Number 001-38716



GAMIDA CELL LTD.
(Translation of registrant’s name into English)



5 Nahum Heftsadie Street
Givaat Shaul, Jerusalem 91340 Israel
(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 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):


INCORPORATION BY REFERENCE

Exhibits 99.1 to this Report on Form 6-K shall be deemed to be incorporated by reference into the Registration Statement on Form S-8 (Registration Number 333-228301) of Gamida Cell Ltd. (the Company) and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished.

Exhibit 99.2 to this Report on Form 6-K shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

RISK FACTORS

The risk factors set forth under the caption Risk Factors in the Companys Registration Statement on Form 20-F (Registration Number 001-38716) shall be deemed to be incorporated by reference herein and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished. Additional risks and uncertainties not currently known to the Company, or that the Company currently deems to be immaterial, also may affect its business, financial condition and/or future operating results.


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.

 
GAMIDA CELL LTD.
   
August 7, 2019
By:
/s/ Shai Lankry
   
Shai Lankry
   
Chief Financial Officer


EXHIBIT INDEX

Exhibit
No.
 
Description
   
 
Unaudited Interim Consolidated Statements of Financial Position as of June 30, 2019 and June 30, 2018, and Unaudited Interim Consolidated Statements of Comprehensive Income, Statements of Changes in Shareholders Equity and Statements of Cash Flows for the six months ended June 30, 2019 and June 30, 2018
   
 
Press Release, dated August 6, 2019 Gamida Cell Reports Second Quarter 2019 Financial Results and Provides Company Update
 
     
101
 
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Interim Consolidated Statements of Financial Position, (ii) Interim Consolidated Statements of Comprehensive Income, (iii) Interim Consolidated Statements of Changes in Shareholders’ Equity, (iv) Interim Consolidated Statements of Cash Flows, and (v) the Notes to Interim Consolidated Financial Statements



Exhibit 99.1

GAMIDA CELL LTD. AND ITS SUBSIDIARY

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2019

U.S. DOLLARS IN THOUSANDS

UNAUDITED

INDEX

 
Page
   
Interim Consolidated Statements of Financial Position
2 - 3
   
Interim Consolidated Statements of Comprehensive Loss
4
   
Interim Consolidated Statements of Changes in Equity
5 – 7
   
Interim Consolidated Statements of Cash Flows
8 - 9
   
Notes to Interim Consolidated Financial Statements
10 - 17





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

   
June 30,
   
December 31,
 
   
2019
   
2018
   
2018
 
   
Unaudited
   
Audited
 
ASSETS
                 
                   
CURRENT ASSETS:
                 
Cash and cash equivalents
 
$
37,078
   
$
19,004
   
$
40,272
 
Available-for-sale financial assets
   
4,618
     
9,632
     
20,417
 
Prepaid expenses and other current assets
   
886
     
1,525
     
1,502
 
                         
Total current assets
   
42,582
     
30,161
     
62,191
 
                         
NON-CURRENT ASSETS:
                       
Property and equipment, net
   
3,437
     
1,546
     
2,311
 
Right-of-use assets
   
6,157
     
-
     
-
 
Other assets
   
1,355
     
1,141
     
662
 
                         
Total non-current assets
   
10,949
     
2,687
     
2,973
 
                         
Total assets
 
$
53,531
   
$
32,848
   
$
65,164
 

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

- 2 -

 
GAMIDA CELL LTD. AND ITS SUBSIDIARY
INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
U.S. dollars in thousands (except share and per share data)

   
June 30,
   
December 31,
 
   
2019
   
2018
   
2018
 
   
Unaudited
   
Audited
 
LIABILITIES AND EQUITY
                 
                   
CURRENT LIABILITIES:
                 
Trade payables
 
$
2,121
   
$
1,158
   
$
1,985
 
Employees and payroll accruals
   
2,753
     
-
     
2,888
 
Current maturities of lease liabilities
   
1,945
     
-
     
-
 
Accrued expenses and other payables
   
2,699
     
4,057
     
1,832
 
                         
Total current liabilities
   
9,518
     
5,215
     
6,705
 
                         
NON-CURRENT LIABILITIES:
                       
Liabilities presented at fair value
   
7,654
     
13,700
     
24,049
 
Employee benefit liabilities, net
   
274
     
217
     
183
 
Lease liability
   
4,627
     
-
     
-
 
Liability to Israel Innovation Authority (IIA)
   
10,906
     
9,753
     
9,540
 
                         
Total non-current liabilities
   
23,461
     
23,670
     
33,772
 
                         
SHAREHOLDERS' EQUITY:
                       
Share capital -
                       
Ordinary shares of NIS 0.01 par value - Authorized: 100,000,000, 23,277,000 and 100,000,000 shares at June 30, 2019 and 2018 and December 31, 2018, respectively; Issued and outstanding: 25,606,423, 689,898 and 24,930,736 shares at June 30, 2019 and 2018 and December 31, 2018, respectively
   
69
     
2
     
67
 
Preferred shares of NIS 0.01 par value - Authorized: 0, 16,723,000 and 0 shares at June 30, 2019 and 2018 and December 31, 2018, respectively; Issued and outstanding: 0, 14,154,743 and 0 shares at June 30, 2019 and 2018 and December 31, 2018, respectively
   
-
     
38
     
-
 
Share premium
   
199,402
     
140,934
     
193,953
 
Capital reserve due to actuarial gains
   
(160
)
   
(79
)
   
(77
)
Available-for-sale reserve
   
(1
)
   
(169
)
   
(43
)
Accumulated deficit
   
(178,758
)
   
(136,763
)
   
(169,213
)
                         
Total shareholders' equity
   
20,552
     
3,963
     
24,687
 
                         
Total liabilities and shareholders' equity
 
$
53,531
   
$
32,848
   
$
65,164
 

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

August 5, 2019
 
/s/ Julian Adams
 
/s/ Shai Lankry
Date of approval of the
 
Julian Adams
 
Shai Lankry
financial statements
 
Director and CEO
 
Chief  Financial Officer

- 3 -

 
GAMIDA CELL LTD. AND ITS SUBSIDIARY
INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
U.S. dollars in thousands (except share and per share data)

   
Six months ended
June 30,
   
Three months ended
June 30,
   
Year ended
December 31,
 
   
2019
   
2018
   
2019
   
2018
   
2018
 
   
Unaudited
   
Audited
 
                               
Operating expenses:
                             
Research and development, net
 
$
14,319
   
$
12,037
   
$
7,036
   
$
6,977
   
$
22,045
 
General and administrative
   
7,574
     
4,570
     
3,761
     
2,917
     
11,599
 
                                         
Operating loss
   
21,893
     
16,607
     
10,797
     
9,894
     
33,644
 
                                         
Finance expenses
   
1,604
     
4,204
     
1,336
     
3,230
     
20,259
 
Finance expenses (income)
   
(14,052
)
   
(330
)
   
(18,169
)
   
(34
)
   
(1,042
)
                                         
Loss (income) before taxes on income
   
9,445
     
20,481
     
(6,036
)
   
13,090
     
52,861
 
Taxes on income
   
100
     
-
     
74
     
-
     
70
 
                                         
Net loss (income)
   
9,545
     
20,481
     
(5,962
)
   
13,090
     
52,931
 
                                         
Other comprehensive loss (income):
                                       
                                         
Items that will be reclassified subsequently to profit or loss:
                                       
Actuarial net loss of defined benefit plans
   
83
     
-
     
-
     
-
     
(2
)
Changes in the fair value of available for sale financial assets
   
(42
)
   
135
     
(9
)
   
86
     
9
 
                                         
Total comprehensive loss (income)
 
$
9,586
   
$
20,616
   
$
(5,971
)
 
$
13,176
   
$
52,938
 
                                         
Net loss (income) per share:
                 
                                         
Basic net loss (income) per share
 
$
0.38
   
$
29.69
   
$
(0.23
)
 
$
18.97
   
$
10.53
 
                                         
Diluted net loss (income) per share
 
$
0.87
   
$
29.69
   
$
0.44
   
$
18.97
   
$
10.53
 

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

- 4 -

 
GAMIDA CELL LTD. AND ITS SUBSIDIARY
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
U.S. dollars in thousands (except share and per share data)

   
Ordinary shares
   
Preferred shares
   
Share
   
Available-for-
sale
   
Capital
reserve due
to actuarial
   
Accumulated
   
Total
 
   
Number
   
Amount
   
Number
   
Amount
   
premium
   
reserve
   
losses
   
deficit
   
equity
 
                                                       
Balance as of January 1, 2019 (audited)
   
24,930,736
   
$
67
     
-
   
$
-
   
$
193,953
   
$
(43
)
 
$
(77
)
 
$
(169,213
)
 
$
24,687
 
                                                                         
Net loss
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(9,545
)
   
(9,545
)
Other comprehensive loss
   
-
     
-
     
-
     
-
     
-
     
42
     
(83
)
   
-
     
(41
)
                                                                         
Total comprehensive loss
   
-
     
-
     
-
     
-
     
-
     
42
     
(83
)
   
(9,545
)
   
(9,586
)
Exercise of options
   
466,375
     
1
     
-
     
-
     
116
     
-
     
-
     
-
     
117
 
Exercise of warrants
   
209,312
     
1
     
-
     
-
     
2,923
     
-
     
-
     
-
     
2,924
 
Share-based compensation
   
-
     
-
     
-
     
-
     
2,410
     
-
     
-
     
-
     
2,410
 
                                                                         
Balance as of June 30, 2019 (unaudited)
   
25,606,423
   
$
69
     
-
   
$
-
   
$
199,402
   
$
(1
)
 
$
(160
)
 
$
(178,758
)
 
$
20,552
 

   
Ordinary shares
   
Preferred shares
   
Share
   
Available-for-
sale
   
Capital
reserve due
to actuarial
   
Accumulated
   
Total
 
   
Number
   
Amount
   
Number
   
Amount
   
premium
   
reserve
   
losses
   
deficit
   
equity
 
                                                       
Balance as of January 1, 2018 (audited)
   
689,898
   
$
2
     
14,154,743
   
$
38
   
$
139,311
   
$
(34
)
 
$
(79
)
 
$
(116,282
)
 
$
22,956
 
                                                                         
Net loss
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(20,481
)
   
(20,481
)
Other comprehensive loss
   
-
     
-
     
-
     
-
     
-
     
(135
)
   
-
     
-
     
(135
)
                                                                         
Total comprehensive loss
   
-
     
-
     
-
     
-
     
-
     
(135
)
   
-
     
(20,481
)
   
(20,616
)
Share-based compensation
   
-
     
-
     
-
     
-
     
1,623
     
-
     
-
     
-
     
1,623
 
                                                                         
Balance as of June 30, 2018 (unaudited)
   
689,898
   
$
2
     
14,154,743
   
$
38
   
$
140,934
   
$
(169
)
 
$
(79
)
 
$
(136,763
)
 
$
3,963
 

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

- 5 -

 
GAMIDA CELL LTD. AND ITS SUBSIDIARY
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
U.S. dollars in thousands (except share and per share data)

   
Ordinary shares
   
Preferred shares
   
Share
   
Available-for-
sale
   
Capital
reserve due
to actuarial
   
Accumulated
   
Total
 
   
Number
   
Amount
   
Number
   
Amount
   
premium
   
reserve
   
losses
   
deficit
   
equity
 
                                                       
Balance as of April 1, 2019 (unaudited)
   
25,140,048
   
$
68
     
-
   
$
-
   
$
197,967
   
$
(10
)
 
$
(160
)
 
$
(184,720
)
 
$
13,145
 
                                                                         
Net income
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
5,962
     
5,962
 
Other comprehensive income
   
-
     
-
     
-
     
-
     
-
     
9
     
-
     
-
     
9
 
                                                                         
Total comprehensive income
   
-
     
-
     
-
     
-
     
-
     
9
     
-
     
5,962
     
5,971
 
Exercise of options
   
466,375
     
1
     
-
     
-
     
116
     
-
     
-
     
-
     
117
 
Share-based compensation
   
-
     
-
     
-
     
-
     
1,319
     
-
     
-
     
-
     
1,319
 
                                                                         
Balance as of June 30, 2019 (unaudited)
   
25,606,423
   
$
69
     
-
   
$
-
   
$
199,402
   
$
(1
)
 
$
(160
)
 
$
(178,758
)
 
$
20,552
 

   
Ordinary shares
   
Preferred shares
   
Share
   
Available-for-
sale
   
Capital
reserve due
to actuarial
   
Accumulated
   
Total
 
   
Number
   
Amount
   
Number
   
Amount
   
premium
   
reserve
   
losses
   
deficit
   
equity
 
                                                       
Balance as of April 1, 2018 (unaudited)
   
689,898
   
$
2
     
14,154,743
   
$
38
   
$
140,155
   
$
(83
)
 
$
(79
)
 
$
(123,673
)
 
$
16,360
 
                                                                         
Net loss
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(13,090
)
   
(13,090
)
Other comprehensive loss
   
-
     
-
     
-
     
-
     
-
     
(86
)
   
-
     
-
     
(86
)
                                                                         
Total comprehensive loss
   
-
     
-
     
-
     
-
     
-
     
(86
)
   
-
     
(13,090
)
   
(13,176
)
Share-based compensation
   
-
     
-
     
-
     
-
     
779
     
-
     
-
     
-
     
779
 
                                                                         
Balance as of June 30, 2018 (unaudited)
   
689,898
   
$
2
     
14,154,743
   
$
38
   
$
140,934
   
$
(169
)
 
$
(79
)
 
$
(136,763
)
 
$
3,963
 

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

- 6 -

 
GAMIDA CELL LTD. AND ITS SUBSIDIARY
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
U.S. dollars in thousands (except share and per share data)

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

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

- 7 -

 
GAMIDA CELL LTD. AND ITS SUBSIDIARY
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

   
Six months ended
June 30,
   
Three months ended
June 30,
   
Year ended
December 31,
 
   
2019
   
2018
   
2019
   
2018
   
2018
 
   
Unaudited
   
Audited
 
Cash flows from operating activities:
                             
                               
Net (loss) income
 
$
(9,545
)
 
$
(20,481
)
 
$
5,962
   
$
(13,090
)
 
$
(52,931
)
                                         
Adjustments to reconcile net loss to net cash used in operating activities:
                                       
                                         
Adjustments to the profit or loss items:
                                       
                                         
Depreciation of property, plant and equipment and right-of-use assets
   
1,245
     
97
     
703
     
48
     
269
 
Financial income, net
   
(569
)
   
(375
)
   
(378
)
   
(362
)
   
(858
)
Cost of share-based compensation
   
2,410
     
1,623
     
1,319
     
779
     
3,575
 
Change in employee benefit liabilities, net
   
8
     
17
     
(3
)
   
33
     
(15
)
Amortization of premium on available-for-sale financial assets
   
101
     
(9
)
   
51
     
(90
)
   
272
 
Revaluation of financial derivatives
   
(13,471
)
   
3,400
     
(17,378
)
   
3,000
     
17,600
 
Revaluation of liability to IIA
   
1,199
     
2,600
     
631
     
2,188
     
2,037
 
                                         
     
(9,077
)
   
7,353
     
(15,055
)
   
5,596
     
22,880
 
Changes in asset and liability items:
                                       
                                         
Decrease (Increase) in prepaid expenses and other current assets and other assets
   
117
     
(1,156
)
   
(292
)
   
(1,256
)
   
942
 
Increase (decrease) in trade payables
   
244
     
(1,232
)
   
1,088
     
306
     
(405
)
Increase in accrued expenses and other payables and employee and payroll accrual
   
162
     
1,871
     
141
     
1,611
     
2,296
 
                                         
     
523
     
(517
)
   
937
     
661
     
2,833
 
                                         
Cash received during the period for:
                                       
                                         
Interest received
   
830
     
391
     
309
     
378
     
792
 
Interest paid
   
(51
)
   
-
     
(23
)
   
-
     
-
 
                                         
     
779
     
391
     
286
     
378
     
792
 
                                         
Net cash used in operating activities
   
(17,320
)
   
(13,254
)
   
(7,870
)
   
(6,455
)
   
(26,426
)
                                         
Cash flows from investing activities:
                                       
                                         
Purchase of property and equipment
   
(878
)
   
(703
)
   
(528
)
   
(472
)
   
(1,645
)
Purchase of of available-for-sale financial assets
   
-
     
-
     
-
     
-
     
(10,905
)
Proceed from sale of available-for-sale financial assets
   
-
     
4,984
     
-
     
-
     
4,949
 
Proceed from maturity of available-for-sale financial assets
   
15,740
     
-
     
1,847
     
-
     
-
 
Proceeds from bank deposits
   
-
     
5,000
     
-
     
-
     
5,000
 
Investment in restricted bank deposits
   
-
     
-
     
-
     
-
     
(150
)
                                         
Net cash provided by (used in) investing activities
   
14,862
     
9,281
     
1,319
     
(472
)
   
(2,751
)

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

- 8 -

 
GAMIDA CELL LTD. AND ITS SUBSIDIARY
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

   
Six months ended
June 30,
   
Three months ended
June 30,
   
Year ended
December 31,
 
   
2019
   
2018
   
2019
   
2018
   
2018
 
   
Unaudited
   
Audited
 
Cash flows from financing activities:
                             
                               
Receipt of grants from the IIA
   
167
     
1,653
     
167
     
-
     
612
 
Proceeds from issuance of shares, net
   
(346
)
   
-
     
(108
)
   
-
     
47,479
 
Payment of lease liabilities
   
(764
)
   
-
     
(324
)
   
-
     
-
 
Exercise of options
   
117
     
-
     
117
     
-
     
2
 
                                         
Net cash provided by (used in) financing activities
   
(826
)
   
1,653
     
(148
)
   
-
     
48,093
 
                                         
Exchange differences on balances of cash and cash equivalents
   
90
     
-
     
28
     
-
     
31
 
                                         
Increase (decrease) in cash and cash equivalents
   
(3,194
)
   
(2,321
)
   
(6,671
)
   
(6,927
)
   
18,947
 
Cash and cash equivalents at beginning of period
   
40,272
     
21,325
     
43,749
     
25,931
     
21,325
 
                                         
Cash and cash equivalents at end of period
 
$
37,078
   
$
19,004
   
$
37,078
   
$
19,004
   
$
40,272
 
                                         
Supplemental disclosure of non-cash financing activities:
                                       
                                         
Significant non-cash transactions:
                                       
                                         
IIA liability for grants to be received
 
$
-
   
$
264
   
$
-
   
$
133
   
$
-
 
                                         
Exercise of warrants liabilities to equity
 
$
2,924
   
$
-
   
$
-
   
$
-
   
$
3,851
 
                                         
Increase in other assets on credit
 
$
(592
)
 
$
(791
)
 
$
(592
)
 
$
(791
)
 
$
(238
)
Purchase of property, plant and equipment on credit
  $ (400 )  
$
-
    $ (400 )   $
-
    $
-
 

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

- 9 -

 
GAMIDA CELL LTD. AND ITS SUBSIDIARY
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands

NOTE 1:-
GENERAL


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


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

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

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

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

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

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

- 10 -

 
GAMIDA CELL LTD. AND ITS SUBSIDIARY
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands

NOTE 1:-
GENERAL (Cont.)


c.
The Company is devoting substantially all of its efforts toward research and development activities. In the course of such activities, the Company has sustained operating losses and expects such losses to continue in the foreseeable future. The Company's accumulated deficit as of June 30, 2019 is $178,758 and negative cash flows from operating activities during the six month period ended June 30, 2019 is $17,320. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The interim consolidated financial statements do not include any adjustments to the carrying amounts and classifications of assets and liabilities that would result if the Company was unable to continue as a going concern. The Company requires additional financing in order to continue to fund its current operations and pay existing and future liabilities.


d.
On July 1, 2019, subsequent to the reporting date, the Company closed a follow-on offering ("offering") of its ordinary shares on the Nasdaq, which resulted in the sale of 7,000,000 ordinary shares at a public offering price of $5 per share, before underwriting discounts. The underwriters had a 30-day option to purchase up to 1,050,000 additional shares at a public offering price of $5 per share,  and exercised in full their option to purchase an additional 1,050,000 ordinary shares at the public offering price of $5.00 per share. The exercise of the underwriters’ option closed on July 8, 2019. The Company received net proceeds from the offering of $37,135 (net of issuance costs and underwriting discounts of $3,115).

 
e.
Definitions:

In these financial statements:

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

- 11 -

 
GAMIDA CELL LTD. AND ITS SUBSIDIARY
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands

NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES


a.
The accompanying unaudited interim consolidated financial statements for the six and three months periods ended June 30, 2019 and 2018 have been prepared in accordance with IAS 34 "Interim Financial Reporting" for interim financial information.

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

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


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


c.
IFRS 16 - Leases:

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

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

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

- 12 -

 
GAMIDA CELL LTD. AND ITS SUBSIDIARY
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands

NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES (Cont.)

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

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

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

Right-of-use assets of $7,106 were recognized and presented separately in the statement of financial position.
Additional lease liabilities of $7,032 were recognized and presented separately in the statement of financial position.
Prepaid expenses and other current assets of $256 and accrued expenses and other payables of $182 related to previous operating leases were derecognized.

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

   
Right-of-use assets
       
   
Offices
and labs
   
Vechicles
   
Production
Plant
   
Total
   
Lease
liabilities
 
                               
As of January 1, 2019 (audited)
 
$
2,104
   
$
291
   
$
4,711
   
$
7,106
   
$
7,032
 
                                         
Depreciation expenses
   
(588
)
   
(67
)
   
(438
)
   
(1,093
)
   
-
 
Interest expenses
   
-
     
-
     
-
     
-
     
211
 
Re-measurement
   
-
     
2
     
56
     
58
     
58
 
Additions
   
-
     
86
     
-
     
86
     
86
 
Payments
   
-
     
-
     
-
     
-
     
(815
)
                                         
As of June 30, 2019 (unaudited)
   
1,516
     
312
     
4,329
     
6,157
     
6,572
 

- 13 -

 
GAMIDA CELL LTD. AND ITS SUBSIDIARY
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands

NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES (Cont.)

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

Operating lease commitments as of December 31, 2018
 
$
7,441
 
Weighted average incremental borrowing rate as of January 1, 2019 (%)
   
1.45-4.01
 
Discounted operating lease commitments of January 1, 2019
   
7,032
 
         
Lease liabilities as of January 1, 2019
 
$
7,032
 

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

1.          Right-of-use assets:

The Company recognizes right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities.

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

2.          Lease liabilities:

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

- 14 -

 
GAMIDA CELL LTD. AND ITS SUBSIDIARY
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands

NOTE 3:-
SHARE-BASED PAYMENT

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

   
Six months ended
June 30,
   
Three months ended
June 30,
   
Year ended
December 31,
 
   
2019
   
2018
   
2019
   
2018
   
2018
 
   
Unaudited
   
Audited
 
                               
Research and development
 
$
593
   
$
627
   
$
364
   
$
145
   
$
705
 
General and administrative
   
1,817
     
996
     
955
     
634
     
2,870
 
                                         
   
$
2,410
   
$
1,623
   
$
1,319
   
$
779
   
$
3,575
 

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

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

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

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

   
June 30,
   
December 31,
 
   
2019
   
2018
   
2018
 
   
Unaudited
   
Audited
 
                   
Dividend yield (%)
   
0
     
0
     
0
 
Expected volatility of the share prices (%)
   
88%-95
%
   
89%-94
%
   
93%-95
%
Risk-free interest rate (%)
   
2.52-2.7
     
2.28-3
     
2.88-2.63
 

- 15 -

 
GAMIDA CELL LTD. AND ITS SUBSIDIARY
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands

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

Movement during the periods:

 
Six months ended
June 30,
   
Year ended
December 31,
 
 
2019
   
2018
   
2018
 

 
Number of
options
   
Weighted
average
exercise
price
   
Number of
options
   
Weighted
average
exercise
price
   
Number of
options
   
Weighted
average
exercise
price
 
                                     
Outstanding at beginning of period
   
3,197,616
   
$
3.07      
2,467,023
   
$
2.28      
2,467,023
   
$
2.28  
Granted
   
544,800
     
10.93
     
401,921
     
4.9
     
751,977
     
5.60
 
Expired
   
-
     
-
     
-
     
-
     
(2,000
)
   
6.00
 
Exercised
   
(466,375
)
   
0.25
     
-
     
-
     
(9,692
)
   
0.25
 
Forfeited
   
-
     
-
     
(9,692
)
   
0.25
     
(9,692
)
   
0.25
 
                                                 
Share options outstanding at end of period
   
3,276,041
     
4.78
     
2,859,252
     
2.65
     
3,197,616
     
3.07
 
               
                                 
Share options exercisable at end of period
   
1,438,658
   
$
2.16      
1,664,152
   
$
1.08
     
1,705,256
   
$
1.21  

As of June 30, 2019, there are $5,645 of total unrecognized cost related to non-vested share based compensation that are expected to be recognized over a period of up to 4 years.

NOTE 4:-
LIABILITIES PRESENTED AT FAIR VALUE


a.
Warrants to purchase Company's shares:

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

   
June 30,
   
December 31,
 
   
2019
   
2018
   
2018
 
   
Unaudited
   
Audited
 
                   
Risk-free interest rate
   
1.71
%
   
2.5
%
   
2.52
%
Expected volatility
   
80
%
   
90
%
   
80
%
Expected life (in years)
   
3
     
2
     
3.5
 
Expected dividend yield
   
0
     
0
     
0
 

- 16 -

 
GAMIDA CELL LTD. AND ITS SUBSIDIARY
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands

NOTE 4:-
LIABILITIES PRESENTED AT FAIR VALUE (Cont.)


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

   
Fair value
of financial
derivatives
 
       
Balance at January 1, 2019 (audited)
 
$
24,049
 
         
Exercise of warrants
   
(2,924
)
         
Revaluation of financial derivatives
   
(13,471
)
         
Balance at June 30, 2019 (unaudited)
 
$
7,654
 

NOTE 5:-
LOSS (INCOME) PER SHARE


a.
Details of the number of shares and loss (income) used in the computation of loss (income) per share:

   
Six months ended
June 30, 2019
   
Three months ended
June 30, 2019
 
   
Weighted
Number of
Shares
   
Loss
(Income)
Attributed
to equity
holders of
the
Company
   
Weighted
Number of
Shares
   
Loss
(Income)
Attributed
to equity
holders of
the
Company
 
                         
For the computation of basic loss (income)
   
25,268,501
   
$
9,545
     
25,495,236
   
$
(5,962
)
Effect of potential dilutive ordinary shares (Warrants)
   
1,078,165
     
13,471
     
476,457
     
17,378