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 May 2014
 
Commission File Number: 001-35464
 
                  MediWound Ltd.                  
(Translation of registrant’s name into English)
 
42 Hayarkon Street
Yavne, 8122745 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 x   Form 40-F o
 
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):   __
 
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
 
Yes o   No x
 
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):  82-________

 

 
 
EXPLANATORY NOTE
 
On May 2, 2014, MediWound Ltd. issued a press release entitled “MediWound Reports First Quarter 2014 Financial Results”. A copy of this press release is attached to this Form 6-K as Exhibit 99.1.

2

 
 
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.
 
 	MEDIWOUND LTD.	 	
 	 	 	 	
Date: May 2, 2014 	By:	/s/ Sharon Malka	 	
 	 	Name:  Sharon Malka	 	
 	 	Title:    Chief Financial Officer	 	

3

 
 
EXHIBIT INDEX

The following exhibits are filed as part of this Form 6-K:

Exhibit                    Description

99.1	Press release dated May 2, 2014 titled “MediWound Reports First Quarter 2014 Financial Results”.	

99.2	Unaudited Interim Financial Statements as of March 31, 2014.	

4

Exhibit 99.1

 
News Release
 
MediWound Reports First Quarter 2014 Financial Results
 
YAVNE, Israel (May 2, 2014) – MediWound Ltd. (Nasdaq: MDWD), a fully integrated biopharmaceutical company bringing innovative therapies to address unmet needs in severe burn and wound management, reports today its financial results for the three months ended March 31, 2014.

Highlights of the first quarter of 2014 and recent weeks include:

 	·	Raised approximately $80 million in a U.S. initial public offering (IPO) of 5.75 million ordinary shares at $14.00 per share, which included the full exercise of the underwriters’ option to purchase additional shares.	

 	·	Generated initial revenues from sales of NexoBrid following its launch in Germany to burn specialists who treat patients in burn centers and hospital burn units.	

 	·	Executed a distribution agreement in Latin America for the marketing and distribution of NexoBrid in Argentina, pending market authorization, as disclosed in the prospectus.	
 
“The first quarter of 2014 was a transformative time for MediWound during which we positioned our Company to continue the marketing of NexoBrid in Europe and the regulatory approval process in the United States,” stated Gal Cohen, President and Chief Executive Officer of MediWound.  “We are very excited to have completed our U.S. IPO and listing on the NASDAQ Global Market, as it provides us with growth capital to expand our marketing infrastructure in Europe, execute our planned clinical studies including the Phase III trial for NexoBrid in the United States and our pediatric trial in the European Union and to scale-up the Company's manufacturing capabilities.
 
“We launched NexoBrid in Germany in December 2013, and our efforts there have commenced well.  Our strategy is to initiate direct sales to burn centers by utilizing tools that illustrate both the clinical and the economic benefits of NexoBrid for the treatment of severe burn wounds.  The reception from physicians has been positive and highly encouraging.  We look forward to expanding the use of NexoBrid into other European countries in the coming quarters and plan to expand the access of NexoBrid to other international markets through agreements with local distributors.  In parallel, we will work to obtain reimbursement coverage.  Central to that effort is data demonstrating that NexoBrid has the ability to promptly and effectively remove the eschar from a wound, thereby allowing clinicians to visually assess burn severity, which results in significantly reduced surgical burden on patients and overall favorable long-term outcomes, while reducing the burden on health systems.
 
“We expect to achieve a number of value-creating milestones throughout the balance of the year,” concluded Mr. Cohen.

 

 
 
First Quarter Financial Results
 
The Company generated initial insignificant revenues from sales of NexoBrid in the first quarter of 2014, after launching NexoBrid in December 2013 in Germany, which included preliminary onsite training and hands-on demonstrations in burn centers throughout Germany.

Operating expenses for the first quarter of 2014 were $4.3 million compared with $1.4 million in the first quarter of 2013.  The increase was primarily due to $1.1 million of commercial activities associated with building the European marketing infrastructure and $1.2 million increase in non-cash share based compensation expenses.
 
For the first quarter of 2014, the Company posted a net loss of $0.7 million, or $0.05 per share.

Adjusted EBITDA, as defined below, for the first quarter of 2014 was $3.1 million compared with $1.3 million for the same quarter last year.
 
Balance Sheet Highlights
 
As of March 31, 2014, the Company had $80.6 million in cash and cash equivalents and working capital of $78.5 million.  The Company used $3.2 million during the quarter to fund operating activities.
 
On March 25, 2014, the Company closed its U.S. IPO and listed 5,750,000 of its ordinary shares on the NASDAQ Global Market. The public offering price was $14.00 per share. After deducting the underwriting discount and the offering expenses, the net proceeds from the offering amounted to $72 million.
 
During 2014, the Company plans to continue to build our marketing infrastructure in Europe, fund further clinical development of NexoBrid, support efforts to obtain regulatory approvals worldwide and initiate our plans to scale up manufacturing capabilities.
 
Non-IFRS Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with IFRS, the Company has provided a supplementary non-IFRS measure to consider in evaluating the Company’s performance. Management uses Adjusted EBITDA. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, impairment, restructuring and further eliminates the effect of share based compensation expenses.

Although Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with IFRS, we believe that the non-IFRS financial measures we present provide meaningful supplemental information regarding our operating results primarily because they exclude certain non-cash charges or items that we do not  believe are reflective of our ongoing operating results when budgeting, planning and forecasting, determining  compensation, and when assessing the performance of our business with our  senior management.

 

 
 
However, investors should not consider these measures in isolation or as substitutes for operating income, cash flows from operating activities or any other measure for determining the Company’s operating performance or liquidity that is calculated in accordance with IFRS. In addition, because Adjusted EBITDA is not calculated in accordance with IFRS, it may not necessarily be comparable to similarly titled measures employed by other companies. The non-IFRS measures included in this press release have been reconciled to the IFRS results in the tables below.
 
About MediWound Ltd.
MediWound is a fully integrated biopharmaceutical company focused on developing, manufacturing and commercializing novel therapeutics based on its patented proteolytic enzyme technology to address unmet needs in the fields of severe burns, as well as chronic and other hard-to-heal wounds. MediWound’s first innovative biopharmaceutical product, NexoBrid, received marketing authorization from the European Medicines Agency for removal of dead or damaged tissue, known as eschar, in adults with deep partial- and full-thickness thermal burns and has been launched in Europe. NexoBrid represents a new paradigm in burn care management, and clinical trials have demonstrated, with statistical significance, its ability to non-surgically and rapidly remove the eschar earlier and, without harming viable tissues. For more information, please visit www.mediwound.com.

Cautionary Note Regarding Forward-Looking Statements
This release includes forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, Section 21E of the US Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts, such as statements regarding assumptions and results related to financial results forecast, commercial results, clinical trials and the regulatory authorizations. Forward-looking statements are based on MediWound’s current knowledge and its present beliefs and expectations regarding possible future events and are subject to risks, uncertainties and assumptions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors including, but not limited to, unexpected results of clinical trials, delays or denial in the FDA or the EMA regulatory approval process or additional competition in the market. The forward-looking statements made herein speak only as of the date of this announcement and MediWound undertakes no obligation to update publicly such forward-looking statements to reflect subsequent events or circumstances, except as otherwise required by law.
 
Contacts:	 	
Sharon Malka	Anne Marie Fields	
Chief Financial & Operation Officer	Senior Vice President	
MediWound Ltd.	LHA	
ir@mediwound.co.il	212-838-3777	
 	afields@lhai.com	
 
 - Financial Tables to Follow -	

 

 
 
CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS

U.S. dollars in thousands
 
 	 	March 31,	 	 	December 31,	 	
 	 	2014	 	 	2013	 	
CURRENT ASSETS:	 	 	 	 	 	 	
Cash, cash equivalents and short term deposits	 	 	80,570	 	 	 	9,553	 	
Accounts receivable	 	 	2,455	 	 	 	2,512	 	
Inventories	 	 	809	 	 	 	-	 	
 	 	 	83,834	 	 	 	12,065	 	
LONG-TERM ASSETS:	 	 	 	 	 	 	 	 	
Long term deposits and deferred costs	 	 	140	 	 	 	204	 	
Property, plant and equipment, net	 	 	1,110	 	 	 	1,136	 	
Intangible assets, net	 	 	987	 	 	 	1,004	 	
Other assets	 	 	417	 	 	 	417	 	
 	 	 	86,488	 	 	 	14,826	 	
CURRENT LIABILITIES:	 	 	 	 	 	 	 	 	
Current maturities of Financials Liabilities	 	 	314	 	 	 	-	 	
Accounts payables and accruals	 	 	5,032	 	 	 	2,023	 	
 	 	 	5,346	 	 	 	2,023	 	
LONG-TERM LIABILITIES:	 	 	 	 	 	 	 	 	
Liabilities in respect of Chief Scientist government grants, net of current maturities	 	 	6,714	 	 	 	6,604	 	
Contingent consideration for the purchase of treasury shares, net of current maturities	 	 	17,115	 	 	 	16,800	 	
Warrants to shareholders	 	 	-	 	 	 	9,200	 	
Severance pay liability, net	 	 	3	 	 	 	3	 	
 	 	 	23,832	 	 	 	32,607	 	
SHAREHOLDERS' EQUITY (DEFICIT)	 	 	57,310	 	 	 	(19,804	)	
 	 	 	86,488	 	 	 	14,826	 	

 

 
 
CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF COMPREHENSIVE INCOME

U.S. dollars in thousands (except share and per share data)
 
 	 	Three months ended
March 31,	 	
 	 	2014	 	 	2013	 	
Revenues	 	 	50	 	 	 	-	 	
Cost of revenues	 	 	170	 	 	 	-	 	
Gross loss	 	 	(120	)	 	 	-	 	
Operating expenses:	 	 	 	 	 	 	 	 	
Research and development, net of participations	 	 	1,465	 	 	 	757	 	
Selling and marketing	 	 	1,615	 	 	 	240	 	
General and administrative	 	 	1,267	 	 	 	411	 	
Total operating expenses	 	 	(4,347	)	 	 	(1,408	)	
Operating loss	 	 	(4,467	)	 	 	(1,408	)	
Financial income	 	 	4,523	 	 	 	-	 	
Financial expense	 	 	(791	)	 	 	(885	)	
Loss from continuing operations	 	 	(735	)	 	 	(2,293	)	
Loss from discontinued operation	 	 	(14	)	 	 	(845	)	
Loss for the period	 	 	(749	)	 	 	(3,138	)	
Foreign currency translation adjustments	 	 	(10	)	 	 	-	 	
Total other comprehensive loss	 	 	(10	)	 	 	-	 	
Total comprehensive loss	 	 	(759	)	 	 	(3,138	)	
 	 	 	 	 	 	 	 	 	
Basic and diluted loss per share:	 	 	 	 	 	 	 	 	
Loss from continuing operations	 	 	(0.05	)	 	 	(0.15	)	
Loss from discontinued operation	 	 	(*	)	 	 	(0.05	)	
Net loss per share	 	 	(0.05	)	 	 	(0.20	)	
Weighted average number of ordinary shares used in the computation of basic and diluted loss per share:	 	 	15,749	 	 	 	15,707	 	
 
(*)           Represents less than $ 0.01

 

 
 
CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands
 
 	 	Three months ended
March 31,	 	
 	 	2014	 	 	2013	 	
Cash Flows from Operating Activities:	 	 	 	 	 	 	
Net loss	 	 	(749	)	 	 	(3,138	)	
Adjustments to reconcile net loss to net cash used in continuing operating activities:	 	 	 	 	 	 	 	 	
Adjustments to profit and loss items:	 	 	 	 	 	 	 	 	
Loss from discontinued operation	 	 	14	 	 	 	845	 	
Depreciation and amortization	 	 	117	 	 	 	65	 	
Revaluation of warrants to shareholders	 	 	(4,491	)	 	 	-	 	
Share-based compensation	 	 	1,261	 	 	 	59	 	
Revaluation of liabilities in respect of Chief Scientist government grants	 	 	141	 	 	 	222	 	
Revaluation of contingent consideration for the purchase of treasury shares	 	 	586	 	 	 	500	 	
Accrued interest in respect of financial loans	 	 	-	 	 	 	168	 	
Other Financing expenses, net	 	 	(14	)	 	 	(6	)	
 	 	 	(2,386	)	 	 	1,853	 	
Changes in asset and liability items:	 	 	 	 	 	 	 	 	
Increase in trade receivables	 	 	(16	)	 	 	-	 	
Decrease in other receivables	 	 	8	 	 	 	44	 	
Increase in inventories	 	 	(809	)	 	 	(17	)	
Decrease in trade payables	 	 	(359	)	 	 	(198	)	
Increase in other payables	 	 	1,092	 	 	 	219	 	
 	 	 	(84	)	 	 	48	 	
Net cash used in continuing operating activities	 	 	(3,219	)	 	 	(1,237	)	
 	 	 	 	 	 	 	 	 	
Net cash used in discontinued operating activities	 	 	(14	)	 	 	(424	)	
 	 	 	 	 	 	 	 	 	
Net cash flows used in operating activities	 	 	(3,233	)	 	 	(1,661	)	

Cash Flows from Investing Activities:	 	 	 	 	 	 	
Purchase of property and equipment	 	 	(74	)	 	 	(25	)	
Interest received	 	 	3	 	 	 	-	 	
Proceeds from (investment in) short term bank deposits, net of investments	 	 	2,500	 	 	 	-	 	
 	 	 	 	 	 	 	 	 	
Net cash provided by (used in) investing activities	 	 	2,429	 	 	 	(25	)	
 	 	 	 	 	 	 	 	 	
Cash Flows from Financing Activities:	 	 	 	 	 	 	 	 	
Proceeds from exercise of options	 	 	208	 	 	 	279	 	
Proceeds from issuance of shares and warrants, net	 	 	74,082	 	 	 	-	 	
Proceeds from shareholders' loans	 	 	-	 	 	 	1,445	 	
Proceeds from the Chief Scientist government grants	 	 	12	 	 	 	-	 	
 	 	 	 	 	 	 	 	 	
Net cash provided by financing activities	 	 	74,302	 	 	 	1,724	 	
Exchange rate differences on cash and cash equivalent balances	 	 	19	 	 	 	6	 	
Increase in cash and cash equivalents from continuing activities	 	 	73,531	 	 	 	468	 	
Decrease in cash and cash equivalents from discontinued activities	 	 	(14	)	 	 	(424	)	
Balance of cash and cash equivalents at the beginning of the period	 	 	7,053	 	 	 	337	 	
Balance of cash and cash equivalents at the end of the period	 	 	80,570	 	 	 	381	 	
Significant non-cash activities:	 	 	 	 	 	 	 	 	
Exercise of cashless warrants into shares	 	 	4,709	 	 	 	-	 	
Unpaid issuance expenses	 	 	2,258	 	 	 	 	 	

 

 
 
ADJUSTED EBITDA

U.S. dollars in thousands

 	 	Three months ended	 	
 	 	March 31,	 	
 	 	2014	 	 	2013	 	
Loss for the period	 	 	(749	)	 	 	(3,138	)	
Adjustments:	 	 	 	 	 	 	 	 	
Financial (expenses) income, net	 	 	3,732	 	 	 	(885	)	
Other expenses *	 	 	(14	)	 	 	(845	)	
Depreciation and amortization	 	 	(117	)	 	 	(65	)	
Share-based compensation expenses **	 	 	(1,261	)	 	 	(59	)	
Total adjustments	 	 	2,340	 	 	 	(1,854	)	
Adjusted EBITDA from continuing operation	 	 	(3,089	)	 	 	(1,284	)	
 	 	 	 	 	 	 	 	 	
* Loss from discontinued operation	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
** Share-based compensation expenses:	 	 	 	 	 	 	 	 	
Cost of revenues	 	 	132	 	 	 	 	 	
Research and development	 	 	346	 	 	 	20	 	
Selling and marketing	 	 	302	 	 	 	 	 	
General and administrative	 	 	481	 	 	 	39	 	
Share-based compensation expenses	 	 	1,261	 	 	 	59	 	
 
###

Exhibit 99.2
 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
INTERIM FINANCIAL STATEMENTS
 
AS OF MARCH 31, 2014
 
IN U.S. DOLLARS IN THOUSANDS
 
UNAUDITED
 
INDEX
 
 	Page	
 	 	
Condensed Interim Consolidated Balance Sheets	2	
 	 	
Condensed Interim Consolidated Statements of Comprehensive Income	3	
 	 	
Condensed Interim Consolidated Statements of Changes in Shareholders' Equity	4 - 5	
 	 	
Condensed Interim Consolidated Statements of Cash Flows	6 - 7	
 	 	
Notes to Condensed Consolidated Interim Financial Statements	8 - 9	

 

 
 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
BALANCE SHEETS

U.S. dollars in thousands (except share and per share data)

 	 	March 31,	 	 	December 31,	 	
 	 	2014	 	 	2013	 	 	2013	 	
 	 	Unaudited	 	 	Audited	 	
CURRENT ASSETS:	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	 	80,570	 	 	 	381	 	 	 	7,053	 	
Short-term bank deposits	 	 	-	 	 	 	-	 	 	 	2,500	 	
Trade receivables	 	 	16	 	 	 	-	 	 	 	-	 	
Other receivables	 	 	2,439	 	 	 	2,029	 	 	 	2,512	 	
Inventories	 	 	809	 	 	 	685	 	 	 	-	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	83,834	 	 	 	3,095	 	 	 	12,065	 	
LONG-TERM ASSETS:	 	 	 	 	 	 	 	 	 	 	 	 	
Long term deposits and deferred costs	 	 	140	 	 	 	2	 	 	 	204	 	
Derivative instruments	 	 	-	 	 	 	14,900	 	 	 	-	 	
Property, plant and equipment, net	 	 	1,110	 	 	 	1,196	 	 	 	1,136	 	
Intangible assets, net	 	 	987	 	 	 	4,919	 	 	 	1,004	 	
Other assets	 	 	417	 	 	 	417	 	 	 	417	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	2,654	 	 	 	21,434	 	 	 	2,761	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	86,488	 	 	 	24,529	 	 	 	14,826	 	
CURRENT LIABILITIES:	 	 	 	 	 	 	 	 	 	 	 	 	
Current maturities of Financials Liabilities	 	 	314	 	 	 	-	 	 	 	-	 	
Trade payables	 	 	823	 	 	 	577	 	 	 	1,180	 	
Derivative in respect of convertible loan	 	 	-	 	 	 	1,616	 	 	 	-	 	
Convertible loan	 	 	-	 	 	 	1,552	 	 	 	-	 	
Accrued expenses and other payables	 	 	4,209	 	 	 	1,254	 	 	 	843	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	5,346	 	 	 	4,999	 	 	 	2,023	 	
LONG-TERM LIABILITIES:	 	 	 	 	 	 	 	 	 	 	 	 	
Liabilities in respect of Chief Scientist government grants net of current maturities	 	 	6,714	 	 	 	6,656	 	 	 	6,604	 	
Contingent consideration for the purchase of treasury shares net of current maturities	 	 	17,115	 	 	 	-	 	 	 	16,800	 	
Warrants to shareholders	 	 	-	 	 	 	-	 	 	 	9,200	 	
Severance pay liability, net	 	 	3	 	 	 	6	 	 	 	3	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	23,832	 	 	 	6,662	 	 	 	32,607	 	
SHAREHOLDERS' EQUITY (DEFICIT):	 	 	 	 	 	 	 	 	 	 	 	 	
Ordinary shares of NIS 0.01 par value:	 	 	 	 	 	 	 	 	 	 	 	 	
 Authorized: 33,000,000 shares as of March 31, 2013 December 31, 2013 and March 31, 2014; Issued: 15,751,441, 15,769,487 and 22,053,336 shares respectively; Outstanding: 15,751,441, 15,013,995 and 21,297,844 shares respectively	 	 	61	 	 	 	9	 	 	 	11	 	
Share premium	 	 	140,052	 	 	 	48,058	 	 	 	62,229	 	
Treasury shares	 	 	(34,600	)	 	 	-	 	 	 	(34,600	)	
Foreign currency translation adjustments	 	 	(42	)	 	 	-	 	 	 	(32	)	
Accumulated deficit	 	 	(48,161	)	 	 	(35,199	)	 	 	(47,412	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	57,310	 	 	 	12,868	 	 	 	(19,804	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	86,488	 	 	 	24,529	 	 	 	14,826	 	
 
The accompanying notes are an integral part of the interim financial statements.

2

 
 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
STATEMENTS OF COMPREHENSIVE INCOME

U.S. dollars in thousands

 	 	Three months ended
March 31,	 	 	Year ended
December 31,	 	
 	 	2014	 	 	2013	 	 	2013	 	
 	 	Unaudited	 	 	Audited	 	
Revenues	 	 	50	 	 	 	-	 	 	 	-	 	
Cost of revenues	 	 	170	 	 	 	-	 	 	 	-	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross loss	 	 	(120	)	 	 	-	 	 	 	-	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	
Research and development, net of participations	 	 	1,465	 	 	 	757	 	 	 	3,635	 	
Selling and marketing	 	 	1,615	 	 	 	240	 	 	 	2,259	 	
General and administrative	 	 	1,267	 	 	 	411	 	 	 	1,687	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	(4,347	)	 	 	(1,408	)	 	 	(7,581	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating loss	 	 	(4,467	)	 	 	(1,408	)	 	 	(7,581	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Financial income	 	 	4,523	 	 	 	-	 	 	 	2,401	 	
Financial expense	 	 	(791	)	 	 	(885	)	 	 	(3,321	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss from continuing operations	 	 	(735	)	 	 	(2,293	)	 	 	(8,501	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss from discontinued operation	 	 	(14	)	 	 	(845	)	 	 	(6,850	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss for the period	 	 	(749	)	 	 	(3,138	)	 	 	(15,351	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive loss:	 	 	 	 	 	 	 	 	 	 	 	 	
Items to be reclassified to profit or loss in subsequent periods:	 	 	 	 	 	 	 	 	 	 	 	 	
Foreign currency translation adjustments	 	 	(10	)	 	 	-	 	 	 	(32	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total other comprehensive loss	 	 	(10	)	 	 	-	 	 	 	(32	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive loss	 	 	(759	)	 	 	(3,138	)	 	 	(15,383	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic and diluted loss per share:	 	 	 	 	 	 	 	 	 	 	 	 	
Loss from continuing operations	 	 	(0.05	)	 	 	(0.15	)	 	 	(0.54	)	
Loss from discontinued operation	 	 	(*	)	 	 	(0.05	)	 	 	(0.44	)	
Net loss per share	 	 	(0.05	)	 	 	(0.20	)	 	 	(0.98	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average number of ordinary shares used in the computation of basic and diluted loss per share: (**)	 	 	15,749	 	 	 	15,707	 	 	 	15,671	 	
 
(*)           Represents less than $ 0.01.
(**)         all ordinary shares, options, warrants and earnings (losses) per share amounts have been adjusted retroactively, see note 1(c).
 
The accompanying notes are an integral part of the interim financial statements.

3

 
 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
  STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

U.S. dollars in thousands (except share data)

 	 	Share capital	 	 	Share premium	 	 	Treasury
shares	 	 	Foreign currency translation reserve	 	 	Accumulateddeficit	 	 	Total
equity	 	
 	 	Unaudited	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of January 1, 2014 (audited)	 	 	11	 	 	 	62,229	 	 	 	(34,600	)	 	 	(32	)	 	 	(47,412	)	 	 	(19,804	)	
Loss for the period	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(749	)	 	 	(749	)	
Other comprehensive loss	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(10	)	 	 	-	 	 	 	(10	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive loss	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(10	)	 	 	(749	)	 	 	(759	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Exercise of options	 	 	(*	)	 	 	208	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	208	 	
Exercise of warrants	 	 	1	 	 	 	4,711	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	4,712	 	
Issuance of shares, net	 	 	17	 	 	 	71,675	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	71,692	 	
Share-based compensation	 	 	-	 	 	 	1,261	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	1,261	 	
Effect of share split	 	 	32	 	 	 	(32	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of March 31, 2014	 	 	61	 	 	 	140,052	 	 	 	(34,600	)	 	 	(42	)	 	 	(48,161	)	 	 	57,310	 	
 
 	 	Share capital	 	 	Share premium	 	 	Treasury
shares	 	 	Foreign currency translation reserve	 	 	Accumulated
deficit	 	 	Total
equity	 	
 	 	Unaudited	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of January 1, 2013 (audited)	 	 	9	 	 	 	47,686	 	 	 	-	 	 	 	-	 	 	 	(32,061	)	 	 	15,634	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive loss	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(3,138	)	 	 	(3,138	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Exercise of options	 	 	(*	)	 	 	279	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	279	 	
Share-based compensation	 	 	-	 	 	 	93	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	93	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of March 31, 2013	 	 	9	 	 	 	48,058	 	 	 	-	 	 	 	-	 	 	 	(35,199	)	 	 	12,868	 	

4

 

MEDIWOUND LTD. AND ITS SUBSIDIARIES
  STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

U.S. dollars in thousands (except share data)

 	 	Share capital	 	 	Share premium	 	 	Treasury
shares	 	 	Foreign currency translation reserve	 	 	Accumulated
deficit	 	 	Total
equity	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of January 1, 2013	 	 	9	 	 	 	47,686	 	 	 	-	 	 	 	-	 	 	 	(32,061	)	 	 	15,634	 	
Loss for the period	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(15,351	)	 	 	(15,351	)	
Other comprehensive loss	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(32	)	 	 	-	 	 	 	(32	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive loss	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(32	)	 	 	(15,351	)	 	 	(15,383	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Exercise of options	 	 	(*	)	 	 	279	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	279	 	
Purchase of treasury shares	 	 	-	 	 	 	-	 	 	 	(34,600	)	 	 	-	 	 	 	-	 	 	 	(34,600	)	
Share-based compensation	 	 	-	 	 	 	607	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	607	 	
Issuance of shares, net	 	 	2	 	 	 	13,657	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	13,659	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of December 31, 2013	 	 	11	 	 	 	62,229	 	 	 	(34,600	)	 	 	(32	)	 	 	(47,412	)	 	 	(19,804	)	

(*)           Represents less than $ 1.

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

5

 
 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
  STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

 	 	Three months ended
March 31,	 	 	Year ended
December 31,	 	
 	 	2014	 	 	2013	 	 	2013	 	
 	 	Unaudited	 	 	Audited	 	
Cash Flows from Operating Activities:	 	 	 	 	 	 	 	 	 	
Net loss	 	 	(749	)	 	 	(3,138	)	 	 	(15,351	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjustments to reconcile net loss to net cash used in continuing operating activities:	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjustments to profit and loss items:	 	 	 	 	 	 	 	 	 	 	 	 	
Loss from discontinued operation	 	 	14	 	 	 	845	 	 	 	6,850	 	
Depreciation and amortization	 	 	117	 	 	 	65	 	 	 	336	 	
Revaluation of warrants to shareholders	 	 	(4,491	)	 	 	-	 	 	 	820	 	
Share-based compensation	 	 	1,261	 	 	 	59	 	 	 	531	 	
Revaluation of liabilities in respect of Chief Scientist government grants	 	 	141	 	 	 	222	 	 	 	(106	)	
Revaluation of contingent consideration for the purchase of treasury shares	 	 	586	 	 	 	500	 	 	 	(2,400	)	
Accrued interest in respect of financial loans	 	 	-	 	 	 	168	 	 	 	1,669	 	
Other Financing expenses, net	 	 	(14	)	 	 	(6	)	 	 	(35	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	(2,386	)	 	 	1,853	 	 	 	7,665	 	
Changes in asset and liability items:	 	 	 	 	 	 	 	 	 	 	 	 	
Increase in trade receivables	 	 	(16	)	 	 	-	 	 	 	-	 	
Decrease (increase) in other receivables	 	 	8	 	 	 	44	 	 	 	(532	)	
Increase in inventories	 	 	(809	)	 	 	(17	)	 	 	-	 	
Increase (decrease) in trade payables	 	 	(359	)	 	 	(198	)	 	 	405	 	
Increase (decrease) in other payables	 	 	1,092	 	 	 	219	 	 	 	(262	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	(84	)	 	 	48	 	 	 	(389	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash used in continuing operating activities	 	 	(3,219	)	 	 	(1,237	)	 	 	(8,075	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash used in discontinued operating activities	 	 	(14	)	 	 	(424	)	 	 	(1,665	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash flows used in operating activities	 	 	(3,233	)	 	 	(1,661	)	 	 	(9,740	)	

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

6

 
 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
  STATEMENTS OF CASH FLOWS

U.S. dollars in thousands
 
 	 	Three months ended
March 31,	 	 	Year ended
December 31,	 	
 	 	2014	 	 	2013	 	 	2013	 	
 	 	Unaudited	 	 	Audited	 	
Cash Flows from Investing Activities:	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Purchase of property and equipment	 	 	(74	)	 	 	(25	)	 	 	(268	)	
Purchase of intangible assets	 	 	-	 	 	 	-	 	 	 	(90	)	
Interest received	 	 	3	 	 	 	-	 	 	 	3	 	
Proceeds from (investment in) short term bank deposits, net of investments	 	 	2,500	 	 	 	-	 	 	 	(2,500	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by (used in) investing activities	 	 	2,429	 	 	 	(25	)	 	 	(2,855	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash Flows from Financing Activities:	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Proceeds from exercise of options	 	 	208	 	 	 	279	 	 	 	279	 	
Proceeds from issuance of shares and warrants, net	 	 	74,082	 	 	 	-	 	 	 	15,800	 	
Proceeds from shareholders' loans	 	 	-	 	 	 	1,445	 	 	 	3,930	 	
Repayment of shareholders' loans	 	 	-	 	 	 	-	 	 	 	(915	)	
Deferred issuance costs	 	 	-	 	 	 	-	 	 	 	(129	)	
Proceeds from the Chief Scientist government grants	 	 	12	 	 	 	-	 	 	 	276	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by financing activities	 	 	74,302	 	 	 	1,724	 	 	 	19,241	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Exchange rate differences on cash and cash equivalent balances	 	 	19	 	 	 	6	 	 	 	70	 	
Increase in cash and cash equivalents from continuing activities	 	 	73,531	 	 	 	468	 	 	 	8,381	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Decrease in cash and cash equivalents from discontinued activities	 	 	(14	)	 	 	(424	)	 	 	(1,665	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance of cash and cash equivalents at the beginning of the period	 	 	7,053	 	 	 	337	 	 	 	337	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance of cash and cash equivalents at the end of the period	 	 	80,570	 	 	 	381	 	 	 	7,053	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Non-cash activities:	 	 	 	 	 	 	 	 	 	 	 	 	
Exercise of cashless warrants into shares	 	 	4,709	 	 	 	-	 	 	 	-	 	
Unpaid issuance expenses	 	 	2,258	 	 	 	-	 	 	 	-	 	
Contingent consideration for the purchase of treasury shares	 	 	-	 	 	 	-	 	 	 	19,200	 	
Exercise of derivative instrument into treasury shares	 	 	-	 	 	 	-	 	 	 	15,400	 	
Conversion of loans and realization of derivatives into shares and warrants	 	 	-	 	 	 	-	 	 	 	6,239	 	

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

7

 
 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)
 
NOTE 1:	GENERAL	

 	a.	General description of the company and its operations:	
 
 	 	MediWound Ltd. (the "Company" or "MediWound"), is a fully integrated biopharmaceutical company focused on developing, manufacturing and commercializing novel products to address unmet needs in the fields of severe burns, chronic and other hard to heal wounds. The Company's first innovative biopharmaceutical product, NexoBrid, received marketing authorization from the European Medicines Agency for removal of dead or damaged tissue, known as eschar, in adults with deep partial and full-thickness thermal burns and was launched in Europe in December 2013.	
 
 	b.	The Company has two wholly-owned subsidiaries: MediWound Germany GmbH, acting as EU marketing authorization holder and EU sales and marketing arm and MediWound UK Limited, an inactive company. In addition, the Company owns 7.5% of PolyHeal Ltd., a private life sciences company ("PolyHeal").	

 	c.	On March 3, 2014, the Company effected a bonus share distribution under which: (i) two and eight tenths (2.8) bonus shares were issued for each ordinary share outstanding prior to such distribution; and (ii) the conversion rate for each preferred share, option and warrant was adjusted to reflect such bonus share distribution. For accounting purposes, this transaction was recorded as a stock split and accordingly (unless otherwise noted), all ordinary shares, options, warrants and earnings (losses) per share amounts have been adjusted retroactively for all periods presented in these financial statements.	

 	d.	On March 25, 2014, the Company closed its initial public offering (IPO) in the United States and listing on the NASDAQ Global Select Market of 5,750,000 new ordinary shares. The public offering price was $14.00 per share. After deducting the underwriting discount and the offering expenses, the net proceeds from the offering amounted to $71,700. The number of shares offered included the underwriters' option to purchase an additional 750,000 shares at the offering price that was exercised prior to closing.	

 	e.	Upon the closing of this IPO the Company issued 336,591 ordinary shares pursuant to the exercise of 1,066,735 warrants held by certain of our shareholders, including (1) the exercise of 433 warrants into 433 ordinary shares at an exercise price of $6.72 per share and the receipt of proceeds by us related to such exercise and (2) the cashless exercise of 1,066,302 warrants into 336,158 ordinary shares at a weighted average exercise price of $9.58 per share.	

8

 
 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)
 
NOTE 2:	SIGNIFICANT ACCOUNTING POLICIES	

 The following accounting policies have been applied consistently in the financial statements for all periods presented unless otherwise stated.

 	a.	Basis of presentation of financial statements:	
 
 	These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").	
 
 	b.	Basis of preparation of the interim consolidated financial statements:	
 
 The interim condensed financial statements for the three months ended March 31, 2014 have been prepared in accordance with IAS 34 "Interim Financial Reporting".
 
 The interim condensed 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 financial statements as of December 31, 2013 that were included in the Registration Statement on Form F-1 filed on March 20, 2014.
 
9