TIDM4BB
3 June 2021
4basebio UK Societas
("4basebio", the "Company" or the "Group")
Final Results
The Board of 4basebio UK Societas is pleased to report the results for the
financial year ended 31 December 2020.
Highlights
* Spin out of DNA operations from 4basebio AG (now 2Invest AG) before year
end
* Expansion into 12,000 square foot freehold office, laboratory and
warehousing space near Cambridge in Q3 2020
* Development of UK DNA and nanoparticle scaling and validation team Q4 2020
* Admission of newly formed 4basebio UK Societas Group to AIM in February
2021
* Signed research collaboration and evaluation license agreements with Royal
Holloway University of London for development of a non-viral vector for
treatment of Duchenne muscular dystrophy in April 2021
Overview
The 4basebio UK Societas group of companies ("the Group") was spun out of
4basebio AG, a German listed company, on 8 December 2020. The Company seat was
subsequently transferred to the UK and the Company was admitted to AIM on 17
February 2021.
The Group is a specialist life sciences group of companies focused on supplying
therapeutic DNA for gene therapies and gene-based vaccines and providing
solutions for effective and safe delivery of these DNA/RNA based products to
patients.
Its focus is the validation, scaling and supply of proprietary high quality GMP
(Good Manufacturing Practice) grade synthetic DNA as well as proprietary
non-viral nanoparticles which can efficiently and safely deliver fully
functional genes to patients. These products and technologies are also
available for customers and partners with whom we endeavour to combine our
capabilities and know-how to develop gene therapy solutions for clinical
development and commercialisation.
This announcement contains inside information for the purposes of the UK Market
Abuse Regulation and the Directors of the Company are responsible for the
release of this announcement.
For further enquiries, please contact:
4basebio UK Societas +44 (0)12 2396 7943
Heikki Lanckriet, CEO
+44 (0)20 7213 0880
Cairn Financial Advisers LLP (Nominated Adviser)
Jo Turner / Sandy Jamieson
finnCap Ltd (Broker)
Geoff Nash/Richard Chambers/Charlotte Sutcliffe +44 (0)20 7220 0500
Walbrook PR +44 (0)20 7933 8780 or
4basebio@walbrookpr.com
Anna Dunphy / Paul McManus Mob: +44 (0)7876 741 001 / +44 (0)7980 541
893
Chairman's statement
I am delighted to be able to deliver my first statement as Chairman of the
newly formed 4basebio UK Societas Group of companies. Since the decision was
taken by the 4basebio AG board in 2020 to spin out the DNA assets of that group
into 4basebio UK Societas and admit its shares to trading on AIM, the Company
and Group has witnessed significant change.
4basebio UK Societas, formally 4basebio SE, was a German registered European
stock corporation which was used to facilitate the spin out from 4basebio AG.
Following approval of the spin out by the 4basebio AG Extraordinary General
Meeting of 3 November 2020 and subsequent confirmation by the German commercial
register on 8 December 2020, its registered seat was moved to the UK on 22
December 2020.
Following Brexit and the requisite change to the SE legislation, the Company's
status was automatically changed to a UK stock corporation, a UK Societas. The
Company will seek shareholder approval at the forthcoming Annual General
Meeting to become a UK PLC. This will not affect its quoted status on AIM.
This process followed acknowledgement by the Board of 4basebio AG that the
market valuation of its DNA business would benefit over time from a separate
listing, distinct from 4basebio AG which now acts as an investment company. To
that end, the AIM Market of London Stock Exchange (AIM) was identified as a
highly suitable market due to the breadth of peer companies, London's large and
sophisticated investor base and the UK operational footprint of the Company,
with its Head Office near Cambridge.
With the spin out and flotation process now completed, the focus of the Board
is now very much on the commercialisation of the Group's technology and growing
stakeholder value over time.
During the latter part of 2020, the Group made the decision to accelerate its
development activities by establishing a UK science group alongside the
existing Spanish team. That UK group now stands at seven staff with further
hires planned over coming months.
The Group continues to focus on its validation and scaling programmes, both in
house and with selected academic and commercial partners. Near term objectives
are centred on the Group's proprietary synthetic hpDNAT being validated for use
in AAV (adeno-associated viral vectors) and in vitro transcription (IVT), as
well as delivering GMP readiness. While we remain relatively early in this
process, it is becoming increasingly clear that these specific areas present a
significant supply challenge for large pharma and biotech which are seeking
alternative DNA solutions, both due to existing supply constraints and certain
challenges in using plasmid DNA.
The Group remains fundamentally at a pre revenue stage but the Board is
optimistic that this approach will prove fruitful with revenue and market
opportunities opening up during the course of 2021 and 2022 in particular.
Tim McCarthy
Chairman
2 June 2021
Consolidated statement of profit or loss and other comprehensive income
for the year ended 31 December
2020 2019
£'000 £'000
Revenues 462 202
Cost of goods sold (188) (230)
Gross profit 274 (28)
Sales and marketing expenses (141) (118)
Administration expenses (516) (237)
Research and non-capitalised development expenses (343) (254)
Other operating expenses (1) (11)
Other operating income 105 228
Loss from operations (622) (420)
Finance expense (94) (109)
Financial result (94) (109)
Loss before tax (716) (529)
Income tax expense (3) 106
Loss for the period (719) (423)
Loss per share
* Diluted and Undiluted (in £/share) (0.08) (0.05)
Items that may be reclassified to the income statement in
subsequent periods
Exchange rate adjustments 162 -
Total comprehensive income (557) (423)
Consolidated statement of financial position
31 December
2020 2019
£'000 £'000
Assets
Intangible assets 785 450
Property, plant and equipment 1,478 78
Other non-current assets 34 29
Non-current assets 2,297 557
Inventories 131 102
Trade receivables 39 77
Other current assets 341 339
Cash and cash equivalents 15,001 80
Current assets 15,512 598
Total assets 17,809 1,155
Liabilities
Financial liabilities (416) (446)
Trade payables (96) (101)
Other current liabilities (301) (19)
Current liabilities (813) (566)
Financial liabilities (1,301) (2,142)
Other liabilities (237) (337)
Non-current liabilities (1,538) (2,479)
Total liabilities (2,351) (3,045)
Net assets 15,458 (1,890)
Share capital 11,130 6,362
Share premium 706 0
Merger reserve 688 0
Capital reserve 13,099 1,356
Foreign exchange reserve 175 13
Accumulated loss (10,340) (9,621)
Total Equity 15,458 (1,890)
Consolidated statement of changes in equity
for the year ended 31 December 2020
in £'000 Share Share Merger Capital Foreign Profit and Total equity
capital premium reserve reserve exchange loss reserve
Balance at 1 January 2020 6,362 - - 1,356 13 (9,621) (1,890)
Capital contributions from - - - 11,743 - - 11,743
4basebio AG (now 2Invest AG)
Combination accounting (6,258) - 688 - - - (5,570)
Capital contributions from
4basebio AG (now 2Invest AG)
Loss after income tax - - - - - (719) (719)
Shares issued for cash 3,209 706 - - - - 3,915
Foreign Exchange difference - - - - 162 - 162
arising on translation of
4basebio S.L.U.
Shares issued to acquire 7,817 - - - - - 7,817
subsidiaries
Balance at 31 December 2020 11,130 706 688 13,099 175 (10,340) 15,458
in £'000 Share Share Merger Capital Foreign Profit and Total equity
capital premium reserve reserve exchange loss reserve
Balance at 1 January 2019 6,362 - - 1,356 13 (9,198) (1,467)
Loss after income tax and total - - - - - (423) (423)
comprehensive income for the
period
Balance at 31 December 2019 6,362 - - 1,356 13 (9,621) (1,890)
Consolidated statement of cash flows
for the year ended 31 December
2020 2019
£'000 £'000
Net loss for the period (719) (423)
Adjustments to reconcile net loss for the period to net
cashflows
Income taxes 3 (106)
Interest charge 94 104
Depreciation of property, plant and equipment 83 15
Amortisation and impairment of intangible assets 4 194 236
Other non-cash items 11 25 (57)
Working capital changes:
Trade receivables and other current assets 91 116
Trade payables and other current liabilities (876) (167)
Inventories (24) 13
Tax receipt 107 -
Net Cash flows from operating activities (1,022) (269)
Investments in property, plant and equipment and intangible assets (351) (3)
Investments in capitalised development (498) (200)
Cash acquired with 4basebio Limited (now 4basebio UK Limited) 2,295 0
Cash flows from investing activities 1,446 (203)
Cash in(out)flow due to changes in financing (1,024) 629
Capital contributions by way of cash 15,626 0
Interest paid (116) (104)
IFRS16 leases (59) (37)
Cash flows from financing activities 14,427 487
Net change in cash and cash equivalents 14,851 16
Exchange differences 70 (4)
Cash and cash equivalents at the beginning of the period 80 69
Cash and cash equivalents at the end of the period 15,001 80
Notes to the financial statements
1. Basis of preparation
The consolidated financial statements of 4basebio UK Societas (or "the Group")
for the financial year ending 31 December 2020 have been prepared in accordance
with the International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB).
The directors, having considered the circumstances giving rise to the formation
of the Group and relevant guidance in IFRS 3.B13 to IFRS 3.B17, have concluded
that the combination in which the Company issued 8,622,231 shares to the
shareholders of its former parent entity as consideration for the spin-off
assets comprising shareholdings in 4basebio S.L.U. and 4basebio Limited (now
4basebio U.K. Limited), should be treated as a continuation of 4basebio S.L.U.
at historic book values. Further details of this consideration are set out in
note 13.
Therefore, although these consolidated financial statements have been issued in
the name of 4basebio UK Societas, the legal acquirer, the Group's activity is
in substance the continuation of the financial information of 4basebio S.L.U.,
to which the comparative financial information presented, for the year ended 31
December 2019, relates. The consolidated financial statements comprise the
results of 4basebio S.L.U. and 4basebio UK Societas for the full year and
4basebio UK Limited from 8 December 2020 the date of the transaction.
The financial information included as comparatives for the year ended 31
December 2019 reflect the results and position of 4basebio S.L.U.;
consequently, the financial information included as comparatives within these
consolidated financial statements does not constitute statutory accounts, but
has been prepared under IFRS and in accordance with the group accounting
policies disclosed.
The financial statements have been prepared on the historical cost basis.
Historical cost is generally based on the fair value of the consideration given
in exchange for goods and services. For calculation reasons, rounding
differences of +/- one unit (£'000, % etc.) may occur in the information
presented in these financial statements.
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date, regardless of whether that price is directly observable
or estimated using another valuation technique. In estimating the fair value of
an asset or a liability, the Group takes into account the characteristics of
the asset or liability if market participants would take those characteristics
into account when pricing the asset or liability at the measurement date. Fair
value for measurement and/or disclosure purposes in these consolidated
financial statements is determined on such a basis, except for leasing
transactions that are within the scope of IFRS 16.
2. Going concern
The directors have, at the time of approving the financial statements, a
reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Thus they continue to adopt
the going concern basis of accounting in preparing the financial statements.
3. Earnings per share
2020 2019
Numerator [in £'000]
Result for the period (719) (423)
Denominator [number of shares]
Weighted average number of registered shares in
circulation (ordinary shares) for calculating 9,197,913 8,622,231
the undiluted earnings per share
Diluted and Undiluted earnings per share (0.08) (0.05)
4basebio UK Societas was incorporated on 11 October 2019 with issued share
capital of 120,000 ordinary shares. On 11 November 2020, a further 3,575,242
ordinary shares were issued for cash. On 8 December 2020 a further 8,622,231
ordinary shares were issued in consideration for the acquisition of 4basebio
S.L.U. and 4basebio Limited (now 4basebio UK Limited).
The calculation of the diluted and undiluted earnings per share for continuing
operations was based on the weighted average number of shares as determined
above. The numerator is defined as result after tax from continuing operations.
The comparative has been restated to reflect the number of shares prior to the
combination which is considered to be 8,622,231; this is the number of shares
adjusted for the exchange ratio of the combination. See note 13 for further
details relating to the business combination.
4. Events after the reporting period
Admission to AIM
On 17 February 2021, the Company's shares were admitted to trading on the AIM
market of London Stock Exchange.
Forward exchange contracts
Subsequent to year end and prior to the approval of these financial statements,
the Group entered into a number of foreign exchange forward contracts to sell
Euros and buy Pounds. The Group's cash balances are primarily held in Euros
following the spin out of activities from 4basebio AG, while a significant
proportion of its expenditure is incurred in Pounds. During the remainder of
2021, the Group is contracted to sell ?2 million at an average price of £
0.8659.
Legal action versus Company
Subsequent to year end, the Company received notification in respect of four
separate legal actions being commenced by shareholders in 4basebio AG (now
2Invest AG) in relation to the spin out process of 4basebio SE (now 4basebio UK
Societas). These actions are being pursued in Germany.
The spin out process approved by the Extraordinary General Meeting of 4basebio
AG provided for shareholders in 4basebio AG to receive one share in 4basebio SE
for every six shares held by each shareholder in 4basebio AG on the specified
settlement date. Under German law, shareholders of 4basebio AG were entitled
to seek compensation in lieu of receiving shares in 4basebio SE, such
compensation set at ?1.30 per share where an objection was made at the time of
the Extraordinary General Meeting. Shareholders with about 40,000 shares
objected to the spin out at the time. Consequently, these claims are seeking
from 4basebio UK Societas compensation in excess of the ?1.30 per share, such
amount yet to be specified.
The directors note that such claims processes are common in Germany and are
often prolonged and consider these actions to be without merit. The Company
has engaged German legal counsel to advise on these matters.
Royal Holloway evaluation licence and research and collaboration agreement
On 27 April 2021, 4basebio Discovery signed an evaluation licence and research
and collaboration agreement with Royal Holloway University of London to enable
collaboration on a payload and vector and to evaluate their efficacy for
treatment of muscular dystrophy. The initial project is expected to extend
over two years, with an option for 4basebio Discovery to enter into a
commercial licence under terms already agreed between the parties.
5. Approval of the financial statements
The financial statements were approved by the board of directors and authorised
for issue on 2 June 2021. A copy of the financial statements, together with the
Notice of AGM which will be announced separately, will shortly be sent to all
shareholders and will be available from the Company's website.
END
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