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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
4d Pharma Plc | LSE:DDDD | London | Ordinary Share | GB00BJL5BR07 | ORD 0.25P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 16.36 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMDDDD
RNS Number : 1156C
4d Pharma PLC
18 February 2022
4D pharma to Restate Unaudited Interim Financial Statements for the Six-Month Period Ended June 30, 2021 to Correct Accounting for Warrants
Non-cash adjustment with no effect on cash position or operating results of 4D Pharma's business
Audited financial statements for Fiscal Year 2020 are not affected
Leeds, UK, February 18, 2022 - 4D pharma plc (AIM: DDDD, NASDAQ: LBPS) , a pharmaceutical Company leading the development of Live Biotherapeutic products (LBPs), a novel class of drug derived from the microbiome, today announced that the Company has determined that the warrants and units assumed by the Company in connection with its March 2021 merger with Longevity Acquisition Corporation should not be recorded as equity instruments, and in accordance with IFRS and US GAAP, should be recorded as derivative liabilities. While the issues identified are non-cash, and do not impact the cash and cash equivalents, the Company has restated the unaudited interim consolidated financial statements for the six months period ending June 30, 2021.
The issues disclosed in this release are an accounting technicality and were identified by the Company during the ongoing preparation of its audited financial statements for the year ended December 31, 2021. The restatements do not impact the Company's cash and cash equivalents, revenues, operating expenses, operating loss, assets, or liquidity for the affected period.
This restatement will apply to the Company's International Financial Reporting Standards "IFRS" and US Generally Accepted Accounting Principles "GAAP" financial statements for the six months period ending June 30, 2021.The Company's audited financial statements for the year ended December 31, 2020 are not affected.
IFRS Statements
As previously reported under IFRS, the Company had concluded that the warrants and units were determined to be equity instruments and accounted for under IFRS 2. During the re-assessment and in line with the IFRIC discussion paper dated February 1, 2022 ('Special purpose acquisition companies (SPAC); accounting for warrants at acquisition'), the Company has reviewed its warrant accounting policies and determined that the rules outlined in IAS 32 may provide a more appropriate treatment than that of IFRS 2. IAS 32 states that equity linked financial instruments must meet a "fixed for fixed" criteria to be accounted for as equity based. As a result of the variation in the strike price currency (USD$) and the Company's functional currency (GBPGBP) together with the cashless exercise features, the warrants and units are to be determined as liabilities. Therefore, the Company has decided to reassess its accounting policy, changing the reporting of the warrants and units to liabilities in its restated financials. The restated IFRS financial statements are set out below. The effect on IFRS reporting are as follows:
-- Income Statement: Restated comprehensive loss of (GBP49.2) million compared to (GBP56.1) million as previously reported. This is a reduction in comprehensive loss of GBP6.9 million due to the change in fair value of the warrants as of June 30, 2021
-- Balance Sheet: Reduction in equity and net assets of GBP11.5 million, offset by an increase in liabilities of GBP11.5 million
GAAP Statements
As previously reported under GAAP, the Company had concluded that the warrants and units were indexed to its own stock and were equity based. According to Accounting Standards Codification "ASC" 815-40-15-71, equity linked financial instruments issued with a strike price denominated in a currency (USD$) different than the Company's functional currency (GBPGBP) incurs an exposure to changes in currency exchange rates and thus cannot be indexed to the Company's stock. Therefore, the Company has corrected this issue and will report the warrants and units as derivative liabilities in the Form 6-K to be furnished with the US Securities and Exchange Commission. The effect on GAAP reporting are as follows:
-- Income Statement: Restated comprehensive loss of ($24.2) million compared to ($18.5) million as previously reported. This is an increase in comprehensive loss of $5.8 million, due to $11.0 million loss on issuance of securities, partially offset by $5.2 million in the change in fair value of the warrants as of June 30, 2021
-- Balance Sheet: Reduction of $5.8 million in stockholder's equity, offset by an increase in liabilities of $5.8 million
About 4D pharma
4D pharma is a world leader in the development of Live Biotherapeutics, a novel and emerging class of drugs, defined by the FDA as biological products that contain a live organism, such as a bacterium, that is applicable to the prevention, treatment or cure of a disease. 4D pharma has developed a proprietary platform, MicroRx(R), that rationally identifies Live Biotherapeutics based on a deep understanding of function and mechanism.
4D pharma's Live Biotherapeutic products (LBPs) are orally delivered single strains of bacteria that are naturally found in the healthy human gut. The Company has five clinical programs, namely a Phase I/II study of MRx0518 in combination with KEYTRUDA(R) (pembrolizumab) in solid tumors, a Phase I study of MRx0518 in a neoadjuvant setting for patients with solid tumors, a Phase I study of MRx0518 in patients with pancreatic cancer, a Phase I/II study of MRx-4DP0004 in asthma, and Blautix(R) in irritable bowel syndrome (IBS) which has completed a successful Phase II trial. Preclinical-stage programs include candidates for CNS disease such as Parkinson's disease and other neurodegenerative conditions. The Company has a research collaboration with MSD, a tradename of Merck & Co., Inc., Kenilworth, NJ, USA, to discover and develop Live Biotherapeutics for vaccines.
For more information, refer to https://www.4dpharmaplc.com .
Contact Information:
4D
Duncan Peyton, Chief Executive Officer +44 (0)113 895 0130
Investor Relations ir@4dpharmaplc.com
Singer Capital Markets - Nominated Adviser and Joint Broker +44 (0)20 7496 3000
Philip Davies / James Fischer (Corporate Finance)
Tom Salvesen (Corporate Broking)
Bryan Garnier & Co. Limited - Joint Broker +44 (0)20 7332 2500
Dominic Wilson
Stern Investor Relations
Julie Seidel +1-212-362-1200
Julie.seidel@sternir.com
IFRS Group Statement of Total Comprehensive Income
For the six months to 30 June 2021 (restated)
Unaudited Unaudited Unaudited Unaudited six months six months six months six months Audited ended ended ended ended Year to 30 June 30 June 30 June 30 June 31 December 2021 2021 2021 2020 2020 Reported Adjustment Restated Reported Reported GBP000 GBP000 GBP000 GBP000 GBP000 ------------------------------------ ----------- ----------- ----------- ----------- ------------ Revenue 231 - 231 275 534 Research and development costs (9,873) - (9,873) (12,418) (22,041) Administrative expenses (3,346) - (3,346) (3,839) (5,969) Foreign currency gains 229 - (229) 920 363 Other operating income 18 - (18) 21 45 ------------------------------------- ----------- ----------- ----------- ----------- ------------ Operating loss before non-recurring costs (12,741) - (12,741) (15,041) (27,068) Non-recurring costs (44,160) - (44,160) (565) (3,110) ------------------------------------- ----------- ----------- ----------- ----------- ------------ Operating loss after non-recuring costs (56,901) - (56,901) (15,606) (30,178) Finance income - Fair value adjustment of warrants and Options - 6,927 6,927 - - - Other 2 - 2 5 5 Finance expense (83) - (83) (88) (173) ------------------------------------- ----------- ----------- ----------- ----------- ------------ Loss before taxation (56,982) 6,927 (50,055) (15,689) (30,346) Taxation 1,532 - 1,532 1,963 4,383 ------------------------------------- ----------- ----------- ----------- ----------- ------------ Loss for the period (55,450) 6,927 (48,523) (13,726) (25,963) Other comprehensive income: Exchange differences on translating foreign operations (665) - (665) 165 110 ------------------------------------- ----------- ----------- ----------- ----------- ------------ Loss and total comprehensive income for the period (56,115) 6,927 (49,188) (13,561) (25,853) ------------------------------------- ----------- ----------- ----------- ----------- ------------ Loss per share Basic and diluted for the period (34.97)p 4.37p (30.60)p (14.06)p (22.80)p ------------------------------------- ----------- ----------- ----------- ----------- ------------
IFRS Group Statement of Financial Position
At 30 June 2021 (restated)
At At At At At 30 June 30 June 30 June 30 June 31 December 2021 2021 2021 2020 2020 Reported Adjustment Restated Reported Reported GBP000 GBP000 GBP000 GBP000 GBP000 ---------------------------- --------- ---------- --------- --------- ------------ Assets Non-current assets Property, plant and equipment - Owned assets 3,229 - 3,229 4,150 3,659 - Right-of-use assets 752 - 752 911 835 Intangible assets 13,780 - 13,780 14,181 14,025 Taxation receivables 180 - 180 191 177 ----------------------------- --------- ---------- --------- --------- ------------ 17,941 - 17,941 19,433 18,696 ---------------------------- --------- ---------- --------- --------- ------------ Current assets Inventories 305 - 305 212 291 Trade and other receivables 2,980 - 2,980 2,046 3,223 Taxation receivables 5,675 - 5,675 8,228 4,436 Cash and cash equivalents 20,746 - 20,746 20,746 8,775 ----------------------------- --------- ---------- --------- --------- ------------ 29,706 - 29,706 20,513 16,725 ---------------------------- --------- ---------- --------- --------- ------------ Total assets 47,647 - 47,647 39,946 35,421 ----------------------------- --------- ---------- --------- --------- ------------ Liabilities Current liabilities Trade and other payables 6,962 - 6,962 6,423 6,379 Lease liabilities 74 - 74 73 73 7,036 - 7,036 6,496 6,452 ---------------------------- --------- ---------- --------- --------- ------------ Non-current liabilities Lease liabilities 936 - 936 1,027 986 Liabilities on warrants and options - 11,503 11,503 - - Deferred tax 12 - 12 966 13 ----------------------------- --------- ---------- --------- --------- ------------ 948 11,503 12,451 1,993 999 ---------------------------- --------- ---------- --------- --------- ------------ Total liabilities 7,984 11,503 19,487 8,489 7,451 ----------------------------- --------- ---------- --------- --------- ------------ Net assets 39,663 (11,503) 28,160 31,457 27,970 ----------------------------- --------- ---------- --------- --------- ------------ Capital and reserves Share capital 451 - 451 274 329 Share premium 159,937 25,734 185,671 130,186 136,278 Merger reserve 958 - 958 958 958 Translation reserve (110) - (110) 611 555 Other reserve (864) - (864) (864) (864) Share-based payment reserve 47,488 (44,164) 3,324 1,010 3,497 Retained earnings (168,197) 6,927 (161,270) (100,718) (112,783) ----------------------------- --------- ---------- --------- --------- ------------ Total equity 39,663 (11,503) 28,160 31,457 27,970 ----------------------------- --------- ---------- --------- --------- ------------
IFRS Group Cash Flow Statement
For the six months to 30 June 2021 (restated)
Unaudited Unaudited Unaudited Unaudited six months six months six months six months Audited ended ended ended ended Year to 30 June 30 June 30 June 30 June 31 December 2021 2021 2021 2020 2020 Reported Adjustment Restated Reported Reported GBP000 GBP000 GBP000 GBP000 GBP000 --------------------------------- ----------- ----------- ----------- ----------- ------------ Loss after taxation (55,450) 6 ,927 (48,523) (13,726) (25,963) Adjustments for: Depreciation of property, plant and equipment 446 - 446 508 1,003 Amortization of intangible assets 74 - 74 110 203 Loss on disposal of property, plant and equipment 40 - 40 - - Lease liabilities included in the Income Statement - - - 68 135 Finance income - Other (2) - (2) (5) (5) - Fair value adjustment of warrants and options - (6,927) (6,927) - - Finance expense 83 - 83 88 173 Expense on issue of shares - - - 1,498 - Share based compensation 44,121 - 44,121 675 3,334 ---------------------------------- ----------- ----------- ----------- ----------- ------------ Cash flows from operations before movements in working capital (10,688) - (10,688) (10,784) (21,120) Changes in working capital: Increase in inventories (14) - (14) (14) (93) Decrease/(increase) in trade and other receivables 243 - 243 (1,037) (2,106) (Increase)/decrease in taxation receivables (1,238) - (1,238) (2,111) 1,697 Increase/(decrease) in trade and other payables 216 - 216 19 (1,052) ---------------------------------- ----------- ----------- ----------- ----------- ------------ Cash outflow from operating activities (11,481) - (11,481) (13,927) (22,674) ---------------------------------- ----------- ----------- ----------- ----------- ------------ Cash flows from investing activities Purchases of property, plant and equipment (117) - (117) (160) (163) Purchase of software and other intangibles - - - (15) (15) ---------------------------------- ----------- ----------- ----------- ----------- ------------ Net cash outflow from investing activities (117) - (117) (175) (178) ---------------------------------- ----------- ----------- ----------- ----------- ------------ Cash flows from financing activities Proceeds from issues of ordinary share capital 27,904 - 27,904 22,000 29,741 Expenses on issue of shares (4,217) - (4,217) (1,498) (1,594) Lease liability payments (37) - (37) (126) (188) Interest received 2 - 2 5 5 Interest paid (83) - (83) (88) (173) ---------------------------------- ----------- ----------- ----------- ----------- ------------ Net cash inflow from financing activities 23,569 - 23,569 20,293 27,791 ---------------------------------- ----------- ----------- ----------- ----------- ------------ Increase in cash and cash equivalents 11,971 - 11,971 6,191 4,939 Cash and cash equivalents at the start of the year 8,775 - 8,775 3,836 3,836 ---------------------------------- ----------- ----------- ----------- ----------- ------------ Cash and cash equivalents at the end of the period 20,746 - 20,746 10,027 8,775 ---------------------------------- ----------- ----------- ----------- ----------- ------------, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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February 18, 2022 02:00 ET (07:00 GMT)
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