Exhibit 99.1

KPMG Auditores, S.L. Torre Realia Plaça d’Europa, 41-43 08908 L’Hospitalet de Llobregat (Barcelona)

Independent Auditor’s Report

To the shareholders of VCN Biosciences, S.L.

Opinion

We have audited the financial statements of VCN Biosciences, S.L. (the Company), which comprise the statements of financial position as of December 31, 2021 and 2020, and the related statements of profit and loss and other comprehensive income, changes in equity, and cash flows for the years then ended, and the related notes to the financial statements.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Directors’ responsibility for the Financial Statements

The Directors are responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that the financial statements are available to be issued.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

KPMG Auditores, S.L.

/S/ KPMG Auditores, S.L.

Barcelona, Spain

February 10, 2022

VCN Biosciences, S.L.
Financial Statements
December 31, 2021 and 2020

Statements of financial position

at December 31, 2021 and 2020

(expressed in Euros)

The notes on pages 7 to 25 form part of these financial statements.

These financial statements were approved by the board of directors on February 9, 2022.

VCN Biosciences, S.L.
Financial Statements
December 31, 2021 and 2020

Statements of profit and loss and other comprehensive income

for the years ended December 31, 2021 and 2020

(expressed in Euros)

All amounts relate to continuing operations.

There were no recognised gains or losses other than the loss for the year.

The total comprehensive income for the year is the same as the loss for the year.

The notes on pages 7 to 25 form part of these financial statements.

VCN Biosciences, S.L.
Financial Statements
December 31, 2021 and 2020

Statements of changes in equity

for the years ended December 31, 2021 and 2020

(expressed in Euros)

The notes on pages 7 to 25 form part of these financial statements.

The notes on pages 7 to 25 form part of these financial statements.

VCN Biosciences, S.L.
Financial Statements
December 31, 2021 and 2020

Notes to the financial statements

for the year ended December 31, 2021 and 2020

(forming part of the financial statements)

1. First time adoption of IFRS

In the context of the preparation of these financial statements, and in accordance with IFRS 1, VCN Biosciences S.L. (the “Company”) has consistently applied the accounting policies set out in note 2 in preparing the financial statements for the years ended December 31, 2021, 2020 and 2019. The Company adopted IFRS for the first time in 2020.

When preparing the opening statement of financial position under International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standard Board (IFRS-IASB), the Company adjusted the statement of financial position dated January 1, 2019, presented in the individual financial statements of the Company for that year, applying as described in IFRS 1 all the mandatory exceptions and some of the optional exemptions to the retrospective application of IFRS-IASB, as described below:

The Company has not applied any of the exemptions to the full retroactive application of IFRS-IASB.

There are no mandatory exceptions applicable to the Company.

2. Nature, principal activities, basis of presentation and significant accounting policies

The Company is a private company limited by shares which was founded in Spain in 2009. Its registered address is Avinguda de la Generalitat, 152 (Sant Cugat del Vallès) and its corporate tax residence is in Barcelona. The Company's statutory activity consists of research and experimental biotechnology development, which is also its principal activity. The Company does not have any sales income because its research and development (R&D) projects are in the early stages of development.  

The Company is a subsidiary of Grifols Innovation and New Technologies, Limited (see note 7). The largest group in which the results of this Company are consolidated is that headed by Grifols S.A., which is the ultimate parent company of the Company, it is listed and no one entity or individual has control. The consolidated accounts of Grifols S.A. are available to the public and may be obtained from Carrer Jesús i Maria, 6, Barcelona.  

On February 19, 2021 Grifols S.A. board of directors issued the consolidated annual accounts of Grifols, S.A. and subsidiaries (“the Group” or “Grifols Group”) for 2020 prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS-EU) which for Grifols Group purposes, are identical to the standards as issued by the International Accounting Standard Board (IFRS-IASB), which show consolidated profit attributable to the parent company of 618,546 thousand euros, total assets of 15,274,776 thousand euros and consolidated equity of 6,720,055 thousand euros (2019: 625,146; 15,542,611 and 6,845,768 thousand euros). The 2021 consolidated annual accounts of the Grifols Group are expected to be issued at the end of February 2022.

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the financial statements of VCN Biosciences S.L.

Basis of preparation

VCN Biosciences, S.L.
Financial Statements
December 31, 2021 and 2020

Notes to the financial statements (continued)

2. Nature, principal activities, basis of presentation and significant accounting policies (continued)

Going concern

The Company had losses in 2021 and 2020 amounting to 1,783 thousand euros and 1,888 thousand euros, respectively (1,489 thousand euros in 2019). As of December 31, 2021 and 2020, the Company’s financial statements presented a positive equity of 626 and 2,409 thousand euros, respectively (negative equity of 703 thousand euros as of December 31, 2019). In 2020 the shareholders made a capital contribution in the amount of 5 million euros in order to restore the equity and financial position of the Company.

As stated in note 2, the Company's statutory activity consists of research and experimental biotechnology development, and since R&D projects are in early stages of development, the Company does not have sales income. Therefore, the Company needs ongoing financial support from shareholders in order to develop its activity.

The Directors of the Company have prepared these financial statements following the principle of a going concern, considering

the nature of the Company and the following facts:

Due to the reasons explained above, there is no significant doubt that the Company will be able to continue using the going concern principle.

Fixed assets

Subsequent costs to the initial recognition of the asset are capitalized only when they increase capacity or productivity or lengthen the useful life of the asset. The carrying amount of parts that are replaced is derecognised.

Leases

IFRS 16 introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognises a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. There are recognition exemptions for short-term leases and leases of low-value items. The application is required for annual periods beginning on or after January 1, 2019.

IFRS 16 replaces existing leases guidance, including IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases – Incentives and SIC-27 Evaluating the substance of transactions involving the legal form of a lease.

The Company adopted IFRS 16 for the first time on January 1, 2019 as permitted under the specific transitional provisions in the standard. The reclassifications and the adjustments arising from the new leasing rules are therefore recognised in the opening statement of financial position at January 1, 2019.

VCN Biosciences, S.L.
Financial Statements
December 31, 2021 and 2020

Notes to the financial statements (continued)

2. Nature, principal activities, basis of presentation and significant accounting policies (continued)

On January 1, 2019 there was no impact in equity due to the IFRS 16 application.

The main policies, estimates and criteria for the application of IFRS 16 are as follows:

Impairment of non-financial assets subject to amortisation or depreciation

The Company assesses whether there are indications of possible impairment losses on non-financial assets subject to amortisation or depreciation, with the aim to verify whether the assets are carried at more than their recoverable amount. The recoverable amount is the higher of the fair value less costs to sell and the value in use.

Impairment losses are recognised in the statement of profit and loss.

At the end of each reporting period the Company assesses whether there are any indications that an impairment loss recognised in prior periods may no longer exist or may have decreased. Impairment losses on goodwill are not reversible. Impairment losses on other assets are only reversed if there has been a change in the estimates used to calculate the recoverable amount of the asset.

A reversal of an impairment loss is recognised in the statement of profit and loss. The increased carrying amount of an asset attributable to a reversal of an impairment loss may not exceed the carrying amount that would have been determined, net of depreciation or amortisation, had no impairment loss been recognised.

After an impairment loss or reversal of an impairment loss is recognised, the depreciation (amortisation) charge for the asset is adjusted in future periods based on its new carrying amount.

However, if the specific circumstances of the assets indicate an irreversible loss, this is recognised directly in losses on the disposal of fixed assets in the statement of profit and loss.

VCN Biosciences, S.L.
Financial Statements
December 31, 2021 and 2020

Notes to the financial statements (continued)

2. Nature, principal activities, basis of presentation and significant accounting policies (continued)

Financial instruments

- Classification of the financial instruments

Financial instruments are classified at the time of their initial recognition as a financial asset, a financial liability or an equity instrument, in accordance with the economic substance of the contractual agreement and with the definitions of financial assets, financial liabilities or equity instruments indicated in IAS 32 “Financial instruments: Presentation”.

For purposes of its measurement, the Company classifies financial instruments in the categories of financial assets and financial liabilities at fair value through profit or loss, separating those initially designated from those held for trading or mandatorily measured at fair value through profit or loss, financial assets and liabilities measured at amortized cost and financial assets measured at fair value through other comprehensive income, separating the equity instruments designated as such, from other financial assets. The classification depends on the Company’s business model to manage the financial assets and the contractual terms of the cash flows.

- Offsetting principles

A financial asset and a financial liability are offset only when the Company currently has the legally enforceable right to offset the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

- Measurement

At the time of initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset that is not at fair value through profit or loss, the costs of the transaction that are directly attributable to the acquisition. The transaction costs of financial assets at fair value through profit or loss are taken to results.

In order to determine the fair value of financial assets or liabilities, the Company uses market data as where available.

- Loans and receivables

Loans and receivables comprise trade and non-trade receivables with fixed or determinable payments that are not quoted in an active market other than those classified in other financial asset categories. These assets are initially recognised at fair value, including transaction costs, and are subsequently measured at amortised cost using the effective interest method.

Nevertheless, financial assets, which have no established interest rate or are expected to be received in the short term, and for which the effect of discounting is immaterial, are measured at their nominal amount.

- Interests

Interest are recognised using the effective interest method.

- Impairment of financial assets

A financial asset or a group of financial assets is impaired and impairment losses are incurred if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset and the event or events have an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

The Company recognises impairment of loans and receivables and debt instruments when estimated future cash flows are reduced or delayed due to debtor insolvency.

- Financial liabilities

Financial liabilities, including trade and other payables, that are not classified as held for trading or as financial liabilities at fair value through profit or loss are initially recognised at fair value less any transaction costs directly attributable to the issue of the financial liability. Subsequent to initial recognition they are measured at amortised cost using the effective interest method.

Nevertheless, financial liabilities which have no established interest rate, which are expected to be settled in the short term and for which the effect of discounting is immaterial, are measured at their nominal amount.

The Company measures financial liabilities at amortised cost provided that reliable estimates of cash flows can be made based on the contractual terms.

VCN Biosciences, S.L.
Financial Statements
December 31, 2021 and 2020

Notes to the financial statements (continued)

2. Nature, principal activities, basis of presentation and significant accounting policies (continued)

Cash and cash equivalents

Cash and cash equivalents include cash on hand and demand deposits in financial institutions.

Government grants

Government grants are recognised when there is reasonable assurance that they will be received and that the Company will comply with the conditions attached.

Outright capital grants are initially recognised as deferred income in the statement of financial position. Income from capital grants is recognised in the statement of profit and loss in line with the depreciation of the corresponding financed assets.

Operating grants received to offset expenses or losses already incurred, or to provide immediate financial support not related to future disbursements, are recognised in the statement of profit and loss.

Financial liabilities comprising implicit assistance in the form of below-market interest rates are initially recognised at fair value. The difference between this value, adjusted where necessary for the issue costs of the financial liability and the amount received, is recognised as a government grant based on the nature of the grant awarded. The amount recognised as other operating income in the statement of profit and loss in 2021 was 192 thousand euros, which included the government grant of the interest-free loan received by the Company in 2021 (see note 9) and debt instalment forgiveness. No income was recognised as a government grant in 2020 (58 thousand euros in 2019).

Post-retirement benefits

The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The amount charged against profits represents the contributions payable to the scheme in respect of the accounting period.

Taxation

The income tax expense or tax benefit for the year comprises current tax and deferred tax.

Current tax is the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the year. Current tax assets or liabilities are measured at the amount expected to be paid to or recovered from the taxation authorities, using the tax rates and tax laws that have been enacted or substantially enacted at the reporting date.

Deferred tax liabilities are the amounts of income taxes payable in future periods in respect of taxable temporary differences, whereas deferred tax assets are the amounts of income taxes recoverable in future periods in respect of deductible temporary differences, the carryforward of unused tax losses, and the carryforward of unused tax credits. Temporary differences are differences between the carrying amount of an asset or liability in the statement of financial position and its tax base.

Current and deferred tax are recognised as income or an expense and included in the profit or loss for the year, except to the extent that the tax arises from a transaction or event which is recognised, in the same or a different year, directly in equity, or from a business combination.

A deferred tax asset is recognised only to the extent that it is probable that tax deductions will be monetized, or future taxable profits will be available against which the temporary difference can be utilised.

Deferred tax assets which do not meet the above conditions are not recognised in the statement of financial position. At year end the Company assesses whether deferred tax assets which were previously not recognised now meet the conditions for recognition.

Since January 1, 2017 the Company files consolidated tax returns with Grifols S.A. and the rest of the Spanish subsidiaries: Instituto Grifols, S.A., Grifols Movaco, S.A., Biomat, S.A., Grifols International, S.A., Grifols Engineering, S.A., Laboratorios Grifols, S.A., Gripdan Invest S.L., Grifols Viajes, S.A., and Aigües Minerals de Vilajuïga S.A.

VCN Biosciences, S.L.
Financial Statements
December 31, 2021 and 2020

Notes to the financial statements (continued)

2. Nature, principal activities, basis of presentation and significant accounting policies (continued)

Classification of assets and liabilities as current and non-current

The Company classifies assets and liabilities in the statement of financial position as current and non-current. Current assets and liabilities are determined as follows:

- Assets are classified as current when they are expected to be realised or are intended for sale or consumption in the Company’s normal operating cycle, they are held primarily for the purpose of trading, they are expected to be realised within twelve months after the reporting date or are cash or a cash equivalent.

- Liabilities are classified as current when they are expected to be settled in the Company’s normal operating cycle, they are held primarily for the purpose of trading, or they are due to be settled within twelve months after the reporting date.

Transactions between group companies

Transactions between group companies are recognised at the fair value of the consideration given or received. The difference between this value and the amount agreed is recognised in line with the underlying economic substance of the transaction.

Research and development expenditures

Any research and development expenditure incurred during the research phase of projects is recognised as an expense when incurred. Costs related with development activities are capitalized when:

Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

As from January 1, 2019 the Company has adopted the latest versions of all the IFRS issued by the International Accounting Standard Board (IASB) for which the mandatory effective date is January 1, 2020.

The Company has applied as from January 1, 2019 the following new accounting standards:

The application of these standards and interpretations did not have any material impacts on the financial statements for the years ended December 31, 2021, 2020 and 2019.

The Directors intend to adopt these standards, where relevant and applicable, in the first accounting period after their effective date, but do not anticipate that they will have a material effect on the financial statements in the period of their initial application.

VCN Biosciences, S.L.
Financial Statements
December 31, 2021 and 2020

Notes to the financial statements (continued)

VCN Biosciences, S.L.
Financial Statements
December 31, 2021 and 2020

Notes to the financial statements (continued)

(a) Fully depreciated assets

Cost of fully depreciated property, plant and equipment in use at December 31 was as follows:

(b) Insurance

The Company has taken out insurance policies to cover the risk of damage to its property, plant and equipment. These policies amply cover the net carrying amount of the Company’s assets.

The Company’s risk management policies are established in order to identify and analyse the risks to which the Company is exposed, establish suitable risk limits and controls, and control risks and compliance with limits. Risk management procedures and policies are regularly reviewed to ensure they take into account changes in market conditions and in the Company’s activities. The Company’s management procedures and rules are designed to create a strict and constructive control environment in which all employees understand their duties and obligations.

Market risk is the risk that changes in the market prices – e.g. foreign exchange rates, will affect the business income or value of its holding of financial instruments. The Company operates internationally and is therefore exposed to currency risk when operating with foreign currencies, especially with regard to the UK Sterling. The management considers that the business has no exposure to significant currency risks.

Liquidity risk is the risk that the Company cannot meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure where possible, that it always has sufficient liquidity to settle its obligations at the maturity date. The Company applies a prudent policy to cover its liquidity risks and manages this proactively through appropriate management of liquid funds in line with Group treasury policies. Additionally, the shareholders make capital contributions in order to restore the financial situation when required.

The Company’s interest rate risks arise from current and non-current borrowings. Borrowings at variable interest rates expose the Company to cash flow interest rate risks. Fixed-rate borrowings expose the Company to fair value interest rate risk. The Company policy set by the Group consists of keeping its borrowings in instruments with a variable interest rate, except for the below-market interest rates granted by governmental institutions (see note 9).

As most of the Company’s financial liabilities are fixed-rate, interest expenses would not significantly change in case of an increase/decrease of 100 basis points at December 31, 2021, 2020 and 2019.

The directors’ policy is to maintain a solid capital base in order to ensure creditor and market confidence and sustain future business development.

VCN Biosciences, S.L.
Financial Statements
December 31, 2021 and 2020

Notes to the financial statements (continued)

(a) Classification

(b) Financial investments in Group and related companies

In 2021 and 2020, the Company had a cash pooling arrangement with Grifols Worldwide Operations Limited, due by 2027. The credit limit was 2,000 million euros and the accrued interest rate was the Group's senior debt plus a spread of 0.75%. As of December 31, 2021 and 2020, the cash pooling balance amounted to 889 and 1,348 thousand euros, respectively (2019: credit balance of 975 thousand euros. See note 12).

The “Loans to group companies (tax effect)” refer to intercompany receivables resulting from the tax effect of filing consolidated tax returns, which comprise accrued income tax and value added tax.

(c) Other receivables

VCN Biosciences, S.L.
Financial Statements
December 31, 2021 and 2020

Notes to the financial statements (continued)

Details of equity and changes during the year are shown in the statement of changes in equity.

(a) Share capital

As of December 2, 2020, an increase of capital was carried out by issuing 63,509 new shares of 1 euro par value each.

The companies that participate directly or indirectly in the share capital of the Company in a percentage equal to or greater than 10% are as follows:

The Company and its shareholders signed, on December 14, 2021, a share purchase agreement with Synthetic Biologics, Inc. (the buyer) to sell all the shares of VCN Biosciences, S.L., subject to fulfilment of certain conditions. Completion of the transaction is expected in the first quarter of 2022.

(b) Share premium

This reserve is freely distributable.

Dividends may not be distributed if, after the distribution, the Company’s equity is lower than the share capital.

As of December 2, 2020, an increase of capital was carried out by issuing 63,509 new shares with a share premium of 77.728999 euros each, which meant a total share premium of 4,936,491 euros.

(c) Legal reserve

Appropriations to the legal reserve were made in compliance with article 274 of the Spanish Companies Act, which requires that companies transfer 10% of profits for the year to a legal reserve until this reserve reaches an amount equal to 20% of the share capital.

The legal reserve is not distributable to shareholders and if it is used to offset losses, in the event that no other reserves are available, the reserve must be replenished with future profits.

The Company operates a defined contribution pension scheme for those employees who have rendered services to the Company for more than 2 years. The pension scheme is part of BancSabadell 18 Fondo de Pensiones, which is managed by BanSabadell Pensiones.

The pension charge for the year represents contributions payable by the Company to the fund (see note 11.c). There were no outstanding or prepaid contributions at the end of the financial year (2020: nil).

VCN Biosciences, S.L.
Financial Statements
December 31, 2021 and 2020

Notes to the financial statements (continued)

(a) Classification

There are no significant differences between the fair value and the carrying value of the Company’s financial liabilities.

(b) Loans from Group companies

(c) Financial liabilities

The financial liabilities amount refers entirely to interest-free or below-market interest rates loans (0% - 1%) extended by governmental institutions (Ministerio de Ciencia, Innovación y Universidades and ACC10 Generalitat de Catalunya). The maturities of these loans are between 2022 and 2029.

In 2021, the Company received interest-free loans that amounted 170 thousand euros (nil in 2020 and 454 thousand euros in 2019).

The difference between the fair value of these liabilities (when relevant conditions associated with the grants are met) and the amount received is recognised as a government grant and classified as other operating income in the statement of profit and loss (see note 2).

VCN Biosciences, S.L.
Financial Statements
December 31, 2021 and 2020

Notes to the financial statements (continued)

Classification of debts by maturity:

As these financial liabilities were booked at fair value at the date of collection with a grant being registered for the difference between the amount received and the fair value, and then booked at amortised cost, the disclosed amounts do not include the future accounting finance expenses related to these financial liabilities.

The Company filed a claim against one of its suppliers for certain manufacturing and engineering services provided in the context of the services agreement signed between the parties, due to some quality issues identified in the services provided. As at December 31, 2021, the trade payable balance with the supplier amounted to 264 thousand euros. In this regard, the Company is claiming all the amounts paid related to those services, amounting to 814 thousand euros, and entered into a negotiation process with the supplier. The Company has not recognized any income in the financial statements related to this claim as it is still a contingent asset. In addition, the purchase agreement signed with Synthetic Biologics stated that any loss or benefit related to this litigation procedure would be borne by Grifols in case the transaction is completed.

VCN Biosciences, S.L.
Financial Statements
December 31, 2021 and 2020

Notes to the financial statements (continued)

(e) Amounts in foreign currencies

The currency profile of the financial liabilities was as follows:

Details of balances with public entities were as follows:

Receivables and payables with Grifols S.A. resulting from the tax effect of filing consolidated tax returns were as follows:

Balances receivable as of December 31, 2021, 2020 and 2019 comprised accrued income tax and value added tax.

VCN Biosciences, S.L.
Financial Statements
December 31, 2021 and 2020

Notes to the financial statements (continued)

The Company had the following main applicable taxes open to inspection by the Spanish taxation authorities:

Because of the different interpretations of the current tax legislation, additional liabilities may arise as a result of a tax inspection. Management considers that such liabilities would not significantly affect the financial statements.

(a) Income tax

Since January 1, 2017 the Company files consolidated tax returns with Grifols S.A. and the rest of the Spanish subsidiaries: Instituto Grifols, S.A., Grifols Movaco, S.A., Biomat, S.A., Grifols International, S.A., Grifols Engineering, S.A., Laboratorios Grifols, S.A., Gripdan Invest S.L., Grifols Viajes, S.A., Aigües Minerals de Vilajuïga S.A. and Araclón Biotech, S.L..

Analysis of tax expense in the year:

Details of deferred tax assets by type of asset were as follows:

VCN Biosciences, S.L.

Financial Statements

December 31, 2021 and 2020

Notes to the financial statements (continued)

The Company did not recognise as deferred tax assets the tax effect of the unused tax loss carryforwards, which amounted to 6,260 thousand euros at December 31, 2021, 2020 and 2019. At the year-end it was not probable that future taxable profit would be available against which the Company could use the benefits therefrom (the use of tax losses in the future will depend on the success of the R&D projects of the Company).

Details of tax deductions were as follows:

In 2021 the Company monetized 531 thousand euros of the deductions generated in 2019 and renounced to the 20%, which amounted to 133 thousand euros. Additionally, 971 thousand euros of tax deductions were recovered by the consolidated tax Group.

As a result of a Group tax credits adjustment, in 2021 the Company transferred to the Group 559 thousand euros of tax deductions.

In 2020 the Company monetized 480 thousand euros of the deductions generated in 2018, renounced to the 20%, which amounted to 120 thousand euros, and regularized 68 thousand euros. The remaining deductions, which amounted to 5 thousand euros, did not have a binding reasoned report, but the Company considered that the amount would be applied by the Group.

VCN Biosciences, S.L.

Financial Statements

December 31, 2021 and 2020

Notes to the financial statements (continued)

(b) Value added tax

Since January 1, 2018 the Company files consolidated tax returns with Grifols S.A. and the rest of the Spanish subsidiaries: Instituto Grifols, S.A., Grifols Movaco, S.A., Biomat, S.A., Grifols International, S.A., Grifols Engineering, S.A., Laboratorios Grifols, S.A., Diagnostic Grifols, S.A., Gripdan Invest S.L., Grifols Viajes, S.A., and Aigües Minerals de Vilajuïga S.A.

11. Staff numbers and costs

(a) The average number of persons employed by the Company during the year, analysed by category, was as follows:

(b) At the end of the year the distribution by gender of Company’s personnel was as follows:

(c) Personnel expenses:

VCN Biosciences, S.L.

Financial Statements

December 31, 2021 and 2020

Notes to the financial statements (continued)

12. Related party transactions

(a) During the year, the following related party transactions took place within the normal course of business:

(*) Other loans refer to the consolidated tax amounts that Grifols S.A. has already collected from the tax authorities.

Related party transactions are conducted at arm’s length.

As of December 31, 2021, 2020 and 2019, the Company held no balances, nor transactions with the parent company.

VCN Biosciences, S.L.

Financial Statements

December 31, 2021 and 2020

Notes to the financial statements (continued)

(b) Information on the Company's directors and senior management personnel

In 2021, 2020 and 2019, the members of the board of directors did not receive any remuneration in their capacity as such, nor loans or advances, and the Company did not extend any guarantees on their behalf. The Company did not extend any advances or loans to senior management personnel either. The Company has no pension or life insurance obligations with its former or current directors or senior management personnel.

The emoluments received by senior management personnel and those members of the board of directors who maintain a working relationship with the Company and who are part of its staff, are included in the personnel expenses caption in the statement of profit and loss. In 2021 and 2020, the aggregate of emoluments received by senior management were 106 thousand euros and 117 thousand euros, respectively (115 thousand euros in 2019).

13. Other operating expenses