Delaware
|
52-2386345
|
|
(State or other jurisdiction of
incorporation or organization)
|
(IRS Employer
Identification No.)
|
Megan Gates, Esq.
Melanie Ruthrauff Levy, Esq.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
(617)
542-6000
|
John D. Hogoboom, Esq.
Lowenstein Sandler LLP
1251 Avenue of the Americas
New York, New York 10020
(212)
262-6700
|
William Hicks, Esq.
Matthew Tikonoff, Esq.
Melissa Frayer, Esq.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
(617)
542-6000
|
Large accelerated filer | ☐ | Accelerated filer | ☒ | |||
Non-accelerated filer
|
☐ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
|
||||||||
Title of Each Class of
Security to be Registered
|
|
Amount
to be
Registered
(1)
|
|
Proposed
Maximum
Offering Price
per Share
|
|
Proposed
Maximum Aggregate
Offering Price
(2)
|
|
Amount of
Registration Fee
(3)
|
Common stock, par value $0.0001 per share
|
|
35,256,571
|
|
N/A
|
|
$279,676.19
|
|
$36.30
|
|
||||||||
|
(1)
|
Represents the maximum number of shares of common stock, $0.0001 par value per share (“Spring Bank common stock”), of Spring Bank Pharmaceuticals, Inc., a Delaware corporation (“Spring Bank”) to be registered based on the estimated maximum number of shares of Spring Bank common stock expected to be issued pursuant to that certain Share Exchange Agreement, dated as of July 29, 2020, by and among Spring Bank,
F-star
Therapeutics Limited, a private company registered in England and Wales
(“F-star”)
and the holders of issued and outstanding capital shares and convertible loan notes of
F-star
party thereto (the “Exchange Agreement”), in exchange for the entire issued and outstanding share capital of
F-star
(the “Exchange”) at an assumed exchange ratio of 0.5577 without giving effect to a reverse stock split of Spring Bank common stock expected to be completed immediately prior to closing of the Exchange.
|
(2)
|
Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(f)(2) of the Securities Act of 1933, as amended. F-star is a private company, no market exists for its securities, and F-star has an accumulated capital deficit. Therefore, the proposed maximum aggregate offering price is one-third of the aggregate par value of the F-star securities expected to be exchanged in the transaction. This calculation takes into account a new investment in an assumed amount of $40.0 million in F-star, which is anticipated to occur following the date hereof and prior to the consummation of the Exchange.
|
(3)
|
This fee has been calculated pursuant to Section 6(b) of the Securities Act of 1933, as amended.
|
|
|
|
1. |
approve the issuance of Spring Bank common stock to the holders of
F-star
share capital in the Exchange, including holders who purchase ordinary shares of
F-star
in the
Pre-Closing
Financing, in accordance with the terms of Exchange Agreement, a copy of which is attached to this proxy statement/prospectus as
Annex A
|
2. |
approve an amendment to Spring Bank’s amended and restated certificate of incorporation effecting a reverse stock split of Spring Bank common stock at a ratio mutually agreed to between Spring Bank and
F-star
in the range of one new share for every shares to one new share for every shares outstanding (or any number in between);
|
3. |
approve an amendment to Spring Bank’s amended and restated certificate of incorporation changing Spring Bank’s corporate name from “Spring Bank Pharmaceuticals, Inc.” to
“F-star
Therapeutics, Inc.” effective upon the Closing;
|
4. |
approve a postponement or adjournment of the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1, 2 or 3; and
|
5. |
consider such other business as may properly come before the stockholders at the Special Meeting or any adjournment or postponement thereof.
|
Martin Driscoll
|
Eliot Forster | |
President and Chief Executive Officer
|
Chief Executive Officer
|
|
Spring Bank Pharmaceuticals, Inc.
|
F-star
Therapeutics Limited
|
1. |
To approve the issuance of Spring Bank common stock to the holders of
F-star
share capital in the Exchange, including holders who purchase ordinary shares of
F-star
in the
Pre-Closing
Financing (as defined in this proxy statement/prospectus) in accordance with the terms of a Share Exchange Agreement (the “Exchange Agreement”), a copy of which is attached to this proxy statement/prospectus as
Annex A
|
2. |
To approve an amendment to Spring Bank’s amended and restated certificate of incorporation to effect a reverse split of all outstanding shares of the Spring Bank common stock at a reverse stock split ratio as mutually agreed to by Spring Bank and
F-star
in the range of one new share for every shares to one new share for every shares outstanding (or any number in between), in the form attached as
Annex C
|
3. |
To approve an amendment to Spring Bank’s amended and restated certificate of incorporation to change the corporate name of Spring Bank from “Spring Bank Pharmaceuticals, Inc.” to
“F-star
Therapeutics, Inc.” effective upon the closing of the Exchange in the form attached as
Annex D
|
4. |
To approve a postponement or adjournment of the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1, 2 or 3.
|
5. |
To transact such other business as may properly come before the stockholders at the Special Meeting or any adjournment or postponement thereof.
|
Page
|
||||
1 | ||||
11 | ||||
24 | ||||
32 | ||||
33 | ||||
118 | ||||
120 | ||||
124 | ||||
172 | ||||
190 | ||||
195 | ||||
203 | ||||
224 | ||||
275 | ||||
287 | ||||
288 | ||||
337 | ||||
338 | ||||
355 | ||||
362 | ||||
365 | ||||
375 | ||||
378 | ||||
382 | ||||
385 | ||||
385 | ||||
385 | ||||
387 | ||||
389 | ||||
F-1 | ||||
A-1 | ||||
B-1 | ||||
C-1 | ||||
D-1 |
Q:
|
What is the Exchange?
|
A:
|
On July 29, 2020, Spring Bank Pharmaceuticals, Inc. (“Spring Bank”),
F-star
Therapeutics Limited
(“F-star”)
and certain holders of issued and outstanding capital shares and convertible loan notes of
F-star
(each a “Seller”; collectively with holders of
F-star
securities who subsequently become parties thereto, the “Sellers”) entered into a share exchange agreement (the “Exchange Agreement”). The Exchange Agreement contains the terms and conditions of the proposed business combination of Spring Bank and
F-star.
Under the Exchange Agreement, Spring Bank will acquire the entire issued and outstanding share capital of
F-star
(including all shares issuable in connection with the
F-star
Note Conversion,
Pre-Closing
Financing and
F-star
Share Conversion (in each case, as defined below)) (the “Exchange”).
|
Q:
|
What will happen to Spring Bank if, for any reason, the Exchange does not close?
|
A:
|
If, for any reason, the Exchange does not close, the board of directors of Spring Bank (the “Spring Bank Board”) may elect to, among other things, continue to operate the business of Spring Bank, attempt to
|
complete another strategic transaction like the Exchange, sell or otherwise dispose of the various assets of Spring Bank or dissolve or liquidate the company. If the Spring Bank Board decides to dissolve and liquidate Spring Bank’s assets, Spring Bank would be required to wind down its clinical trials, pay all of its debts and contractual obligations, and to set aside certain reserves for potential future claims. This would be a lengthy and uncertain process, and there can be no assurances as to the amount or timing of available cash, if any, that would be left to distribute to Spring Bank stockholders after paying the debts and other obligations of Spring Bank and setting aside funds for reserves. |
Q:
|
Why are the two companies proposing to combine?
|
A:
|
F-star
and Spring Bank believe that the Exchange will result in a publicly listed company seeking to advance
F-star’s
clinical and preclinical immuno-oncology pipeline of multiple tetravalent bispecific antibody programs, as well as Spring Bank’s STING (STimulator of INterferon Gene) agonist, SB 11285, currently in a Phase 1a/1b clinical trial. For a discussion of Spring Bank’s and
F-star’s
reasons for the Exchange, see the section titled
“The Exchange—Spring Bank Reasons for the Exchange”
“The
Exchange—F-star
Reasons for the Exchange”
|
Q:
|
Why am I receiving this proxy statement/prospectus?
|
A:
|
You are receiving this proxy statement/prospectus because you have been identified as a Spring Bank stockholder as of the Record Date (as defined below), and you are entitled to vote at the Special Meeting to approve the transactions contemplated by the Exchange Agreement, including the issuance of shares of Spring Bank common stock pursuant to the Exchange Agreement. This document serves as:
|
• |
a proxy statement of Spring Bank used to solicit proxies for the Special Meeting; and
|
• |
a prospectus of Spring Bank used to offer shares of Spring Bank common stock in exchange for
F-star
share capital in the Exchange to
F-star
securityholders.
|
Q:
|
What is required to consummate the Exchange?
|
A:
|
To consummate the Exchange, Spring Bank stockholders must approve the issuance of shares of Spring Bank common stock pursuant to the Exchange Agreement (Proposal No. 1), approve and adopt the amendment to the amended and restated certificate of incorporation of Spring Bank effecting a reverse stock split at a ratio as mutually agreed to by Spring Bank and
F-star
in the range of one new share for every shares to one new share for every shares outstanding (the “Reverse Stock Split”) (Proposal No. 2) and approve and adopt an amendment to the amended and restated certificate of incorporation of Spring Bank to change the corporate name of Spring Bank from “Spring Bank Pharmaceuticals, Inc.” to
“F-star
Therapeutics, Inc.” effective as of the Closing (the “Spring Bank Name Change”) (Proposal No. 3).
|
Q:
|
What will
F-star
Securityholders receive in the Exchange?
|
A:
|
Immediately after the consummation of the Exchange, the holders of
F-star
share capital (including all
F-star
shares issued in connection with the
F-star
Note Conversion, the
F-star
Share Conversion and
Pre-Closing
Financing) will receive shares of Spring Bank common stock equal to the Exchange Ratio for each
F-star
ordinary share held immediately prior to the Closing. Immediately following the Closing and assuming an Exchange Ratio of 0.5338 (which assumes both that Spring Bank’s valuation will not be adjusted as a result of its expected net cash at Closing and that
F-star
raises $25.0 million in the
Pre-Closing
Financing at a
pre-money
valuation of at least $35.0 million), the
F-star
securityholders are expected to own approximately 61.2% of the outstanding capital stock of the combined company, which is subject to adjustment as described in the section titled “
The Exchange Agreement — Transaction Consideration and Adjustment
|
Q:
|
What will Spring Bank stockholders receive in the Exchange?
|
A:
|
At the Closing, Spring Bank stockholders will continue to own and hold their existing shares of Spring Bank common stock. Immediately following the Closing and assuming an Exchange Ratio of 0.5338 (which assumes both that Spring Bank’s valuation will not be adjusted as a result of its expected net cash at Closing and that
F-star
raises $25.0 million in the
Pre-Closing
Financing at a
pre-money
valuation of at least $35.0
|
million), the Spring Bank securityholders are expected to own approximately 38.8% of the outstanding capital stock of the combined company, which is subject to adjustment as described in the section titled “
The Exchange Agreement—Transaction Consideration and Adjustment
|
Q:
|
Who will be the directors of the combined company following the Exchange?
|
A:
|
Following the Closing, the board of directors of the combined company will include a total of eight directors, three of whom will be current directors of Spring Bank and five of whom will be designated by
F-star.
It is anticipated that, following the Closing, the board of directors of the combined company will be constituted as follows:
|
Name
|
Current Principal Affiliation
|
|
Eliot Forster, Ph.D. |
Director and Chief Executive Officer,
F-star
|
|
Nessan Bermingham, Ph.D. |
Director,
F-star
|
|
Edward Benz, Jr., M.D. |
Director,
F-star
|
|
Geoffrey Race |
Director,
F-star
|
|
Patrick Krol |
Director,
F-star
|
|
David Arkowitz | Director, Spring Bank | |
Todd Brady, M.D., Ph.D. | Director, Spring Bank | |
Pamela Klein, M.D. | Director, Spring Bank |
Q:
|
Who will be the executive officers of the combined company immediately following the Exchange?
|
A:
|
Immediately following the Closing, the executive management team of the combined company is expected to be as follows:
|
Name
|
Title
|
|
Eliot Forster, Ph.D. | President, Chief Executive Officer and Director | |
Darlene Deptula-Hicks | Chief Financial Officer and Treasurer | |
Neil Brewis, Ph.D. | Chief Scientific Officer | |
Louis Kayitalire, M.D. | Chief Medical Officer |
Q:
|
What are the material U.S. federal income tax consequences of the Exchange to U.S. Holders?
|
A:
|
Spring Bank and
F-star
intend to treat the Exchange as constituting a reorganization within the meaning of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (a
“B-Reorganization”).
As further described in the section titled
“The Exchange—Material U.S. Federal Income Tax Consequences of the Exchange to U.S. Holders”
B-Reorganization
is uncertain. Assuming the Exchange constitutes a
B-Reorganization,
subject to the limitations and qualifications further described in the above referenced section of this proxy statement/prospectus, U.S. Holders (as defined in the above referenced section of this proxy statement/prospectus) of
F-star
shares generally should not recognize gain or loss for U.S. federal income tax purposes in connection with the Exchange.
|
Q:
|
What are the material U.S. federal income tax consequences of the receipt of two CVRs and the Reverse Stock Split to U.S. Holders?
|
A:
|
Spring Bank intends to take the position that the fair market value of the CVRs cannot be reasonably ascertained on the date of the issuance of the CVRs and, accordingly, the issuance of the CVRs constitutes an “open transaction.” Accordingly, absent a change in law requiring otherwise, Spring Bank will not report the issuance of the CVRs as a current distribution of property with respect to its stock and will instead report each future cash payment (if any) on the CVRs as a distribution by Spring Bank for U.S. federal income tax purposes, with each such payment being reported as a dividend to the extent of Spring Bank’s current or accumulated earnings and profits in the year in which such payment is made. However, as further described in the in the section titled “
Agreements Related to the Share Exchange—Material U.S. Federal Income Tax Consequences of the Receipt of CVRs to U.S. Holders
|
prospectus) would not generally recognize income in respect of the CVRs at the time such CVRs are issued and would take no tax basis in the CVRs. Future cash payments (if any) on the CVRs would be treated as a distribution and constitute a dividend to the extent of the U.S. Holder’s pro rata share of Spring Bank current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) in the taxable year of such payment, then as a non-taxable return of capital to the extent of the U.S. Holder’s basis in its Spring Bank common stock, and finally as capital gain from the sale or exchange of Spring Bank common stock with respect to any remaining payment. Dividends received by individual U.S. Holders are currently eligible for reduced rates of taxation applicable to long-term capital gains, provided certain holding period requirements are met. |
Q:
|
What is the
Pre-Closing
Financing?
|
A:
|
Concurrently with entering into the Exchange Agreement, certain existing investors of
F-star
agreed, pursuant to binding equity commitment letters by and between each investor and
F-star,
to purchase ordinary shares of
F-star
in a private placement to occur immediately prior to the Closing. This is referred to as the
“Pre-Closing
Financing”. As of , 2020,
F-star
had received commitments from investors to purchase $ million of ordinary shares of
F-star
in the
Pre-Closing
Financing.
F-star
may continue to seek additional commitments in the
Pre-Closing
Financing until 11:59 p.m., Eastern time on the 10
th
day prior to the Special Meeting. The
Pre-Closing
Financing is expected to be completed pursuant to Regulation D under the Securities Act of 1933, as amended.
F-star
ordinary shares that are issued in the
Pre-Closing
Financing will be converted into shares of Spring Bank common stock in the Exchange. Accordingly, by approving Proposal No. 1 relating to the issuance of shares in the Exchange, Spring Bank stockholders will also be approving the issuance of shares of Spring Bank common stock to be issued in exchange for all
F-star
ordinary shares that are sold in the
Pre-Closing
Financing.
|
Q:
|
Do persons involved in the Exchange have interests that may conflict with mine as a Spring Bank stockholder?
|
A:
|
Yes. When considering the recommendations of Spring Bank Board, you should be aware that certain Spring Bank directors and executive officers have interests in the Exchange that are different from, or are in addition to, yours. The Spring Bank Board was aware of these interests and considered them, among other matters, in its decision to approve the Exchange. Upon completion of the Exchange, if the employment of Martin Driscoll, R. P. “Kris” Iyer, Ph.D., Lori Firmani and Garrett Winslow, is terminated by Spring Bank without cause, these executive officers will be entitled to certain payments and employment benefits following their respective terminations. In addition, all unvested issued and outstanding Spring Bank
|
options and restricted stock units will be accelerated and vested in full immediately prior to the Closing and, following this acceleration, each option that has not previously been exercised will expire on the date of the Closing. As of August 1, 2020, the aggregate value of these severance payments, benefits and accelerated vesting is $2,098,798 (collectively, not individually), as described in the section titled “
The Exchange—Interests of the Spring Bank Directors and Executive Officers in the Exchange—Exchange-Related Compensation of Executive Officers
|
Q:
|
As a Spring Bank stockholder, how does the Spring Bank Board recommend that I vote?
|
A:
|
After careful consideration, the Spring Bank Board recommends that Spring Bank stockholders vote “FOR” each of the proposals.
|
Q:
|
What risks should I consider in deciding whether to vote in favor of the Exchange?
|
A:
|
You should carefully review the section of this proxy statement/prospectus titled “Risk Factors,” which sets forth certain risks and uncertainties related to the Exchange, risks and uncertainties to which the combined company’s business will be subject, and risks and uncertainties to which each of Spring Bank and
F-star,
as independent companies, are subject.
|
Q:
|
Who can vote at the Special Meeting?
|
A:
|
Only Spring Bank stockholders of record at the close of business on the Record Date, , 2020, will be entitled to vote at the Special Meeting. As of , 2020, there were shares of Spring Bank common stock outstanding and entitled to vote.
|
Q:
|
As a holder of Spring Bank common stock, how many votes do I have?
|
A:
|
On each matter to be voted upon, you have one vote for each share of Spring Bank common stock you own as of the Record Date.
|
Q:
|
What is the quorum requirement for the Special Meeting?
|
A:
|
The presence, of the holders of a majority of the voting power of all outstanding shares of Spring Bank common stock entitled to vote at the Special Meeting is necessary to constitute a quorum at the Special Meeting. Votes of stockholders of record who are represented at the Special Meeting abstentions, and broker
non-votes
are counted for purposes of determining whether a quorum exists.
|
Q:
|
What are “broker
non-votes”?
|
A:
|
If you hold shares beneficially in street name and do not provide your broker or other agent with voting instructions, your shares may constitute “broker
non-votes.”
Broker
non-votes
occur on a matter when banks, brokers and other nominees are not permitted to vote on certain
non-discretionary
matters without instructions from the beneficial owner and instructions are not given. These matters are referred to as
“non-routine”
matters. Proposal No. 1 is anticipated to be a
non-routine
matter, and Proposal Nos. 2, 3 and 4 are anticipated to be routine matters on which Spring Bank expects brokers, banks or other nominees to have authority and, therefore, broker
non-votes
are not expected with respect to these proposals. Broker
non-votes
will have no effect on the outcome of Proposal No. 1.
|
Q:
|
When do you expect the Exchange to be consummated?
|
A:
|
Spring Bank and
F-star
anticipate that the closing of the Exchange will occur shortly after the Special Meeting to be held on , 2020, but the companies cannot predict the exact timing. For more information, see the section titled
“The Exchange Agreement—Conditions to the Completion of the Exchange”
|
Q:
|
What do I need to do now?
|
A:
|
Spring Bank and
F-star
urge you to read this proxy statement/prospectus carefully, including its annexes, and to consider how the Exchange affects you.
|
Q:
|
What happens if I do not return a proxy card or otherwise provide proxy instructions, as applicable?
|
A:
|
If you are a Spring Bank stockholder, the failure to return your proxy card or otherwise provide proxy instructions will reduce the aggregate number of votes required to approve Proposal Nos. 1 and 4 and will have the same effect as a vote “AGAINST” Proposal Nos. 2 and 3.
|
Q:
|
When and where is the Special Meeting of Spring Bank stockholders?
|
A:
|
The Special Meeting will be held virtually via live audio webcast on the internet at www.virtualshareholdermeeting.com/SBPH2020SM at , Eastern time, on , 2020.
|
Q:
|
If my Spring Bank shares are held in “street name” by my broker, will my broker vote my shares for me?
|
A:
|
Unless your broker has discretionary authority to vote on certain matters, your broker will not be able to vote your shares of Spring Bank common stock without instructions from you. Brokers are not expected to have discretionary authority to vote for Proposal No. 1. To make sure that your vote is counted, you should instruct your broker to vote your shares, following the procedures provided by your broker.
|
Q:
|
May I change my vote after I have submitted a proxy or provided proxy instructions?
|
A:
|
Spring Bank stockholders of record, other than those Spring Bank stockholders who are parties to the Voting Agreements, may change their vote at any time before their proxy is voted at the Special Meeting in one of four ways. First, a Spring Bank stockholder of record can send a written notice to the Secretary of Spring Bank stating that it would like to revoke its proxy. Second, a Spring Bank stockholder of record can submit new proxy instructions either on a new proxy card, via telephone or via the internet. Third, a Spring Bank stockholder of record can attend the Special Meeting and vote. Attendance alone will not revoke a proxy. If a Spring Bank stockholder who owns shares of Spring Bank common stock in “street name” has instructed a broker to vote its shares of Spring Bank common stock, the stockholder must follow directions received from its broker to change those instructions. The Spring Bank stockholder’s most current vote, whether by telephone, internet or proxy card, is the one that will be counted.
|
Q:
|
Who is paying for this proxy solicitation?
|
A:
|
Spring Bank and
F-star
will share equally, up to $50,000 in the case of
F-star,
the cost of soliciting, printing and filing this proxy statement/prospectus and the proxy card. Arrangements will also be made with brokerage firms and other custodians, nominees and fiduciaries who are record holders of Spring Bank common stock for the forwarding of solicitation materials to the beneficial owners of Spring Bank common stock. Spring Bank will reimburse these brokers, custodians, nominees and fiduciaries for the reasonable
out-of-pocket
|
Q:
|
Who can help answer my questions?
|
A:
|
If you are a Spring Bank stockholder and would like additional copies, without charge, of this proxy statement/prospectus or if you have questions about the Exchange, including the procedures for voting your shares, you should contact:
|
• |
F-star’s
Promising Clinical-Stage Assets
F-star
is a clinical-stage immuno-oncology company with multiple promising and innovative clinical-stage therapeutic programs, near-term milestones, and an accomplished oncology development leadership team.
F-star
believes that its product candidates will overcome many of the challenges facing current immuno-oncology therapies.
F-star’s
vision is to transform the treatment of cancer through the development of differentiated and well-tolerated mAb
2
bispecific antibodies, which are designed to simultaneously address multiple immune evasion pathways that limit the effect of current immuno-oncology therapies.
|
• |
Management Team
F-star
experienced in immuno-oncology clinical drug development under the supervision of an experienced, well-qualified board of directors with representation from each of the current boards of directors of Spring Bank and
F-star.
|
• |
Cash Resources
Pre-Closing
Financing and cash on hand to enable it to implement its near-term business plans, and the combined company will have greater access to the public market to raise additional funds in the future.
|
• |
the Spring Bank Board’s belief that maintaining Spring Bank as an independent stand-alone company involved significant risk and the potential for significant dilution to the Spring Bank stockholders, taking into account Spring Bank’s business, operational and financial status and prospects, including its cash position, the substantially diminished price of the Spring Bank common stock following the termination of Spring Bank’s lead clinical development program, uncertainty regarding the successful clinical development of Spring Bank’s remaining clinical program, given its early stage of development, and the need to raise significant additional financing for the future development of Spring Bank’s remaining clinical product candidate in a volatile market;
|
• |
the Spring Bank Board’s belief, based in part on the judgment, advice and analysis of Spring Bank senior management with respect to the potential strategic, financial and operational benefits of the Exchange, that
F-star’s
multiple promising clinical-stage therapeutic programs in the area of immuno-oncology, and the potential for near-term milestones, would result in a greater probability of providing value to Spring Bank’s stockholders than Spring Bank continuing as an independent stand-alone company;
|
• |
that the Spring Bank stockholders could potentially receive significant future payments pursuant to the CVRs in the event of certain business development transactions involving Spring Bank’s STING agonist compound and its STING antagonist program during specified future periods;
|
• |
the Spring Bank Board’s belief that if Spring Bank were to raise sufficient capital to develop Spring Bank’s SB 11285 clinical program and conduct the necessary
IND-enabling
activities for the lead STING antagonist development candidate as a stand-alone company, the resulting dilution to existing Spring Bank stockholders would have been greater than the dilution resulting from the Exchange;
|
• |
the Spring Bank Board’s consideration of the valuation and business prospects of the other strategic combination candidates involved in its thorough strategic review process, and its collective view that
F-star
was the most attractive candidate for Spring Bank due to, among other things,
F-star’s
belief that its tetravalent mAb
2
bispecific antibodies may overcome many of the challenges facing current immuno-oncology therapies, and that
F-star’s
potential to achieve key milestones over the next two years could enable the combined company to access the public markets for additional financial resources; and
|
• |
the significant risks and delays associated with, and uncertain value and costs to Spring Bank stockholders of, a potential liquidation of Spring Bank.
|
• |
historical and current information concerning
F-star’s
business, including its financial performance and condition, operations, management and competitive position;
|
• |
current industry and economic conditions and
F-star’s
prospects if it were to remain an independent company, including its need to obtain additional financing and the terms on which it would be able to obtain such financing, if at all;
|
• |
the cash resources of the combined company expected to be available at the Closing and the anticipated burn rate of the combined company;
|
• |
the potential for increased access to sources of capital and a broader range of investors to support the development of
F-star’s
product candidates than it could otherwise obtain if it continued to operate as a privately held company;
|
• |
the potential to provide its current shareholders with greater liquidity by owning stock in a public company; and
|
• |
the expectation that the Exchange with Spring Bank would be a more time- and cost-effective means to access capital than other options considered.
|
• |
solicit or initiate, or knowingly encourage, induce or facilitate the making, submission or announcement of, any Acquisition Proposal, in the case of Spring Bank, or an
F-star
Acquisition Proposal, in the case of
F-star,
each as defined in “
The Exchange Agreement – Spring Bank Acquisition Proposal and Acquisition Transaction
The Exchange Agreement –
F-star
Acquisition Proposal,”
F-star
Acquisition Proposal, as the case may be;
|
• |
furnish any
non-public
information with respect to it or any of its subsidiaries to any person in connection with or in response to an Acquisition Proposal or
F-star
Acquisition Proposal, as the case may be, or an inquiry or indication of interest that would reasonably be expected to lead to an Acquisition Proposal or
F-star
Acquisition Proposal, as the case may be;
|
• |
engage in discussions or negotiations with any person with respect to any Acquisition Proposal or
F-star
Acquisition Proposal, as the case may be;
|
• |
approve, endorse or recommend an Acquisition Proposal or an
F-star
Acquisition Proposal, as the case may be; or
|
• |
enter into any letter of intent or similar document or any agreement providing for or otherwise relating to, with respect to Spring Bank, an Acquisition Transaction, as defined in “
The Exchange Agreement – Spring Bank Acquisition Proposal and Acquisition Transaction
F-star,
a transaction contemplated by an
F-star
Acquisition Proposal.
|
Name
|
Title
|
|
Eliot Forster, Ph.D.
|
President, Chief Executive Officer and Director | |
Darlene Deptula-Hicks
|
Chief Financial Officer and Treasurer
|
|
Neil Brewis, Ph.D.
|
Chief Scientific Officer
|
|
Louis Kayitalire, M.D.
|
Chief Medical Officer
|
• |
such
F-star
shareholder
will not recognize gain or loss upon the exchange of
F-star
capital stock for Spring Bank common stock pursuant to the Exchange;
|
• |
such
F-star
shareholder’s
aggregate tax basis for the shares of Spring Bank common stock received in the Exchange will equal the stockholder’s aggregate tax basis in the shares of
F-star
capital stock surrendered in the Exchange; and
|
• |
the holding period of the shares of Spring Bank common stock received by such
F-star
shareholder
in the Exchange will include the holding period of the shares of
F-star
capital stock surrendered in exchange therefor.
|
• |
Spring Bank will hold more than 25% of the original share capital of
F-star;
and
|
• |
The exchange of securities takes place for bona fide commercial reasons and does not form part of a scheme or arrangements, of which the main purpose, or one of the main purposes is the avoidance of liability to CGT (Section 137 TCGA 1992).
|
• |
The issuance of Spring Bank common stock to holders of
F-star
share capital pursuant to the Exchange Agreement and the resulting change in control from the Exchange must be approved by Spring Bank stockholders. Failure to obtain these approvals or meet other conditions set forth in the Exchange Agreement would prevent the Closing of the Exchange.
|
• |
The Exchange Ratio may be adjusted depending on Spring Bank’s net cash at Closing, the timing of Closing and the amount of gross proceeds received in the
Pre-Closing
Financing such that the Spring Bank securityholders and
F-star
securityholders may own more or less of the combined company that presented in this proxy statement/prospectus.
|
• |
The Exchange Ratio set forth in the Exchange Agreement is not adjustable based on the market price of Spring Bank common stock, so the Exchange consideration at the Closing may have a greater or lesser value than at the time the Exchange Agreement was signed.
|
• |
Failure to complete the Exchange may result in either Spring Bank or
F-star
paying a termination fee to the other party and could significantly harm the market price of Spring Bank common stock and negatively affect the future business and operations of each company.
|
• |
The Exchange may be completed even though certain events occur prior to the Closing that materially and adversely affect Spring Bank or
F-star.
|
• |
Some Spring Bank and
F-star
officers and directors have interests in the Exchange that are different from the respective stockholders of Spring Bank and
F-star
and that may influence them to support or approve the Exchange without regard to the interests of the respective Spring Bank stockholders or holders of F-star share capital.
|
• |
The market price of Spring Bank common stock following the Exchange may decline as a result of the Exchange.
|
• |
Spring Bank stockholders may not receive any payment on the CVRs and the CVRs may otherwise expire valueless.
|
• |
The Spring Bank stockholders and holders of F-star share capital may not realize a benefit from the Exchange commensurate with the ownership dilution they will experience in connection with the Exchange.
|
• |
During the pendency of the Exchange, Spring Bank and
F-star
may not be able to enter into a business combination with another party at a favorable price because of restrictions in the Exchange Agreement, which could adversely affect their respective businesses.
|
• |
Certain provisions of the Exchange Agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Exchange Agreement.
|
Six Months Ended June 30,
|
Years Ended December 31,
|
|||||||||
Entities
|
2020
|
2019
|
2019
|
2018
|
2017
|
|||||
F-star Delta
|
Full 6
months |
Full 6 months | Full Year | Full Year | Full Year | |||||
F-star
|
Full 6
months |
May 7, 2019 to June 30, 2019 | May 7, 2019 to December 31, 2019 | — | — | |||||
F-star GmbH
|
Full 6
months |
May 7, 2019 to June 30, 2019 | May 7, 2019 to December 31, 2019 | — | — | |||||
F-star Beta
|
Full 6
months |
May 7, 2019 to June 30, 2019 | May 7, 2019 to December 31, 2019 | — | — | |||||
F-star Alpha
|
Full 6
months |
May 7, 2019 to June 30, 2019 | May 7, 2019 to December 31, 2019 | — | — |
6 months ended June 30,
|
||||||||||||
2020
|
2019
|
Change
|
||||||||||
(in thousands)
|
||||||||||||
Revenue
|
£ | 1,537 | £ | 20,154 | (£18,616) | |||||||
Costs related to collaborative arrangements
|
(333 | ) | (17,437 | ) | 17,104 | |||||||
Research and development costs
|
(7,423 | ) | (9,575 | ) | 2,152 | |||||||
General and administrative expenses
|
(4,960 | ) | (3,764 | ) | (1,196 | ) | ||||||
Other income
|
371 | — | 371 | |||||||||
Other expenses
|
(1,282 | ) | (243 | ) | (1,040 | ) | ||||||
|
|
|
|
|
|
|||||||
Loss from operations
|
|
(12,090
|
)
|
|
(10,865
|
)
|
|
(1,225
|
)
|
|||
Fair value losses on financial liabilities at fair value through profit or loss (FVTPL)
|
(1,509 | ) | — | (1,509 | ) | |||||||
Finance income
|
8 | 1 | 7 | |||||||||
Finance costs
|
(438 | ) | — | (438 | ) | |||||||
|
|
|
|
|
|
|||||||
Loss before tax from continuing operations
|
|
(14,028
|
)
|
|
(10,864
|
)
|
|
(3,164
|
)
|
|||
Income tax credit
|
2,692 | 756 | 1,936 | |||||||||
|
|
|
|
|
|
|||||||
Loss for the year attributable to equity holders of the parent
|
|
(£11,336
|
)
|
|
(£10,108
|
)
|
|
(£1,228
|
)
|
|||
Basic and diluted loss per share
|
(£0.64 | ) | (£0.86 | ) | £ | 0.22 |
Year ended December 31,
|
||||||||||||
(in thousands, except per share data)
|
||||||||||||
(Restated)
|
(Restated)
|
|||||||||||
2019
|
2018
|
2017
|
||||||||||
Revenue
|
£ | 21,882 | £ | 29,997 | £ | 11,027 | ||||||
Costs related to collaborative arrangements
|
(17,960 | ) | (13,892 | ) | (6,346 | ) | ||||||
Research & development expense
|
(32,673 | ) | — | — | ||||||||
General & administrative expense
|
(12,295 | ) | (399 | ) | (616 | ) | ||||||
Other income
|
113 | — | — | |||||||||
Other gains
|
310 | 195 | 71 | |||||||||
|
|
|
|
|
|
|||||||
(Loss)/ profit from operations
|
|
(40,622
|
)
|
|
15,900
|
|
|
4,136
|
|
|||
Fair value losses on financial liabilities at fair value through profit or loss (FVTPL)
|
(1,106 | ) | — | — | ||||||||
Finance income
|
8 | 4 | — | |||||||||
Finance costs
|
(256 | ) | — | — | ||||||||
|
|
|
|
|
|
|||||||
(Loss)/ profit before tax from continuing operations
|
|
(41,976
|
)
|
|
15,905
|
|
|
4,136
|
|
|||
|
|
|
|
|
|
|||||||
Income tax credit/(charge)
|
7,016 | (2,636 | ) | (657 | ) | |||||||
|
|
|
|
|
|
|||||||
(Loss)/ profit for the year attributable to equity holders of the parent
|
|
(34,959
|
)
|
|
13,269
|
|
|
3,479
|
|
|||
|
|
|
|
|
|
|||||||
Items that may be reclassified to profit or loss in subsequent periods:
|
||||||||||||
Foreign exchange arising on consolidation
|
77 | — | — | |||||||||
|
|
|
|
|
|
|||||||
Other comprehensive income for the period
|
|
77
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|||||||
Total comprehensive (loss)/ income attributable to owners of the parent
|
|
(£34,882
|
)
|
£
|
13,269
|
|
£
|
3,479
|
|
|||
(Loss)/earnings per share for profit attributable to the shareholders of the parent:
|
||||||||||||
(Loss)/earnings per share
|
(£ 2.37 | ) | £ | 1.47 | £ | 0.38 | ||||||
(Loss)/earnings per share, after dilution
|
(£ 2.37 | ) | £ | 1.47 | £ | 0.38 |
As of December 31,
|
||||||||||||
(in thousands)
|
||||||||||||
(Restated)
|
(Restated)
|
|||||||||||
2019
|
2018
|
2017
|
||||||||||
Cash and cash equivalents
|
£ | 3,736 | £ | 6,458 | £ | 3,780 | ||||||
Total assets
|
53,102 | 24,979 | 13,964 | |||||||||
Total liabilities
|
24,570 | 9,118 | 10,485 | |||||||||
Issued capital
|
178 | — | — | |||||||||
(Accumulated losses)/ retained earnings
|
(16,908 | ) | 15,861 | 3,479 | ||||||||
Total equity
|
£ | 28,532 | £ | 15,861 | £ | 3,479 |
As of December 31,
|
||||||||||||
(in thousands)
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Net cash (used in)/ generated from operating activities
|
(£16,557 | ) | £ | 12,298 | £ | 13,627 | ||||||
Net cash generated from/ (used in) investing activities
|
4,105 | (9,620 | ) | (9,846 | ) | |||||||
Net cash generated from financing activities
|
£ | 9,733 | £— | £— |
Period Ended
May 6, |
Year Ended
December 31, |
|||||||||||
(in thousands, except per share data)
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Revenue
|
€ | 9,058 | € | 21,088 | € | 15,749 | ||||||
Other income
|
591 | 505 | 232 | |||||||||
Raw materials and consumables used
|
(1,339 | ) | (3,960 | ) | (2,958 | ) | ||||||
Depreciation, amortization and loss on disposal
|
(454 | ) | (835 | ) | (559 | ) | ||||||
Employee expenses
|
(3,369 | ) | (7,995 | ) | (6,853 | ) | ||||||
Other expenses
|
(3,087 | ) | (7,429 | ) | (5,613 | ) | ||||||
|
|
|
|
|
|
|||||||
Operating profit/ (loss)
|
1,399 | 1,375 | (3 | ) | ||||||||
Finance income
|
125 | 164 | 116 | |||||||||
Finance costs
|
(109 | ) | (223 | ) | (201 | ) | ||||||
|
|
|
|
|
|
|||||||
Net finance income/ (costs)
|
16 | (60 | ) | (85 | ) | |||||||
|
|
|
|
|
|
|||||||
Profit/(loss) before tax on ordinary activities
|
1,415 | 1,315 | (88 | ) | ||||||||
Income tax (charge)/ credit
|
(49 | ) | 195 | 225 | ||||||||
|
|
|
|
|
|
|||||||
Profit for the period
|
1,366 | 1,510 | 137 | |||||||||
|
|
|
|
|
|
|||||||
Earnings per share
|
€2.26 | €2.50 | €0.23 | |||||||||
Earnings per share, after dilution
|
€2.15 | €2.50 | €0.23 |
As of
May 6, |
As of December 31,
|
|||||||||||
(in thousands)
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Cash and cash equivalents
|
€ | 849 | € | 2,053 | € | 3,133 | ||||||
Total assets
|
19,949 | 18,543 | 13,598 | |||||||||
Total liabilities
|
20,518 | 20,019 | 9,696 | |||||||||
Share capital—ordinary
|
605 | 605 | 605 | |||||||||
Accumulated losses
|
(32,533 | ) | (33,836 | ) | (28,328 | ) | ||||||
Total shareholders’ (deficit)/ equity
|
(€569 | ) | (€1,477 | ) | €3,902 |
Period Ended
May 6, |
Year Ended
December 31, |
|||||||||||
(in thousands)
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Net cash flows (used in) / generated from operating activities
|
(€2,253 | ) | € | 6,680 | (€273 | ) | ||||||
Net cash flows generated from/ (used in) investing activities
|
127 | (7,518 | ) | (4,217 | ) | |||||||
Net cash flows generated from/ (used in) financing activities
|
€845 | (€217 | ) | €2,079 |
Period Ended
May 6, |
Year Ended
December 31, |
|||||||||||
(in thousands, except per share data)
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Revenue
|
£ | 7,903 | £ | 17,394 | £ | 14,993 | ||||||
Costs related to collaborative arrangements
|
(1,864 | ) | (6,719 | ) | (3,289 | ) | ||||||
Research and development costs
|
(5,106 | ) | (12,049 | ) | (11,933 | ) | ||||||
General and administrative expenses
|
(909 | ) | (345 | ) | (352 | ) | ||||||
Other gains
|
— | 1 | 165 | |||||||||
Other expenses
|
(58 | ) | (20 | ) | — | |||||||
|
|
|
|
|
|
|||||||
Loss on operations
|
|
(34
|
)
|
|
(1,738
|
)
|
|
(414
|
)
|
|||
Finance costs
|
(103 | ) | (145 | ) | (102 | ) | ||||||
|
|
|
|
|
|
|||||||
Loss before tax on continuing operation
|
|
(137
|
)
|
|
(1,883
|
)
|
|
(516
|
)
|
|||
Corporation tax benefit
|
639 | 2,416 | 705 | |||||||||
|
|
|
|
|
|
|||||||
Profit for the year and total comprehensive income attributable to the equity holders of the parent
|
|
£502
|
|
|
£533
|
|
|
£189
|
|
|||
|
|
|
|
|
|
|||||||
Earnings per share
|
£0.05 | £0.06 | £0.02 | |||||||||
Earnings per share, after dilution
|
£0.05 | £0.06 | £0.02 |
As of
May 6, |
As of December 31,
|
|||||||||||
(in thousands)
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Cash and cash equivalents
|
£ | 915 | £ | 5,709 | £ | 1,910 | ||||||
Total assets
|
5,727 | 9,408 | 5,030 | |||||||||
Total liabilities
|
13,704 | 18,575 | 5,421 | |||||||||
Issued capital
|
— | — | — | |||||||||
Accumulated losses
|
(7,977 | ) | (9,167 | ) | (391 | ) | ||||||
Total equity
|
(£7,977 | ) | (£9,167 | ) | (£391 | ) |
Period Ended
May 6, |
Year Ended
December 31, |
|||||||||||
(in thousands)
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Net cash (used in)/ generated from operating activities
|
(£4,621 | ) | £242 | (£2,959 | ) | |||||||
Net cash used in investing activities
|
(50 | ) | (2,424 | ) | — | |||||||
Net cash (used in)/ generated from financing activities
|
(£123 | ) | £ | 5,981 | £ | 2,667 |
Six Months
Ended June 30, 2020 |
Year Ended
December 31, 2019 |
|||||||
Spring Bank Historical Per Common Share Data:
|
||||||||
Basic and diluted net loss per share
|
$ | (0.88 | ) | $ | (1.46 | ) | ||
Book value per share
|
$ | 1.35 | $ | 2.15 | ||||
F-star
Historical Per Common Share Data:
|
||||||||
Basic and diluted net loss per share
|
£ | (0.64 | ) | £ | (2.37 | ) | ||
Book value per share
|
£ | 1.15 | £ | 2.08 | ||||
F-star
and Spring Bank Combined Unaudited Pro Forma Data:
|
||||||||
Basic and diluted net loss per share
|
$ | (0.62 | ) | $ | (1.32 | ) | ||
Book value per share
|
$ | 1.36 |
• |
general business or economic conditions affecting the industries in which Spring Bank or
F-star,
as applicable, operates and general conditions in financial markets to the extent these general conditions do not disproportionately affect Spring Bank and
F-star,
respectively;
|
• |
with respect to Spring Bank, any change in its stock price or trading volume excluding any underlying effect that may have caused such change, unless this effect is otherwise exempt from causing a material adverse effect under the Exchange Agreement;
|
• |
failure to meet internal or analysts’ expectations or projections for results of operations;
|
• |
failure to meet expectations regarding, or changes in expectations regarding, clinical trial program or study progress and, subject to certain exceptions, the occurrence of adverse events or serious adverse events in a clinical trial program;
|
• |
any effect resulting from the performance of obligations under the Exchange Agreement or the announcement of the Exchange or any related transactions;
|
• |
natural disasters, acts of terrorism, sabotage, military action or war or any escalation or worsening of military actions or wars, or any viruses, pandemics, epidemic or other outbreaks of illness or public health events, or any spread or worsening of these events (including worsening of the
COVID-19
(as defined below) pandemic), or any other circumstance that may be considered a force majeure event;
|
• |
certain changes in, or any compliance with or action taken for the purpose of complying with, applicable laws or generally accepted accounting principles in the United States (“U.S. GAAP”), International Financial Reporting Standards or related interpretations provided these matters do not disproportionately affect Spring Bank or
F-star,
respectively;
|
• |
actions taken by Spring Bank as reasonably necessary to comply with the Exchange Agreement or as otherwise permitted by the Exchange Agreement;
|
• |
a government authority’s rejection or
non-acceptance
of intellectual property filings and applications;
|
• |
regulatory action or the announcement of regulatory action regarding potentially competitive products or product candidates; and
|
• |
stockholder litigation arising from or relating to the Exchange Agreement or the Exchange.
|
• |
the attention of its management and employees may be directed toward the completion of the Exchange and related matters and may be diverted from Spring Bank’s
day-to-day
|
• |
third parties may seek to terminate or renegotiate their relationships with Spring Bank as a result of the Exchange, whether pursuant to the terms of their existing agreements with Spring Bank or otherwise.
|
• |
investors react negatively to the Exchange, Spring Bank’s reasons for the Exchange or the prospects of the combined company’s product candidates, business and financial condition following the Exchange;
|
• |
the effect of the Exchange on the combined company’s business and prospects is not consistent with the expectations of financial or industry analysts; or
|
• |
the combined company does not achieve the perceived benefits of the Exchange as rapidly or to the extent anticipated by financial or industry analysts.
|
• |
any delay in the commencement, enrollment and ultimate completion of clinical trials;
|
• |
results of clinical trials of existing and future product candidates, or those of the combined company’s competitors;
|
• |
variations in the combined company’s financial results or those of companies that are perceived to be similar to the combined company;
|
• |
regulatory or legal developments in the United States or other countries;
|
• |
inability to obtain adequate product supply for any approved drug, or the inability to do so at acceptable prices;
|
• |
the success of competitive therapies;
|
• |
market conditions in the pharmaceutical and biotechnology sectors, and the issuance of new or changed securities analysts’ reports or recommendations;
|
• |
announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by the combined company or the combined company’s competitors;
|
• |
significant lawsuits, including patent or stockholder litigation;
|
• |
additions or departures of key scientific or management personnel;
|
• |
general economic, industry and market conditions; and
|
• |
failure to maintain compliance with the continued listing requirements of The Nasdaq Capital Market.
|
• |
complexities associated with managing the combined businesses;
|
• |
integrating personnel from the two companies;
|
• |
creation of uniform standards, controls, procedures, policies and information systems;
|
• |
potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the Exchange; and
|
• |
performance shortfalls at one or both of the companies as a result of the diversion of management’s attention caused by completing the Exchange and integrating the companies’ operations.
|
• |
initiation, progress, timing, costs and results of clinical trials of SB 11285;
|
• |
initiation, progress, timing, costs and results of preclinical studies and clinical trials of Spring Bank’s STING antagonist candidates and any other product candidates Spring Bank may develop;
|
• |
the number and characteristics of product candidates that Spring Bank discovers or
in-license
and develops;
|
• |
the outcome, timing and cost of seeking regulatory review by the FDA and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities to require that Spring Bank performs more studies than those Spring Bank currently expects;
|
• |
the costs of filing, prosecuting, defending and enforcing any patent claims and maintaining and enforcing other intellectual property rights;
|
• |
subject to receipt of marketing approval, revenue, if any, received from commercial sales of SB 11285 and any other products;
|
• |
the costs and timing of the implementation of commercial-scale manufacturing activities;
|
• |
the costs and timing of establishing sales, marketing and distribution capabilities for any product candidates for which Spring Bank may receive regulatory approval; and
|
• |
the costs of operating as a public company.
|
• |
continues clinical development of SB 11285, Spring Bank’s lead STING agonist product candidate;
|
• |
initiates and continues research and preclinical and clinical development efforts for Spring Bank’s other product candidates, including candidates from Spring Bank’s STING antagonist program;
|
• |
seeks to identify and develop additional product candidates;
|
• |
seeks regulatory and marketing approvals for Spring Bank’s product candidates that successfully complete clinical trials, if any;
|
• |
establishes sales, marketing, distribution and other commercial infrastructure in the future to commercialize various products for which Spring Bank may obtain marketing approval, if any;
|
• |
requires the manufacture and supply of larger quantities of product candidates for clinical development and potentially commercialization;
|
• |
maintains, expands and protects Spring Bank’s intellectual property portfolio; and
|
• |
adds operational, financial and management information systems and personnel, including personnel to support Spring Bank’s product development and help comply with Spring Bank’s obligations as a public company.
|
• |
successful completion of Spring Bank’s Phase 1a/1b clinical trial for SB 11285;
|
• |
successful completion of additional studies to support additional clinical trials;
|
• |
initiation and successful enrollment and completion of additional clinical trials;
|
• |
safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority for marketing approval;
|
• |
timely receipt of marketing approvals from applicable regulatory authorities;
|
• |
the performance of Spring Bank’s collaborators;
|
• |
establishment of supply arrangements with third-party raw materials suppliers and manufacturers;
|
• |
establishment of arrangements with third-party manufacturers to obtain finished drug products that are appropriately packaged for sale;
|
• |
obtaining and maintaining patent, trade secret protection and regulatory exclusivity, both in the United States and internationally;
|
• |
protection of Spring Bank’s rights in Spring Bank’s intellectual property portfolio;
|
• |
successful launch of commercial sales following any marketing approval;
|
• |
a continued acceptable safety profile following any marketing approval; and
|
• |
commercial acceptance by patients, the medical community and third-party payors following any marketing approval.
|
• |
the potential diversion of healthcare resources away from the conduct of preclinical activities and clinical trials to focus on pandemic concerns, including the availability of necessary materials and the attention of physicians serving as Spring Bank’s clinical trial investigators, hospitals serving as Spring Bank’s clinical trial sites and hospital staff supporting the conduct of Spring Bank’s prospective clinical trials;
|
• |
limitations on travel that could interrupt key preclinical activities and trial activities, such as clinical trial site initiations and monitoring, domestic and international travel by employees, contractors or patients to clinical trial sites, including any government-imposed travel restrictions or quarantines that will impact the ability or willingness of patients, employees or contractors to travel to Spring Bank’s research, manufacturing and clinical trial sites or secure visas or entry permissions, any of which could delay or adversely impact the conduct or progress of Spring Bank’s prospective clinical trials;
|
• |
interruption or delays in the operations of the U.S. FDA and comparable foreign regulatory agencies, which may impact review, inspection, clearance and approval timelines;
|
• |
interruption in global shipping affecting the transport of clinical trial materials, such as patient samples, investigational drug product candidates and conditioning drugs and other supplies used in Spring Bank’s prospective clinical trials;
|
• |
interruption of, or delays in receiving, supplies of Spring Bank’s investigational drug product from Spring Bank’s contract manufacturing organizations due to staffing shortages, production slowdowns or stoppages and disruptions in delivery system;
|
• |
limitations on Spring Bank’s business operations by local, state, or the federal government that could impact Spring Bank’s ability to conduct Spring Bank’s preclinical or clinical activities, including
|
completing any
IND-enabling
studies or Spring Bank’s ability to select future development candidates; and
|
• |
business disruptions caused by potential workplace, laboratory and office closures and an increased reliance on employees working from home, disruptions to or delays in ongoing laboratory experiments and operations, staffing shortages, travel limitations, cyber security and data accessibility, or communication or mass transit disruptions, any of which could adversely impact Spring Bank’s business operations or delay necessary interactions with local regulators, ethics committees, manufacturing sites, research or clinical trial sites and other important agencies and contractors.
|
• |
delay or failure in reaching agreement with the FDA or a comparable foreign regulatory authority on a trial design that Spring Bank is able to execute;
|
• |
delay or failure in obtaining authorization to commence a trial or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a clinical trial;
|
• |
delay or failure in reaching agreement on acceptable terms with prospective clinical research organizations (“CROs”), and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;
|
• |
delay or failure in obtaining Investigational Review Board (“IRB”), approval or the approval of other reviewing entities, including comparable foreign regulatory authorities, to conduct a clinical trial at a site;
|
• |
withdrawal of clinical trial sites from Spring Bank’s clinical trials as a result of changing standards of care or the ineligibility of a site to participate in Spring Bank’s clinical trials;
|
• |
delay or failure in recruiting and enrolling suitable study subjects to participate in a trial;
|
• |
delay or failure in study subjects completing a trial or returning for post-treatment
follow-up
or otherwise complying with the trial protocol;
|
• |
clinical sites and investigators deviating from the trial protocol, failing to conduct the trial in accordance with regulatory requirements or dropping out of a trial;
|
• |
inability to identify and maintain a sufficient number of trial sites, many of which may already be engaged in other clinical trial programs, including some that may be for competing product candidates with the same indication;
|
• |
failure of Spring Bank’s third-party service providers to satisfy their contractual duties or meet expected deadlines;
|
• |
delay or failure in adding new clinical trial sites;
|
• |
feedback from the FDA, the IRBs, data safety monitoring boards, or comparable foreign regulatory authorities, or results from earlier stage or concurrent preclinical studies and clinical trials, that might require modification of the protocol for the trial;
|
• |
decision by the FDA, the IRBs, comparable foreign regulatory authorities, or Spring Bank, or recommendation by a data safety monitoring board or comparable foreign regulatory authority, to suspend or terminate clinical trials at any time for safety issues or for any other reason;
|
• |
unacceptable risk-benefit profile, unforeseen safety issues or adverse side effects or adverse events;
|
• |
failure of a product candidate to demonstrate any benefit;
|
• |
difficulties in manufacturing or obtaining from third parties sufficient quantities of a product candidate for use in clinical trials;
|
• |
lack of adequate funding to continue the clinical trial, including the incurrence of unforeseen costs due to enrollment delays, requirements to conduct additional clinical studies or increased expenses associated with the services of Spring Bank’s CROs and other third parties; or
|
• |
changes in governmental regulations or administrative actions.
|
• |
the size and nature of the patient population;
|
• |
the severity of the disease under investigation;
|
• |
the proximity of patients to clinical sites;
|
• |
the eligibility criteria for the trial;
|
• |
the design of the clinical trial;
|
• |
efforts to facilitate timely enrollment;
|
• |
competing clinical trials; and
|
• |
clinicians’ and patients’ perceptions as to the potential advantages and risks of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications Spring Bank is investigating.
|
• |
decreased demand for SB 11285 or any of Spring Bank’s other product candidates;
|
• |
the inability to commercialize SB 11285 or any of Spring Bank’s other product candidates;
|
• |
termination of clinical trial sites or entire trial programs;
|
• |
injury to Spring Bank’s reputation and significant negative media attention;
|
• |
withdrawal of clinical trial subjects;
|
• |
significant costs to defend the related litigation;
|
• |
substantial monetary awards to clinical trial subjects or patients;
|
• |
loss of revenue;
|
• |
diversion of management and scientific resources from Spring Bank’s business operations; and
|
• |
increased scrutiny and potential investigation by, among others, the FDA, the United States Department of Justice (“DOJ”), the Office of Inspector General of the Office of Health and Human Services (“HHS”), state attorneys general, members of Congress and the public.
|
• |
delays by Spring Bank’s third-party contract manufacturers to produce and deliver sufficient supply of clinical trial materials, including but not limited to delays or disruptions as a result of the ongoing
COVID-19
pandemic and third-party contractors giving greater priority to the supply of other products over Spring Bank’s product candidates or otherwise not satisfactorily performing according to the terms of the agreements between Spring Bank and them;
|
• |
the possible termination or nonrenewal of agreements by Spring Bank’s third-party contractors at a time that is costly or inconvenient for Spring Bank;
|
• |
the possible breach by the third-party contractors of Spring Bank’s agreements with them;
|
• |
the failure of third-party contractors to comply with applicable regulatory requirements;
|
• |
the possible mislabeling of clinical supplies, potentially resulting in the wrong dose amounts being supplied or active drug or placebo not being properly identified;
|
• |
the possibility of clinical supplies not being delivered to clinical sites on time, leading to clinical trial interruptions, or of drug supplies not being distributed to commercial vendors in a timely manner, resulting in lost sales; and
|
• |
the possible misappropriation of Spring Bank’s proprietary information, including Spring Bank’s trade secrets and
know-how.
|
• |
results of clinical trials of Spring Bank’s product candidates or those of Spring Bank’s competitors;
|
• |
the success of competitive products or technologies;
|
• |
developments related to any future collaborations;
|
• |
regulatory or legal developments in the United States and other countries;
|
• |
development of new product candidates that may address Spring Bank’s markets and may make Spring Bank’s product candidates less attractive;
|
• |
changes in physician, hospital or healthcare provider practices that may make Spring Bank’s product candidates less useful;
|
• |
announcements by Spring Bank, Spring Bank’s partners or Spring Bank’s competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; developments or disputes concerning patent applications, issued patents or other proprietary rights;
|
• |
the recruitment or departure of key personnel;
|
• |
the level of expenses related to any of Spring Bank’s product candidates or clinical development programs;
|
• |
failure to meet or exceed financial estimates and projections of the investment community or that Spring Bank provides to the public;
|
• |
the results of Spring Bank’s efforts to discover, develop, acquire or
in-license
additional product candidates or products;
|
• |
actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;
|
• |
variations in Spring Bank’s financial results or those of companies that are perceived to be similar to Spring Bank;
|
• |
changes in the structure of healthcare payment systems;
|
• |
market conditions in the pharmaceutical and biotechnology sectors;
|
• |
general economic, industry and market conditions; and
|
• |
the other factors described in this “Risk Factors” section.
|
• |
being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;
|
• |
not being required to comply with the auditor attestation requirements in the assessment of Spring Bank’s internal control over financial reporting;
|
• |
not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;
|
• |
reduced disclosure obligations regarding executive compensation; and
|
• |
exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
|
• |
a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of Spring Bank Board;
|
• |
no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
|
• |
the exclusive right of Spring Bank Board to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from filling vacancies on Spring Bank Board;
|
• |
the ability of Spring Bank Board to authorize the issuance of shares of preferred stock and to determine the terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
|
• |
the ability of Spring Bank Board to alter Spring Bank’s bylaws without obtaining stockholder approval;
|
• |
the required approval of the holders of at least a majority of the shares entitled to vote at an election of directors to adopt, amend or repeal Spring Bank’s bylaws or repeal the provisions of Spring Bank’s restated certificate of incorporation regarding the election and removal of directors;
|
• |
a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of Spring Bank’s stockholders;
|
• |
the requirement that a special meeting of stockholders may be called only by the board of directors, the chairman of the board of directors, the chief executive officer or stockholders holding a majority of Spring Bank’s issued and outstanding common stock, which may delay the ability of Spring Bank’s stockholders to force consideration of a proposal or to take action, including the removal of directors; and
|
• |
advance notice procedures that stockholders must comply with in order to nominate candidates to Spring Bank Board or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of Spring Bank.
|
• |
continues to develop and conduct clinical trials for its lead product candidate, FS118;
|
• |
continues the research and development of its other mAb
2
product candidates, including completing preclinical studies and commencing clinical trials for FS120 and FS222;
|
• |
discovers and develops additional mAb
2
product candidates and makes further investments in its modular antibody technology platform;
|
• |
seeks regulatory approvals for any mAb
2
product candidates that successfully complete clinical trials;
|
• |
experiences any delays or encounter any issues with any of the above, including but not limited to failed studies, complex results, safety issues or other regulatory challenges;
|
• |
establishes a sales, marketing and distribution infrastructure and
scale-up
manufacturing capabilities, whether alone or with third parties, to commercialize any mAb
2
product candidates for which it may obtain regulatory approval, if any;
|
• |
maintains, expands and protects its intellectual property portfolio, including litigation costs associated with defending against alleged patent infringement claims;
|
• |
adds clinical, scientific, operational, financial and management information systems and personnel, including personnel to support its product development and potential future commercialization efforts;
|
• |
expands its operations in the United States, Europe and other geographies; and
|
• |
incurs additional legal, accounting and other expenses associated with operating as a public company.
|
• |
the cost, progress, results of the Phase 1 clinical trial of FS118 and any later-stage clinical trials for this product candidate;
|
• |
the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for its other mAb
2
product candidates, including FS120, FS222 and any future product candidate;
|
• |
the number of potential new mAb
2
product candidates
F-star
identifies and decides to develop;
|
• |
the cost of manufacturing drug supply for the clinical trials of its mAb
2
product candidates;
|
• |
the time and costs involved in obtaining regulatory approval for its mAb
2
product candidates and any delays
F-star
may encounter as a result of evolving regulatory requirements or adverse clinical trial results with respect to any of its mAb
2
product candidates;
|
• |
the costs involved in growing
F-star’s
organization to the size and expertise needed to allow for the research, development and potential commercialization of
F-star’s
current or any future mAb
2
product candidates;
|
• |
fulfilling obligations under
F-star’s
existing collaboration agreements and the entry into new collaboration agreements;
|
• |
the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing its intellectual property rights and defending any intellectual property-related claims, including any claims by third parties that
F-star
is infringing upon their intellectual property rights;
|
• |
the cost of commercialization activities and costs involved in the creation of an effective sales, marketing and healthcare compliance organization for any mAb
2
product candidates
F-star
develops, if approved;
|
• |
the potential additional expenses attributable to adjusting
F-star’s
development plans (including any supply related matters) to the
COVID-19
pandemic;
|
• |
the revenue, if any, received from commercial sales of its mAb
2
product candidates for which
F-star
receive marketing approval; and
|
• |
the costs of operating as a public company.
|
• |
successful and timely completion of preclinical studies, including
in vivo
|
• |
sufficiency of
F-star’s
financial and other resources to complete the necessary preclinical studies and clinical trials;
|
• |
receiving regulatory approvals or authorizations for conducting
F-star’s
planned clinical trials or future clinical trials;
|
• |
initiation and successful patient enrollment in and completion of clinical trials on a timely basis;
|
• |
safety, tolerability and efficacy profiles that are satisfactory to the FDA, the EMA or any other comparable foreign regulatory authority for a product to receive marketing approval;
|
• |
timely receipt of marketing approvals for
F-star’s
mAb
2
product candidates from applicable regulatory authorities;
|
• |
the extent of any required post-marketing approval commitments made to applicable regulatory authorities;
|
• |
establishing and scaling up, either alone or with third-party manufacturers, manufacturing capabilities of clinical supply for
F-star’s
clinical trials and commercial manufacturing, if any mAb
2
product candidates are approved;
|
• |
obtaining and maintaining patent and trade secret protection or regulatory exclusivity for
F-star’s
mAb
2
product candidates, both in the United States and internationally;
|
• |
successfully scaling a sales and marketing organization and launching commercial sales of
F-star’s
mAb
2
product candidates, if approved;
|
• |
acceptance of
F-star’s
mAb
2
product candidates’ benefits and uses, if approved, by patients, the medical community and third-party payors;
|
• |
maintaining a continued acceptable safety profile of
F-star’s
mAb
2
product candidates following marketing approval and commercial launch;
|
• |
effectively competing with companies developing and commercializing other therapies in the same indications targeted by
F-star’s
mAb
2
product candidates;
|
• |
obtaining and maintaining healthcare coverage and adequate reimbursement from third-party payors for any approved products; and
|
• |
enforcing and defending intellectual property rights and claims.
|
• |
delays in or failure to obtain regulatory approval to commence a clinical trial;
|
• |
delays in or failure to reach agreement on acceptable terms with prospective contract research organizations (“CROs”), and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;
|
• |
delays in or failure to obtain institutional review board (“IRB”), approval at each site;
|
• |
delays in or failure to recruit a sufficient number of suitable patients to participate in a trial;
|
• |
failure to have participants complete a trial or return for post-treatment
follow-up;
|
• |
clinical sites deviating from trial protocol or dropping out of a trial;
|
• |
delays in adding new clinical trial sites;
|
• |
failure to manufacture sufficient quantities of a mAb
2
product candidate for use in clinical trials in a timely manner;
|
• |
safety or tolerability concerns that could cause it or
F-star’s
collaborators, as applicable, to suspend or terminate a trial if
F-star
or
F-star’s
collaborators find that the participants are being exposed to unacceptable health risks;
|
• |
changes in regulatory requirements, policies and guidelines;
|
• |
failure of
F-star’s
third-party research contractors to comply with regulatory requirements or meet their contractual obligations to it in a timely manner, or at all;
|
• |
delays in establishing the appropriate dosage levels for a particular product candidate through clinical trials;
|
• |
the quality or stability of the mAb
2
product candidate falling below acceptable standards; and
|
• |
business interruptions resulting from pandemics, including those related to
COVID-19,
geo-political
actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires.
|
• |
regulatory authorities may withdraw approvals of such product and require
F-star’s
approved product to be taken off the market, through a recall or other action;
|
• |
regulatory authorities may require the addition of labeling statements or specific warnings, such as a “black box” warning or a contraindication, to the product’s prescribing information, or require field alerts to be sent to physicians and pharmacies;
|
• |
regulatory authorities may require a medication guide explaining the risks of such side effects to be distributed to patients, or that
F-star
implement a risk evaluation and mitigation strategy plan to ensure that the benefits of the product outweigh its risks (such as through a REMS in the United States that may include a restricted distribution program or educational programs for prescribers);
|
• |
F-star
may be required to change the way the product is administered or to conduct additional clinical trials;
|
• |
F-star
may be subject to limitations on how it may promote the product;
|
• |
sales of the product may decrease significantly;
|
• |
F-star
may be subject to litigation or product liability claims; and
|
• |
F-star’s
reputation may suffer.
|
• |
size and nature of the patient population and process for identifying patients;
|
• |
proximity and availability of clinical trial sites for prospective patients;
|
• |
eligibility and exclusion criteria for the trial;
|
• |
design of the clinical trial;
|
• |
safety profile, to date, of the mAb
2
product candidate under study;
|
• |
perceived risks and benefits of the mAb
2
product candidate under study;
|
• |
perceived risks and benefits of
F-star’s
approach to treatment of diseases;
|
• |
competition with other companies for clinical sites of patients;
|
• |
severity of the disease under investigation;
|
• |
degree of progression of the patient’s disease at the time of enrollment;
|
• |
ability to obtain and maintain patient consent;
|
• |
risk that enrolled patients will drop out before completion of the trial;
|
• |
competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages of the mAb
2
product candidate being studied in relation to other available therapies, including any new products that may be approved for the indications
F-star
is investigating;
|
• |
patient referral practices of physicians; and
|
• |
ability to adequately monitor patients during and after treatment.
|
• |
The FDA, EMA or comparable foreign regulatory authorities may disagree with the design or implementation of
F-star’s
clinical trials;
|
• |
F-star
may be unable to demonstrate to the satisfaction of the FDA, the EMA or other comparable foreign regulatory authorities that a mAb
2
product candidate is safe, pure and potent or effective for its proposed indication;
|
• |
the results of clinical trials may not meet the level of statistical significance required by the FDA, the EMA or other comparable foreign regulatory authorities for approval;
|
• |
F-star
may be unable to demonstrate that a mAb
2
product candidate’s clinical and other benefits outweigh its safety risks;
|
• |
the FDA, the EMA or other comparable foreign regulatory authorities may disagree with
F-star’s
interpretation of data from preclinical studies or clinical trials;
|
• |
the data collected from clinical trials of
F-star’s
mAb
2
product candidates may not be sufficient to support the submission of a Biologics License Application (“BLA”), to the FDA or other submission or to obtain regulatory approval in the United States, the EU or elsewhere;
|
• |
upon review of
F-star
clinical trial sites and data, the FDA, EMA or comparable foreign regulatory authorities may find
F-star’s
record keeping or the record keeping of its clinical trial sites to be inadequate;
|
• |
the FDA, the EMA or other comparable foreign regulatory authorities may find deficiencies with or fail to approve the manufacturing processes or facilities of third-party manufacturers with which
F-star
contract for clinical and commercial supplies; and
|
• |
the approval policies or regulations of the FDA, the EMA or other comparable foreign regulatory authorities or the laws they enforce may significantly change in a manner rendering
F-star’s
clinical data insufficient for approval.
|
• |
decreased demand for
F-star’s
products due to negative public perception;
|
• |
injury to
F-star’s
reputation;
|
• |
withdrawal of clinical trial participants or difficulties in recruiting new trial participants;
|
• |
initiation of investigations by regulators;
|
• |
costs to defend or settle the related litigation;
|
• |
a diversion of management’s time and
F-star’s
resources;
|
• |
substantial monetary awards to trial participants or patients;
|
• |
product recalls, withdrawals or labeling, marketing or promotional restrictions;
|
• |
loss of revenues from product sales; and
|
• |
the inability to commercialize any of
F-star’s
mAb
2
product candidates, if approved.
|
• |
a covered benefit under its health plan;
|
• |
safe, effective and medically necessary;
|
• |
appropriate for the specific patient;
|
• |
cost-effective; and
|
• |
neither experimental nor investigational.
|
• |
the clinical indications for which
F-star’s
mAb
2
product candidates are approved;
|
• |
physicians, hospitals, cancer treatment centers and patients considering
F-star’s
mAb
2
product candidates as a safe and effective treatment;
|
• |
the potential and perceived advantages of
F-star’s
mAb
2
product candidates over alternative treatments;
|
• |
the prevalence and severity of any side effects;
|
• |
product labeling or product insert requirements of the FDA, the EMA or other comparable foreign regulatory authorities, or any risk mitigation measures that are required to be followed as part of the product’s marketing approval;
|
• |
limitations or warnings contained in the labeling approved by the FDA, the EMA or other comparable foreign regulatory authorities;
|
• |
the timing of market introduction of
F-star’s
mAb
2
product candidates in relation to other potentially competitive products;
|
• |
the cost of
F-star’s
mAb
2
product candidates in relation to alternative treatments;
|
• |
the amount of upfront costs or training required for physicians to administer
F-star’s
mAb
2
product candidates;
|
• |
the availability of coverage and adequate reimbursement from third-party payors and government authorities;
|
• |
the willingness of patients to pay
out-of-pocket
|
• |
the relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies;
|
• |
the effectiveness of
F-star’s
sales and marketing efforts and distribution support; and
|
• |
the presence or perceived risk of potential product liability claims.
|
• |
the Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or paying any remuneration (including any kickback, bribe, or certain rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under U.S. federal and state healthcare programs such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. In addition, a claim including items or services resulting from a violation of the Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act, (“FCA”);
|
• |
federal civil and criminal false claims laws and civil monetary penalty laws, including the FCA, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal healthcare programs, knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or transmit money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing or concealing an obligation to pay money to the federal government. Manufacturers can be held liable
|
under the FCA even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims. The FCA also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery;
|
• |
HIPAA, which created new federal criminal and civil statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters. Similar to the Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA without actual knowledge of the statute or specific intent to violate it;
|
• |
HIPAA, as amended by HITECH, and their implementing regulations, which impose certain obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information by covered entities subject to the rule, such as health plans, healthcare clearinghouses and certain healthcare providers, as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information and require notification to affected individuals and regulatory authorities of certain breaches of individually identifiable health information. HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions;
|
• |
federal legislation commonly referred to as Physician Payments Sunshine Act, enacted as part of the ACA, and its implementing regulations, which requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to the CMS information related to certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists, chiropractors and, beginning in 2022 for payments and other transfers of value provided in the previous year, certain advanced
non-physician
healthcare practitioners) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;
|
• |
analogous state laws and regulations, including: state anti-kickback and false claims laws that may apply to claims involving healthcare items or services reimbursed by any third-party payor, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral source; state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities; state and local laws that require the registration of pharmaceutical sales representatives; and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts; and
|
• |
European and other foreign law equivalents of each of the laws, including reporting requirements detailing interactions with and payments to healthcare providers.
|
• |
F-star’s
inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;
|
• |
the inability of sales personnel to obtain access to or persuade adequate numbers of physicians to prescribe
F-star’s
products;
|
• |
the lack of complementary products to be offered by sales personnel, which may put
F-star
at a competitive disadvantage relative to companies with more extensive product lines;
|
• |
unforeseen costs and expenses associated with creating an independent sales and marketing organization; and
|
• |
costs of marketing and promotion above those anticipated by
F-star.
|
• |
the potential diversion of healthcare resources away from the conduct of clinical trials to focus on pandemic concerns, including the attention of physicians serving as
F-star’s
clinical trial investigators, hospitals serving as
F-star’s
clinical trial sites and hospital staff supporting the conduct of
F-star’s
prospective clinical trials;
|
• |
limitations on travel that could interrupt key trial and business activities, such as clinical trial site initiations and monitoring, domestic and international travel by employees, contractors or patients to clinical trial sites, including any government-imposed travel restrictions or quarantines that will impact the ability or willingness of patients, employees or contractors to travel to
F-star’s
clinical trial sites or secure visas or entry permissions, a loss of
face-to-face
F-star’s
prospective clinical trials;
|
• |
the potential negative affect on the operations of
F-star’s
third-party manufacturers;
|
• |
interruption in global shipping affecting the transport of clinical trial materials, such as patient samples, investigational drug product and conditioning drugs and other supplies used in
F-star’s
prospective clinical trials; and
|
• |
business disruptions caused by potential workplace, laboratory and office closures and an increased reliance on employees working from home, disruptions to or delays in ongoing laboratory experiments.
|
• |
the scope of rights granted under the license agreement and other interpretation-related issues;
|
• |
the extent to which
F-star’s
mAb
2
product candidates, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;
|
• |
the sublicensing of patent and other rights under
F-star’s
collaborative development relationships;
|
• |
F-star’s
diligence obligations under the license agreement and what activities satisfy those diligence obligations;
|
• |
the inventorship and ownership of inventions and
know-how
resulting from the joint creation or use of intellectual property by
F-star’s
licensors
F-star
and
F-star’s
partners; and
|
• |
the priority of invention of patented technology.
|
• |
others may be able to make bispecific antibodies that are the same as or similar to
F-star’s
mAb
2
product candidates but that are not covered by the claims of the patents that
F-star
own or have exclusively licensed;
|
• |
the patents of third parties may have an adverse effect on
F-star’s
business;
|
• |
F-star
or any current or future licensors or strategic partners might not have been the first to conceive or reduce to practice the inventions covered by the issued patent or pending patent application that
F-star
own or have exclusively licensed;
|
• |
F-star
or any future licensors or strategic partners might not have been the first to file patent applications covering certain of
F-star’s
inventions;
|
• |
others may independently develop similar or alternative technologies or duplicate any of
F-star’s
technologies without infringing
F-star’s
intellectual property rights;
|
• |
it is possible that
F-star’s
pending patent applications will not lead to issued patents;
|
• |
issued patents that
F-star
own or have exclusively licensed may not provide
F-star
with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by
F-star’s
competitors;
|
• |
F-star’s
competitors might conduct research and development activities in countries where
F-star
does not have patent rights and then use the information learned from such activities to develop competitive products for sale in
F-star’s
major commercial markets;
|
• |
third parties performing manufacturing or testing for
F-star
using
F-star’s
products or technologies could use the intellectual property of others without obtaining a proper license; and
|
• |
F-star
may not develop additional technologies that are patentable.
|
• |
F-star
may not be able to control the amount and timing of resources that the collaboration partner devotes to
F-star’s
research programs and mAb
2
product candidates;
|
• |
for collaboration agreements where
F-star
is solely or partially responsible for funding development expenses through a defined milestone event, the payments
F-star
receive from the collaboration partner may not be sufficient to cover the expenses
F-star
has or would need to incur in order to achieve that milestone event;
|
• |
F-star
may be required to relinquish significant rights to
F-star’s
collaborative partners, including rights to exploit
F-star’s
intellectual property and marketing and distribution rights;
|
• |
if the development of the relevant mAb
2
product candidates is not successful,
F-star’s
anticipated payments under any partnership agreement (e.g., royalty payments for licensed products) may not materialize;
|
• |
F-star
relies on the information and data received from third parties regarding their research programs and mAb
2
product candidates and will not have control of the process conducted by the third party in gathering and composing such data and information;
|
• |
if rights to develop and commercialize
F-star’s
mAb
2
product candidates that are subject to collaborations revert to it for any reason,
F-star
may not have sufficient financial resources to develop such mAb
2
product candidates, which may result in
F-star
failing to recognize any value from
F-star’s
investments in developing such mAb
2
product candidates;
|
• |
a collaborative partner may develop a competing product either by itself or in collaboration with others, including one or more of
F-star’s
competitors, or seek to restrict
F-star
from working with other collaborators that may compete with
F-star’s
partner’s products, which could deprioritize the development of
F-star’s
products;
|
• |
F-star’s
collaborative partners’ willingness or ability to complete their obligations under
F-star’s
partnership arrangements may be adversely affected by business combinations or significant changes in a collaborative partner’s business strategy;
|
• |
F-star
may experience delays in, or increases in the costs of, the development of
F-star’s
research programs and mAb
2
product candidates due to the termination or expiration of collaborative research and development arrangements;
|
• |
F-star
may have disagreements with collaborative partners, including disagreements over proprietary rights, contract interpretation,
non-competition
limitations, or the preferred course of development, that might cause delays or termination of the research, development or commercialization of mAb
2
product candidates, might lead to additional responsibilities for
F-star
with respect to mAb
2
product candidates, or might result in litigation or arbitration, any of which may be time-consuming and expensive;
|
• |
collaborative partners may not properly maintain or defend
F-star’s
intellectual property rights or may use proprietary information in such a way as to invite litigation or other intellectual property-related proceedings that could invalidate
F-star’s
intellectual property or jeopardize
F-star’s
proprietary information or expose
F-star
to potential litigation; or
|
• |
collaborative partners may infringe or otherwise violate the intellectual property rights of third parties, which may expose
F-star
to litigation and potential liability.
|
• |
economic weakness, including inflation, or political instability in particular
non-U.S.
economies and markets;
|
• |
differing regulatory requirements for product approvals;
|
• |
differing jurisdictions could present different issues for securing, maintaining or obtaining freedom to operate in such jurisdictions;
|
• |
potentially reduced protection for intellectual property rights;
|
• |
difficulties in compliance with different, complex and changing laws, regulations and court systems of multiple jurisdictions and compliance with a wide variety of foreign laws, treaties and regulations;
|
• |
changes in
non-U.S.
regulations and customs, tariffs and trade barriers;
|
• |
changes in
non-U.S.
currency exchange rates of the pound sterling, U.S. dollar, euro and currency controls;
|
• |
changes in a specific country’s or region’s political or economic environment, including the implications of the United Kingdom’s withdrawal from the European Union;
|
• |
trade protection measures, import or export licensing requirements or other restrictive actions by governments;
|
• |
differing reimbursement regimes and price controls in certain international markets;
|
• |
negative consequences from changes in tax laws;
|
• |
compliance with tax, employment, immigration and labor laws for employees living or traveling abroad, including, for example, the variable tax treatment in different jurisdictions of share options granted under
F-star’s
employee stock plan or equity incentive plan;
|
• |
workforce uncertainty in countries where labor unrest is more common than in the United States;
|
• |
difficulties associated with staffing and managing international operations, including differing labor relations;
|
• |
production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and
|
• |
business interruptions resulting from
geo-political
actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires.
|
• |
the strategies, prospects, plans, expectations and objectives of management of the combined company for future operations of the combined company following the closing of the Exchange;
|
• |
the level of net cash held by Spring Bank at the closing of the Exchange;
|
• |
F-star’s
ability to complete
the Pre-Closing Financing
and the proceeds expected to be received therefrom;
|
• |
the approval and closing of the Exchange, including the timing of the Exchange, the ability of Spring Bank to obtain stockholder approval for the Exchange, other conditions to the completion of the Exchange, the adjustment of the Exchange Ratio, and relative ownership levels as of the closing of the Exchange;
|
• |
the progress, scope or duration of the development of product candidates or programs;
|
• |
statements concerning proposed clinical trials or product candidates;
|
• |
the benefits that may be derived from, or the commercial or market opportunity of, product candidates;
|
• |
the ability of Spring Bank or
F-star
to protect their intellectual property rights;
|
• |
the anticipated operations, financial position, losses, costs or expenses of Spring Bank,
F-star
or the combined company following the closing of the Exchange;
|
• |
statements regarding future economic conditions or performance;
|
• |
the expected benefits of and potential value created by the Exchange for the stockholders of Spring Bank; and
|
• |
statements of belief and any statement of assumptions underlying any of the foregoing.
|
1. |
To approve the issuance of Spring Bank common stock to the holders of
F-star
share capital in the Exchange, including holders who purchase ordinary shares of
F-star
in the
Pre-Closing
Financing, in accordance with the Exchange Agreement, a copy of which is attached to this proxy statement/prospectus as
Annex A
|
2. |
To approve an amendment to Spring Bank’s amended and restated certificate of incorporation to effect the Reverse Stock Split, in the form attached to this proxy statement/prospectus as
Annex C
|
3. |
To approve an amendment to Spring Bank’s amended and restated certificate of incorporation to effect the Spring Bank Name Change effective as of the Closing, in the form attached to this proxy statement/prospectus as
Annex D
|
4. |
To approve a postponement or adjournment of the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1, 2 or 3; and
|
5. |
To transact such other business as may properly come before the Special Meeting or any postponement or adjournment thereof.
|
• |
The Spring Bank Board has determined that the transactions contemplated by the Exchange Agreement are fair to, advisable and in the best interests of Spring Bank and Spring Bank stockholders and has approved and declared advisable the Exchange Agreement and such transactions, including the issuance of shares of Spring Bank common stock to the holders of
F-star
share capital pursuant to the terms of the Exchange Agreement. The Spring Bank Board recommends that Spring Bank stockholders vote “FOR” Proposal No. 1 to approve the issuance of Spring Bank common stock to the holders of
F-star
share capital pursuant to the Exchange Agreement, including holders of
F-star
share capital who purchase
F-star
securities in the
Pre-Closing
Financing.
|
• |
The Spring Bank Board has determined that the Reverse Stock Split is fair to, advisable and in the best interests of Spring Bank and Spring Bank stockholders and has approved and declared advisable the Reverse Stock Split. The Spring Bank Board recommends that Spring Bank stockholders vote “FOR” Proposal No. 2 to approve an amendment to the amended and restated certificate of incorporation of Spring Bank effecting the Reverse Stock Split.
|
• |
The Spring Bank Board has determined that the Spring Bank Name Change is fair to, advisable and in the best interests of Spring Bank and Spring Bank stockholders and has approved and declared advisable the Spring Bank Name Change. The Spring Bank Board recommends that Spring Bank stockholders vote “FOR” Proposal No. 3 to approve an amendment to the amended and restated certificate of incorporation of Spring Bank to effect the Spring Bank Name Change.
|
• |
The Spring Bank Board has determined and believes that postponing or adjourning the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1, 2 or 3 is advisable to, and in the best interests of, Spring Bank and Spring Bank stockholders. The Spring Bank Board recommends that Spring Bank stockholders vote “FOR” Proposal No. 4 to postpone or adjourn the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1, 2 or 3.
|
• |
By internet
(www.proxyvote.com)
16-digit
control number(s) in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. On this website, you can also elect to receive future distributions of Spring Bank’s proxy statements and annual reports to stockholders by electronic delivery.
|
• |
By telephone
(1-800-690-6903)
.
16-digit
control number(s) in hand when you call and then follow the instructions.
|
• |
By mail
|
• |
At
the Special Meeting
www.virtualshareholdermeeting.com/SBPH2020SM
.
16-digit
control number included in your proxy materials or the accompanying instructions. The meeting webcast will begin promptly at Eastern time. Spring Bank encourages you to access the meeting prior to the start time. Online
check-in
will begin at Eastern time, and you should allow ample time to test your computer and for the
check-in
procedures.
|
• |
send timely written notice to Spring Bank’s Corporate Secretary stating that the stockholder would like to revoke its proxy;
|
• |
submit new proxy instructions either on a new proxy card or via phone or the internet; or
|
• |
attend the Special Meeting and vote. Simply attending the Special Meeting will not, by itself, revoke your proxy.
|
• |
the Spring Bank Board’s belief that maintaining Spring Bank as an independent stand-alone company involved significant risk and the potential for significant dilution to the Spring Bank stockholders, taking into account Spring Bank’s business, operational and financial status and prospects, including its cash position, the substantially diminished price of the Spring Bank common stock following the termination of the clinical development of Spring Bank’s lead candidate (inarigivir), uncertainty regarding the successful clinical development of Spring Bank’s remaining clinical program, given its early stage of development, and the need to raise significant additional financing for the future development of Spring Bank’s remaining clinical product candidate in a volatile market;
|
• |
the Spring Bank Board’s belief, based in part on the judgment, advice and analysis of Spring Bank senior management with respect to the potential strategic, financial and operational benefits of the Exchange, that
F-star’s
multiple promising clinical-stage therapeutic programs in the area of immuno-oncology, and the potential for near-term milestones, would result in a greater probability of providing value to Spring Bank’s stockholders than Spring Bank continuing as an independent stand-alone company;
|
• |
that the Spring Bank stockholders could potentially receive significant future payments pursuant to the CVRs in the event of certain business development transactions involving Spring Bank’s STING agonist compound and its STING antagonist program during specified future periods;
|
• |
the Spring Bank Board’s consideration that the combined company would have sufficient cash from the
Pre-Closing
Financing and cash on hand to enable the combined company to implement its near-term business plans or that Spring Bank stockholders would be compensated for any shortfall in the expected proceeds of the
Pre-Closing
Financing, and the fact that the combined company would have greater access to the public market to raise additional funds in the future;
|
• |
the Spring Bank Board’s belief that if Spring Bank were to raise sufficient capital to develop Spring Bank’s SB 11285 clinical program and conduct the necessary
IND-enabling
activities for the lead STING antagonist development candidate as a stand-alone company, the resulting dilution to existing Spring Bank stockholders would have been greater than the dilution resulting from the Exchange;
|
• |
the Spring Bank Board’s consideration of the valuation and business prospects of the other strategic combination candidates involved in its thorough strategic review process, and its collective view that
F-star
was the most attractive candidate for Spring Bank due to, among other things,
F-star’s
belief that its tetravalent mAb
2
bispecific antibodies may overcome many of the challenges facing current immuno-oncology therapies, and that
F-star’s
potential to achieve key milestones over the next two years could enable the combined company to access the public markets for additional financial resources;
|
• |
the Spring Bank Board’s consideration that the combined company will be led by a senior management team from
F-star
experienced in immuno-oncology clinical drug development under the supervision of an experienced, well-qualified board of directors with representation from each of the current boards of directors of Spring Bank and
F-star;
|
• |
the limited amount of available cash that would be remain for distribution to Spring Bank stockholders in a potential dissolution and liquidation of Spring Bank, and the significant risks, costs and length of time involved in such a process; and
|
• |
the Spring Bank Board’s consideration of the financial analysis of Ladenburg and the opinion of Ladenburg delivered to the Spring Bank Board on July 27, 2020, to the effect that, as of the date of such opinion, and based upon and subject to the various assumptions made, procedures followed, matters considered and limitations and qualifications on the scope of the review undertaken by Ladenburg, as set forth in its written opinion, the Acquisition Consideration was fair, from a financial point of view, to Spring Bank stockholders as more fully described below under the caption “
The Exchange—Opinion of the Spring Bank Financial Advisor.
|
• |
the sample Exchange Ratio used to establish the number of shares of Spring Bank common stock to be issued to
F-star
shareholders in the Exchange and presented to the Spring Bank Board was determined based on the relative valuations of the companies (including the anticipated proceeds of the
Pre-Closing
Financing), and thus the relative percentage ownership of Spring Bank stockholders and
F-star
shareholders immediately following the completion of the Exchange would be adjusted based on the amount of Spring Bank’s net cash and the actual amount of proceeds raised by
F-star
in the
Pre-Closing
Financing;
|
• |
the limited number and nature of the conditions to
F-star’s
obligation to consummate the Exchange and the limited risk of non-satisfaction of such conditions, as well as the anticipated likelihood that the Exchange will be consummated on a timely basis;
|
• |
the respective rights of, and limitations on, Spring Bank and
F-star
under the Exchange Agreement to consider certain unsolicited acquisition proposals under certain circumstances, should Spring Bank or
F-star
receive a superior offer;
|
• |
the reasonableness of the potential termination fee of $2.0 million and related reimbursement of certain transaction expenses of up to $750,000, and the fact that Spring Bank would be entitled to a termination fee of $2,.0 million in the event that the Exchange Agreement was terminated if the
Pre-Closing
Financing did not result in gross proceeds of at least the target amount set forth in the Exchange Agreement;
|
• |
the Voting Agreements, pursuant to which certain directors, officers and certain stockholders of Spring Bank have agreed, solely in their capacity as stockholders of Spring Bank, to vote all of their shares of Spring Bank common stock in favor of the approval of the Exchange Agreement; and
|
• |
the belief that the terms of the Exchange Agreement, including the parties’ representations, warranties and covenants, and the conditions to their respective obligations, are reasonable under the circumstances.
|
• |
the $2.0 million termination fee and up to $750,000 in related expense reimbursement obligations payable by Spring Bank to
F-star
upon the occurrence of certain events and the potential effect of such fees in deterring other potential acquirers from proposing an alternative transaction that may be more advantageous to Spring Bank stockholders;
|
• |
the substantial expenses to be incurred in connection with the Exchange, including the costs associated with any related litigation;
|
• |
the possible volatility, at least in the short term, of the trading price of Spring Bank common stock resulting from the announcement of the Exchange;
|
• |
the risk that the Exchange might not be consummated in a timely manner or at all and the potential adverse effect of the public announcement of the Exchange or delay or failure to complete the Exchange on the reputation of Spring Bank;
|
• |
the likely detrimental effect on Spring Bank’s cash position, stock price and ability to initiate another strategic process and to successfully complete an alternative transaction should the Exchange not be completed;
|
• |
the risk to Spring Bank’s business, operations and financial results in the event that the Exchange is not consummated, including the diminution of Spring Bank’s cash and the significant challenges associated with the need to raise additional capital through the public or private sale of equity securities;
|
• |
the possibility of disruptive stockholder litigation following announcement of the Exchange;
|
• |
the fact that
F-star’s
product candidates are still in an early stage of clinical development, and accordingly are subject to the risk that they may not ever be successfully developed into products that can be marketed and sold;
|
• |
the strategic direction of the combined company following the completion of the Exchange, which will be determined by a board of directors to be initially comprised of a majority of the directors designated by
F-star;
and
|
• |
various other risks associated with the combined company and the Exchange, including those described in the section titled “Risk Factors” in this proxy statement/prospectus.
|
• |
historical and current information concerning
F-star’s
business, including its financial performance and condition, operations, management and competitive position;
|
• |
current industry and economic conditions and
F-star’s
prospects if it were to remain an independent company, including its need to obtain additional financing and the terms on which it would be able to obtain such financing, if at all;
|
• |
the cash resources of the combined company expected to be available at the Closing and the anticipated burn rate of the combined company;
|
• |
the potential for increased access to sources of capital and a broader range of investors to support the development of
F-star’s
product candidates than it could otherwise obtain if it continued to operate as a privately held company;
|
• |
the potential to provide its current shareholders with greater liquidity by owning stock in a public company;
|
• |
the expectation that the Exchange with Spring Bank would be a more time- and cost-effective means to access capital than other options considered;
|
• |
the expectation that substantially all of
F-star
employees, particularly its management, will serve in similar roles at the combined company;
|
• |
the terms and conditions of the Exchange Agreement, including, without limitation, the following:
|
• |
the expected relative percentage ownership of Spring Bank’s stockholders and
F-star
shareholders in the combined company initially at the Closing and the implied valuation of
F-star
based on Spring Bank’s cash contribution to the combined company;
|
• |
the parties’ representations, warranties and covenants and the conditions to their respective obligations;
|
• |
the limited number and nature of the conditions of the obligation of Spring Bank to consummate the Exchange; and
|
• |
the conclusion of the
F-star
Board of Directors that the potential termination fee of $2.0 million, less in specified circumstances the reimbursement of certain Exchange fees and expenses incurred in connection with the Exchange of up to $750,000, payable by Spring Bank to
F-star,
and the potential termination fee of $2.0 million payable by
F-star
to Spring Bank, and the circumstances when such fees may be payable, were reasonable;
|
• |
the expectation that the Exchange will be treated as a reorganization for U.S. federal income tax purposes;
|
• |
the ability to obtain a Nasdaq listing and the change of the combined company’s name to
F-star
Therapeutics, Inc., upon the Closing;
|
• |
the Voting Agreements, pursuant to which certain directors, officers and stockholders of Spring Bank have agreed, solely in their capacity as stockholders of Spring Bank to vote all of their shares of Spring Bank common stock in favor of approval of the Exchange Agreement; and
|
• |
the likelihood that the Exchange will be consummated on a timely basis.
|
• |
the risk that the potential benefits of the Exchange Agreement may not be realized;
|
• |
the risk that future sales of common stock by existing Spring Bank stockholders may cause the price of Spring Bank common stock to fall, thus reducing the value of the consideration received by
F-star
shareholders in the Exchange;
|
• |
the $2.0 million termination fee payable by
F-star
to Spring Bank in the event the Exchange Agreement is terminated by Spring Bank if the
Pre-Closing
Financing is terminated or does not occur prior to January 29, 2021 and the potential effect of such termination fee in deterring other potential acquirers from proposing an alternative Exchange that may be more advantageous to
F-star’s
shareholders;
|
• |
the price volatility of Spring Bank’s common stock, which may reduce the value of Spring Bank common stock that
F-star
shareholders will receive upon the Closing;
|
• |
the potential reduction of Spring Bank’s net cash prior to closing;
|
• |
the risk that the
Pre-Closing
Financing, which is a condition of the Exchange, is not completed;
|
• |
the possibility that Spring Bank could under certain circumstances consider unsolicited acquisition proposals if superior to the Exchange;
|
• |
the possibility that the Exchange might not be completed for a variety of reasons, such as the failure of Spring Bank to obtain the required stockholder vote, and the potential adverse effect on the reputation of
F-star
and the ability of
F-star
to obtain financing in the future in the event the Exchange is not completed;
|
• |
the potential effect of the Exchange Agreement, including restrictions on
F-star’s
ability to solicit alternative Exchanges, in deterring other potential acquirers from proposing an alternative Exchange that may be more advantageous to
F-star’s
shareholders;
|
• |
the risk that the Exchange might not be consummated in a timely manner or at all;
|
• |
the fact that the representations and warranties in the Exchange Agreement do not survive the Closing and the potential risk of liabilities that may arise post-closing;
|
• |
the expenses to be incurred in connection with the Exchange and related administrative challenges associated with combining the organizations;
|
• |
the additional expenses that
F-star’s
business will be subject to as a public company following the Closing to which it has not previously been subject; and
|
• |
various other risks associated with the combined company and the Exchange, including the risks described in the section titled “
Risk Factors
|
• |
Reviewed a draft of the Exchange Agreement dated July 26, 2020, and a draft of the CVR Agreements. Both the Exchange Agreement and the CVR Agreements were the most recent drafts made available to Ladenburg prior to delivery of the Opinion;
|
• |
Reviewed and analyzed certain publicly available financial and other information for each of Spring Bank and
F-star,
respectively, including equity research on comparable companies and on Spring Bank, and certain other relevant financial and operating data furnished to Ladenburg by the management of each of Spring Bank and
F-star,
respectively;
|
• |
Reviewed and analyzed certain relevant historical financial and operating data concerning
F-star
furnished to Ladenburg by the management of
F-star;
|
• |
Discussed with certain members of the management of Spring Bank the historical and current business operations, financial condition and prospects of Spring Bank;
|
• |
Reviewed and analyzed certain operating results of
F-star
as compared to operating results and the reported price and trading histories of certain publicly traded companies that Ladenburg deemed relevant;
|
• |
Reviewed and analyzed certain financial terms of the Exchange Agreement and the CVR Agreements as compared to the publicly available financial terms of certain selected business combinations that Ladenburg deemed relevant;
|
• |
Reviewed and analyzed certain financial terms of completed initial public offerings for certain companies that Ladenburg deemed relevant;
|
• |
Reviewed certain pro forma financial effects of the Exchange; and
|
• |
Reviewed and analyzed such other information and such other factors, and conducted such other financial studies, analyses and investigations, as Ladenburg deemed relevant for the purposes of the opinion.
|
• |
Aeglea BioTherapeutics, Inc.
|
• |
Allogene Therapeutics, Inc.
|
• |
ALX Oncology Holdings Inc.
|
• |
AnaptysBio, Inc.
|
• |
Arcus Biosciences, Inc.
|
• |
Autolus Therapeutics plc
|
• |
BeiGene, Ltd.
|
• |
Bicycle Therapeutics plc
|
• |
Corvus Pharmaceuticals, Inc.
|
• |
Cue Biopharma, Inc.
|
• |
Fusion Pharmaceuticals Inc.
|
• |
Harpoon Therapeutics, Inc.
|
• |
IDEAYA Biosciences, Inc.
|
• |
iTeos Therapeutics, Inc.
|
• |
Jounce Therapeutics, Inc.
|
• |
Mersana Therapeutics, Inc.
|
• |
Neon Therapeutics, Inc.
|
• |
NextCure, Inc.
|
• |
ORIC Pharmaceuticals, Inc.
|
• |
Relay Therapeutics, Inc.
|
• |
Replimune Group, Inc.
|
• |
Revolution Medicines, Inc.
|
• |
Surface Oncology, Inc.
|
• |
Sutro Biopharma, Inc.
|
• |
TCR2 Therapeutics Inc.
|
• |
Turning Point Therapeutics, Inc.
|
• |
Zentalis Pharmaceuticals, Inc.
|
• |
Zymeworks Inc.
|
First Trade Date
|
Issuer
|
Enterprise Value
($M) |
||||
7/24/2020 |
iTeos Therapeutics, Inc.
|
$ | 286.4 | |||
7/17/2020 |
ALX Oncology Holdings Inc.
|
402.5 | ||||
7/16/2020 |
Relay Therapeutics, Inc.
|
1,002.1 | ||||
6/26/2020 |
Fusion Pharmaceuticals Inc.
|
365.9 | ||||
4/24/2020 |
ORIC Pharmaceuticals, Inc.
|
251.5 | ||||
4/6/2020 |
Zentalis Pharmaceuticals, LLC
|
373.4 | ||||
2/13/2020 |
Revolution Medicines, Inc.
|
593.1 | ||||
5/29/2019 |
NextCure, Inc.
|
118.9 | ||||
5/24/2019 |
IDEAYA Biosciences, Inc.
|
65.8 | ||||
5/23/2019 |
Bicycle Therapeutics plc
|
127.7 | ||||
4/18/2019 |
Turning Point Therapeutics, Inc.
|
266.3 | ||||
2/15/2019 |
TCR2 Therapeutics Inc.
|
165.1 | ||||
2/8/2019 |
Harpoon Therapeutics, Inc.
|
161.5 | ||||
10/11/2018 |
Allogene Therapeutics, Inc.
|
1,339.3 | ||||
9/27/2018 |
Sutro Biopharma, Inc.
|
194.5 | ||||
7/23/2018 |
Replimune Group, Inc.
|
300.5 | ||||
6/28/2018 |
Neon Therapeutics, Inc.
|
289.1 | ||||
6/22/2018 |
Autolus Therapeutics plc
|
372.3 | ||||
4/20/2018 |
Surface Oncology, Inc.
|
242.7 | ||||
3/16/2018 |
Arcus Biosciences, Inc.
|
342.6 | ||||
12/21/2017 |
Cue Biopharma, Inc.
|
48.4 | ||||
6/29/2017 |
Mersana Therapeutics, Inc.
|
176.2 | ||||
4/28/2017 |
Zymeworks Inc.
|
248.1 | ||||
1/27/2017 |
Jounce Therapeutics, Inc.
|
125.4 | ||||
1/26/2017 |
AnaptysBio, Inc.
|
221.1 | ||||
4/7/2016 |
Aeglea BioTherapeutics, Inc.
|
46.2 | ||||
3/22/2016 |
Corvus Pharmaceuticals, Inc.
|
231.5 | ||||
2/3/2016 |
BeiGene, Ltd.
|
570.6 |
• |
Advaxis, Inc.
|
• |
Allogene Therapeutics, Inc.
|
• |
ALX Oncology Holdings Inc.
|
• |
Aptevo Therapeutics Inc.
|
• |
Aravive, Inc.
|
• |
Arvinas, Inc.
|
• |
Atreca, Inc.
|
• |
Autolus Therapeutics plc
|
• |
Bicycle Therapeutics plc
|
• |
Black Diamond Therapeutics, Inc.
|
• |
Checkpoint Therapeutics, Inc.
|
• |
Compugen Ltd.
|
• |
Corvus Pharmaceuticals, Inc.
|
• |
Cue Biopharma, Inc.
|
• |
Cyclacel Pharmaceuticals, Inc.
|
• |
Fate Therapeutics, Inc.
|
• |
Fusion Pharmaceuticals Inc.
|
• |
Genocea Biosciences, Inc.
|
• |
Gritstone Oncology, Inc.
|
• |
Harpoon Therapeutics, Inc.
|
• |
IGM Biosciences, Inc.
|
• |
iTeos Therapeutics, Inc.
|
• |
Mersana Therapeutics, Inc.
|
• |
Mustang Bio, Inc.
|
• |
NextCure, Inc.
|
• |
ORIC Pharmaceuticals, Inc.
|
• |
Pieris Pharmaceuticals, Inc.
|
• |
Relay Therapeutics, Inc.
|
• |
Revolution Medicines, Inc.
|
• |
Surface Oncology, Inc.
|
• |
Sutro Biopharma, Inc.
|
• |
TCR2 Therapeutics Inc.
|
• |
Trillium Therapeutics Inc.
|
• |
Zentalis Pharmaceuticals, Inc.
|
Company Name
|
Enterprise Value
($M) |
|||
Allogene Therapeutics, Inc.
|
$ | 4,635.4 | ||
Fate Therapeutics, Inc.
|
2,473.0 | |||
Relay Therapeutics, Inc.
|
2,428.8 | |||
IGM Biosciences, Inc.
|
1,608.2 | |||
Arvinas, Inc.
|
1,302.5 | |||
Revolution Medicines, Inc.
|
1,273.5 | |||
Mersana Therapeutics, Inc.
|
1,183.6 | |||
Zentalis Pharmaceuticals, LLC
|
1,169.8 | |||
Compugen Ltd.
|
968.4 | |||
ALX Oncology Holdings Inc.
|
842.7 | |||
Black Diamond Therapeutics, Inc.
|
622.9 | |||
Cue Biopharma, Inc.
|
528.7 | |||
Trillium Therapeutics Inc.
|
525.8 | |||
Autolus Therapeutics plc
|
511.2 | |||
ORIC Pharmaceuticals, Inc.
|
443.4 | |||
Harpoon Therapeutics, Inc.
|
300.7 | |||
TCR2 Therapeutics Inc.
|
284.0 | |||
Atreca, Inc.
|
282.8 | |||
Fusion Pharmaceuticals Inc.
|
278.0 | |||
iTeos Therapeutics, Inc.
|
255.9 | |||
NextCure, Inc.
|
233.9 | |||
Bicycle Therapeutics plc
|
201.5 | |||
Sutro Biopharma, Inc.
|
171.0 | |||
Genocea Biosciences, Inc.
|
137.3 | |||
Surface Oncology, Inc.
|
135.4 | |||
Pieris Pharmaceuticals, Inc.
|
121.1 | |||
Checkpoint Therapeutics, Inc.
|
105.7 | |||
Gritstone Oncology, Inc.
|
104.7 | |||
Corvus Pharmaceuticals, Inc.
|
99.4 | |||
Mustang Bio, Inc.
|
98.8 | |||
Aravive, Inc.
|
75.4 | |||
Aptevo Therapeutics Inc.
|
17.5 | |||
Advaxis, Inc.
|
15.1 | |||
Cyclacel Pharmaceuticals, Inc.
|
(6.0 | ) |
Closed Date
|
Target
|
Acquirer
|
Implied Enterprise
Value ($M)
|
|||||
3/2/2020 | Forty Seven Inc. | Gilead Sciences Inc. | $ | 4,622.6 | ||||
12/9/2019 | Synthorx Inc. | Sanofi S.A. | 2,308.8 | |||||
5/14/2018 | Aurka Pharma Inc. | Eli Lilly and Co. | 575.0 | |||||
9/6/2017 | Rigontec GmbH | Merck & Co. Inc. | 542.6 | |||||
11/16/2016 | Virttu Biologics Limited | TNK Therapeutics, Inc. | 35.0 | |||||
11/1/2016 | Kolltan Pharmaceuticals, Inc. | Celldex Therapeutics, Inc. | 369.3 | |||||
4/5/2016 | Cormorant Pharmaceuticals AB | Bristol-Myers Squibb | 520.0 | |||||
1/10/2016 | Tensha Therapeutics Inc. | Roche AG | 535.0 | |||||
10/21/2015 | Admune Therapeutics LLC | Novartis International AG | 258.0 |
• |
severance and retention payments to which certain of Spring Bank’s executive officers will be entitled following completion of the Exchange as a result of termination of employment;
|
• |
the accelerated vesting of certain of the equity awards held by Spring Bank’s executive officers and directors in connection with the completion of the Exchange; and
|
• |
the fact that David Arkowitz, Todd Brady, M.D., Ph.D. and Pamela Klein, M.D., current directors of Spring Bank, will continue as directors of the combined company after the Closing.
|
Option Awards
|
Stock Awards
|
|||||||||||||||||||||||
Name
|
Number of
Shares of Spring Bank Common Stock Underlying Unexercised Options (#) Exercisable |
Number of
Shares of Spring Bank Common Stock Underlying Unexercised Options (#) Unexercisable |
Option
Exercise Price ($) |
Option
Expiration Date |
Number
of Shares or Units That Have Not Vested (#) |
Market
Value of Shares or Units That Have Not Vested ($)
(1)
|
||||||||||||||||||
Current Executive Officers
|
||||||||||||||||||||||||
Martin Driscoll
|
295,047 | — | $ | 12.88 | 8/16/2025 | — | — | |||||||||||||||||
President and Chief Executive Officer
|
20,000 | — | 10.97 | 5/18/2026 | — | — | ||||||||||||||||||
71,667 | 8,333 | 7.66 | 2/9/2027 | — | — | |||||||||||||||||||
50,000 | 30,000 | 12.10 | 1/15/2028 | — | — | |||||||||||||||||||
18,750 | 31,250 | 10.35 | 1/24/2029 | — | — | |||||||||||||||||||
— | 40,000 | 1.41 | 3/5/2030 | |||||||||||||||||||||
100,000 | $ | 162,000 | ||||||||||||||||||||||
Lori Firmani
|
10,000 | — | 10.97 | 5/18/2026 | — | — | ||||||||||||||||||
Vice President of Finance and Treasurer
|
3,583 | 417 | 7.66 | 2/9/2027 | — | — | ||||||||||||||||||
1,875 | 1,125 | 12.10 | 1/15/2028 | — | — | |||||||||||||||||||
1,875 | 3,125 | 10.35 | 1/24/2029 | — | — | |||||||||||||||||||
— | 15,000 | 1.41 | 3/5/2030 | |||||||||||||||||||||
65,000 | $ | 105,300 | ||||||||||||||||||||||
R. P. “Kris” Iyer, Ph.D.
|
12,500 | — | $ | 9.28 | 3/30/2025 | — | — | |||||||||||||||||
Chief Scientific Officer
|
5,000 | — | 10.97 | 5/18/2026 | — | — | ||||||||||||||||||
35,833 | 4,167 | 7.66 | 2/9/2027 | — | — | |||||||||||||||||||
25,000 | 15,000 | 12.10 | 1/15/2028 | — | — | |||||||||||||||||||
16,875 | 28,125 | 10.35 | 1/24/2029 | |||||||||||||||||||||
— | 20,000 | 1.41 | 3/5/2030 | — | — | |||||||||||||||||||
70,000 | $ | 113,400 | ||||||||||||||||||||||
Garrett Winslow, Esq.
|
35,000 | 5,000 | $ | 7.86 | 3/30/2025 | — | — | |||||||||||||||||
General Counsel and Corporate
|
11,250 | 6,750 | 12.10 | 1/15/2028 | — | — | ||||||||||||||||||
Secretary
|
13,125 | 21,875 | 10.35 | 1/24/2029 | — | — | ||||||||||||||||||
— | 25,000 | 1.41 | 3/5/2030 | |||||||||||||||||||||
75,000 | $ | 121,500 | ||||||||||||||||||||||
Current Directors
|
||||||||||||||||||||||||
Scott Smith
|
7,028 | 3,972 | $ | 11.34 | 8/15/2028 | — | — | |||||||||||||||||
Chairman of the Board
|
7,500 | — | 4.62 | 7/10/2029 | — | — | ||||||||||||||||||
625 | 6,875 | 1.60 | 6/24/2030 | — | — | |||||||||||||||||||
David Arkowitz
|
10,000 | — | $ | 9.28 | 3/30/2025 | — | — | |||||||||||||||||
Director
|
5,500 | — | 9.05 | 7/28/2026 | — | — | ||||||||||||||||||
5,500 | — | 14.27 | 6/15/2027 | — | — | |||||||||||||||||||
5,500 | — | 13.99 | 6/18/2028 | — | — | |||||||||||||||||||
7,500 | — | 4.62 | 7/10/2029 | — | — | |||||||||||||||||||
625 | 6,875 | 1.60 | 6/24/2030 | — | — | |||||||||||||||||||
Todd Brady, M.D., Ph.D.
|
11,000 | — | $ | 9.05 | 7/28/2026 | — | — | |||||||||||||||||
Director
|
5,500 | — | 14.27 | 6/15/2027 | — | — | ||||||||||||||||||
5,500 | — | 13.99 | 6/18/2028 | — | — | |||||||||||||||||||
7,500 | — | 4.62 | 7/10/2029 | — | — | |||||||||||||||||||
625 | 6,875 | 1.60 | 6/24/2030 | — | — | |||||||||||||||||||
Timothy Clackson, Ph.D.
|
8,861 | 2,139 | $ | 13.10 | 3/1/2028 | — | — | |||||||||||||||||
Director
|
7,500 | — | 4.62 | 7/10/2029 | — | — | ||||||||||||||||||
625 | 6,875 | 1.60 | 6/24/2030 | — | — | |||||||||||||||||||
Kurt Eichler
|
5,000 | — | $ | 12.88 | 8/20/2025 | — | — | |||||||||||||||||
Director
|
5,500 | — | 9.05 | 7/28/2026 | — | — | ||||||||||||||||||
5,500 | — | 14.27 | 6/15/2027 | — | — | |||||||||||||||||||
5,500 | — | 13.99 | 6/18/2028 | — | — | |||||||||||||||||||
7,500 | — | 4.62 | 7/10/2029 | — | — | |||||||||||||||||||
625 | 6,875 | 1.60 | 6/24/2030 | — | — | |||||||||||||||||||
Pamela Klein, M.D.
|
5,000 | 10,000 | 4.62 | 7/10/2029 | — | — | ||||||||||||||||||
Director
|
625 | 6,875 | 1.60 | 6/24/2030 | — | — |
(1) |
The value of any unvested stock awards was determined by multiplying the number of unvested shares subject to the award by $1.62 (the average closing market price per share of Spring Bank’s common stock over the first five business days following the public announcement of the Exchange).
|
Cash
|
COBRA
Benefits |
Total
|
||||||||||
Martin Driscoll
(1)
|
$ | 556,875 | $ | 17,092 | $ | 573,967 | ||||||
R.P. “Kris” Iyer, Ph.D.
(2)
|
$ | 378,000 | $ | 21,585 | $ | 399,585 | ||||||
Lori Firmani
(3)
|
$ | 247,850 | $ | 28,081 | $ | 275,931 | ||||||
Garrett Winslow
(4)
|
$ | 380,694 | $ | 29,121 | $ | 409,815 |
(1) |
Pursuant to the employment agreement entered into on August 7, 2015 by and between Spring Bank and Mr. Driscoll, in the event that Mr. Driscoll’s employment is terminated by Spring Bank without cause or by Mr. Driscoll for good reason within one year of a change of control (including as a result of the Exchange), Spring Bank has agreed to continue to pay Mr. Driscoll his then-current base salary (currently $495,000) over a period of 12 months and to pay COBRA continuation premiums on his behalf for medical and dental benefits to him and covered members of his family for a period of up to 12 months. On March 5, 2020, the Spring Bank Board approved a retention arrangement for Mr. Driscoll, which provides that in the event of a termination without cause or a resignation for good reason (including in connection with the Exchange) prior to December 15, 2020, Mr. Driscoll will also be entitled to receive his unpaid retention award of ($61,875).
|
(2) |
Pursuant to the employment agreement entered into on December 16, 2015 by and between Spring Bank and R.P. “Kris” Iyer, its chief scientific officer, in the event that Dr. Iyer’s employment is terminated by Spring Bank without cause or by Dr. Iyer for good reason within two years of a change of control (including as a result of the Exchange), Spring Bank has agreed to pay a lump sum payment equal to 12 months of his then-current base salary (currently $378,000 per year).
|
(3) |
Pursuant to the employment agreement entered into on January 1, 2020 by and between Spring Bank and Lori Firmani, its Vice President of Finance and Treasurer, in the event that Ms. Firmani’s employment is terminated by Spring Bank without cause or by Ms. Firmani for good reason within one year of a change of control (including as a result of the Exchange), Spring Bank has agreed to continue to pay Ms. Firmani her then-current base salary (currently $200,000) over a period of 12 months and to pay COBRA continuation premiums on her behalf for medical benefits to her and covered members of her family for a period of up to 12 months. On March 5, 2020, the Spring Bank Board approved a retention arrangement for Lori Firmani, which provides that in the event of a termination without cause or a resignation for good reason (including in connection with the Exchange) prior to December 15, 2020, Ms. Firmani will be entitled to receive her unpaid retention award ($47,850).
|
(4) |
Pursuant to the employment agreement entered into on November 30, 2016 by and between Spring Bank and Garrett Winslow, its General Counsel and Corporate Secretary, in the event that Mr. Winslow’s employment is terminated by Spring Bank without cause or by Mr. Winslow for good reason within one year of a change of control (including as a result of the Exchange), Spring Bank has agreed to continue to pay Mr. Winslow his then-current base salary (currently $321,600) over a period of 12 months and to pay COBRA continuation premiums on his behalf for medical benefits to him and
|
covered members of his family for a period of up to 12 months. On March 5, 2020, the Spring Bank Board approved a retention arrangement for Mr. Winslow, which provides that in the event of a termination without cause or a resignation for good reason (including in connection with the Exchange) prior to December 15, 2020, Mr. Winslow will be entitled to receive his unpaid retention award ($59,094). |
Directors and Executive Officers
|
F-star Share Capital
Beneficially Held Immediately Prior to the Closing |
|||
Eliot Forster, Ph.D.
(1)
|
336,176 | |||
Darlene Deptula-Hicks
(2)
|
90,963 | |||
Neil Brewis, Ph.D.
(3)
|
216,793 | |||
Louis Kayitalire, M.D.
(4)
|
82,473 | |||
Nessan Bermingham, Ph.D.
(5)
|
187,990 | |||
Edward Benz, M.D.
(6)
|
26,250 | |||
Jean-François Formela, M.D.
(7)
|
— | |||
Deborah Harland, Ph.D.
(8)
|
— | |||
Patrick Krol
(9)
|
— | |||
Geoffrey Race
(10)
|
26,250 | |||
Helmut Schuehsler, Ph.D.
(11)
|
— |
(1) |
Consists of (i) 164,978 ordinary shares, (ii) 26,296 shares issuable upon the exercise of options under the legacy GmbH Scheme exercisable within 60 days of August 1, 2020, and (iii) 144,901 shares issuable upon the exercise of options outstanding under the
F-star
EIP exercisable within 60 days of August 1, 2020.
|
(2) |
Consists of 90,963 shares issuable upon the exercise of options under the
F-star
EIP exercisable within 60 days of August 1, 2020.
|
(3) |
Consists of (i) 176,380 ordinary shares, (ii) 20,229 shares issuable upon the exercise of options under the legacy GmbH Scheme, and (iii) 20,184 shares issuable upon the exercise of options.
|
(4) |
Consists of 82,473 shares issuable upon the exercise of options under the
F-star
EIP exercisable within 60 days of August 1, 2020.
|
(5) |
Consists of 187,990 shares issuable upon the exercise of options under the
F-star
Therapeutics Limited 2018 Equity Incentive Plan exercisable within 60 days of August 1, 2020. This does not include share capital held by Atlas Venture Fund VII, L.P. or the ordinary shares issuable upon the conversion of the convertible notes held by Atlas Venture Opportunity Fund I, L.P.
|
(6) |
Consists of 26,250 shares issuable upon the exercise of options under the
F-star
EIP exercisable within 60 days of August 1, 2020.
|
(7) |
This does not include the share capital held by Atlas Venture Fund VII, L.P. or the ordinary shares issuable upon the conversion of the convertible notes held by Atlas Venture Opportunity Fund I., L.P.
|
(8) |
This does not include the shares held by, or the ordinary shares issuable upon the conversion of the convertible notes held by, S.R. One, Limited, an indirect, wholly-owned subsidiary of GlaxoSmithKline plc.
|
(9) |
This does not include the share capital held by, or the ordinary shares issuable upon the conversion of the convertible notes held by, Coöperatieve Aescap Venture I, U.A.
|
(10) |
Consists of 26,250 shares issuable upon the exercise of options outstanding under the
F-star
EIP.
|
(11) |
This does not include the share capital held by, or the ordinary shares issuable upon the conversion of the convertible notes held by, TVM Life Science Ventures VI GmbH & Co. KG and TVM Life Science Ventures VI L.P.
|
Shareholder Name
|
F-star Share Capital
Held Immediately Prior to the Closing |
|||
Entities affiliated with Atlas Venture Fund
(1)
|
8,724,7487 | |||
Coöperatieve Aescap Venture I, U.A.
(2)
|
4,613,323 | |||
Entities affiliated with TVM Life Sciences
(3)
|
3,187,864 | |||
MP Healthcare Venture Management Inc.
(4)
|
2,132,634 | |||
Merck Ventures B.V.
(5)
|
3,027,4672 | |||
S.R. One, Limited
(6)
|
5,430,570 |
(1) |
Consists of (i) 103,611 ordinary shares issuable upon conversion of Series Seed Preferred shares, (ii) 313,661 ordinary shares issuable upon conversion of Series A Preferred shares, (iii) 4,693,801 ordinary shares held by Atlas Venture Fund VII, L.P., and (iv) 3,613,675 ordinary shares issuable upon conversion of $4,300,247 of convertible notes, interest calculated as of September 30, 2020. Atlas Venture Associates VII, L.P. (“AVA VII LP”) is the sole general partner of Atlas Venture Fund VII, L.P. Atlas Venture Associates VII, Inc. (“AVA VII Inc.”) is the sole general partner of AVA VII LP. Nessan Bermingham, Ph.D., a Venture Partner of Atlas Venture, is a member of
F-star’s
board of directors. Dr. Bermingham disclaims beneficial ownership of the shares held by the entities affiliated with Atlas Venture. Jean-Francois Formela, M.D., a partner of Atlas Venture, is a member of
F-star’s
board of directors. Dr. Formela disclaims beneficial ownership of the shares held by the entities affiliated with Atlas Venture.
|
(2) |
Consists of (i) 302,880 ordinary shares issuable upon conversion of Series A Preferred shares, (ii) 3,407,025 ordinary shares, and (iii) 903,418 ordinary shares issuable upon conversion of $1,075,068 of convertible notes, interest calculated as of September 30, 2020.
|
|
(3) |
Consists of (i) 130,778 ordinary shares issuable upon conversion of Series A Preferred shares, (ii) 1,471,079 ordinary shares held by TVM Life Science Ventures VI GmbH & Co. KG (“TVM VI”), (iii) 36,354 ordinary shares issuable upon conversion of Series A Preferred shares, (iv) 407,833 ordinary shares held by TVM Life Science Ventures VI L.P. (“TVM VI LP”), (v) 894,384 ordinary shares issuable upon conversion of $1,064,318 of convertible notes held by TVM VI, interest calculated as of September 30, 2020, and (vi) 247,536 ordinary shares issuable upon conversion of $294,569 of convertible notes, interest calculated as of September 30, 2020 held by TVM VI LP. Hubert Birner, Stefan Fischer, and Helmut Schuehsler, Ph.D. are members of the investment committee of TVM Life Science Ventures Management VI L.P. (“TVM VI Management”), a special limited partner of each of TVM VI and TVM VI LP, with voting and dispositive power over the shares held by TVM VI and TVM VI LP.
|
(4) |
Consists of (i) 100,353 ordinary shares issuable upon conversion of Series A Preferred shares, (ii) 1,128,863 ordinary shares, and (iii) 903,418 ordinary shares issuable upon conversion of $1,075,068 of convertible notes, interest calculated as of September 30, 2020.
|
(5) |
Consists of (i) 99,653 ordinary shares issuable upon conversion of Series A Preferred shares, (ii) 1,120,977 ordinary shares, and (iii) 1,806,837 ordinary shares issuable upon conversion of $2,150,137 of convertible notes, interest calculated as of September 30, 2020. Merck Ventures B.V. is an affiliate of Merck KGaA, Darmstadt, Germany.
|
(6) |
Consists of (i) 148,333 ordinary shares issuable upon conversion of Series A Preferred shares, (ii) 1,668,562 ordinary shares, and (iii) 3,613,675 ordinary shares issuable upon conversion of $4,300,274 of convertible notes, interest calculated as of September 30, 2020. S.R. One, Limited, is an indirect, wholly-owned subsidiary of GlaxoSmithKline plc.
|
Optionholder Name
|
Grant Date
|
Expiration
Date |
Exercise Price
|
Number of F-star
Ordinary Shares Underlying Options or RSUs as of August 1, 2020 |
Number of F-star
Ordinary Shares Underlying Options or RSUs Vested as of 60 Days from August 1, 2020 |
|||||||||||||||
Eliot Forster, Ph.D.
|
10/1/2018 | — | GBP 0.00017006 | 50,571 | 26,296 | |||||||||||||||
10/1/2018 | — | GBP 0.01 | 289,803 | 144,901 | ||||||||||||||||
7/1/2020 | — | GBP 0.01 | 2,030,000 | — | ||||||||||||||||
Darlene Deptula-Hicks
|
5/1/2019 | — | USD 1.87 | 252,676 | 90,963 | |||||||||||||||
7/1/2020 | — | — | 235,000 | — | ||||||||||||||||
Neil Brewis, Ph.D.
|
11/2/2015 | — | GBP 0.00042514 | 20,229 | 20,229 | |||||||||||||||
5/7/2019 | — | GBP 0.01 | 56,068 | 20,184 | ||||||||||||||||
7/1/2020 | — | GBP 0.01 | 625,000 | — | ||||||||||||||||
Louis Kayitalire, M.D.
|
6/17/2019 | — | USD 1.87 | 242,569 | 82,473 | |||||||||||||||
7/1/2020 | — | — | 235,000 | — | ||||||||||||||||
Nessan Bermingham, Ph.D.
(1)
|
4/1/2018 | — | GBP 0.01 | 303,211 | 187,990 | |||||||||||||||
7/1/2020 | — | — | 150,000 | — | ||||||||||||||||
Edward Benz, M.D.
|
12/18/2019 | — | USD 1.61 | 35,000 | 26,250 | |||||||||||||||
Geoffrey Race
|
12/18/2019 | — | GBP 0.01 | 35,000 | 26,250 |
• |
in the event Spring Bank enters into a definitive agreement for a proposed transaction for Spring Bank’s STING antagonist program on or prior to the Closing, an amount equal to any upfront payments that, as of the Closing, are earned by Spring Bank, such amount not to exceed $2.0 million;
|
• |
certain prepaid expenses and deposits, up to an aggregate amount of $2.0 million and subject to certain limitations; and
|
• |
expenses paid, or liabilities incurred, by Spring Bank or any of its subsidiaries prior to the Closing that are approved in writing to be paid to Spring Bank or any of its subsidiaries pursuant to any directors’ and officers’ insurance policies in excess of the deductible thereunder.
|
• |
all accounts payable and accrued expenses and any other current and long-term liabilities of Spring Bank or any of its subsidiaries;
|
• |
any reserves for legal settlements, except to the extent such amounts are covered by insurance policies;
|
• |
the cash cost of any unpaid change of control payments or severance, termination or similar payments or obligations, including any COBRA-related obligations, that are or become due to any current or former employee, director or independent contractor of Spring Bank or any of its subsidiaries before or after the Closing;
|
• |
any outstanding lease obligations, as calculated in accordance with the Exchange Agreement;
|
• |
any payments to be made by Spring Bank or any of its subsidiaries in connection with the termination of any existing contract and to wind down all clinical trial programs of Spring Bank or any of its subsidiaries, other than Spring Bank’s ongoing Phase 1a/1b, multicenter, open-label,
non-randomized,
dose-escalation, and cohort expansion study examining SB 11285 administered as an IV infusion in patients with advanced solid tumors, referred to herein as the STING trial; and
|
• |
all accrued and unpaid taxes of Spring Bank and its subsidiaries.
|
• |
the net amount of any transaction expense reimbursement owed to, or transaction expense payment owed by Spring Bank pursuant to the Exchange Agreement.
|
• |
certain reimbursable costs or expenses of Spring Bank in connection with the performance of Spring Bank’s obligation related the Approved Development Transaction (as defined below);
|
• |
any payments to holders of any Spring Bank’s 2016 warrants that elect to receive the Black-Scholes value of such warrants pursuant to their terms;
|
• |
any costs or expenses, including attorney’s fees or settlement costs, incurred in connection with any potential or actual security holder litigation arising or resulting from the Exchange including all amounts paid or payable up to the retention amount of any insurance policy that covers or may cover such costs or expenses and amounts not covered by any such insurance policy;
|
• |
any costs or expenses of Spring Bank in connection with Spring Bank’s completion of the STING Trial; or
|
• |
any costs or expenses, including attorney’s fees or settlement costs, incurred in connection with any exercise of appraisal rights by Spring Bank stockholders in connection with the Exchange.
|
Pre-Closing
Financing Gross Proceeds
|
Spring
Bank Net Cash |
Exchange
Ratio |
Post-Exchange
Ownership by Spring Bank Securityholders |
Post-Exchange
Ownership of
F-star
Securityholders |
||||||||||||
$ | % | % | ||||||||||||||
$ | % | % | ||||||||||||||
$ | % | % |
• |
shareholders that are not U.S. Holders;
|
• |
financial institutions;
|
• |
investors in pass-through entities, including (but not limited to) partnerships or limited liability companies treated as partnerships for tax purposes;
|
• |
insurance companies;
|
• |
tax-exempt
organizations;
|
• |
pension plans;
|
• |
“controlled foreign corporations;”
|
• |
“passive foreign investment companies;”
|
• |
corporations that accumulate earnings to avoid U.S. federal income tax;
|
• |
regulated investment companies or real estate investment trusts;
|
• |
brokers or dealers in securities or currencies;
|
• |
certain expatriates or persons whose functional currency is not the U.S. dollar;
|
• |
traders in securities that elect to use a mark to market method of accounting;
|
• |
persons that hold Spring Bank common stock or
F-star
shares as part of a straddle, hedge, constructive sale, synthetic security or other integrated investment, or conversion transaction;
|
• |
persons that received Spring Bank common stock or
F-star
shares upon the conversion of a convertible note or any other convertible instrument;
|
• |
persons who own 10% or more of the voting power of
F-star
and who are considered “United States Shareholders” of a “controlled foreign corporation” with respect to
F-star;
and
|
• |
U.S. Holders that acquired their shares of Spring Bank common stock or
F-star
shares through the exercise of an employee stock option or otherwise as compensation.
|
• |
a citizen or resident of the United States;
|
• |
a corporation, or other entity treated as a corporation, created or organized in or under the laws of the United States or any state or political subdivision thereof;
|
• |
an estate that is subject to U.S. federal income tax on its income regardless of its source; or
|
• |
a trust, the substantial decisions of which are controlled by one or more U.S. persons and which is subject to the primary supervision of a U.S. court, or a trust that validly has elected under applicable Treasury regulations to be treated as a U.S. person for U.S. federal income tax purposes.
|
(i) |
no gain or loss would be recognized upon the U.S. Holder’s receipt of Spring Bank common stock in exchange for the U.S. Holder’s ordinary shares of
F-star;
|
(ii) |
the U.S. Holder’s tax basis of the shares of Spring Bank common stock received would be the same as the tax basis of the U.S. Holder’s ordinary shares of
F-star
exchanged therefor; and
|
(iii) |
the holding period of the Spring Bank common stock in the hands of the U.S. Holder would include the holding period of the U.S. Holder’s ordinary shares of
F-star
exchanged therefor.
|
(i) |
the U.S. Holder would recognize gain or loss equal to the difference, if any, between the fair market value (as of the closing of the Exchange) of the shares of Spring Bank common stock received pursuant to the Exchange and the U.S. Holder’s tax basis in the ordinary shares of
F-star
surrendered in exchange therefor;
|
(ii) |
the tax basis of the shares of Spring Bank common stock received by the
F-star
shareholders would be the fair market value (as of the closing of the Exchange) of such shares; and
|
(iii) |
the holding period of the Spring Bank common stock in the hands of the
F-star
shareholders would commence on the day following the closing date of the Exchange.
|
• |
Spring Bank will hold more than 25% of the original share capital of
F-star;
and
|
• |
The exchange of securities takes place for bona fide commercial reasons and does not form part of a scheme or arrangements, of which the main purpose, or one of the main purposes is the avoidance of liability to CGT (Section 137 TCGA 1992).
|
• |
no temporary restraining order, preliminary or permanent injunction or other order preventing the Closing shall have been issued by ant court of competent jurisdiction and remain in effect and no statute, rule, regulation or order shall be enacted, entered, enforced or deemed applicable to the Exchange, which makes the consummation of the Exchange illegal;
|
• |
the stockholders of Spring Bank must have approved the Company Stockholder Approval Matters;
|
• |
the registration statement of which this proxy statement/prospectus forms a part must be effective and no stop order suspending the effectiveness of the registration statement shall have been issued and no proceedings for such purpose shall have been initiated by the SEC;
|
• |
prior to the conclusion of the Special Meeting, the SEC shall not have issued an order suspending the use of this proxy statement/prospectus, and no proceeding in respect of the proxy statement/prospectus shall have been initiated by the SEC;
|
• |
the shares of Spring Bank common stock to be issued in the Exchange to be approved for listing on Nasdaq, subject to consummation of the Exchange and official notice of issuance; and
|
• |
all foreign antitrust approvals, to the extent applicable, shall have been obtained.
|
• |
the representations and warranties of Spring Bank with respect to organization and qualification and charter documents, capital structure, and authority,
non-contravention
and approvals (other than, with
|
respect to capital structure, inaccuracies that are de minimis, individually or in the aggregate), must be true and correct on the date of the Exchange Agreement and on the date of the Closing in all respects as if made on date of the Closing date or, if such representations and warranties address matters as of a particular date, then as of that particular date;
|
• |
all other representations and warranties of Spring Bank, must be true and correct on the date of the Exchange Agreement and on the date of Closing date in all respects as if made on the date of Closing or, if such representations and warranties address matters as of a particular date, then as of that particular date, except where the failure of these representations and warranties to be true and correct (disregarding all qualifications or limitations as to “materiality,” “Spring Bank Material Adverse Effect” and words of similar import) has not had, individually or in the aggregate, a Spring Bank Material Adverse Effect, as described in the section “
Exchange Agreement—Representations and Warranties
|
• |
Spring Bank must have performed or complied with in all material respects all agreements and covenants in the Exchange Agreement required to be performed or complied with by it on or prior to the Closing;
|
• |
Since the date of the Exchange Agreement, no Spring Bank Material Adverse Effect shall have occurred and be continuing, as described in the section “Exchange Agreement—Representations and Warranties”;
|
• |
Spring Bank must have delivered certain certificates and other documents required under the Exchange Agreement for the Closing;
|
• |
Spring Bank must have delivered to
F-star
written resignations of the officers and directors of Spring Bank that are not continuing as officers and directors of the combined company following the Exchange and must have caused the board of directors of the combined company to be constituted as agreed to by Spring Bank and
F-star
effective as of the Closing;
|
• |
F-star
must have received
lock-up
agreements from each director and executive officer of Spring Bank, each of whom has already executed and delivered such agreements to
F-star,
and such
lock-up
agreements must be in full force and effect;
|
• |
no delisting or suspension in trading of Spring Bank common stock on Nasdaq shall be in effect as of the Closing;
|
• |
Certain contracts of Spring Bank must have been terminated, or, to the extent such contracts have not been terminated as of the Closing, notice of termination shall have been given under such contracts (with any monetary liabilities resulting from such termination being accounted for in the calculation of Spring Bank’s net cash); and
|
• |
the Reverse Stock Split must have been effected.
|
• |
the representations and warranties of
F-star
with respect to organization and qualification and charter documents, capital structure, authority,
non-contravention
and approvals, employee benefit plans and ownership of Spring Bank common stock (other than, with respect to capital structure, inaccuracies that are de minimis, individually or in the aggregate) must be true and correct on the date of the Exchange Agreement and on the date of Closing in all respects as if made on the date of Closing or, if such representations and warranties address matters as of a particular date, then as of that particular date;
|
• |
the representations and warranties of the
F-star
shareholders with respect to the ownership of the
F-star
shares and
F-star
loan notes and authority and
non-contravention
(other than, with respect to ownership, inaccuracies that are de minimis, individually or in the aggregate) must be true and correct
|
on the date of the Exchange Agreement and on the date of Closing in all respects as if made on the date of Closing or, if such representations and warranties address matters as of a particular date, then as of that particular date;
|
• |
all other representations and warranties of
F-star
and the
F-star
shareholders must be true and correct on the date of the Exchange Agreement and on the date of Closing date in all respects as if made on the date of Closing or, if such representations and warranties address matters as of a particular date, then as of that particular date, except where the failure of these representations and warranties to be true and correct (disregarding all qualifications or limitations as to “materiality,”
“F-star
Material Adverse Effect” and words of similar import) has not had, individually or in the aggregate, an
F-star
Material Adverse Effect, as described in the section “Exchange Agreement—Representations and Warranties”;
|
• |
F-star
and the
F-star
shareholders must have performed or complied with in all material respects all agreements and covenants in the Exchange Agreement required to be performed or complied with by them on or prior to the Closing;
|
• |
the
Pre-Closing
Financing must have occurred in accordance with the terms of the equity commitment letters and subscription agreements entered into in connection therewith;
|
• |
since the date of the Exchange Agreement, no
F-star
Material Adverse Effect shall have occurred and be continuing, as described in the section “Exchange Agreement—Representations and Warranties”;
|
• |
F-star
must have delivered certain certificates and other documents required under the Exchange Agreement for the Closing;
|
• |
the
F-star
shareholders must have delivered to the Exchange Agent share certificates representing all of the issued
F-star
ordinary shares, together with appropriate transfer documents effecting the transfer of all of the
F-star
ordinary shares to Spring Bank;
|
• |
F-star
must have executed and delivered an allocation certificate to Spring Bank;
|
• |
the Conversions must have occurred; and
|
• |
Spring Bank must have received
lock-up
agreements from each director and executive officer of
F-star,
and each
F-star
shareholder affiliated with a director or executive officer of
F-star,
each of whom has already executed and delivered such agreements to Spring Bank, and such
lock-up
agreements, together with other
lock-up
agreements obtained after the date of the Exchange Agreement and received by Spring Bank must be in full force and effect.
|
• |
corporate organization and qualification and similar corporate matters;
|
• |
capitalization
|
• |
authority to enter into the Exchange Agreement and related agreements, enforceability;
|
• |
noncontravention with organizational documents and legal requirements;
|
• |
required third-party consents, approvals, notices and filings;
|
• |
financial statements;
|
• |
liabilities;
|
• |
material changes or events;
|
• |
tax matters;
|
• |
intellectual property;
|
• |
compliance with legal and regulatory requirements;
|
• |
legal proceedings and orders;
|
• |
broker’s, finder’s or other fees or commissions in connection with the Exchange;
|
• |
employee and labor matters and benefit plans;
|
• |
title to assets, real property and leaseholds;
|
• |
environmental matters;
|
• |
material contracts and the validity and absence of breach of such contracts;
|
• |
books and records;
|
• |
insurance;
|
• |
government contracts;
|
• |
transactions with certain related parties; and
|
• |
the inapplicability of state takeover statutes and Section 203 of the DGCL.
|
• |
the documents filed with the SEC and the accuracy of information contained in those documents;
|
• |
Spring Bank’s code of ethics;
|
• |
the opinion of Spring Bank’s financial advisor, Ladenburg;
|
• |
shell company status; and
|
• |
bank accounts and accounts receivable.
|
• |
ownership of Spring Bank capital stock; and
|
• |
Pre-Closing
Financing.
|
• |
ownership of
F-star
shares and convertible loan notes;
|
• |
authority to enter into the Exchange Agreement and related agreements, enforceability;
|
• |
tax matters;
|
• |
accuracy of certain information; and
|
• |
ownership of Spring Bank capital stock.
|
• |
conditions generally affecting the industries in which
F-star
or Spring Bank participates or the United States or global economy or capital markets as a whole, to the extent they do not have a disproportionate impact on
F-star
or Spring Bank or any of their respective subsidiaries, taken as a whole, relative to other companies in the industry in which they operate;
|
• |
any failure by
F-star
or Spring Bank or their respective subsidiaries to meet its estimates or expectations of its development programs, internal or analyst (in the case of Spring Bank) projections or forecasts or third party revenue or earnings predictions (but any event, development, circumstance, change, effect or occurrence causing or contributing to such failures may constitute a Material Adverse Effect and may be taken into account in determining whether a Material Adverse Effect has occurred).
|
• |
the execution, delivery, announcement or performance of the obligations under the Exchange Agreement or the announcement, pendency or anticipated Closing;
|
• |
natural disasters or acts of terrorism, sabotage, military action or war or any escalation or worsening thereof, or any viruses, pandemics, epidemic or other outbreak of illness or public health event, or any spread or worsening thereof, or any other event, development, circumstance, change, effect or occurrence that may be considered a force majeure event; or
|
• |
changes in U.S. GAAP or International Financial Reporting Standards (“IFRS”) (with respect to
F-star)
or applicable legal requirements (or, in each case, the interpretation thereof) to the extent they do not disproportionately impact
F-star
or Spring Bank or any of their respective subsidiaries, taken as a whole, relative to other companies in the industry in which they operate;
|
• |
the taking of any action, or the failure to take any action by
F-star
or Spring Bank or their respective subsidiaries, that is required or reasonably necessary to comply with the terms of the Exchange Agreement or the taking of any action permitted by the Exchange Agreement;
|
• |
changes in or affecting research and development, clinical trials or other drug development activities (including the failure to obtain positive results from clinical trials, the occurrence of adverse events or serious adverse events in any clinical trial, development activities or favorable responses from any applicable governmental body) conducted by or on behalf of
F-star
or Spring Bank or their respective
|
subsidiaries or licensees in respect of
F-star’s
or Spring Bank’s products or product candidates (but any effect of any such adverse event or serious adverse event in any clinical trial (taking into account the intended patient population and phase of dose escalation of such clinical trial) on
F-star
or Spring Bank, as applicable, may be taken into account in determining whether a Material Adverse Effect has occurred);
|
• |
any rejection or
non-acceptance
by a governmental body of a registration or filing by
F-star
or Spring Bank relating to any intellectual property rights of
F-star
or Spring Bank, as applicable; or
|
• |
regulatory approval of, or regulatory action or announcement with respect to, any product, or product candidates, of a third party that are similar to, or expected to compete against, any of
F-star
or Spring Bank product candidates.
|
• |
changes in the trading price or trading volume of Spring Bank common stock (but any event, development, circumstance, change, effect or occurrence causing or contributing to such changes may constitute a Spring Bank Material Adverse Effect and may be taken into account in determining whether a Spring Bank Material Adverse Effect has occurred);
|
• |
general conditions in financial markets and any changes therein (including any changes arising out of acts of terrorism, war, weather conditions or other force majeure event), to the extent that such conditions do not have a disproportionate impact on Spring Bank and its subsidiaries, taken as a whole, relative to other companies in the industry in which Spring Bank operates or to which other companies undertaking transactions similar to the transactions contemplated by the Exchange Agreement may be subject; or
|
• |
any stockholder or derivative litigation arising from or relating to the Exchange Agreement or the transactions contemplated by the Exchange Agreement.
|
• |
solicit or initiate, or knowingly encourage, induce or facilitate the making, submission or announcement of, any Acquisition Proposal or
F-star
Acquisition Proposal, as applicable, or take any action that would reasonably be expected to lead to an Acquisition Proposal or
F-star
Acquisition Proposal, as applicable;
|
• |
furnish any
non-public
information with respect to it or any of its subsidiaries to any person in connection with or in response to an Acquisition Proposal or
F-star
Acquisition Proposal, as applicable, or an inquiry or indication of interest that would reasonably be expected to lead to an Acquisition Proposal or
F-star
Acquisition Proposal, as applicable;
|
• |
engage in discussions or negotiations with any person with respect to any Acquisition Proposal or
F-star
Acquisition Proposal, as applicable;
|
• |
approve, endorse or recommend an Acquisition Proposal or
F-star
Acquisition Proposal, as applicable; or
|
• |
enter into any letter of intent or similar document or any agreement providing for or otherwise relating to, with respect to Spring Bank, an Acquisition Transaction, or with respect to
F-star,
a transaction contemplated by an
F-star
Acquisition Proposal.
|
• |
neither Spring Bank nor any representative of Spring Bank has breached the
non-solicitation
provisions of the Exchange Agreement described above;
|
• |
Spring Bank Board concludes in good faith, after consultation with its outside legal counsel, that the failure to take such action is reasonably likely to constitute a breach of the fiduciary duties of the board of directors to Spring Bank’s stockholders under applicable legal requirements;
|
• |
prior to furnishing any such information to, or entering into discussions with such third party, Spring Bank gives
F-star
written notice of the identity of the third party and of Spring Bank’s intention to furnish information to, or enter into discussions with, such third party;
|
• |
Spring Bank receives from the third party an executed confidentiality agreement on terms no more favorable to Spring Bank than the confidentiality agreement between Spring Bank and
F-star
and containing customary limitations on the use and disclosure of all nonpublic written and oral information furnished to such third party by or on behalf of Spring Bank; and
|
• |
prior to or simultaneously with the furnishing of any such information to such third party, Spring Bank furnishes or makes available such nonpublic information to
F-star,
to the extent not previously furnished.
|
• |
to be reasonably likely to be consummated if accepted; and
|
• |
to be more favorable to holders of Spring Bank common stock, from a financial point of view, than the Exchange, taking into account any changes to the terms of the Exchange Agreement offered by
F-star
or the holders of shares or convertible loan notes of
F-star
party to the Exchange Agreement in response to the offer.
|
• |
any merger, consolidation, amalgamation, share exchange, business combination, issuance or acquisition of securities, tender offer, exchange offer or similar transaction: in which Spring Bank or its subsidiaries is a constituent corporation; in which any individual, entity, governmental entity, or “group,” as defined in the Exchange Act and the rules thereunder, directly or indirectly acquires beneficial or record ownership of securities representing more than 20% of the outstanding securities of any class of voting securities of Spring Bank or its subsidiaries; or in which Spring Bank or its subsidiaries issues securities representing more than 20% of the outstanding securities of any class of voting securities of such entity;
|
• |
any sale, lease, exchange, transfer, license, acquisition or disposition of any business or businesses or assets that constitute or account for 20% or more of the consolidated net revenues, net income or assets of Spring Bank or its subsidiaries; or
|
• |
any liquidation or dissolution of Spring Bank or its subsidiaries.
|
• |
any merger, consolidation, amalgamation, share exchange, business combination, acquisition of securities, tender offer, exchange offer or similar transaction: in which
F-star
or any of its subsidiaries is a constituent corporation; in which any individual, entity, governmental entity, or “group,” as defined in the Exchange Act and the rules thereunder, directly or indirectly acquires beneficial or record ownership of securities representing more than 20% of the outstanding securities of any class of voting securities of
F-star
or any of its subsidiaries; or in which
F-star
or any of its subsidiaries issues securities representing more than 20% of the outstanding voting securities of any class of securities of such entity; or
|
• |
any sale, lease, exchange, transfer, acquisition or disposition of any business or businesses or assets that constitute 20% or more of the consolidated net revenues, net income or assets of
F-star
or its subsidiaries.
|
• |
amend or otherwise change any of the organizational documents of
F-star
or any of its subsidiaries, or effect or be a party to any merger, consolidation, share exchange business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction;
|
• |
issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (except for the issuance of (i) ordinary shares pursuant to options or restricted stock unit awards granted prior to the date of the Exchange Agreement, (ii) ordinary shares in the
Pre-Closing
Financing, (iii) up to $3,000,000 in aggregate principal amount of convertible loan notes, and (iv) ordinary shares in the Conversions);
|
• |
except for the Conversions, redeem, repurchase or otherwise acquire any
F-star
share capital;
|
• |
extend credit for borrowed money to any third party or incur any indebtedness for borrowed money or guarantee any indebtedness for borrowed money or issue or sell any debt securities or guarantee any debt securities or other obligations of others or sell, pledge, dispose of or create an encumbrance with respect to any assets (except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practice, (ii) encumbrances created by operation of law or dispositions of obsolete or worthless assets, and (iii) the issuance of up to $3,000,000 in aggregate principal amount of convertible loan notes);
|
• |
accelerate, amend or change the period (or permit any acceleration, amendment or change) of exercisability of options or warrants or authorize cash payments in exchange for any options;
|
• |
declare, set aside, make or pay any dividend or other distribution in respect of any of its share capital, except for dividends from a wholly owned subsidiary to its parent;
|
• |
split, combine or reclassify any of its share capital or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its share capital;
|
• |
amend the terms of, repurchase, redeem or otherwise acquire, or permit any subsidiary to repurchase, redeem or otherwise acquire, any of its securities or any securities of its subsidiaries, or propose to do any of the foregoing;
|
• |
sell, assign, transfer, license, sublicense or otherwise dispose of any
F-star
intellectual property rights (other than in the ordinary course of business);
|
• |
materially change any royalty payments charged by
F-star
or any of its subsidiaries or materially change any royalty payments charged by any third parties who have licensed intellectual property rights to
F-star
or any of its subsidiaries other than in the ordinary course of business;
|
• |
form any subsidiary;
|
• |
acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or any other material property or assets or any equity interest or other interest in any other entity or enter into a joint venture with any other entity;
|
• |
forgive any loans to any person, including employees, officers, directors or affiliates;
|
• |
take any action to change accounting policies or procedures other than as required by applicable legal requirements, IFRS, or U.S. GAAP;
|
• |
make or change any material tax election inconsistent with past practice, change any material tax accounting method or settle or compromise any material tax liability except in any case as required by applicable legal requirements;
|
• |
pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of liabilities incurred in the ordinary course of business and consistent with past practice;
|
• |
other than in the ordinary course of business, enter into or materially amend any material contract;
|
• |
enter into or amend a contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Exchange;
|
• |
settle or agree to settle any litigation, action, suit, proceeding, claim or arbitration, other than in the ordinary course of business;
|
• |
amend, modify or waive any provision of any
F-star
Pre-Closing
Financing Agreement which would be materially adverse to Spring Bank; or
|
• |
take, or agree to take, any of the actions described above.
|
• |
amend or otherwise change any of the organizational documents of Spring Bank or any of its subsidiaries, or effect or be a party to any merger, consolidation, share exchange business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction, except for any Permitted Disposition;
|
• |
issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (except for shares issuable pursuant to options, restricted stock units or warrants granted or outstanding as of the date of the Exchange Agreement);
|
• |
redeem, repurchase or otherwise acquire any shares of its common stock;
|
• |
extend credit for borrowed money to any third party or incur any indebtedness for borrowed money or guarantee any indebtedness for borrowed money or issue or sell any debt securities or guarantee any debt securities or other obligations of others or sell, pledge, dispose of or create an encumbrance with respect to any assets (except for (i) encumbrances created pursuant to operation of law, (ii) pursuant to the terms of the Approved Development Transaction, or any Permitted Disposition, or (iii) dispositions of obsolete or worthless assets);
|
• |
accelerate, amend or change the period (or permit any acceleration, amendment or change) of exercisability of options or warrants or authorize cash payments in exchange for any options or warrants, except as may be required under any Spring Bank option plan or contract or as may be required under applicable legal requirements;
|
• |
declare, set aside, make or pay any dividend or other distribution in respect of any of its capital stock (other than the issuance of the CVRs in accordance with the CVR Agreements or the Permitted Dividend, if any), except for dividends from a wholly owned subsidiary to its parent;
|
• |
split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock (other than the Reverse Stock Split);
|
• |
amend the terms of, repurchase, redeem or otherwise acquire, or permit any subsidiary to repurchase, redeem or otherwise acquire, any of its securities or any securities of its subsidiaries, or propose to do any of the foregoing;
|
• |
sell, assign, transfer, license, sublicense or otherwise dispose of any intellectual property rights, other than other than (i) the Approved Development Transaction, (ii) a Permitted Disposition or (iii) in the ordinary course of business;
|
• |
materially change any royalty payment charged by Spring Bank or any of its subsidiaries or materially change any royalty payment charged by third persons who have licensed intellectual property rights to Spring Bank or any of its subsidiaries, except pursuant to the Approved Development Transaction or any Permitted Disposition;
|
• |
form any Subsidiary, other than for the purpose of effecting the Approved Development Transaction or a Permitted Disposition;
|
• |
acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or any other material property or assets or any equity interest or other interest in another entity or enter into a joint venture with another entity;
|
• |
forgive any loans to any person, including employees, officers, directors or affiliates;
|
• |
other than as required by applicable legal requirements, (i) increase the compensation payable or to become payable to its directors, officers, employees or consultants, (ii) grant any severance, change in control, retention or termination pay to, or enter into any employment, severance or similar agreement with, any director, officer, employee or consultant, (iii) hire any new employee or consultant whose annual base salary is more than $150,000 per year, or (iv) establish, adopt, enter into, terminate or amend in any material respect any collective bargaining or similar agreement or benefit plan, or take any action to accelerate the time of payment or vesting of any compensation or benefits or take any action to fund or secure the funding of any compensation or benefits (other than qualified retirement plan benefits);
|
• |
change accounting policies or procedures other than as required by applicable legal requirements or U.S. GAAP;
|
• |
make or change any material tax election inconsistent with past practices, change any material tax accounting method or settle or compromise any material federal, state, local or foreign tax liability, except in each case as required by applicable legal requirements;
|
• |
pay, discharge or satisfy any claims or liabilities (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in Spring Bank’s financial statements or incurred in the ordinary course of business and consistent with past practice;
|
• |
enter into any partnership arrangements, joint development agreements or strategic alliances except in connection with the Approved Development Transaction or any Permitted Disposition;
|
• |
except in connection with the Approved Development Transaction or any Permitted Disposition, enter into any contract (i) involving annual payments by Spring Bank or any of its subsidiaries greater than $25,000 in the aggregate, (ii) involving indemnification by Spring Bank or any of its subsidiaries, other than in the ordinary course of business, (iii) relating to intellectual property rights (other than confidentiality agreements, assignment of inventions agreements between Spring Bank or any of its subsidiaries and any employee thereof and
non-exclusive
licenses in the ordinary course of business), and/or (iv) that is not terminable for convenience without penalty;
|
• |
amend in any material respect or terminate any material contract;
|
• |
except in connection with the Approved Development Transaction, make any capital expenditure or capital commitment in excess of $25,000, other than capital expenditures or capital commitments in connection with the STING Trial, not to exceed $50,000 in the aggregate;
|
• |
initiate any litigation, action, suit, proceeding, claim or arbitration, other than with certain vendors for repayment of amounts in dispute, or settle or agree to settle any litigation, action, suit, proceeding, claim or arbitration, other than any settlement which (i) provides a complete release of all claims against Spring Bank, and (ii) that does not involve the payment of any amount by Spring Bank in excess of $100,000 (after giving effect to any applicable insurance coverage);
|
• |
fail to make any material payment with respect to any of Spring Bank’s or any of its subsidiaries’ accounts payable or indebtedness in a timely manner in accordance with their terms and consistent with past practices;
|
• |
enter into or amend a contract that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Exchange; or
|
• |
take, or agree to take, any of the actions described above.
|
• |
take all actions necessary or advisable to satisfy the conditions to the obligations to close the Exchange and otherwise to complete the Exchange;
|
• |
prepare and file all filings and give all notices required to be made and given in connection with the Exchange;
|
• |
obtain all approvals, consents, ratifications, permissions, waivers or authorizations required to be obtained in connection with the Exchange; and
|
• |
lift any restraint, injunction or other legal bar to the Exchange.
|
• |
for a period of six years after the Closing, Spring Bank will indemnify, hold harmless and provide advancement of expenses to each person who at any time prior to the date of the Exchange Agreement
|
or prior to the Closing becomes a director or officer Spring Bank,
F-star
and their respective subsidiaries (the “D&O Indemnified Parties”), to the fullest extent permitted under the applicable legal requirements and the organizational documents of Spring Bank,
F-star
or their respective subsidiaries;
|
• |
from and after the Closing, Spring Bank will maintain directors’ and officers’ liability insurance policies (at
F-star’s
expense) for Spring Bank, its subsidiaries,
F-star
and its subsidiaries effective as of the Closing date on commercially available terms and conditions and with customary coverage limits;
|
• |
prior to the Closing, Spring Bank must purchase and fully
pre-pay
(at Spring Bank’s expense) a “tail” endorsement for the Spring Bank’s existing directors’ and officers’ insurance policies and Spring Bank’s existing fiduciary liability insurance policies, in each case, that provides a
six-year
extended reporting period from and after the Closing for claims first made against an individual insured for any alleged or actual wrongful act(s) that occurred prior to the Closing or the functional equivalent;
|
• |
Spring Bank must (at
F-star’s
expense) maintain products liability and human clinical trial liability insurance policies for Spring Bank and its subsidiaries with an effective date as of the date of Closing on commercially available terms and conditions and with customary coverage limits providing coverage for bodily injury or property damage caused by Spring Bank or its subsidiaries’ products, including bodily injury or property damage occurring in connection with human clinical trials, anywhere in the world
|
• |
Prior to the Closing, Spring Bank must purchase and fully
pre-pay
(at
F-star’s
expense) a “tail” endorsement to Spring Bank’s existing global products liability and human clinical trial liability insurance policy that provides a
six-year
extended reporting period from and after the Closing for claims for alleged bodily injury or property damage that occurred prior to the Closing in connection with Spring Bank’s or any of its subsidiaries’ products, including any alleged bodily injury or property damage occurring in connection with human clinical trials or the functional equivalent; and
|
• |
Spring Bank will use commercially reasonable efforts to cause the shares of its common stock to be issued in connection with the Exchange to be approved for listing (subject to notice of issuance) on Nasdaq at or prior to the Closing.
|
• |
by mutual written consent duly authorized by the board of directors of each of Spring Bank and
F-star;
|
• |
by either Spring Bank or
F-star
if the Exchange has not been consummated on or before January 29, 2021; provided, that (a) the right to terminate the Exchange Agreement will not be available to any party whose failure to fulfill any obligation under the Exchange Agreement has been the cause of or resulted in the failure of the Exchange to occur on or before such date, (b) such date shall be subject to extension to the extent required to calculate net cash in accordance with the Exchange Agreement, and (c) in the event that the SEC has not declared effective the registration statement of which this this proxy statement/prospectus forms a part by November 30, 2020 each of Spring Bank and
F-star
will be entitled to extend the date for termination of the Exchange Agreement for an additional 60 days;
|
• |
by Spring Bank or
F-star
if a court of competent jurisdiction or governmental entity has issued a nonappealable final order, decree or ruling or taken any other action, in each case having the effect of permanently restraining, enjoining or otherwise prohibiting the Exchange;
|
• |
by Spring Bank or
F-star
if (i) the Special Meeting (including any postponements and adjournments thereof) has been held and completed and the Spring Bank stockholders have taken a final vote on the issuance of the Spring Bank common stock in connection with the Exchange and the Reverse Stock Split, and (ii) the Spring Bank stockholders have not approved the issuance of shares of Spring Bank common stock pursuant to the Exchange Agreement or the Reverse Stock Split; provided that this right to terminate the Exchange Agreement will not be available to a party where the failure to obtain the approval of Spring Bank’s stockholders shall have been caused by the action or failure to act of such party and such action or failure to act constitutes a material breach by such party of the Exchange Agreement;
|
• |
by Spring Bank or
F-star
if the other party has, or, in the case of Spring Bank, the holders of
F-star
shares or convertible loan notes who are parties to the Exchange Agreement have, breached any of its or their representations, warranties, covenants or agreements contained in the Exchange Agreement or if any representation or warranty of the other party or parties, respectively, has or have become inaccurate, in either case such that the conditions to the Closing relating thereto would not be satisfied as of time of such breach or inaccuracy, but if such breach or inaccuracy is curable, then the Exchange Agreement will not terminate as a result of a particular breach or inaccuracy unless it remains uncured as of the 30th day after the date of written notice given by the
non-breaching
party of such breach or inaccuracy and such party’s intention to terminate the Exchange Agreement;
|
• |
by Spring Bank or
F-star
if a Material Adverse Effect with respect to the other has occurred after the date of the Exchange Agreement, but such termination shall only be effective if, in the event the Material Adverse Effect is curable, such Material Adverse Effect is not cured within 30 days after the date of written by the unaffected party of the occurrence of the Material Adverse Effect and such party’s intention to terminate the Exchange Agreement;
|
• |
by
F-star,
at any time prior to the approval by Spring Bank’s stockholders of the issuance of shares of Spring Bank common stock pursuant to the Exchange Agreement and the Reverse Stock Split, if:
|
• |
the Spring Bank Board withdraws or modifies its recommendation that the stockholders of Spring Bank vote to approve the issuance of shares of Spring Bank common stock pursuant to the Exchange Agreement and the Reverse Stock Split;
|
• |
following the public disclosure of an Acquisition Proposal (other than a tender offer or exchange offer which is addressed below), the Spring Bank Board fails to publicly reaffirm the Spring Bank’s Board of Directors’ recommendation included in the preceding bullet point within five business days of Spring Bank’s written request;
|
• |
Spring Bank enters into a letter of intent or definitive agreement relating to an Acquisition Proposal (other than a permitted confidentiality agreement);
|
• |
Spring Bank or any director or officer of Spring Bank shall have willfully and intentionally breached the
non-solicitation
provisions of the Exchange Agreement, as described further in the section titled “
The Exchange Agreement—No Solicitation
|
• |
the Spring Bank Board shall have failed to recommend against or take a neutral position with respect to a tender or exchange offer relating to any Acquisition Proposal in any position taken pursuant to Rules
14d-9
and
14e-2
under the Exchange Act;
|
• |
by Spring Bank, at any time prior to the approval by Spring Bank’s stockholders of the issuance of shares of Spring Bank common stock pursuant to the Exchange Agreement and the Reverse Stock Split, if Spring Bank has received a Superior Offer, Spring Bank has complied with its obligations under the Exchange Agreement in order to accept the Superior Offer, Spring Bank concurrently terminates the Exchange Agreement and enters into a definitive agreement with respect to such Superior Offer, and Spring Bank pays to
F-star
a termination fee of $2.0 million no later than two business days following such termination; and
|
• |
by Spring Bank, if the
Pre-Closing
Financing is terminated or does not occur prior to January 29, 2021;
provided
,
however
, this right to terminate is not available where the failure to obtain the
Pre-Closing
Financing shall have been caused by the action or failure to act of Spring Bank and such action or failure to act constitutes a material breach by Spring Bank of the Exchange Agreement.
|
• |
the Exchange Agreement is terminated (i) by either
F-star
or Spring Bank based on the failure to close the Exchange on or before January 29, 2021, (ii) by either
F-star
or Spring Bank if the Spring Bank stockholder do not approve the issuance of shares of Spring Bank common stock pursuant to the Exchange Agreement or the Reverse Stock Split, or (iii) by
F-star
upon a breach of the Exchange Agreement or representations or warranties by Spring Bank; provided, that, an Acquisition Proposal has been publicly announced, disclosed or otherwise communicated to Spring Bank Board prior to such termination and, within nine months after the date of such termination, Spring Bank enters into a definitive agreement with respect to, or consummates, an Acquisition Transaction;
|
• |
the Exchange Agreement is terminated by
F-star
based on (i) the Spring Bank Board withdrawing or modifying its recommendation that the stockholders of Spring Bank vote to approve the issuance of shares of Spring Bank common stock pursuant to the Exchange Agreement and the Reverse Stock Split, (ii) following the public disclosure of an Acquisition Proposal (other than a tender offer or exchange offer which is addressed below), the Spring Bank Board failing to publicly reaffirm the Spring Bank Board’s recommendation within five business days of Spring Bank’s written request, (iii) Spring Bank entering into a letter of intent or definitive agreement relating to an Acquisition Proposal (other than a permitted confidentiality agreement), (iv) Spring Bank or any director or officer of Spring Bank having willfully and intentionally breached the
non-solicitation
provisions of the Exchange Agreement, as described further in the section titled “The Exchange Agreement—No Solicitation” above, or (v) the Spring Bank Board having failed to recommend against or take a neutral position with respect to a tender or exchange offer relating to any Acquisition Proposal: and
|
• |
the Exchange Agreement is terminated by Spring Bank, prior to obtaining the approval of Spring Bank’s stockholders of the issuance of shares of Spring Bank common stock pursuant to the Exchange Agreement and the Reverse Stock Split of Spring Bank common stock, if Spring Bank has received a Superior Offer, Spring Bank has complied in all material respects with its obligations under the
|
Exchange Agreement in order to accept the Superior Offer, and Spring Bank concurrently terminates the Exchange Agreement and enters into a definitive agreement with respect to the Superior Offer.
|
• |
shareholders that are not U.S. Holders;
|
• |
financial institutions;
|
• |
investors in pass-through entities, including (but not limited to) partnerships or limited liability companies treated as partnerships for tax purposes;
|
• |
insurance companies;
|
• |
tax-exempt
organizations;
|
• |
pension plans;
|
• |
“controlled foreign corporations;”
|
• |
“passive foreign investment companies;”
|
• |
corporations that accumulate earnings to avoid U.S. federal income tax;
|
• |
regulated investment companies or real estate investment trusts;
|
• |
brokers or dealers in securities or currencies;
|
• |
certain expatriates or persons whose functional currency is not the U.S. dollar;
|
• |
traders in securities that elect to use a mark to market method of accounting;
|
• |
persons that hold Spring Bank common stock as part of a straddle, hedge, constructive sale, synthetic security or other integrated investment, or conversion transaction; and
|
• |
persons that received Spring Bank common stock upon the conversion of a convertible note or any other convertible instrument;
|
• |
U.S. Holders that acquired their shares of Spring Bank common stock through the exercise of an employee stock option or otherwise as compensation.
|
• |
a citizen or resident of the United States;
|
• |
a corporation, or other entity treated as a corporation, created or organized in or under the laws of the United States or any state or political subdivision thereof;
|
• |
an estate that is subject to U.S. federal income tax on its income regardless of its source; or
|
• |
a trust, the substantial decisions of which are controlled by one or more U.S. persons and which is subject to the primary supervision of a U.S. court, or a trust that validly has elected under applicable Treasury regulations to be treated as a U.S. person for U.S. federal income tax purposes.
|
• |
the Board of Directors believes a higher stock price may help generate investor interest in Spring Bank or the combined company and help Spring Bank or the combined company attract and retain employees; and
|
• |
a stock price of at least $4.00 per share will be required by Nasdaq in order to approve the initial listing of the combined company following the Exchange.
|
• |
the market price per share of Spring Bank common stock after the reverse stock split will rise in proportion to the reduction in the number of shares of Spring Bank common stock outstanding before the Reverse Stock Split;
|
• |
the Reverse Stock Split will result in a per share price that will attract brokers and investors who do not trade in lower priced stocks;
|
• |
the Reverse Stock Split will result in a per share price that will increase the ability of Spring Bank to attract and retain employees; or
|
• |
the market price per share will either exceed or remain in excess of the $4.00 minimum bid price as required by Nasdaq for the listing of the combined company’s common stock.
|
• |
Continue its business as currently conducted
|
• |
Pursue another strategic transaction
|
• |
Dissolve and liquidate its assets
|
• |
Cohort A: Melanoma
|
• |
Cohort B: Head and neck squamous cell carcinoma (HNSCC)
|
• |
Cohort C: Tumors other than Cohort A and B (Naïve or relapsed refractory to anti
PD-1/PD-L1)
|
Compound
|
Company
|
Phase
|
Delivery
|
|||
ADU-S100
|
Aduro Biotech | Phase I | Intratumoral | |||
MK-1454
|
Merck | Phase I | Intratumoral | |||
MK-2118
|
Merck | Phase I | Intratumoral | |||
SYMB1891 | Synlogic, Inc. | Phase I | Intratumoral | |||
BMS-986301
|
Bristol-Meyers Squibb | Phase I | Intratumoral or Intramuscular | |||
GSK532 | GlaxoSmithKline | Phase I | Intravenous | |||
ExoSTING | Codiak Biosciences | Preclinical | Intratumoral | |||
E7766 | Eisai Co., Ltd. | Preclinical | Intratumoral | |||
CRD5500 | Curadev Pharma | Preclinical | Intratumoral or antibody conjugated | |||
TTI-10001
|
Trillium Therapeutics | Preclinical | Intratumoral | |||
SR-8314
|
Stingray Therapeutics | Preclinical | Intraperitoneal |
• |
completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice (“GLP”) regulations;
|
• |
submission to the FDA of an IND, which must take effect before human clinical trials may begin;
|
• |
approval by an independent institutional review board (“IRB”) representing each clinical site before each clinical trial may be initiated;
|
• |
performance of adequate and well-controlled human clinical trials in accordance with good clinical practices (“GCP”) to establish the safety and efficacy of the proposed drug product for each indication;
|
• |
preparation and submission to the FDA of a new drug application (“NDA”) requesting marketing for one or more proposed indications;
|
• |
review by an FDA advisory committee, where appropriate or if applicable;
|
• |
satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with cGMP requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity;
|
• |
satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data;
|
• |
payment of user fees and securing FDA approval of the NDA; and
|
• |
compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy (“REMS”), and the potential requirement to conduct post-approval studies.
|
• |
restrictions on the marketing or manufacturing of the product, suspension of the approval, or complete withdrawal of the product from the market or product recalls;
|
• |
fines, warning letters or holds on post-approval clinical trials;
|
• |
refusal of the FDA to approve pending NDAs or supplements to approved NDAs;
|
• |
product seizure or detention, or refusal to permit the import or export of products; or
|
• |
injunctions or the imposition of civil or criminal penalties.
|
• |
Community MAs, which are issued by the European Commission through the Centralized Procedure, providing for the grant of a single marketing authorization following a favorable opinion of the Committee for Medicinal Products for Human Use (“CHMP”) of the EMA and which is valid throughout the entire territory of the European Economic Area (“EEA”). The Centralized Procedure is mandatory for certain types of products, such as biotechnology medicinal products, orphan medicinal products and medicinal products indicated for the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and viral diseases. The Centralized Procedure is optional for products containing a new active substance not yet authorized in the EEA, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the EU. Under the Centralized Procedure, the maximum timeframe for the evaluation of an MA application is 210 days (excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP). Accelerated evaluation might be granted by the CHMP in exceptional cases, when the authorization of a medicinal product is of major interest from the point of view of public health and in particular from the viewpoint of therapeutic innovation. Under the accelerated procedure the standard
210-day
review period is reduced to 150 days.
|
• |
National MAs, which are issued by the competent authorities of the Member States of the “EEA” and only cover their respective territory, are available for products not falling within the mandatory scope of the Centralized Procedure. Where a product has already been authorized for marketing in a Member State of the EEA, this National MA can be recognized in another Member States through the Mutual Recognition Procedure. If the product has not received a National MA in any Member State at the time of application, it can be approved simultaneously in various Member States through the Decentralized Procedure. This application is identical to the application that would be submitted to the EMA for authorization through the centralized procedure. The reference EU Member State prepares a draft assessment and drafts of the related materials within 120 days after receipt of a valid application. The
|
resulting assessment report is submitted to the concerned EU Member States who, within 90 days of receipt must decide whether to approve the assessment report and related materials. If a concerned EU Member State cannot approve the assessment report and related materials due to concerns relating to a potential serious risk to public health, disputed elements may be referred to the European Commission, whose decision is binding on all EU Member States.
|
• |
an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs, although this fee would not apply to sales of certain products approved exclusively for orphan indications;
|
• |
expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability;
|
• |
expanded manufacturers’ rebate liability under the Medicaid Drug Rebate Program by increasing the minimum rebate for both branded and generic drugs and revising the definition of “average manufacturer price,” or AMP, for calculating and reporting Medicaid drug rebates on outpatient prescription drug prices and extending rebate liability to prescriptions for individuals enrolled in Medicare Advantage plans;
|
• |
addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;
|
• |
expanded the types of entities eligible for the 340B drug discount program;
|
• |
established the Medicare Part D coverage gap discount program by requiring manufacturers to provide a 50%
point-of-sale-discount
off the negotiated price of applicable brand drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturers’ outpatient drugs to be covered under Medicare Part D;
|
• |
a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research, along with funding for such research;
|
• |
the Independent Payment Advisory Board (“IPAB”) which has authority to recommend certain changes to the Medicare program to reduce expenditures by the program that could result in reduced payments for prescription drugs. However, the IPAB implementation has been not been clearly defined. PPACA provided that under certain circumstances, IPAB recommendations will become law unless Congress enacts legislation that will achieve the same or greater Medicare cost savings; and
|
• |
established the Center for Medicare and Medicaid Innovation within CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending. Funding has been allocated to support the mission of the Center for Medicare and Medicaid Innovation from 2011 to 2019.
|
Location
|
Primary Use
|
Approximate
Square Footage |
Lease
Expiration Date |
Renewal Option
|
||||
35 Parkwood Drive, Suite 210, Hopkinton, Massachusetts
|
Corporate headquarters | 31,315 | October 2028 |
One five-year term
|
• |
Novel Tetravalent Format
F-star
engineers its mAb
2
bispecific antibodies to simultaneously bind two different targets, with two binding sites for each target. The ability to bind
F-star’s
distinct targets is known as tetravalency. This unique tetravalent format is designed to enable
F-star’s
mAb
2
bispecific antibodies to achieve more efficient crosslinking, clustering or conditionality than other bispecific antibodies, which have the potential to elicit improved biological responses and enable
F-star’s
mAb
2
bispecific antibodies to overcome tumor evasion pathways. These three key characteristics are described further below:
|
• |
Crosslinking
F-star’s
bispecific antibodies, enables durable and strong target crosslinking through the ability to engage with target-bearing cells simultaneously, for example, engaging both tumor cells and immune cells.
|
• |
Clustering.
F-star’s
mAb
2
bispecific antibodies have
F-star’s
distinct binding sites, they can potentially induce more potent clustering than
non-tetravalent
bispecific antibody formats.
|
• |
Conditionality.
F-star
is able to leverage the tetravalent format of its mAb
2
bispecific antibodies so that targets are only activated when they are simultaneously bound.
|
• |
Natural Human Antibody Format.
F-star’s
mAb
2
bispecific antibodies are designed to conserve the natural human antibody format, with greater than 95% identity, allowing
F-star
to leverage the following advantages:
|
• |
Minimal systemic toxicity.
F-star’s
mAb
2
bispecific antibodies use an IgG structure, without synthetic linkers and domains, there is lower potential for systemic toxicity than traditional and bispecific antibodies.
|
• |
Low immunogenicity risk.
F-star’s
mAb
2
bispecific antibodies and the low number of modifications
F-star
engineers into its mAb
2
bispecific antibodies is designed to help mitigate immunogenicity risk, or the risk that the immune system recognizes the mAb
2
bispecific antibody as foreign, potentially resulting in lower exposure and toxicity.
|
• |
Ease of manufacturability.
F-star
is able to produce
F-star’s
mAb
2
bispecific antibodies through established manufacturing processes readily and at large scale without potentially complicating additions, such as domain assembly or other modifications.
|
• |
Rapidly accelerating the clinical development of
F-star’s
three novel mAb
2
product candidates to treat a range of advanced cancers.
F-star
believes its mAb
2
product candidates represent potentially
best-in-class
|
treated with existing therapies.
F-star
believes FS118, which is being evaluated in a Phase 1 clinical trial, has the potential to provide significant clinical benefit through its dual-checkpoint inhibitor targets
(LAG-3
and
PD-L1).
In addition to FS118,
F-star
anticipates that it will initiate a Phase 1 trial for FS120 (targeting OX40 and CD137, dual-stimulatory) in the fourth quarter of 2020 and will submit a CTA to the EMA for FS222 (targeting CD137 and
PD-L1,
stimulatory/inhibitory) in the second half of 2020.
|
• |
Initially focusing
F-star’s
development strategy on tumors where checkpoint inhibitors are currently utilized but are poor long-term treatment options, and then subsequently broadening to other tumor types and potentially, first-line therapies.
F-star’s
early-stage clinical trials include or will include a broad range of tumor types to evaluate safety, tolerability and dosing, as well as early signals of efficacy. Following these early-stage clinical trials,
F-star
intends to employ a patient selection strategy using biomarkers to focus further development on targeted patient subsets. These subsets are expected to include patients with high cancer target
co-expression
and/or resistance to current checkpoint therapies.
F-star
believes its mAb
2
bispecific antibodies may also ultimately deliver therapeutic benefit in a broader range of tumors, expanding beyond the initial indications
F-star
may pursue.
F-star
believes its development strategy best serves the patient, can be efficiently pursued by
F-star’s
organization and, is likely to lead to a rapid development strategy and regulatory pathway to market. For example,
F-star
has identified several tumor types which have a strong fit with the potential FS118 mechanism of action, including appropriate target expression.
|
• |
Leveraging the transformational potential of
F-star’s
modular antibody technology platform to create a leading immuno-oncology pipeline of differentiated clinical assets capable of improving patient outcomes.
F-star’s
proprietary mAb
2
bispecific antibodies have a number of potential advantages resulting from their novel tetravalent and natural human antibody formats. This approach could provide therapeutic advantages compared to other modalities, such as combinations of monospecific and other bispecific antibodies, which
F-star
believes will result in improved efficacy, minimized toxicity and simplified manufacturability.
F-star
believes its technology has the potential to be matched with any antibody domain in a modular
“plug-and-play”
2
product candidates.
F-star
believes these benefits provide multiple opportunities to consistently generate clinical candidates that could potentially address the needs of patients who are without adequate therapeutic options.
|
• |
Leveraging and continuing to build
F-star’s
comprehensive intellectual property portfolio in order to protect
F-star’s
dominant position in mAb
2
bispecific antibodies.
F-star
has built a comprehensive patent portfolio around its technology and product pipeline with over 200 granted patents and 60 pending applications. This patent estate covers
F-star’s
mAb
2
bispecific format and aims to provide
F-star
with robust intellectual property exclusivity and prohibit use of
F-star’s
technology by third parties.
F-star
intends to continue to seek additional patent protection as it develops additional novel mAb
2
product candidates.
|
• |
Crosslinking.
|
• |
Clustering.
|
• |
Conditionality.
|
• |
Tetravalent crosslinking.
F-star’s
mAb
2
bispecific antibodies is designed to allow for more efficient target cell crosslinking than certain bispecific antibodies because there is an additional, second set of dual binding sites in the Fc region, and both sets can be engineered to engage with antigens that are found on both tumor cells and immune cells. For
F-star’s
mAb
2
product candidates that target tumor-associated antigens, such as
PD-L1
(FS118 and FS222),
|
|
|
|
crosslinking also supports safety by targeting the mAb
2
product candidates to the tumor, localizing the immune activation and thereby minimizing systemic toxicities.
|
• |
Optimal clustering.
F-star’s
mAb
2
bispecific antibodies has
F-star’s
distinct binding sites, two for each antigen, they are designed to potentially induce more potent activation of multiple cellular receptors, including those on single cells, than other bispecific antibodies. This is particularly useful for
F-star’s
mAb
2
product candidates FS120 and FS222, which activate costimulatory molecules such as CD137 which employ clustering for potent activation.
|
• |
Conditionality.
F-star
combines bivalency for two targets with careful selection of target antigens to achieve optimal activation of the immune system, but only when both target antigens are present. For example, while some of
F-star’s
mAb
2
bispecific antibodies may be able to activate the immune system through binding to only one antigen, the greatest effect is expected to be seen when both antigens are bound at the same time, as observed with FS118. Additionally, through selection of target antigens and precise engineering of the dual antigen binding sites,
F-star
aims to increase the activity of its immunostimulatory mAb
2
bispecific antibodies at the tumor site, as observed with FS222 preclinically.
F-star
believes it can potentially increase the safety of its mAb
2
product candidates compared to other bispecific antibodies which bind to their targets only monovalently and cannot be engineered for such optimal antigen binding.
|
• |
Plug-and-play
F-star
refers to its proprietary platform as modular antibody technology, because
F-star’s
library of Fcabs can be combined in a modular fashion with potentially any standard antibody antigen binding domains. This
plug-and-play
2
bispecific antibodies.
F-star’s
Fcabs contain new target binding sites resulting from minimal modifications made in the Fc domain of the existing antibody structure.
F-star
routinely generates, in parallel, Fcabs that bind to human targets as well as those that bind to mouse targets. From these mouse Fcabs,
F-star
generate mouse mAb
2
bispecific antibody equivalents that can be used to test activity in animal models. The modular nature of the technology enables the rapid generation of novel mAb
2
product candidates.
|
• |
Minimized systemic toxicity.
F-star
can engineer specific mutations in the Fc domain of
F-star’s
mAb
2
bispecific antibodies to prevent binding to Fc gamma receptors and eliminate Fc gamma receptor-mediated crosslinking. As a result,
F-star’s
mAb
2
bispecific antibodies can potentially improve immune activation while minimizing systemic toxicity.
|
• |
Low immunogenicity risk.
F-star’s
mAb
2
bispecific antibodies and the low number of modifications
F-star
engineers into its mAb
2
bispecific antibodies is designed to help mitigate immunogenicity risk.
|
• |
Ease of manufacturability.
F-star
is able to produce its mAb
2
bispecific antibodies through established manufacturing processes readily and at large scale without potentially complicating additions, such as domain assembly or other modifications.
F-star’s
mAb
2
bispecific antibodies also have pharmacologic properties consistent with other traditional antibody products, potentially allowing dosing to be adjusted based on patient response and
off-the-shelf
|
F-star’s
most advanced product candidate, FS118, is an anti-cancer mAb
2
bispecific antibody targeting two receptors,
PD-L1
and
LAG-3,
both of which are established pivotal targets in immuno-oncology.
F-star
is conducting an open-label, dose-escalation Phase 1 clinical trial with FS118 in patients with advanced cancers that have progressed on
PD-1/PD-L1
F-star
expects to report Phase 1 results in the fourth quarter of 2020 and initiate a proof of concept trial for FS118 in the first quarter of 2021 in patients with acquired resistance head and neck cancers.
F-star’s
current findings support the testing of FS118 in cancers with Acquired Resistance to prior
PD-1/PD-L1
|
FS120 is an anti-cancer mAb
2
bispecific antibody that is designed to bind to and stimulate OX40 and CD137, two proteins found on the surface of T cells that both function to enhance T cell activity.
F-star
is developing FS120 alone and in combination with
PD-1/PD-L1
PD-1/PD-L1
co-expression
of OX40 and CD137 in the tumor microenvironment, such as gastric and bladder cancer.
F-star
has an open IND for FS120 and plans to initiate a Phase 1 clinical trial in patients with advanced cancers in the fourth quarter of 2020.
|
FS222 is an anti-cancer mAb
2
bispecific antibody that is designed to target both the costimulatory CD137 and the inhibitory
PD-L1
receptors, which are
co-expressed
in a number of tumor types including
non-small-cell
lung cancer, breast cancer and gastrointestinal cancers such as colorectal and esophageal cancer.
F-star
plans to submit a CTA in the second half of 2020 and to initiate a Phase 1 clinical trial in patients with advanced cancers for FS222 in the first quarter of 2021.
F-star
believes there is a strong rationale to combine FS222 with other anti-cancer agents, including targeted therapy and chemotherapy, and this can be done within the Phase 1 study.
|
• |
completion of nonclinical laboratory tests and animal studies according to “GLPs”, and applicable requirements for the human use of laboratory animals or other applicable regulations;
|
• |
submission of an IND application, which must become effective before clinical trials may begin;
|
• |
approval of the protocol and related documentation by an independent IRB or ethics committee at each clinical trial site before each study may be initiated;
|
• |
performance of adequate and well-controlled human clinical trials according to the FDA’s regulations commonly referred to as “GCPs”, and any additional requirements for the protection of human research subjects and their health information, to establish the safety, purity and potency of the proposed biologic for its intended use or uses;
|
• |
submission to the FDA of a Biologics License Application (“BLA”), for marketing approval that includes substantive evidence of safety, purity, and potency from results of nonclinical studies and clinical trials;
|
• |
satisfactory completion of FDA
pre-approval
inspections of manufacturing facilities where the biologic is produced to assess compliance with current Good Manufacturing Practice (“GMP”), requirements to assure that the facilities, methods and controls are adequate to preserve the biologic’s identity, strength, quality and purity;
|
• |
potential FDA audits of the nonclinical study and clinical trial sites that generated the data in support of the BLA; and
|
• |
FDA review and approval, or licensure, of the BLA, which must occur before the biologic can be marketed or sold.
|
• |
Phase 1 — the product candidate is initially given to healthy human subjects or patients and tested for safety, dosage tolerance, reactivity, absorption, metabolism, distribution and excretion. These trials may also provide early evidence of effectiveness. During Phase 1 clinical trials, sufficient information about the investigational product’s activity may be obtained to permit the design of well-controlled and scientifically valid Phase 2 clinical trials.
|
• |
Phase 2 — clinical trials are conducted in a limited number of patients in the target population to identify possible adverse effects and safety risks, to evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage. Multiple Phase 2
|
clinical trials may be conducted by the sponsor to obtain information prior to beginning larger and more expensive Phase 3 clinical trials.
|
• |
Phase 3 — when Phase 2 evaluations demonstrate that a dosage range of the product appears effective and has an acceptable safety profile and provide sufficient information for the design of Phase 3 clinical trials, Phase 3 clinical trials are undertaken to provide statistically significant evidence of clinical efficacy and to further test for safety in an expanded patient population at multiple clinical trial sites. Phase 3 clinical trials are performed after preliminary evidence suggesting effectiveness of the biologic has been obtained, and they are intended to further evaluate dosage, effectiveness and safety, to establish the overall benefit-risk relationship of the investigational biologic, and to provide an adequate basis for product approval by the FDA.
|
• |
National procedure.
|
• |
Decentralized procedure.
|
• |
Mutual recognition procedure.
|
• |
expenses incurred under agreements with third parties, including CROs that conduct research, preclinical activities and clinical trials on its behalf as well as contract manufacturing organizations (“CMOs”), that manufacture drug products for use in its preclinical and clinical trials;
|
• |
salaries, benefits and other related costs, including stock-based compensation expense, for personnel in its research and development functions;
|
• |
costs of outside consultants, including their fees, stock-based compensation and related travel expenses;
|
• |
the cost of laboratory supplies and acquiring, developing and manufacturing preclinical study and clinical trial materials;
|
• |
costs related to compliance with regulatory requirements; and
|
• |
facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.
|
• |
establishing an appropriate safety profile for its product candidates;
|
• |
successful enrollment in and completion of clinical trials;
|
• |
receipt of marketing approvals from applicable regulatory authorities;
|
• |
establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;
|
• |
obtaining and maintaining patent and trade secret protection and regulatory exclusivity for its product candidates;
|
• |
launching commercial sales of the products, if and when approved, whether alone or in collaboration with others; and
|
• |
if a product is approved, a continued acceptable safety profile of the product.
|
• |
CROs in connection with performing research services on its behalf and clinical trials;
|
• |
investigative sites or other providers in connection with clinical trials;
|
• |
vendors in connection with preclinical and clinical development activities; and
|
• |
vendors related to product manufacturing, development and distribution of preclinical and clinical supplies.
|
For the
Six Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
Risk-free interest rate
|
0.7 | % | 2.6 | % | ||||
Expected term (in years)
|
5.9 | 6.0 | ||||||
Expected volatility
|
82.8 | % | 81.1 | % | ||||
Expected dividend yield
|
0 | % | 0 | % |
For the
Three Months Ended
June 30, |
For the
Six Months Ended
June 30, |
|||||||||||||||
|
|
|
|
|||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Stock-based compensation:
|
||||||||||||||||
Research and development
|
$ | 171 | $ | 339 | $ | 446 | $ | 656 | ||||||||
General and administrative
|
303 | 702 | 845 | 1,357 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Stock-based compensation
|
$ | 474 | $ | 1,041 | $ | 1,291 | $ | 2,013 | ||||||||
|
|
|
|
|
|
|
|
For the
Three Months Ended
June 30, |
Change
|
For the
Six Months Ended
June 30, |
Change
|
|||||||||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Research and development
|
$ | 3,204 | $ | 7,275 | $ | (4,071 | ) | $ | 8,507 | $ | 12,842 | $ | (4,335 | ) | ||||||||||
General and administrative
|
2,164 | 2,490 | (326 | ) | 5,043 | 5,300 | (257 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total operating expenses
|
5,368 | 9,765 | (4,397 | ) | 13,550 | 18,142 | (4,592 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss from operations
|
(5,368 | ) | (9,765 | ) | 4,397 | (13,550 | ) | (18,142 | ) | 4,592 | ||||||||||||||
Other income (expense)
|
(1,198 | ) | 325 | (1,523 | ) | (1,433 | ) | 686 | (2,119 | ) | ||||||||||||||
Change in fair value of warrant liabilities
|
22 | 4,885 | (4,863 | ) | 261 | 7,706 | (7,445 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss
|
$ | (6,544 | ) | $ | (4,555 | ) | $ | (1,989 | ) | $ | (14,722 | ) | $ | (9,750 | ) | $ | (4,972 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the
Six Months Ended
June 30, |
||||||||
2020
|
2019
|
|||||||
Net cash used in operating activities
|
$ | (11,961 | ) | $ | (14,765 | ) | ||
Net cash provided by investing activities
|
11,234 | 10,582 | ||||||
Net cash (used in) provided by financing activities
|
(19,451 | ) | 6 | |||||
|
|
|
|
|||||
Net decrease in cash, cash equivalents and restricted cash
|
$ | (20,178 | ) | $ | (4,177 | ) | ||
|
|
|
|
• |
the continued clinical development of SB 11285, its lead STING agonist product candidate;
|
• |
the costs involved in conducting preclinical and clinical activities for its STING and
COVID-19
programs;
|
• |
the costs of preparing, filing, and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims;
|
• |
the extent to which it may elect to continue product development activities in the future, if at all; and
|
• |
the timing and completion of the Exchange.
|
Six Months Ended June 30,
|
Years Ended December 31,
|
|||||||||
Entities
|
2020
|
2019
|
2019
|
2018
|
2017
|
|||||
F-star
Delta
|
Full 6
months |
Full 6 months | Full year |
Full
Year |
Full
Year |
|||||
F-star
|
Full 6
months |
May 7, 2019 to June 30, 2019 | May 7, 2019 to December 31, 2019 | — | — | |||||
F-star
GmbH
|
Full 6
months |
May 7, 2019 to June 30, 2019 | May 7, 2019 to December 31, 2019 | — | — | |||||
F-star
Beta
|
Full 6
months |
May 7, 2019 to June 30, 2019 | May 7, 2019 to December 31, 2019 | — | — | |||||
F-star
Alpha
|
Full 6
months |
May 7, 2019 to June 30, 2019 | May 7, 2019 to December 31, 2019 | — | — |
• |
expenses incurred under agreements with contract research organizations (“CROs”) as well as investigative sites and consultants that conduct
F-star’s
clinical trials, preclinical studies and other scientific development services;
|
• |
manufacturing
scale-up
expenses and the cost of acquiring and manufacturing preclinical and clinical trial materials;
|
• |
expenses incurred for outsourced professional scientific development services;
|
• |
costs for laboratory materials and supplies used to support
F-star’s
research activities;
|
• |
allocated facilities costs, depreciation and other expenses, which include rent and utilities; and
|
• |
up-front,
milestone and management fees for maintaining licenses under
F-star’s
third-party licensing agreements.
|
Six Months Ended June 30,
|
||||||||||||
2020
|
2019
|
Change
|
||||||||||
(in thousands)
|
||||||||||||
Statements of Comprehensive Loss
|
||||||||||||
Revenue
|
£ | 1,537 | £ | 20,154 | (£18,616 | ) | ||||||
Costs related to collaborative arrangements
|
(333 | ) | (17,437 | ) | 17,104 | |||||||
Research and development costs
|
(7,423 | ) | (9,575 | ) | 2,152 | |||||||
General and administrative expenses
|
(4,960 | ) | (3,764 | ) | (1,196 | ) | ||||||
Other income
|
371 | — | 371 | |||||||||
Other expenses
|
(1,282 | ) | (243 | ) | (1,040 | ) | ||||||
|
|
|
|
|
|
|||||||
Loss from operations
|
|
(12,090
|
)
|
|
(10,865
|
)
|
|
(1,225
|
)
|
|||
Fair value losses on financial liabilities at fair value through profit or loss (FVTPL)
|
(1,509 | ) | — | (1,509 | ) | |||||||
Finance income
|
8 | 1 | 7 | |||||||||
Finance costs
|
(438 | ) | — | (438 | ) | |||||||
|
|
|
|
|
|
|||||||
Loss before tax from continuing operations
|
|
(14,028
|
)
|
|
(10,864
|
)
|
|
(3,164
|
)
|
|||
Income tax credit
|
2,692 | 756 | 1,936 | |||||||||
|
|
|
|
|
|
|||||||
Loss for the year attributable to equity holders of the parent
|
|
(£11,336
|
)
|
|
(£10,108
|
)
|
|
(£1,228
|
)
|
|||
|
|
|
|
|
|
Six Month Periods Ended
June 30, |
Change
|
|||||||||||
2020
|
2019
|
|||||||||||
(in thousands)
|
||||||||||||
Revenue by entity
|
||||||||||||
F-star
(formerly
F-star
Delta)
|
£ | 950 | £ | 18,874 | (£17,924 | ) | ||||||
F-star
GmbH
|
587 | 1,279 | (692 | ) | ||||||||
F-star
Beta
|
— | — | — | |||||||||
F-star
Alpha
|
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total Revenue
|
£
|
1,537
|
|
£
|
20,153
|
|
|
(£18,616
|
)
|
|||
|
|
|
|
|
|
Six Month Period
Ended June 30, |
Change
|
|||||||||||
2020
|
2019
|
|||||||||||
(in thousands)
|
||||||||||||
Costs related to collaborative arrangements
|
||||||||||||
Derecognition of intangible assets on licensing of IP rights
|
£ | — | (£12,574 | ) | £ | 12,574 | ||||||
FTE expense
|
(120 | ) | (1,929 | ) | 1,809 | |||||||
External R&D expense
|
(44 | ) | (2,458 | ) | 2,414 | |||||||
Amortization of intangible assets
|
(169 | ) | (476 | ) | 307 | |||||||
|
|
|
|
|
|
|||||||
Total costs related to collaborative arrangements
|
|
(£333
|
)
|
|
(£17,437
|
)
|
|
£17,104
|
|
|||
|
|
|
|
|
|
|||||||
Six Month Period
Ended June 30, |
Change
|
|||||||||||
2020
|
2019
|
|||||||||||
(in thousands)
|
||||||||||||
Costs related to collaborative arrangements
|
||||||||||||
F-star
(formerly F-star Delta)
|
(£274 | ) | (£17,401 | ) | £17,127 | |||||||
F-star
GmbH
|
(59 | ) | (36 | ) | (23 | ) | ||||||
F-star
Beta
|
— | — | — | |||||||||
F-star
Alpha
|
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total costs related to collaborative arrangements
|
|
(£333
|
)
|
|
(£17,437
|
)
|
|
£17,104
|
|
|||
|
|
|
|
|
|
Six Month Period
Ended June 30, |
Change
|
|||||||||||
2020
|
2019
|
|||||||||||
(in thousands)
|
||||||||||||
Direct costs related to collaborative arrangements by program
|
||||||||||||
FS118
|
£ | — | (£2,958 | ) | £ | 2,958 | ||||||
FS122
|
— | (13,397 | ) | 13,397 | ||||||||
FS422
|
(274 | ) | (104 | ) | (170 | ) | ||||||
DN02
|
(59 | ) | (36 | ) | (23 | ) | ||||||
Other
|
— | (942 | ) | 942 | ||||||||
|
|
|
|
|
|
|||||||
Total costs related to collaborative arrangement by program
|
|
(£333
|
)
|
|
(£17,437
|
)
|
|
£17,104
|
|
|||
|
|
|
|
|
|
Six Month Ended
June 30, |
Change
|
|||||||||||
2020
|
2019
|
|||||||||||
(in thousands)
|
||||||||||||
Research and development
|
||||||||||||
F-star
(formerly
F-star
Delta)
|
(£1,219 | ) | (£2,946 | ) | £1,727 | |||||||
F-star
GmbH
|
(4,305 | ) | (2,353 | ) | (1,952 | ) | ||||||
F-star
Beta
|
(1,902 | ) | (4,275 | ) | 2,373 | |||||||
F-star
Alpha
|
3 | (1 | ) | 4 | ||||||||
|
|
|
|
|
|
|||||||
Total Research and development costs
|
|
(£7,423
|
)
|
|
(£9,575
|
)
|
|
£2,152
|
|
|||
|
|
|
|
|
|
Six Month Period Ended
June 30, |
Change
|
|||||||||||
2020
|
2019
|
|||||||||||
(in thousands)
|
||||||||||||
£
|
£
|
£
|
||||||||||
Direct research and development costs by program
|
||||||||||||
FS118
|
(£2,045 | ) | (£1,113 | ) | (£932 | ) | ||||||
FS120
|
(1,547 | ) | (2,239 | ) | 692 | |||||||
FS222
|
(1,912 | ) | (2,393 | ) | 481 | |||||||
Other
|
(1,918 | ) | (3,830 | ) | 1,912 | |||||||
|
|
|
|
|
|
|||||||
Total research and development costs by program
|
|
(£7,423
|
)
|
|
(£9,575
|
)
|
£
|
2,152
|
|
|||
|
|
|
|
|
|
Six Month Periods Ended
June 30, |
Change
|
|||||||||||
2020
|
2019
|
|||||||||||
(in thousands)
|
||||||||||||
General and administrative by entity
|
||||||||||||
F-star
(formerly
F-star
Delta)
|
(£895 | ) | (£721 | ) | (£174 | ) | ||||||
F-star
GmbH
|
(3,991 | ) | (2,873 | ) | (1,118 | ) | ||||||
F-star
Beta
|
(71 | ) | (152 | ) | 81 | |||||||
F-star
Alpha
|
(3 | ) | (18 | ) | 15 | |||||||
|
|
|
|
|
|
|||||||
Total general and administrative
|
|
(£4,960
|
)
|
|
(£3,764
|
)
|
|
(£1,196
|
)
|
|||
|
|
|
|
|
|
Year Ended
December 31, |
||||||||||||
2019
|
2018
|
Change
|
||||||||||
(in thousands)
|
||||||||||||
Statements of Comprehensive (Loss)/ Income
|
||||||||||||
Revenue
|
£ | 21,882 | £ | 29,997 | (£8,115 | ) | ||||||
Costs related to collaborative arrangements
|
(17,960 | ) | (13,892 | ) | (4,068 | ) | ||||||
Research and development costs
|
(32,673 | ) | — | (32,673 | ) | |||||||
General and administrative expenses
|
(12,295 | ) | (399 | ) | 11,896 | |||||||
Other income
|
113 | — | 113 | |||||||||
Other gains
|
310 | 195 | 115 | |||||||||
|
|
|
|
|
|
|||||||
(Loss)/ profit from operations
|
|
(40,622
|
)
|
|
15,900
|
|
|
(56,522
|
)
|
|||
Fair value losses on financial liabilities at fair value through profit or loss (FVTPL)
|
(1,106 | ) | — | (1,106 | ) | |||||||
Finance income
|
8 | 4 | 4 | |||||||||
Finance costs
|
(256 | ) | — | (256 | ) | |||||||
|
|
|
|
|
|
|||||||
(Loss)/ profit before tax from continuing operations
|
|
(41,976
|
)
|
|
15,905
|
|
|
(57,881
|
)
|
|||
Income tax credit/ (charge)
|
7,016 | (2,636 | ) | 9,652 | ||||||||
|
|
|
|
|
|
|||||||
Net (loss)/ profit attributable to equity holders of the parent
|
|
(£34,959
|
)
|
£
|
13,269
|
|
|
(£48,228
|
)
|
|||
|
|
|
|
|
|
Years Ended
December 31, |
Change
|
|||||||||||
2019
|
2018
|
|||||||||||
(in thousands)
|
||||||||||||
Revenue by entity
|
||||||||||||
F-star
(formerly
F-star
Delta)
|
£ | 20,000 | £ | 29,997 | (£9,997 | ) | ||||||
F-star
GmbH
|
1,882 | — | 1,882 | |||||||||
F-star
Beta
|
— | — | — | |||||||||
F-star
Alpha
|
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total Revenue
|
£
|
21,882
|
|
£
|
29,997
|
|
|
(£8,115
|
)
|
|||
|
|
|
|
|
|
Year Ended December 31,
|
Change
|
|||||||||||
2019
|
2018
|
|||||||||||
(in thousands)
|
||||||||||||
Costs related to collaborative arrangements
|
||||||||||||
Derecognition of intangible assets on licensing of IP rights
|
(£12,574 | ) | £ | — | (£12,574 | ) | ||||||
FTE expense
|
(2,275 | ) | (4,824 | ) | 2,549 | |||||||
External R&D expense
|
(2,490 | ) | (7,985 | ) | 5,495 | |||||||
Amortization of intangible assets
|
(621 | ) | (1,084 | ) | 463 | |||||||
|
|
|
|
|
|
|||||||
Total costs related to collaborative arrangements
|
|
(£17,960
|
)
|
|
(£13,892
|
)
|
|
(£4,068
|
)
|
|||
|
|
|
|
|
|
Year Ended December 31,
|
Change
|
|||||||||||
2019
|
2018
|
|||||||||||
(in thousands)
|
||||||||||||
Costs related to collaborative arrangements
|
||||||||||||
F-star
(formerly
F-star
Delta)
|
(£17,780 | ) | (£13,892 | ) | (£3,888 | ) | ||||||
F-star
GmbH
|
(180 | ) | — | (180 | ) | |||||||
F-star
Beta
|
— | — | — | |||||||||
F-star
Alpha
|
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total costs related to collaborative arrangements
|
|
(£17,960
|
)
|
|
(£13,892
|
)
|
|
(£4,068
|
)
|
|||
|
|
|
|
|
|
Year Ended
December 31,
|
Change
|
|||||||||||
2019
|
2018
|
|||||||||||
(in thousands)
|
||||||||||||
Direct costs related to collaborative arrangements by program
|
||||||||||||
FS118
|
(£2,958 | ) | (£9,519 | ) | £6,561 | |||||||
FS122
|
(13,397 | ) | — | (13,397 | ) | |||||||
FS422
|
(483 | ) | — | (483 | ) | |||||||
DN02
|
(180 | ) | — | (180 | ) | |||||||
Other
|
(942 | ) | (4,373 | ) | 3,431 | |||||||
|
|
|
|
|
|
|||||||
Total costs related to collaborative arrangement by program
|
|
(£17,960
|
)
|
|
(£13,892
|
)
|
|
(£4,068
|
)
|
|||
|
|
|
|
|
|
Year Ended
December 31, |
Change
|
|||||||||||
2019
|
2018
|
|||||||||||
(in thousands)
|
||||||||||||
Research and development
|
||||||||||||
F-star
(formerly
F-star
Delta)
|
(£14,113 | ) | £ | — | (£14,113 | ) | ||||||
F-star
GmbH
|
(6,283 | ) | — | (6,283 | ) | |||||||
F-star
Beta
|
(12,256 | ) | — | (12,256 | ) | |||||||
F-star
Alpha
|
(21 | ) | — | (21 | ) | |||||||
|
|
|
|
|
|
|||||||
Total Research and development costs
|
|
(£32,673
|
)
|
£
|
—
|
|
|
(£32,673
|
)
|
|||
|
|
|
|
|
|
Year Ended
December 31, |
Change
|
|||||||||||
2019
|
2018
|
|||||||||||
(in thousands)
|
||||||||||||
Direct research and development costs by program
|
||||||||||||
FS118
|
(£7,047 | ) | £ | — | (£7,047 | ) | ||||||
FS120
|
(6,873 | ) | — | (6,873 | ) | |||||||
FS222
|
(5,632 | ) | — | (5,632 | ) | |||||||
Others
|
(13,121 | ) | — | (13,121 | ) | |||||||
|
|
|
|
|
|
|||||||
Total research and development costs by program
|
|
(£32,673
|
)
|
£
|
—
|
|
|
(£32,673
|
)
|
|||
|
|
|
|
|
|
Year Ended
December 31, |
Change
|
|||||||||||
2019
|
2018
|
£
|
||||||||||
(in thousands)
|
||||||||||||
General and administrative by entity
|
||||||||||||
F-star
(formerly
F-star
Delta)
|
(£3,657 | ) | (£399 | ) | (£3,258 | ) | ||||||
F-star
GmbH
|
(8,373 | ) | — | (8,373 | ) | |||||||
F-star
Beta
|
(251 | ) | — | (251 | ) | |||||||
F-star
Alpha
|
(14 | ) | — | (14 | ) | |||||||
|
|
|
|
|
|
|||||||
Total general and administrative expense
|
|
(£12,295
|
)
|
|
(£399
|
)
|
|
(£11,896
|
)
|
|||
|
|
|
|
|
|
Year Ended
December 31, |
Change
|
|||||||||||
2018
|
2017
|
|||||||||||
(in thousands)
|
||||||||||||
Statements of Comprehensive (Loss)/ Income
|
||||||||||||
Revenue
|
£ | 29,997 | £ | 11,027 | £ | 18,970 | ||||||
Costs related to collaborative arrangements
|
(13,893 | ) | (6,346 | ) | (7,547 | ) | ||||||
Research and development costs
|
— | — | — | |||||||||
General and administrative expenses
|
(399 | ) | (616 | ) | 217 | |||||||
Other gains
|
195 | 71 | 124 | |||||||||
|
|
|
|
|
|
|||||||
Profit from operations
|
|
15,900
|
|
|
4,136
|
|
|
11,764
|
|
|||
Finance income
|
4 | — | 4 | |||||||||
|
|
|
|
|
|
|||||||
Profit before tax from continuing operations
|
|
15,905
|
|
|
4,136
|
|
|
11,769
|
|
|||
Income tax charge
|
(2,636 | ) | (657 | ) | (1,979 | ) | ||||||
|
|
|
|
|
|
|||||||
Profit attributable to equity holders of the parent
|
£13,269
|
£3,479
|
£9,790
|
|||||||||
|
|
|
|
|
|
Period Ended
May 6, |
Year Ended
December 31, |
Change
|
||||||||||
2019
|
2018
|
|||||||||||
(in thousands)
|
||||||||||||
Statements of Comprehensive Income
|
||||||||||||
Revenue
|
€ | 9,057 | € | 21,088 | (€12,031 | ) | ||||||
Other income
|
591 | 505 | 86 | |||||||||
Raw materials and consumables used
|
(1,339 | ) | (3,960 | ) | 2,621 | |||||||
Depreciation, amortization and loss on disposal
|
(454 | ) | (835 | ) | 381 | |||||||
Employee expenses
|
(3,369 | ) | (7,995 | ) | 4,626 | |||||||
Other expenses
|
(3,087 | ) | (7,429 | ) | 4,342 | |||||||
|
|
|
|
|
|
|||||||
Operating profit
|
|
1,399
|
|
|
1,374
|
|
|
25
|
|
|||
Finance income
|
125 | 164 | (39 | ) | ||||||||
Finance costs
|
(109 | ) | (223 | ) | 114 | |||||||
|
|
|
|
|
|
|||||||
Profit before tax on ordinary activities
|
|
1,415
|
|
|
1,315
|
|
|
100
|
|
|||
Tax (charge)/ benefit on profit on ordinary activities
|
(49 | ) | 195 | (244 | ) | |||||||
|
|
|
|
|
|
|||||||
Profit attributable to owners of the parent
|
€
|
1,366
|
|
€
|
1,510
|
|
|
(€ 144
|
)
|
|||
|
|
|
|
|
|
Year Ended
December 31, |
||||||||||||
2018
|
2017
|
Change
|
||||||||||
(in thousands)
|
||||||||||||
Statements of Comprehensive Income
|
||||||||||||
Revenue
|
€ | 21,088 | € | 15,749 | € | 5,339 | ||||||
Other income
|
505 | 232 | 273 | |||||||||
Raw materials and consumables used
|
(3,960 | ) | (2,958 | ) | (1,002 | ) | ||||||
Depreciation, amortization and loss on disposal
|
(835 | ) | (559 | ) | (276 | ) | ||||||
Employee expenses
|
(7,995 | ) | (6,853 | ) | (1,141 | ) | ||||||
Other expenses
|
(7,429 | ) | (5,613 | ) | (1,816 | ) | ||||||
|
|
|
|
|
|
|||||||
Operating profit/ (loss)
|
|
1,375
|
|
|
(3
|
)
|
|
1,378
|
|
|||
Finance income
|
164 | 116 | 48 | |||||||||
Finance costs
|
(223 | ) | (201 | ) | (22 | ) | ||||||
|
|
|
|
|
|
|||||||
Profit/ (loss) before tax on ordinary activities
|
|
1,315
|
|
|
(88
|
)
|
|
1,403
|
|
|||
Income tax credit
|
195 | 225 | (30 | ) | ||||||||
|
|
|
|
|
|
|||||||
Profit attributable to owners of the parent
|
€ 1,510
|
€ 137
|
€ 1,373
|
|||||||||
|
|
|
|
|
|
Period Ended
May 6, |
Year Ended
December 31, |
Change
|
||||||||||
2019
|
2018
|
|||||||||||
(in thousands)
|
||||||||||||
Statements of Comprehensive Income
|
||||||||||||
Revenue
|
£ | 7,903 | £ | 17,394 | (£9,491 | ) | ||||||
Costs relating to collaborative arrangements
|
(1,864 | ) | (6,719 | ) | 4,856 | |||||||
Research and development costs
|
(5,107 | ) | (12,049 | ) | 6,942 | |||||||
General and administrative expenses
|
(909 | ) | (345 | ) | (563 | ) | ||||||
Other gains
|
— | 1 | (1 | ) | ||||||||
Other expenses
|
(58 | ) | (20 | ) | (38 | ) | ||||||
|
|
|
|
|
|
|||||||
Loss on operations
|
|
(34
|
)
|
|
(1,739
|
)
|
1,705 | |||||
Finance costs
|
(103 | ) | (145 | ) | 42 | |||||||
|
|
|
|
|
|
|||||||
Loss before tax from continuing operation
|
|
(137
|
)
|
|
(1,883
|
)
|
|
1,747
|
|
|||
Corporation tax benefit
|
639 | 2,416 | (1,777 | ) | ||||||||
|
|
|
|
|
|
|||||||
Profit for the financial period and comprehensive income attributable to the equity shareholders of the parent
|
£
|
502
|
|
£
|
533
|
|
|
(£31
|
)
|
|||
|
|
|
|
|
|
Period Ended
May 6, |
Year Ended
December 31, |
Change
|
||||||||||
2019
|
2018
|
|||||||||||
(in thousands)
|
||||||||||||
Direct costs related to collaborative arrangements by program
|
||||||||||||
Recharges that relate to revenue from
F-star
Delta
|
(£1,864 | ) | (£4,825 | ) | £ | 2,961 | ||||||
Intangible derecognition
|
— | (1,895 | ) | 1,895 | ||||||||
|
|
|
|
|
|
|||||||
Total costs related to collaborative arrangement by program
|
|
(£1,864
|
)
|
|
(£6,720
|
)
|
£
|
4,856
|
|
|||
|
|
|
|
|
|
Period Ended
May 6, |
Year Ended
December 31, |
Change
|
||||||||||
2019
|
2018
|
|||||||||||
(in thousands)
|
||||||||||||
Direct research and development costs by program
|
||||||||||||
FS120
|
(£2,425 | ) | (£4,002 | ) | £ | 1,577 | ||||||
FS222
|
(1,727 | ) | (3,304 | ) | 1,577 | |||||||
Others
|
(954 | ) | (4,743 | ) | 3,789 | |||||||
|
|
|
|
|
|
|||||||
Total research and development costs by program
|
|
(£5,107
|
)
|
|
(£12,049
|
)
|
£
|
6,942
|
|
|||
|
|
|
|
|
|
Year Ended
December 31, |
Change
|
|||||||||||
2018
|
2017
|
|||||||||||
(in thousands)
|
||||||||||||
Statements of Comprehensive Income
|
||||||||||||
Revenue
|
£ | 17,394 | £ | 14,993 | £ | 2,401 | ||||||
Costs relating to collaborative arrangements
|
(6,719 | ) | (3,289 | ) | (3,430 | ) | ||||||
Research and development costs
|
(12,049 | ) | (11,933 | ) | (115 | ) | ||||||
General and administrative expenses
|
(345 | ) | (352 | ) | 7 | |||||||
Other gains
|
1 | 166 | (166 | ) | ||||||||
Other expenses
|
(20 | ) | — | (20 | ) | |||||||
|
|
|
|
|
|
|||||||
Loss on operations
|
|
(1,739
|
)
|
|
(415
|
)
|
(1,324 | ) | ||||
Finance costs
|
(145 | ) | (102 | ) | (43 | ) | ||||||
|
|
|
|
|
|
|||||||
Loss before tax from continuing operation
|
|
(1,883
|
)
|
|
(517
|
)
|
|
(1,366
|
)
|
|||
Corporation tax benefit
|
2,416 | 705 | 1,711 | |||||||||
|
|
|
|
|
|
|||||||
Profit for the year and comprehensive income attributable to the equity holders of the parent
|
£
|
533
|
|
£
|
189
|
|
£
|
344
|
|
|||
|
|
|
|
|
|
Year Ended
December 31, |
Change
|
|||||||||||
2018
|
2017
|
|||||||||||
(in thousands)
|
||||||||||||
Direct costs related to collaborative arrangements by program
|
||||||||||||
Recharges that relate to revenue from
F-star
Delta
|
(£4,824 | ) | (£2,304 | ) | (£2,520 | ) | ||||||
Intangible derecognition
|
(1,895 | ) | (985 | ) | (910 | ) | ||||||
|
|
|
|
|
|
|||||||
Total costs related to collaborative arrangement by program
|
|
(£6,719
|
)
|
|
(£3,289
|
)
|
|
(£3,430
|
)
|
|||
|
|
|
|
|
|
Year Ended December 31,
|
Change
|
|||||||||||
2018
|
2017
|
|||||||||||
(in thousands)
|
||||||||||||
Direct research and development costs by program
|
||||||||||||
FS118
|
£ | — | (£3,801 | ) | £ | 3,801 | ||||||
FS120
|
(4,002 | ) | (366 | ) | (3,636 | ) | ||||||
FS222
|
(3,304 | ) | (463 | ) | (2,841 | ) | ||||||
Other
|
(4,743 | ) | (7,303 | ) | 2,560 | |||||||
|
|
|
|
|
|
|||||||
Total research and development costs by program
|
|
(£12,049
|
)
|
|
(£11,933
|
)
|
|
(£116
|
)
|
|||
|
|
|
|
|
|
Six Month Period
June 30, |
||||||||
2020
|
2019
|
|||||||
(thousands)
|
||||||||
Net cash used in operating activities
|
(£1,728 | ) | (£3,683 | ) | ||||
Net cash generated from investing activities
|
8 | 4,095 | ||||||
Net cash generated from/ (used in) financing activities
|
174 | (89 | ) | |||||
Cash and cash equivalents
|
£
|
2,155
|
|
£
|
6,773
|
|
Year Ended
December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
(thousands)
|
||||||||||||
Net cash (used in)/ generated from operating activities
|
(£16,557 | ) | £ | 12,298 | £ | 13,627 | ||||||
Net cash generated from/ (used in) investing activities
|
4,105 | (9,620 | ) | (9,847 | ) | |||||||
Net cash generated from financing activities
|
9,733 | — | — | |||||||||
Cash and cash equivalents
|
£
|
3,736
|
|
£
|
6,458
|
|
£
|
3,780
|
|
Period Ended
May 6, |
Year Ended
December 31, |
|||||||||||
2019
|
2018
|
2017
|
||||||||||
(in thousands)
|
||||||||||||
Net cash flows (used in) / generated from operating activities
|
(€2,253 | ) | € | 6,680 | (€273 | ) | ||||||
Net cash flows generated from/ (used in) investing activities
|
127 | (7,518 | ) | (4,217 | ) | |||||||
Net cash flows generated from/ (used in) financing activities
|
844 | (217 | ) | 2,079 | ||||||||
Cash and cash equivalents
|
€
|
849
|
|
€
|
2,053
|
|
€
|
3,133
|
|
Period Ended
May 6, |
Year Ended
December 31, |
|||||||||||
2019
|
2018
|
2017
|
||||||||||
(in thousands)
|
(in thousands)
|
|||||||||||
Net cash used in operating activities
|
(£4,621 | ) | (£720 | ) | (£2,959 | ) | ||||||
Net cash used in investing activities
|
50 | (1,462 | ) | — | ||||||||
Net cash (used in)/ generated from financing activities
|
(123 | ) | 5,981 | 2,667 | ||||||||
Cash and cash equivalents
|
£
|
915
|
£
|
5,709
|
|
£
|
1,910
|
|
Payments Due by Period
|
||||||||||||||||||||
Total
|
Less than
1 year |
1 to 3
years |
3 to 5
years |
More
than 5 years |
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Contract manufacturing organization
|
£ | 735 | £ | 735 | £ | — | £ | — | £ | — | ||||||||||
Finance lease obligations
|
505 | 465 | 40 | — | — | |||||||||||||||
Convertible notes held under FVTPL
|
10,838 | 10,838 | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total contractual obligations and commitments
|
£ | 12,078 | £ | 12,038 | £ | 40 | £ | — | £ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||||||
Total
|
Less than
1 year |
1 to 3
years |
3 to 5
years |
More
than 5 years |
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Balance outstanding between
F-star
GmbH and
F-star
Alpha
|
€ | 9,056 | € | 9,056 | € | — | € | — | € | — | ||||||||||
Finance lease obligations
|
985 | 563 | 422 | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total contractual obligations and commitments
|
€ | 10,041 | € | 9,619 | € | 422 | € | — | € | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||||||
Total
|
Less than
1 year |
1 to 3
years |
3 to 5
years |
More
than 5 years |
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Annual fee payable to Iontas Limited
|
£ | 500 | £ | 50 | £ | 100 | £ | 100 | £ | 250 | ||||||||||
Loan payable by
F-star
Beta to
F-star
GmbH
|
10,048 | 10,048 | — | — | — | |||||||||||||||
Contracts Manufacturing Organization commitment
|
7,900 | 7,900 | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commitments
|
£ | 18,448 | £ | 17,998 | £ | 100 | £ | 100 | £ | 250 | ||||||||||
|
|
|
|
|
|
|
|
|
|
• |
F-star
Alpha—holds the intellectual property rights for one early stage clinical molecule, which is not currently being developed. It has no income streams, other than interest income earned on loans to other
F-star
group entities.
F-star
Alpha does not employ an organized workforce and does not currently utilize one via any contractual arrangements. In the absence of processes and the ability to generate outputs, the acquisition of
F-star
Alpha was deemed by management to be an asset acquisition
|
• |
F-star
Beta—holds the intellectual property rights for several early discovery stage assets and two preclinical assets. Although
F-star
Beta does not employ its own workforce it has a contracted right to access the workforce of
F-star
GmbH or the ability to contract with other workforces and has the ability to create outputs via partnering or collaboration arrangements and so was deemed to be a business by management.
|
• |
F-star
GmbH—holds the intellectual property rights for several
non-immuno-oncology
assets that are being developed under a collaboration agreement with a partner.
F-star
GmbH employs its own workforce and the ability to create outputs and as such was deemed a business by management.
|
• |
The values assigned to the assumptions represented management’s assessment of the future trends in the relevant industry and have been based on historical data from both external and internal sources.
|
• |
The discount rate which has been estimated based on cost of equity and cost of debt.
|
• |
The cash flow projections included specific development estimates including cost of sales, cost of research & development, probability of success and amount and timing of projected future revenue.
|
• |
Obsolescence factor (Investment) which relates to the cost incurred on an asset in a given year which has been discounted for an estimate of
non-productive
spend in that year (i.e., expenditure which has not been deemed to have increased the value of the asset). Management assessed this by examining all activities carried out in each year and determining the productivity of each activity.
|
• |
Value inflection events (CMC). These are events that would result in an increase or decrease of the value of an asset. Publicly traded comparable companies were identified that experienced similar events and the equity value was calculated
one-day
prior to the associated news release, as well as
one-day,
five-days,
10-days
and
30-days
post news release to measure the increase or decrease in value. To appropriately manufacture a pharmaceutical or biologic specific manufacturing processes, product characteristics, and product testing must be defined in order to ensure that the product is safe, effective and consistent between batches. These activities are known as ‘CMC’, chemistry, manufacturing, and control.
|
Asset
|
Asset Type
|
Method used to estimate recoverability
|
||
FS21
|
Partnered asset
|
NPV of probability—adjusted future cash flows
|
||
FS120
|
Non-partnered assets
|
Cost approach
|
||
FS222
|
Non-partnered
assets
|
Cost approach
|
Asset
|
Asset Type
|
Method used to estimate recoverability
|
||
Partnered Neuroscience assets
|
Partnered asset
|
NPV of probability—adjusted future cash flows
|
• |
Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1)
|
• |
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2)
|
• |
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3)
|
Increase probability by 10%: | £0.4 million | |
Decrease probability by 10%: | (£0.4) million |
• |
each performance obligation contains multiple deliverables; and
|
• |
resource expended has been assessed as the most accurate method of measuring progress towards completion of each performance obligation.
|
• |
each performance obligation contains multiple deliverables; and
|
• |
resource expended has been assessed as the most accurate method of measuring progress towards completion of each performance obligation.
|
• |
Discount factor: 13.0%
|
• |
The values assigned to the key assumptions represented management’s assessment of the future trends in the relevant industry and have been based on historical data from both external and internal sources.
|
• |
The discount rate was estimated based on cost of equity and cost of debt.
|
FS120
|
FS222
|
|||||||
Obsolescence factor
|
||||||||
2019 investment
|
0 | % | 25 | % | ||||
2018 investment
|
50 | % | 50 | % | ||||
2017 investment
|
80 | % | 80 | % | ||||
Value inflection events
|
||||||||
Candidate selection
|
3 | % | 3 | % | ||||
Manufacturing process determined
|
12.5 | % | 12.5 | % |
Name
|
Age
|
Position
|
||||
Executive Officers
|
|
|
|
|
||
Eliot Forster, Ph.D.
|
54 | President, Chief Executive Officer and Director | ||||
Darlene Deptula-Hicks
|
62 | Chief Financial Officer and Treasurer | ||||
Neil Brewis, Ph.D.
|
54 | Chief Scientific Officer | ||||
Louis Kayitalire, M.D.
|
63 | Chief Medical Officer | ||||
Non-Employee
Directors
|
|
|
|
|
||
David Arkowitz
|
58 | Director | ||||
Edward Benz, Jr., M.D
|
74 | Director | ||||
Nessan Bermingham, Ph.D.
|
47 | Director-Chairperson | ||||
Todd Brady, M.D., Ph.D.
|
49 | Director | ||||
Pamela Klein, M.D.
|
58 | Director | ||||
Patrick Krol
|
57 | Director | ||||
Geoffrey Race
|
59 | Director |
• |
Class I consists of Pamela Klein, M.D. and Timothy Clackson, Ph.D., each with a term expiring at the 2022 annual meeting of stockholders;
|
• |
Class II consists of David Arkowitz and Kurt Eichler, each with a term expiring at the 2023 annual meeting of stockholders; and
|
• |
Class III consists of Todd Brady, M.D., Ph.D., Martin Driscoll and Scott Smith each with a term expiring at the 2021 annual meeting of stockholders.
|
• |
Class I will consist of Pamela Klein, M.D., Patrick Krol, and Geoffrey Race, each with a term expiring at the 2022 annual meeting of stockholders.
|
• |
Class II will consist of David Arkowitz, Nessan Bermingham, Ph.D., and Eliot Forster, Ph.D., each with a term expiring at the 2023 annual meeting of stockholders.
|
• |
Class III will consist of Todd Brady, M.D., Ph.D. and Edward Benz, Jr., M.D., each with a term expiring at the 2021 annual meeting of stockholders.
|
• |
appointing, overseeing, and if need be, terminating any independent auditor;
|
• |
assessing the qualification, performance and independence of its independent auditor;
|
• |
reviewing the audit plan and
pre-approving
all audit and
non-audit
services to be performed by its independent auditor;
|
• |
reviewing its financial statements and related disclosures;
|
• |
reviewing the adequacy and effectiveness of its accounting and financial reporting processes, systems of internal control and disclosure controls and procedures;
|
• |
reviewing Spring Bank’s overall risk management framework;
|
• |
overseeing procedures for the treatment of complaints on accounting, internal accounting controls, or audit matters;
|
• |
reviewing and discussing with management and the independent auditor the results of Spring Bank’s annual audit, reviews of its quarterly financial statements and its publicly filed reports;
|
• |
reviewing and approving related person transactions; and
|
• |
preparing the audit committee report that the SEC requires in its annual proxy statement.
|
• |
reviewing the elements and amount of total compensation for all executive officers;
|
• |
formulating and recommending any proposed changes in the compensation of Spring Bank’s chief executive officer for approval by the Board;
|
• |
reviewing and approving any changes in the compensation for executive officers, other than Spring Bank’s chief executive officer;
|
• |
administering Spring Bank’s equity compensation plans;
|
• |
reviewing annually Spring Bank’s overall compensation philosophy and objectives, including compensation program objectives, target pay positioning and equity compensation; and
|
• |
preparing the compensation committee report that the SEC will require in Spring Bank’s annual proxy statement, if applicable.
|
• |
evaluating and making recommendations regarding the composition, organization and governance of the Spring Bank Board and its committees;
|
• |
identifying, recruiting and nominating director candidates to the Spring Bank Board if and when necessary;
|
• |
evaluating and making recommendations regarding the creation of additional committees or the change in mandate or dissolution of committees;
|
• |
reviewing and making recommendations with regard to its corporate governance guidelines and compliance with laws and regulations; and
|
• |
reviewing and approving conflicts of interest of its directors and corporate officers, other than related person transactions reviewed by the Audit Committee.
|
Member
Annual Fee
|
Chairman
Annual Fee
|
|||||||
Board of Directors
|
$ | 37,500 | $ | 67,500 |
(1)
|
|||
Audit Committee
|
$ | 7,500 | $ | 15,000 | ||||
Compensation Committee
|
$ | 5,000 | $ | 10,000 | ||||
Nomination and Corporate Governance Committee
|
$ | 4,000 | $ | 8,000 | ||||
Science and Technology Committee
|
$ | 4,000 | $ | 8,000 |
(1) |
The Chairman of Spring Bank’s Board of Directors only receives a retainer for such service if he or she is a
non-employee
director.
|
Name
|
Fees Earned or
Paid in Cash
($)
(1)
|
Stock
Awards
($)
|
Option
Awards
($)
(2)
|
Total
($)
|
||||||||||||
David Arkowitz
|
— | 57,500 | 22,952 | 80,452 | ||||||||||||
Todd Brady, M.D., Ph.D.
|
— | 49,500 | 22,952 | 72,452 | ||||||||||||
Pamela Klein, M.D.
(3)
|
19,735 | — | 45,904 | 65,639 |
(1) |
Reflects payment of annual fees for Board and committee service from January 1 to December 31 in fully vested shares of Spring Bank common stock. As of December 31, 2019, Spring Bank’s
non-employee
directors did not hold any shares under outstanding stock awards.
|
(2) |
These amounts reflect the aggregate grant date fair value of option awards in 2019 computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 8 to Spring Bank’s consolidated financial statements included in Spring Bank’s Annual Report on Form
10-K
|
for the year ended December 31, 2019, filed with the SEC on February 14, 2020. As of December 31, 2019, Mr. Arkowitz held options to purchase 34,000 shares of Spring Bank common stock, Dr. Brady held options to purchase 29,500 shares of Spring Bank common stock, and Dr. Klein held options to purchase 15,000 shares of Spring Bank common stock. |
(3) |
Pamela Klein, M.D. was elected to the Spring Bank Board on July 10, 2019.
|
Name
|
Fees Earned or
Paid in Cash ($) |
Option
Awards
($)
(2)
|
Total
($) |
|||||||||
Edward Benz, Jr. M.D.
(1)
|
$ | 1,485 | $ | 75,226 | $ | 76,711 | ||||||
Nessan Bermingham, Ph.D.
|
$ | 107,584 | $ | 651,693 | $ | 759,277 | ||||||
Patrick Krol
|
— | — | — | |||||||||
Geoffrey Race
(1)
|
$ | 1,485 | $ | 108,449 | $ | 109,934 |
(1) |
Dr. Benz and Mr. Race were elected to the F-star Board of Directors on December 18, 2019.
|
(2) |
These amounts reflect the aggregate grant date fair value of option awards in 2019. Assumptions used in the calculation of these amounts are included in the notes to F-star’s consolidated financial statements. As of December 31, 2019, Mr. Bermingham held options to purchase 303,211 F-star ordinary shares, Dr. Benz held options to purchase 35,000 F-star ordinary shares, and Mr. Race held options to purchase 35,000 F-star ordinary shares.
|
Board Chair
|
$ | 75,000 | ||
Audit Committee Chairperson
|
$ | 16,500 | ||
Audit Committee member
|
$ | 8,000 | ||
Compensation Committee Chairperson
|
$ | 12,500 | ||
Compensation Committee member
|
$ | 6,500 | ||
Nominating and Corporate Governance Committee Chairperson
|
$ | 9,000 | ||
Nominating and Corporate Governance Committee member
|
$ | 4,500 |
Name
|
Title
|
|
Eliot Forster, Ph.D.
|
Chief Executive Officer and Director | |
Darlene Deptula-Hicks
|
Chief Financial Officer
|
|
Neil Brewis, Ph.D.
|
Chief Scientific Officer
|
Name and Principal Position
|
Year
|
Salary
|
Bonus
(1)
|
Option
awards
(5)
|
All other
compensation
(2)
|
Total
|
||||||||||||||||||
Eliot Forster, Ph.D.
(3)(4)
|
2019 | $435,625 | $— | $1,054,659 | $58,212 | $1,458,486 | ||||||||||||||||||
Chief Executive Officer
|
||||||||||||||||||||||||
Darlene Deptula-Hicks
|
2019 | $327,125 | — | $543,035 | — | $870,160 | ||||||||||||||||||
Chief Financial Officer
|
||||||||||||||||||||||||
Neil Brewis, Ph.D.
(4)
|
2019 | $229,587 | $31,250 | $236,408 | $2,867 | $500,112 | ||||||||||||||||||
Chief Scientific Officer
|
(1) |
Any discretionary bonuses for Drs. Forster and Brewis and Ms. Deptula-Hicks for services in 2019 have yet to be determined or paid. Dr. Brewis received a retention bonus in 2019.
|
(2) |
Includes company contributions to the
F-star
defined pension contribution scheme and F-star 401(k) plan, as applicable.
|
(3) |
Dr. Forster is also a member of
F-star’s
board of directors, but did not receive any additional compensation in his capacity as a director.
|
(4) |
Salary payments to Drs. Forster and Brewis were paid in British pounds and converted to U.S. dollars using an exchange rate of 1.28 on December 31, 2019.
|
(5) |
These amounts reflect the aggregate grant date fair value of option awards in 2019. Assumptions used in the calculation of these amounts are included in the notes to F-star’s consolidated financial statements. As of December 31, 2019, Dr. Forster held options to purchase 340,374 F-star ordinary shares, Dr. Brewis held options to purchase 76,297 F-star ordinary shares, and Ms. Deptula-Hicks held options to purchase 252,656 F-star ordinary shares.
|
Option awards
(1)
|
||||||||||||||||||||
Name
|
Vesting
start date |
Number of
securities underlying unexercised options (#) exercisable |
Number of
securities underlying unexercised options (#) unexercisable |
Option exercise
price |
Option
expiration date |
|||||||||||||||
Eliot Forster, Ph.D.
|
10/1/2018 | 17,194 |
(2)
|
33,377 | GBP 0.00017006 | 6/14/29 | ||||||||||||||
10/1/2018 | 98,533 |
(2)
|
191,270 | £0.01 | 6/14/29 | |||||||||||||||
Darlene Deptula-Hicks
|
5/1/2019 | — |
(2)
|
252,676 | $1.87 | 6/14/29 | ||||||||||||||
Neil Brewis, Ph.D.
|
11/2/2015 | 20,229 |
(2)
|
— | GBP 0.00042514 | 11/2/25 | ||||||||||||||
5/7/2019 | — |
(2)
|
56,068 | £0.01 | 6/14/29 |
(1) |
All of the option awards listed in the table above were granted under the
F-star
EIP, the terms of which are described below under “—
Equity incentive plans
|
(2) |
The options vest as to 28% of the total shares on the first anniversary of the vesting start date and 2% on the last day of each month subsequent to such first anniversary until the option is fully vested on the fourth anniversary, subject to the holder’s continued service through the applicable vesting date.
|
• |
the amounts involved exceeded or will exceed $120,000; and
|
• |
a director, executive officer, holder of more than 5% of the outstanding capital stock of Spring Bank or
F-star,
or any member of such person’s immediate family, had or will have a direct or indirect material interest.
|
• |
the related person’s interest in the related person transaction;
|
• |
the approximate dollar value of the amount involved in the related person transaction;
|
• |
the approximate dollar value of the amount of the related person’s interest in the transaction without regard to the amount of any profit or loss;
|
• |
whether the transaction was undertaken in the ordinary course of Spring Bank’s business;
|
• |
whether the terms of the transaction are no less favorable to Spring Bank than terms that could have been reached with an unrelated third party;
|
• |
the purpose of, and the potential benefits to Spring Bank of, the transaction; and
|
• |
any other information regarding the related person transaction or the related person in the context of the proposed transaction that would be material to investors in light of the circumstances of the particular transaction.
|
Director
|
Affiliation with Principal Shareholder
|
|
Nessan Bermingham, Ph.D. |
Venture Partner at Atlas Venture, an affiliate of a principal shareholder of
F-star
|
|
Jean-Francois Formela, M.D. |
Partner at Atlas Venture, an affiliate of a principal shareholder of
F-star
|
|
Deborah Harland, Ph.D. |
Partner at S.R. One, a principal shareholder of
F-star
|
|
Patrick Krol |
Managing Partner of Aescap Venture, an affiliate of a principal shareholder of
F-star
|
|
Helmut Schuehsler, Ph.D. |
Chairman of TVM Capital Group and Chief Executive Officer of TVM Capital Healthcare Partners, affiliates of principal shareholders of
F-star
|
Purchasers
|
Aggregate Principal
Price |
|||
Atlas Venture Opportunity Fund I, LP
(1)
|
$ | 4,000,000 | ||
Coöperatieve AESCAP Venture I U.A.
(2)
|
$ | 1,000,000 | ||
TVM Life Sciences Ventures VI GmbH & Co.
(3)
|
$ | 990,000 | ||
TVM Life Sciences Ventures VI Limited Partnership
(3)
|
$ | 274,000 | ||
MP Healthcare Venture Management, Inc.
|
$ | 1,000,000 | ||
Merck Ventures BV
|
$ | 2,000,000 | ||
S.R. One, Limited
(5)
|
$ | 4,000,000 | ||
Entities Affiliated with John Haurum, F-star’s former Chief Executive Officer
|
$ | 351,074 |
(1) |
Nessan Bermingham, Ph.D., a Venture Partner of Atlas Venture, is a member of
F-star’s
Board of Directors. Jean-Francois Formela, M.D., a partner of Atlas Venture, is a member of
F-star’s
Board of Directors.
|
(2) |
Patrick Krol, a Managing Partner at Coöperatieve Aescap Venture I, U.A., is a member of
F-star’s
Board of Directors.
|
(3) |
Helmut Schuehsler, Ph.D., an officer of TVM Life Science Ventures Management VI L.P. affiliates of principal shareholders of F-star, is a member of
F-star’s
Board of Directors.
|
(4) |
Deborah Harland, Ph.D., a partner at S.R. One Limited, is a member of
F-star’s
Board of Directors.
|
Purchasers
|
Aggregate Principal
Price |
|||
Atlas Venture Opportunity Fund I, LP
(1)
|
$ | 2,500,000 | ||
Coöperatieve AESCAP Venture I U.A.
(2)
|
$ | 1,266,000 | ||
MP Healthcare Venture Management, Inc.
|
$ | 1,500,000 | ||
Merck Ventures BV
|
$ | 2,000,000 | ||
S.R. One, Limited
(3)
|
$ | 2,500,000 |
(1) |
Nessan Bermingham, Ph.D., a Venture Partner of Atlas Venture, is a member of
F-star’s
Board of Directors. Jean-Francois Formela, M.D., a partner of Atlas Venture, is a member of
F-star’s
Board of Directors.
|
(2) |
Patrick Krol, a Managing Partner at Coöperatieve Aescap Venture I, U.A., is a member of
F-star’s
Board of Directors.
|
(3) |
Deborah Harland, Ph.D., a partner at S.R. One Limited, is a member of
F-star’s
Board of Directors.
|
F-star Gamma Shareholder
|
Payment Associated
with Purchase of the Buy-Out Option |
Payment Associated
with Exercise of Buy-Out Option |
||||||
Atlas Venture Fund VII, L.P.
(1)
|
$ | 148,000 | $ | 4,123,605 | ||||
Coöperatieve AESCAP Venture I U.A.
(2)
|
$ | 107,450 | $ | 2,993,144 | ||||
TVM Life Science Ventures VI GmbH & Co.
(3)
|
$ | 46,400 | $ | 1,292,375 | ||||
TVM Life Science Ventures VI Limited Partnership
(3)
|
$ | 12,850 | $ | 358,290 | ||||
S.R. One Limited
(4)
|
$ | 52,600 | $ | 1,465,867 | ||||
MP Healthcare Venture Management, Inc.
|
$ | 35,600 | $ | 991,730 | ||||
Merck Ventures B.V.
|
$ | 35,350 | $ | 984,802 | ||||
John Haurum
(5)
|
$ | 23,250 | $ | 647,923 | ||||
Neil Brewis
|
$ | 6,450 | $ | 179,979 | ||||
Jane Dancer
(5)
|
$ | 6,450 | $ | 179,979 | ||||
John Edwards
(6)
|
$ | 6,450 | $ | 179,979 | ||||
Tolga Hassan
(5)
|
$ | 6,450 | $ | 179,979 |
(1) |
Nessan Bermingham, Ph.D., a Venture Partner of Atlas Venture, is a member of F-star’s Board of Directors. Jean-Francois Formela, M.D., a partner of Atlas Venture, is a member of F-star’s Board of Directors.
|
(2) |
Patrick Krol, a Managing Partner at Coöperatieve Aescap Venture I, U.A., is a member of F-star’s Board of Directors.
|
(3) |
Helmut Schuehsler, Ph.D., an officer of TVM Life Science Ventures Management VI L.P. affiliates of principal shareholders of F-star, is a member of F-star’s Board of Directors.
|
(4) |
Deborah Harland, Ph.D., a partner at S.R. One Limited, is a member of F-star’s Board of Directors.
|
(5) |
Former officer of F-star.
|
(6) |
Former director of F-star.
|
F-star Delta Shareholder
|
Payment Associated
with Purchase of the Buy-Out Option |
|||
Atlas Venture Fund VII, L.P.
(1)
|
$ | 13,653,817 | ||
Coöperatieve AESCAP Venture I U.A.
(2)
|
$ | 9,907,793 | ||
TVM Life Science Ventures VI GmbH & Co.
(3)
|
$ | 4,277,211 | ||
TVM Life Science Ventures VI Limited Partnership
(3)
|
$ | 1,187,087 | ||
S.R. One Limited
(4)
|
$ | 4,854,588 | ||
MP Healthcare Venture Management, Inc.
|
$ | 3,284,122 | ||
Merck Ventures B.V.
|
$ | 3,261,027 | ||
John Haurum
(5)
|
$ | 2,120,129 | ||
Neil Brewis
|
$ | 572,758 | ||
Jane Dancer
(5)
|
$ | 572,758 | ||
John Edwards
(6)
|
$ | 1,122,422 | ||
Tolga Hassan
(5)
|
$ | 572,758 |
(1) |
Nessan Bermingham, Ph.D., a Venture Partner of Atlas Venture, is a member of F-star’s Board of Directors. Jean-Francois Formela, M.D., a partner of Atlas Venture, is a member of F-star’s Board of Directors.
|
(2) |
Patrick Krol, a Managing Partner at Coöperatieve Aescap Venture I, U.A., is a member of F-star’s Board of Directors.
|
(3) |
Helmut Schuehsler, Ph.D., an officer of TVM Life Science Ventures Management VI L.P. affiliates of principal shareholders of F-star, is a member of F-star’s Board of Directors.
|
(4) |
Deborah Harland, Ph.D., a partner at S.R. One Limited, is a member of F-star’s Board of Directors.
|
(5) |
Former officer of F-star.
|
(6) |
Former director of F-star.
|
• |
the transaction is approved by the board of directors prior to the time that the interested stockholder became an interested stockholder;
|
• |
upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; or
|
• |
at or subsequent to such time that the stockholder became an interested stockholder the business combination is approved by the board of directors and authorized at an annual or Special Meeting of stockholders by at least
two-thirds
of the outstanding voting stock that is not owned by the interested stockholder.
|
• |
Board of Directors Vacancies
|
• |
Classified Board
sixty-six
and two thirds percent (66 2/3%) of the votes that all stockholders would be entitled to cast in an election of directors. In addition, stockholders will not be permitted to cumulate their votes for the election of directors.
|
• |
Stockholder Action; Special Meeting of Stockholders
|
• |
Advance Notice Requirements for Stockholder Proposals and Director Nominations
|
• |
Issuance of Undesignated Preferred Stock
|
• |
Exclusive Forum
|
Provision
|
F-star
(Pre-Exchange)
|
Spring Bank (Post-Exchange)
|
||
Authorized Capital Stock |
As of August 1, 2020, the issued share capital of
F-star
consists of (i) 16,265,864 ordinary shares of, par value £0.01 per share, (ii) 103,611 Seed Preference Shares, par value £0.01 per share, and (iii) 1,441,418 Series A Preference Shares, par value £0.01 per share.
|
The amended and restated certificate of incorporation of Spring Bank authorizes the issuance of up to 200,000,000 shares of common stock, par value $0.0001 per share and 10,000,000 shares of undesignated preferred stock, par value $0.0001 per share. | ||
Number of Directors |
F-star’s
articles of association provide that unless agreed otherwise by certain holders of ordinary shares, Seed Preference Shares and Series A Shares, the number of directors must not be more than nine and must not be less than three.
|
Spring Bank’s amended and restated certificate of incorporation and amended and restated bylaws do not provide for a maximum or minimum number of directors. The number of directors must be set by approval of the Board of Directors. Currently the size of the Board of Directors is fixed at seven (7). |
Provision
|
F-star
(Pre-Exchange)
|
Spring Bank (Post-Exchange)
|
||
Stockholder Nominations and Proposals |
F-star’s
articles of association provide certain shareholders with rights to appoint and remove directors.
So long as each Investor holds not less than 7.5% of the issued shares comprised in
F-star’s
share capital, other than deferred shares (the “Equity Shares”), it has the right to appoint (and remove or replace ) a director.
Each of the directors appointed by an Investor is entitled to be appointed to any committee of the
F-star
Board of Directors and to the board of directors of any of
F-star’s
subsidiaries.
TVM Life Science Ventures VI GmbH & Co. KG and TVM Life Science Ventures VI Limited Partnership; Atlas Venture Fund VII, LP; Coöperative AESCAP Venture I U.A.; MP Healthcare Venture Management, Inc.; Merck Ventures BV and Merck Holding GmbH; Novo A/S; and S.R. One, Limited; and each of their permitted transferees (the “Investors”) jointly, acting by the prior written consent of the Qualified Majority (the “Qualified Majority Consent”), may appoint (and remove or replace) up to: (i) two independent directors to the
F-star
Board of Directors, one of whom shall act as the
F-star
Board of Directors’ chairman; and (ii) one director as the
F-star’s
Chief Executive Officer.
F-star’s
shareholders’ agreement provides that if an Investor between 3.5% and 7.5% of the issued Equity Shares, that Investor shall have the right to appoint a an observer who may attend each meeting of the
F-star
Board of Directors, any committee of the
F-star
Board of Directors and any meeting of the board of directors of any of
F-star’s
subsidiaries.
Certain of
F-star’s
investors also have an entrenched right to appoint an observer to attend each and any meeting of the
F-star
Board of Directors, any
|
Spring Bank’s amended and restated bylaws provide that a stockholder entitled to vote at the annual meeting of the stockholders may nominate persons for election to the Board of Directors or propose business to be considered by the stockholders at such annual meeting, subject to certain notice and procedural requirements. |
Provision
|
F-star
(Pre-Exchange)
|
Spring Bank (Post-Exchange)
|
||
committee of the
F-star
Board of Directors and any meeting of the board of directors of any of
F-star’s
subsidiaries.
|
||||
Classified Board of Directors |
F-star’s
articles of association do not provide for the division of the
F-star
Board of Directors into staggered classes.
|
Spring Bank’s amended and restated certificate of incorporation provides for the Board of Directors to be divided into three classes, with one class being elected each year at the annual meeting and members of each class holding office for a three-year term. | ||
Removal of Directors |
Under the Companies Act, the
F-star
Board of Directors has the power to call a general meeting of
F-star’s
shareholders and
F-star’s
shareholders have a right to require that the directors exercise this power.
F-star’s
articles of association provide that if the shareholders exercise such sower, the
F-star
Board of Directors must convene the meeting for a date not later than 28 days after the date on which they became subject to the requirement under the Companies Act.
|
Under the amended and restated certificate of incorporation of Spring Bank, a director may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of 66 2/3% of the voting power of all then outstanding shares of voting stock of Spring Bank with the power to vote at an annual election of directors. | ||
Special Meeting of the Stockholders |
Under the Companies Act 2006,
F-star’s
Board has the power to call a general meeting of the shareholders of
F-star.
In addition,
F-star’s
shareholders have a right to require that the directors exercise their power and call a general meeting.
F-star’s
articles of association provide that if the shareholders exercise such power
F-star’s
Board must convene the meeting for a date not later than 28 days after the date on which they became subject to such requirement under the Companies Act.
|
The amended and restated certificate of incorporation of Spring Bank and the amended and restated bylaws of Spring Bank provide that a Special Meeting of the stockholders of Spring Bank may be called, for any purpose or purposes, at any time by the Spring Bank Board, the Chairman of the Board or the Chief Executive Officer, but such Special Meetings may not be called by stockholders or any other person or persons. | ||
Cumulative Voting |
F-star’s
articles of association do not have a provision granting cumulative voting rights in the election of its directors.
|
The DGCL does not provide Spring Bank’s stockholders with the right to cumulate their votes in the election of directors. | ||
Vacancies |
With the exception of the nomination procedures discussed above,
F-star’s
articles of association do not provide
|
The amended and restated certificate of incorporation and amended and restated bylaws |
Provision
|
F-star
(Pre-Exchange)
|
Spring Bank (Post-Exchange)
|
||
specific procedures for filling a vacancy on the
F-star
Board.
|
of Spring Bank provide that, subject to the rights of holders of any series of preferred stock, any vacancy or newly created directorships on the Spring Bank Board will be filled only by a majority of the directors then in office, although less than a quorum, or by a sole remaining director, and will not be filled by the stockholders. A director elected to fill a vacancy will hold office until the next election of the class for which such director will have been chosen, subject to the election and qualification of a successor or until such director’s earlier death, resignation or removal. | |||
Voting Stock |
F-star’s
articles of association provide that the holders of Series A Shares, Seed Preferred Shares and Ordinary Shares are each entitled to one vote for each share held on record.
|
Holders of Spring Bank common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. | ||
Drag Along |
F-star’s
articles of association provide that if the holders of, in aggregate, at least 65% of
F-star’s
Series A Shares, Seed Preferred Shares and ordinary shares (as if they were the same class) held by Investors (a “Qualified Majority”) wish to transfer their
F-star
shares to a third party purchaser, those shareholders are able to require all the other
F-star
shareholders (including optionholders who become shareholders in
F-star
on exercise of their share options) to also sell and transfer all their shares to that third-party purchaser.
|
Spring Bank does not have any drag along terms in place. | ||
Registration Rights |
F-star’s
shareholders’ agreement provides that in the event of an IPO of
F-star’s
shares the Investors will be entitled to certain registration rights, including: (i) two demand registration rights each year; (ii) unlimited piggy back registrations on all registrations by
F-star
for its own account; and (iii) the payment by
F-star
of any registration and legal expenses up to £50,000 (plus value added tax).
|
Provision
|
F-star
(Pre-Exchange)
|
Spring Bank (Post-Exchange)
|
||
from the conversion will rank
pari passu
|
||||
Right of First Refusal |
F-star’s
articles of association provide that, with the exception of transfers to certain permitted transferees, a shareholder who desires to transfer their shares to a third party must notify
F-star
of that intention and then, before the sale, offer those shares to: (i) first, the Investors; and (ii) second, the holders of the ordinary shares (other than the Investors). The sale price will be the price specified by the selling shareholder in its initial sale notice tor a value otherwise agreed by the parties.
Any shares not sold through the above
pre-emption
process, may be sold to the intended third party at the same agreed price provided that certain requirements are satisfied e.g. the transfer cannot be to a competitor of
F-star
|
Spring Bank does not have a right of first refusal in place. | ||
Right of
Co-Sale
|
F-star’s
articles of association provide that where a shareholder who has been through the
pre-emption
process contained in the articles of association (as explained above) wishes to sell more than 2% of the Equity Shares (but less than a number that constitutes a controlling interest), Investors who have not taken up their
pre-emption
rights will be entitled to benefit from a
co-sale
right, enabling them to sell some of their Equity Shares on the same terms proposed by the transferor. The maximum number of shares an Investor can sell is determined as: (X / Y) x Z where:
X = the number of Equity Shares held by the Investor;
Y = the total number of Equity Shares; and
Z = the number of Equity Shares the transferor is proposing to sell.
|
Spring Bank does not have a right of
co-sale
in place.
|
||
Forum Selection |
F-star’s
articles of association do not have a provision regarding forum selection.
|
Spring Bank’s amended and restated certificate of incorporation provides that, unless Spring Bank consents in |
Provision
|
F-star
(Pre-Exchange)
|
Spring Bank (Post-Exchange)
|
||
writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of Spring Bank to Spring Bank or Spring Bank’s stockholders, (iii) any action asserting a claim against Spring Bank or any director or officer or other employee of Spring Bank arising pursuant to any provision of the DGCL, or (iv) any action asserting a claim against Spring Bank or any director or officer or other employee of Spring Bank governed by the internal affairs doctrine. For more information see the section titled “
Description of Spring Bank Capital Stock
|
||||
Indemnification |
F-star’s
articles of association provide that, subject to the Companies Act, each of
F-star’s
directors and other officers are entitled to be indemnified by
F-star
against all liabilities incurred by him in the execution and discharge of his or her duties or in relation to those duties, save that such director or other officer will not be indemnified against: (i) liability incurred by the director to the Company; (ii) liability incurred by the director to pay a fine imposed in criminal proceedings or payable to a regulatory authority in respect of
non-compliance
with any regulatory requirements; or (iii) liability incurred by the director in defending criminal proceedings in which he is convicted, in defending civil proceedings against him from the Company, or in connection with
|
The amended and restated certificate of incorporation of Spring Bank provides that a director of Spring Bank will not be personally liable to Spring Bank or its stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by the DGCL, as amended. The amended and restated certificate of incorporation of Spring Bank further provides that Spring Bank will, to the fullest extent permitted by law, indemnify and advance expenses to any person made or threatened to be made a party to an action, suit or proceeding by reason of |
Provision
|
F-star
(Pre-Exchange)
|
Spring Bank (Post-Exchange)
|
||
application under sections 661(3),(4) or 1157 of the Companies Act.
Subject to certain limited exemptions, the Companies Act renders void an indemnity for a director against any liability attaching to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company of which he or she is a director.
|
the fact that he or she is or was a director or officer of Spring Bank.
The amended and restated bylaws of Spring Bank provide that Spring Bank will indemnify and hold harmless, to the fullest extent permitted by the DGCL, as amended, any director or officer of Spring Bank who was or is made or is threatened to be made a party to any proceeding, except that Spring Bank will be required to indemnify an officer or director in connection with a proceeding initiated by such person only if the proceeding was authorized in the specific case by the Spring Bank Board. These rights are not exclusive of any other rights which such person may have or hereafter acquire under any statute, provision of the certificate of incorporation, the bylaws, agreement, vote of stockholders or disinterested directors or otherwise.
|
|||
Advancement of Expenses |
The Companies Act permits
F-star
to pay or reimburse a director for certain expenditures incurred by that director in the defense of certain proceedings and investigations brought against him in relation to
F-star
or an associated company.
|
The amended and restated certificate of incorporation of Spring Bank provides that, to the fullest extent not prohibited by applicable law, Spring Bank will pay the expenses incurred by any officer or director in defending any proceeding in advance of its final disposition, provided, however, that, to the extent required by law, such payment of expenses in advance of the final disposition of the proceeding will be made only upon receipt of an undertaking by the person to repay all amounts in advance if it should be ultimately determined that the person is not entitled to be indemnified under the amended and restated |
Provision
|
F-star
(Pre-Exchange)
|
Spring Bank (Post-Exchange)
|
||
bylaws of Spring Bank or otherwise. | ||||
Dividends Declaration and Payment of Dividends
|
F-star’s
articles of association provide that
F-star’s
distributable profits in respect of any financial year will, if determined by
F-star’s
Board acting with Qualified Majority Consent, be paid as dividends to
F-star’s
shareholders pro rata to their holding of Equity Shares.
In addition, the
F-star
shareholders’ agreement provides that
F-star
may not declare or make payment of any dividend or distribution without first obtaining the written consent of the holders of more than 65% of shares held by the Investors.
|
Subject to the DGCL, Spring Bank’s Board of Directors may declare any dividend upon the capital stock of Spring Bank. Dividends may be paid in cash, property or capital stock. | ||
General Provisions |
F-star’s
articles of association may be amended by special resolution (being a resolution passed by the holders of at least 75% of the shares voted), as prescribed by applicable law and
F-star’s
articles of association.
In addition, the
F-star
shareholders agreement provides that
F-star
may not amend, modify or repeal any provision of its articles of association without first obtaining the written consent of the holders of more than 65% of shares held by the Investors.
|
Spring Bank’s amended and restated certificate of incorporation may be amended as prescribed by applicable law. Under the DGCL, an amendment to a certificate of incorporation must be approved by a majority of the stock entitled to vote on the amendment (unless a higher vote is required by the corporation’s certificate of incorporation). Spring Bank’s amended and restated bylaws may be amended by the Board of Directors or by the stockholders as provided in the amended and restated certificate of incorporation. | ||
Anti-dilution |
The
F-star
articles of association include anti-dilution rights in favor of holders of Series A Shares.
|
|||
Matters requiring consent |
The
F-star
shareholders’ agreement provides that holders of at least 65% of the shares held by the Investors must first consent to the following matters, before they are implemented:
1. any amendments of
F-star’s
articles of association;
2. the merger, the demerger, change of corporate form or any measures that lead to a
|
Name and Address of Beneficial Owner
|
Number of
Shares Beneficially Owned |
Percentage
Beneficially Owned |
||||||
5%+ Stockholders:
|
||||||||
Ridgeback Capital Investments Ltd.
(1)
|
1,142,900 | 6.6 | % | |||||
Biotechnology Value Fund, L.P.
(2)
|
951,701 | 5.5 | % | |||||
Other Directors and other Named Executive Officers:
|
||||||||
Kurt Eichler
(3)
|
675,239 | 3.9 | % | |||||
R.P. “Kris” Iyer, Ph.D.
(4)
|
580,834 | 3.3 | % | |||||
Martin Driscoll
(5)
|
574,846 | 3.2 | % | |||||
Todd Brady, M.D., Ph.D.
(6)
|
93,120 | * | ||||||
David Arkowitz
(7)
|
78,190 | * | ||||||
Timothy Clackson, Ph.D.
(8)
|
59,606 | * | ||||||
Scott Smith
(9)
|
54,490 | * | ||||||
Pamela Klein, M.D.
(10)
|
7,708 | * | ||||||
All Current Directors and Officers as a Group (10 persons)
(11)
|
2,214,202 | 12.2 | % |
(1) |
This information is based solely on a Schedule 13G filed with the SEC on January 6, 2020. Consists of 1,142,900 shares of common stock beneficially owned by Ridgeback Capital Investments L.P. (“RCILP”). Ridgeback Capital Management LP (“RCM”) and Ridgeback Capital Investments Ltd. (“RCI”) do not own any Shares directly. RCI is the general partner of RCILP. Pursuant to an investment management agreement, RCM maintains investment and voting power with respect to the securities held or controlled by RCI. Wayne Holman, an individual, controls RCM. RCM and RCI may be deemed to own beneficially all of the shares. Each of RCM and RCI disclaim beneficial ownership of any of the securities held by RCILP, except to the extent of any pecuniary interest therein. The address of the principal business office of each of RCILP, RCI and RCM is 500 South Pointe Drive, Suite 220, Miami Beach, Florida 33139.
|
(2) |
This information is based solely on a Schedule 13G/A filed with the SEC on February 14, 2020. Consists of 466,424 shares of common stock beneficially owned by Biotechnology Value Fund, L.P. (“BVF”), 355,132 shares of common stock beneficially owned by Biotechnology Value Fund II, L.P. (“BVF2”), 72,232 shares of common stock beneficially owned by Biotechnology Value Trading Fund OS LP (“Trading Fund OS”) and 57,913 shares of common stock in a certain account managed by BVF Partners L.P. (the “Partners Managed Account”). BVF I GP LLC (“BVF GP”), as the general partner of BVF, may be deemed to beneficially own the shares beneficially owned by BVF. BVF II GP LLC (“BVF2 GP”), as the general partner of BVF2, may be deemed to beneficially own the shares beneficially owned by BVF2. BVF Partners OS Ltd. (“Partners OS”), as the general partner of Trading Fund OS, may be deemed to beneficially own the shares beneficially owned by Trading Fund OS. BVF GP Holdings LLC (“BVF GPH”), as the sole member of each of BVF GP and BVF2 GP, may be deemed to beneficially own the 821,556 shares beneficially owned in the aggregate by BVF and BVF2. Partners, as the investment manager of BVF, BVF2, and Trading Fund OS, and the sole member of Partners OS, may be deemed to beneficially own the 951,701 Shares beneficially owned in the aggregate by BVF, BVF2, Trading Fund OS, and a certain Partners managed account (the “Partners Managed Account”), including 57,913 Shares held in the Partners Managed Account. BVF Inc., as the general partner of Partners, may be deemed to beneficially own the shares beneficially owned by Partners and Mr. Lampert, as a director and officer of BVF Inc., may be deemed to beneficially own the shares beneficially owned by BVF Inc. Each of BVF GP, BVF2 GP, Partners OS, BVF GPH, Partners, BVF Inc. and Mr. Lampert disclaims beneficial ownership of the shares of common stock beneficially owned by BVF, BVF2, Trading Fund OS, and the Partners Managed Accounts. The address of the principal’ business and office of BVF Inc. and certain of its affiliates is 1 Sansome Street, 30th Floor, and San Francisco, California, 94194.
|
(3) |
Consists of (i) 549,273 shares held directly by Mr. Eichler, (ii) 30,875 shares of common stock issuable upon the exercise of options held by Mr. Eichler exercisable within 60 days after August 1, 2020, (iii) 64,100 shares of common stock issuable upon the exercise of warrants held by Mr. Eichler exercisable within 60 days after August 1, 2020, (iv) 19,791 shares of Spring Bank common stock held by Teresa Eichler as custodian for Katherine Eichler UGMA NJ and beneficially owned by Mr. Eichler, of which Mr. Eichler has shared voting and investment power, (v) 10,000 shares held by trusts for which Mr. Eichler serves as the trustee, of which Mr. Eichler has sole voting and investment power, and (vi) 1,200 shares are held by Mr. Eichler as custodian for one of his minor children, of which Mr. Eichler has sole voting and investment power.
|
(4) |
Consists of (i) 50,000 shares of common stock held directly by Dr. Iyer, (ii) 99,584 shares of common stock issuable upon the exercise of options held by Dr. Iyer exercisable within 60 days after August 1, 2020 and (iii) 431,250 shares of common stock held by a family trust in which Dr. Iyer is a trustee and shares voting and investment control.
|
(5) |
Consists of (i) 90,400 shares held by Mr. Driscoll, (ii) 21,900 shares of common stock issuable upon the exercise of warrants held by Mr. Driscoll exercisable within 60 days after August 1, 2020 and (iii) 462,546 shares of common stock issuable upon the exercise of options held by Mr. Driscoll exercisable within 60 days after August 1, 2020.
|
(6) |
Consists of (i) 50,781 shares held by Dr. Brady, (ii) 10,964 shares of common stock issuable upon the exercise of warrants held by Dr. Brady exercisable within 60 days after August 1, 2020 and (iii) 31,375 shares of common stock issuable upon the exercise of options held by Dr. Brady exercisable within 60 days of August 1, 2020.
|
(7) |
Consists of (i) 37,929 shares held by Mr. Arkowitz, (ii) 4,386 shares of common stock issuable upon the exercise of warrants held by Mr. Arkowitz exercisable within 60 days after August 1, 2020 and (iii) 35,875 shares of common stock issuable upon the exercise of options held by Mr. Arkowitz exercisable within 60 days after August 1, 2020.
|
(8) |
Consists of (i) 41,064 shares held by Dr. Clackson and (ii) 18,542 shares of common stock issuable upon the exercise of options held by Dr. Clackson exercisable within 60 days of August 1, 2020.
|
(9) |
Consists of (i) 37,476 shares held by Mr. Smith and (ii) 17,014 shares of common stock issuable upon the exercise of options held by Mr. Smith exercisable within 60 days of August 1, 2020.
|
(10) |
Consists of 7,708 shares of common stock issuable upon the exercise of options held by Dr. Klein exercisable within 60 days of August 1, 2020.
|
(11) |
See footnotes (3) through (10) above. Also includes (i) 63,250 shares of common stock issuable upon the exercise of options held by Garrett Winslow, Spring Bank’s General Counsel and Corporate Secretary, exercisable within 60 days of August 1, 2020, (ii) 9,169 shares directly or indirectly held by Lori Firmani, Spring Bank’s Vice President, Finance, and (iii) 17,750 shares of common stock issuable upon the exercise of options held by Ms. Firmani exercisable within 60 days of August 1, 2020.
|
• |
each person, or group of affiliated persons, who are known by
F-star
to beneficially own more than 5% of the outstanding ordinary shares of
F-star;
|
• |
each of
F-star’s
directors as of August 1, 2020;
|
• |
each of
F-star’s
named executive officers; and
|
• |
all of the current directors and executive officers of
F-star
as a group.
|
Name and Address of Beneficial Owner
(1)
|
Number of
Shares
Beneficially
Owned
(2)
|
Percentage of
Beneficial
Ownership
(3)
|
||||||
Named Executive Officers and Directors
|
||||||||
Eliot Forster, Ph.D.
(4)
|
336,175 | 1.1 | % | |||||
Darlene Deptula-Hicks
(5)
|
96,016 | * | ||||||
Neil Brewis, Ph.D.
(6)
|
216,799 | * | ||||||
Louis Kayitalire, M.D.
(7)
|
82,473 | * | ||||||
Nessan Bermingham, Ph.D.
(8)
|
187,990 | * | ||||||
Edward Benz, M.D.
(9)
|
26,250 | * | ||||||
Jean-Francois Formela, M.D.
(10)
|
— | — | ||||||
Deborah Harland, Ph.D.
(11)
|
— | — | ||||||
Patrick Krol
(12)
|
— | — | ||||||
Geoffrey Race
(13)
|
26,250 | * | ||||||
Helmut Schuehsler, Ph.D.
(14)
|
— | — | ||||||
All current executive officers and directors as a group (11 persons)
|
966,894 | 3.3 | % | |||||
|
|
|
|
|||||
5% and Greater Shareholders
|
||||||||
Entities affiliated with Atlas Venture Fund
(15)
400 Technology Square, 10
th
Floor
Cambridge, MA 02139 |
8,724,748 | 28.58 | % | |||||
Coöperatieve Aescap Venture I, U.A.
(16)
Barbara Strozzilaan 101 1083 HN Amsterdam, Netherlands |
4,613,323 | 15.11 | % | |||||
Entities affiliated with TVM Life Sciences
(17)
Ottostraße 4 80333 Munich, Germany |
3,187,864 | 10.44 | % | |||||
MP Healthcare Venture Management Inc.
(18)
33 Arch Street Boston, MA 02110 |
2,132,634 | 6.99 | % | |||||
Merck Ventures B.V.
(19)
Frankfurter Strasse 250 Darmstadt, 64293, Germany |
3,027,467 | 9.92 | % | |||||
S.R. One, Limited
(20)
29 Farm Street Office # 3.01 London W15FRL, UK |
5,430,570 | 17.79 | % |
* |
Indicates beneficial ownership of less than 1% of the total outstanding
F-star
ordinary shares.
|
(1) |
Unless otherwise indicated, the address of such individual is Eddeva B920, Babraham Research Campus, Cambridge CB22 3AT, UK.
|
(2) |
Applicable number of shares beneficially owned is calculated as of August 1, 2020, including any shares that the individual has the right to acquire within 60 days of August 1, 2020.
|
(3) |
Applicable percentage ownership is based on 17,707,282
F-star
ordinary shares outstanding as of August 1, 2020.
|
(4) |
Consists of (i) 164,978 ordinary shares, (ii) 26,296 shares issuable upon the exercise of options in the legacy GmbH Scheme exercisable within 60 days of August 1, 2020, and (iii) 144,901 shares issuable upon the exercise of options outstanding under the
F-star
EIP exercisable within 60 days of August 1, 2020.
|
(5) |
Consists of 187,990 shares issuable upon the exercise of options in the
F-star
EIP exercisable within 60 days of August 1, 2020.
|
(6) |
Consists of (i) 176,380 ordinary shares, (ii) 20,229 shares issuable upon the exercise of options in the legacy GmbH Scheme, and (iii) 21,312 shares issuable upon the exercise of options outstanding under the 2019
F-star
EIP exercisable within 60 days of August 1, 2020.
|
(7) |
Consists of 82,473 shares issuable upon the exercise of options under the
F-star
EIP exercisable within 60 days of August 1, 2020.
|
(8) |
Consists of 194,055 shares issuable upon the exercise of options in a
Non-qualifying
plan exercisable within 60 days of August 1, 2020. This does not include share capital held by Atlas Venture Fund VII, L.P. or the ordinary shares issuable upon the conversion of the convertible notes held by Atlas Venture Opportunity Fund I., L.P.
|
(9) |
Consists of 26,250 shares issuable upon the exercise of options outstanding under the
F-star
EIP exercisable within 60 days of August 1, 2020.
|
(10) |
This does not include the share capital held by Atlas Venture Fund VII, L.P. or the ordinary shares issuable upon the conversion of the convertible notes held by Atlas Venture Opportunity Fund I., L.P.
|
(11) |
This does not include the share capital held by or the ordinary shares issuable upon the conversion of the convertible notes held by S.R. One, Limited, an indirect, wholly-owned subsidiary of GlaxoSmithKline plc.
|
(12) |
This does not include the share capital held by or the ordinary shares issuable upon the conversion of the convertible notes held by Coöperatieve Aescap Venture I, U.A.
|
(13) |
Consists of 26,250 shares issuable upon the exercise of options outstanding under the
F-star
EIP.
|
(14) |
This does not include the shares held by or the ordinary shares issuable upon the conversion of the convertible notes held by TVM Life Science Ventures VI GmbH & Co. KG and TVM Life Science Ventures VI L.P.
|
(15) |
Consists of (i) 103,611 ordinary shares issuable upon conversion of Series Seed Preferred shares, (ii) 313,661 ordinary shares issuable upon conversion of Series A Preferred shares, (iii) 4,693,801 ordinary shares held by Atlas Venture Fund VII, L.P., and (iv) 3,613,675 ordinary shares issuable upon conversion of $4,300,247 of convertible notes, interest calculated as of September 30, 2020. Atlas Venture Associates VII, L.P. (“AVA VII LP”) is the sole general partner of Atlas Venture Fund VII, L.P. Atlas Venture Associates VII, Inc. (“AVA VII Inc.”) is the sole general partner of AVA VII LP. Nessan Bermingham, Ph.D., a Venture Partner of Atlas Venture, is a member of
F-star’s
board of directors. Dr. Bermingham disclaims beneficial ownership of the shares held by the entities affiliated with Atlas Venture. Jean-Francois Formela, M.D., a partner of Atlas Venture, is a member of
F-star’s
board of directors. Dr. Formela disclaims beneficial ownership of the shares held by the entities affiliated with Atlas Venture.
|
(16) |
Consists of (i) 302,880 ordinary shares issuable upon conversion of Series A Preferred shares, (ii) 3,407,025 ordinary shares, and (iii) 903,418 ordinary shares issuable upon conversion of $1,075,068 of convertible notes, interest calculated as of September 30, 2020.
|
(17) |
Consists of (i) 130,778 ordinary shares issuable upon conversion of Series A Preferred shares, (ii) 1,471,079 ordinary shares held by TVM Life Science Ventures VI GmbH & Co. KG (“TVM VI”), (iii) 36,354 ordinary shares issuable upon conversion of Series A Preferred shares, (iv) 407,833 ordinary shares held by TVM Life Science Ventures VI L.P. (“TVM VI LP”), (v) 894,384 ordinary shares issuable upon conversion of $1,064,318 of convertible notes held by TVM VI, interest calculated as of September 30, 2020, and (vi) 192,363 ordinary shares issuable upon conversion of $294,569 of convertible notes, interest calculated as of September 30, 2020 held by TVM VI LP. Hubert Birner, Stefan Fischer, and Helmut Schuehsler, Ph.D. are members of the investment committee of TVM Life Science Ventures Management VI L.P. (“TVM VI
|
Management”), a special limited partner of each of TVM VI and TVM VI LP, with voting and dispositive power over the shares held by TVM VI and TVM VI LP. |
(18) |
Consists of (i) 100,353 ordinary shares issuable upon conversion of Series A Preferred shares, (ii) 1,128,863 ordinary shares, and (iii) 903,418 ordinary shares issuable upon conversion of $1,075,068 of convertible notes, interest calculated as of September 30, 2020.
|
(19) |
Consists of (i) 99,653 ordinary shares issuable upon conversion of Series A Preferred shares, (ii) 1,120,977 ordinary shares, and (iii) 1,806,837 ordinary shares issuable upon conversion of $2,150,137 of convertible notes, interest calculated as of September 30, 2020. Merck Ventures B.V. is an affiliate of Merck KGaA, Darmstadt, Germany.
|
(20) |
Consists of (i) 148,333 ordinary shares issuable upon conversion of Series A Preferred shares, (ii) 1,668,562 ordinary shares, and (iii) 3,613,675 ordinary shares issuable upon conversion of 4,300,274 of convertible notes, interest calculated as of September 30, 2020. S.R. One, Limited, is an indirect, wholly-owned subsidiary of GlaxoSmithKline plc.
|
• |
each person, or group of affiliated persons, expected by Spring Bank and
F-star
to become the beneficial owner of more than 5% of the outstanding common stock of the combined company;
|
• |
each person expected to be a named executive officer or director of the combined company; and
|
• |
all of the combined company’s executive officers and directors as a group.
|
* |
Indicates beneficial ownership of less than 1% of the total outstanding
F-star
ordinary shares.
|
(1) |
Unless otherwise indicated, the address of such individual is Eddeva B920, Babraham Research Campus, Cambridge CB22 3AT, UK.
|
(2) |
Applicable number of shares of stock beneficially owned is calculated as of August 1, 2020, including any shares of stock that the individual has the right to acquire within 60 days of August 1, 2020.
|
(3) |
Applicable percentage ownership is based on 46,064,451 shares of common stock outstanding as of August 1, 2020.
|
(4) |
Consists of (i) 88,065 ordinary shares, (ii) 14,036 shares issuable upon the exercise of options in the legacy GmbH Scheme exercisable within 60 days of August 1, 2020, and (iii) 77,348 shares issuable upon the exercise of options outstanding under the
F-star
EIP exercisable within 60 days of August 1, 2020.
|
(5) |
Consists of 48,566 shares issuable upon the exercise of options in the
F-star
EIP exercisable within 60 days of August 1, 2020.
|
(6) |
Consists of (i) 94,151 ordinary shares, (ii) 10,798 shares issuable upon the exercise of options in the legacy GmbH Scheme, and (iii) 10,774 shares issuable upon the exercise of options outstanding under the
F-star
EIP exercisable within 60 days of August 1, 2020.
|
(7) |
Consists of 44,024 shares issuable upon the exercise of options under the
F-star
EIP exercisable within 60 days of August 1, 2020.
|
(8) |
Consists of 100,349 shares issuable upon the exercise of options in a
Non-qualifying
plan exercisable within 60 days of August 1, 2020. This does not include share capital held by Atlas Venture Fund VII, L.P. or the ordinary shares issuable upon the conversion of the convertible notes held by Atlas Venture Opportunity Fund I., L.P.
|
(9) |
Consists of 14,012 shares issuable upon the exercise of options outstanding under the
F-star
EIP exercisable within 60 days of August 1, 2020.
|
(10) |
Consists of 14,012 shares issuable upon the exercise of options outstanding under the
F-star
EIP.
|
(11) |
Consists of 7,500 shares of common stock issuable upon the exercise of fully vested and exercisable options held by Dr. Klein.
|
(12) |
This does not include the share capital held by or the ordinary shares issuable upon the conversion of the convertible notes held by Coöperatieve Aescap Venture I, U.A.
|
(13) |
Consists of (i) 50,781 shares held by Dr. Brady, (ii) 10,964 shares of common stock issuable upon the exercise of warrants held by Dr. Brady exercisable within 60 days after August 1, 2020 and (iii) 7,500 shares of common stock issuable upon the exercise of fully vested and exercisable options held by Dr. Brady.
|
(14) |
Consists of (i) 37,929 shares held by Mr. Arkowitz, (ii) 4,386 shares of common stock issuable upon the exercise of warrants held by Mr. Arkowitz exercisable within 60 days after August 1, 2020 and (iii) 7,500 shares of common stock issuable upon the exercise of fully vested and exercisable options held by Mr. Arkowitz.
|
(15) |
Consists of (i) 55,307 ordinary shares issuable upon conversion of Series Seed Preferred shares, (ii) 167,432 ordinary shares issuable upon conversion of Series A Preferred shares, (iii) 2,505,550 ordinary shares held by Atlas Venture Fund VII, L.P., and (iv) 1,499,027 ordinary shares issuable upon conversion of $4,313,425 of convertible notes, interest calculated as of October 15, 2020. Atlas Venture Associates VII, L.P. (“AVA VII LP”) is the sole general partner of Atlas Venture Fund VII, L.P. Atlas Venture Associates VII, Inc. (“AVA VII Inc.”) is the sole general partner of AVA VII LP. Nessan Bermingham, Ph.D., a Venture Partner of Atlas Venture, is a member of
F-star’s
board of directors. Dr. Bermingham disclaims beneficial ownership of the shares held by the entities affiliated with Atlas Venture. Jean-Francois Formela, M.D., a partner of Atlas Venture, is a member of
F-star’s
board of directors. Dr. Formela disclaims beneficial ownership of the shares held by the entities affiliated with Atlas Venture.
|
(16) |
Consists of (i) 55,307 ordinary shares issuable upon conversion of Series Seed Preferred shares, (ii) 167,432 ordinary shares issuable upon conversion of Series A Preferred shares, (iii) 2,505,550 ordinary shares held by Atlas Venture Fund VII, L.P., and (iv) 1,928,979 ordinary shares issuable upon conversion of $4,300,274 of convertible notes, interest calculated as of September 30, 2020. Atlas Venture Associates VII, L.P. (“AVA VII LP”) is the sole general partner of Atlas Venture Fund VII, L.P. Atlas Venture Associates VII, Inc. (“AVA VII Inc.”) is the sole general partner of AVA VII LP. Nessan Bermingham, Ph.D., a Venture Partner of Atlas Venture, is a member of
F-star’s
board of directors. Dr. Bermingham disclaims beneficial ownership of the shares held by the entities affiliated with Atlas Venture. Jean-Francois Formela, M.D., a partner of Atlas Venture, is a member of
F-star’s
board of directors. Dr. Formela disclaims beneficial ownership of the shares held by the entities affiliated with Atlas Venture.
|
(17) |
Consists of (i) 79,180 ordinary shares issuable upon conversion of Series A Preferred shares, (ii) 890,678 ordinary shares, and (iii) 1,928,979 ordinary shares issuable upon conversion of $4,300,274 of convertible notes, interest calculated as of September 30, 2020. S.R. One, Limited, is an indirect, wholly-owned subsidiary of GlaxoSmithKline plc.
|
Spring Bank Pharmaceuticals, Inc.
35 Parkwood Drive, Suite 210
Hopkinton, Massachusetts 01748
Telephone: (508)
473-5993
Attn: General Counsel and Corporate Secretary
|
F-star
Therapeutics Limited
Eddeva B920
Babraham Research Campus
Cambridge, CB22 3AT
United Kingdom
Telephone:
+44-1223
497400
Attn: General Counsel
|
F-star
GAAP Adjusted |
Historic
Spring Bank |
Pro Forma
Adjustments |
Pro Forma
Combined |
Notes | ||||||||||||||||
Assets
|
||||||||||||||||||||
Current assets
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 2.7 | $ | 8.5 | $ | 25.0 | $ | 36.2 | A | |||||||||||
Marketable securities
|
— | 15.0 | — | 15.0 | ||||||||||||||||
Trade and other receivables
|
2.5 | — | — | 2.5 | ||||||||||||||||
Prepaid expenses and other current assets
|
4.2 | 2.7 | — | 6.9 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total current assets
|
9.4 | 26.2 | 25.0 | 60.6 | ||||||||||||||||
Property and equipment, net
|
1.0 | 2.0 | (0.5 | ) | 2.5 | C | ||||||||||||||
Lease right of use assets
|
0.2 | 2.6 | 0.1 | 2.9 | C | |||||||||||||||
Intangible assets, net
|
12.1 | — | 1.0 | 13.1 | C | |||||||||||||||
Other assets
|
0.1 | 0.3 | — | 0.4 | ||||||||||||||||
Goodwill
|
3.9 | — | 1.4 | 5.3 | D | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total assets
|
$ | 26.7 | $ | 31.1 | $ | 27.0 | $ | 84.8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Liabilities and Stockholders’ Equity
|
|
|||||||||||||||||||
Current liabilities:
|
||||||||||||||||||||
Accounts payable
|
$ | 12.3 | $ | 2.5 | — | $ | 14.8 | |||||||||||||
Accrued expenses and other current liabilities
|
0.6 | 2.3 | $ | 6.5 | 9.4 | E | ||||||||||||||
Lease liability
|
0.2 | 0.4 | — | 0.6 | ||||||||||||||||
Convertible notes
|
17.8 | — | (17.8 | ) | — | B | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total current liabilities
|
30.9 | 5.2 | (11.3 | ) | 24.8 | |||||||||||||||
Non-current
liabilities:
|
||||||||||||||||||||
Lease liability, noncurrent
|
— | 2.7 | — | 2.7 | ||||||||||||||||
Other long-term liabilities
|
— | — | 0.4 | 0.4 | C | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total
non-current
liabilities
|
— | 2.7 | 0.4 | 3.1 | ||||||||||||||||
Stockholders’ equity:
|
||||||||||||||||||||
Preferred Stock
|
— | — | — | — | ||||||||||||||||
Common Stock
|
0.2 | — | (0.2 | ) | — | F | ||||||||||||||
Additional
paid-in
capital
|
26.8 | 164.1 | 25.0 | 90.6 | A | |||||||||||||||
17.8 | B | |||||||||||||||||||
(143.1 | ) | E, F | ||||||||||||||||||
Accumulated other comprehensive income
|
— | — | — | — | ||||||||||||||||
Accumulated deficit
|
(31.2 | ) | (140.9 | ) | 140.9 | (33.7 | ) | F | ||||||||||||
(2.5 | ) | E | ||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total stockholders’ equity (deficit)
|
(4.2 | ) | 23.2 | 37.9 | 56.9 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total liabilities and stockholders’ equity
|
$ | 26.7 | $ | 31.1 | $ | 27.0 | $ | 84.8 | ||||||||||||
|
|
|
|
|
|
|
|
F-star
GAAP Adjusted |
Historic
Spring Bank |
Pro Forma
Adjustments |
Pro Forma
Combined |
Notes | ||||||||||||||||
Revenue
|
$ | 1.9 | $ | — | $ | — | $ | 1.9 | ||||||||||||
Operating Expenses:
|
||||||||||||||||||||
Research and development
|
5.9 | 8.5 | — | 14.4 | ||||||||||||||||
General and administrative
|
6.3 | 5.1 | — | 11.4 | ||||||||||||||||
Other operating (income) expense, net
|
1.2 | — | — | 1.2 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total operating expenses
|
13.4 | 13.6 | — | 27.0 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Loss from operations
|
(11.5 | ) | (13.6 | ) | — | (25.1 | ) | |||||||||||||
Interest income (expense), net
|
(0.5 | ) | (0.2 | ) | 0.5 | (0.2 | ) | B | ||||||||||||
Change in fair value of liabilities
|
(1.9 | ) | 0.3 | 1.9 | 0.3 | B | ||||||||||||||
Other
non-operating
income (expense), net
|
— | (1.2 | ) | — | (1.2 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Loss before tax
|
(13.9 | ) | (14.7 | ) | 2.4 | (26.2 | ) | |||||||||||||
Income tax benefit (expense)
|
— | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net loss
|
$ | (13.9 | ) | $ | (14.7 | ) | $ | 2.4 | $ | (26.2 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net loss per share, basic and diluted
|
$ | (0.78 | ) | $ | (0.88 | ) | $ | (0.62 | ) | |||||||||||
|
|
|
|
|
|
|||||||||||||||
Weighted-average common shares outstanding, basic and diluted
|
16,243,171 | 16,787,919 | 41,953,752 | G | ||||||||||||||||
|
|
|
|
|
|
F-star
GAAP Adjusted |
Historic
Spring Bank |
Pro Forma
Adjustments |
Pro Forma
Combined |
Notes | ||||||||||||||||
Revenue
|
$ | 29.9 | $ | — | $ | — | $ | 29.9 | ||||||||||||
Operating Expenses:
|
||||||||||||||||||||
Research and development
|
41.9 | 23.3 | — | 65.2 | ||||||||||||||||
General and administrative
|
21.3 | 9.7 | — | 31.0 | ||||||||||||||||
Other operating (income) expense, net
|
(1.3 | ) | — | — | (1.3 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total operating expenses
|
61.9 | 33.0 | — | 94.9 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Loss from operations
|
(32.0 | ) | (33.0 | ) | — | (65.0 | ) | |||||||||||||
Interest income (expense), net
|
(0.4 | ) | 0.7 | 0.2 | 0.5 | B | ||||||||||||||
Change in fair value of liabilities
|
(1.5 | ) | 8.2 | 1.5 | 8.2 | B | ||||||||||||||
Other
non-operating
income (expense), net
|
— | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Loss before tax
|
(33.9 | ) | (24.1 | ) | 1.7 | (56.3 | ) | |||||||||||||
Income tax benefit (expense)
|
1.5 | — | — | 1.5 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net loss
|
$ | (32.4 | ) | $ | (24.1 | ) | $ | 1.7 | $ | (54.8 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net loss per share, basic and diluted
|
$ | (2.20 | ) | $ | (1.46 | ) | $ | (1.32 | ) | |||||||||||
|
|
|
|
|
|
|||||||||||||||
Weighted-average common shares outstanding, basic and diluted
|
13,734,903 | 16,454,083 | 41,619,916 | G | ||||||||||||||||
|
|
|
|
|
|
1.
|
Description of the Transaction, Basis of Presentation
|
2.
|
Accounting for the Exchange
|
Estimated number of shares to be owned by Spring Bank stockholders
|
17,864,680 | |||
Multiplied by the fair value per share of Spring Bank common stock
|
$ | 1.39 | ||
|
|
|||
Value of common stock
|
24.8 | |||
Contingent value rights
|
0.2 | |||
|
|
|||
Estimated purchase price
|
$ | 25.0 | ||
|
|
Spring
Bank Stock Price |
Purchase
Price |
Goodwill/
(Bargain Purchase Gain) |
||||||||||
Increase of 10%
|
$ | 1.53 | $ | 27.5 | $ | 3.9 | ||||||
Increase of 20%
|
$ | 1.67 | $ | 30.0 | $ | 6.4 | ||||||
Increase of 30%
|
$ | 1.81 | $ | 32.5 | $ | 8.9 | ||||||
Decrease of 10%
|
$ | 1.25 | $ | 22.5 | $ | (1.1 | ) | |||||
Decrease of 20%
|
$ | 1.11 | $ | 20.1 | $ | (3.5 | ) | |||||
Decrease of 30%
|
$ | 0.97 | $ | 17.6 | $ | (6.0 | ) |
Cash and cash equivalents
|
$ | 8.5 | ||
Marketable securities
|
15.0 | |||
Prepaid expenses and other assets
|
3.0 | |||
Property and equipment
|
1.5 | |||
Operating lease right of use asset
|
2.7 | |||
Intangible assets
|
1.0 | |||
Accounts payable, accrued expenses and other liabilities
|
(4.8 | ) | ||
Other long-term liabilities
|
(0.2 | ) | ||
Operating lease liability
|
(3.1 | ) | ||
|
|
|||
Net assets acquired
|
23.6 | |||
Less: preliminary purchase price
|
25.0 | |||
|
|
|||
Goodwill
|
$ | 1.4 | ||
|
|
Note 3
|
Pro Forma Adjustments
|
A. |
Concurrently with the execution of the Exchange Agreement, certain existing investors of
F-star,
pursuant to binding equity commitment letters by and between each investor and
F-star,
agreed to subscribe in a private placement of securities of
F-star
as of immediately prior to the Closing (the
“Pre-Closing
Financing”). This adjustment reflects an expected $25 million in net proceeds from the
Pre-Closing
Financing.
|
B. |
Pursuant to the terms of the Exchange Agreement and immediately prior to the Closing, all issued and outstanding
F-star
convertible promissory notes will convert into
F-star
ordinary shares (the
“F-star
Note Conversion”). This adjustment reflects conversion of
F-star
Convertible Notes into Series A preference shares which will in turn be converted into ordinary
F-star
shares immediately prior to the closing of the Exchange.
F-star
has elected the fair value option for this instrument and the impact of changes in fair value is reflected in historic earnings. For purposes of the pro forma statement of operations, it is assumed that conversion to equity took place on January 1, 2019 and amounts recorded to earnings related to marking this instrument to fair value and interest expense have been reversed.
|
C. |
To reflect estimated fair values of Spring Bank assets acquired and liabilities assumed, including recognition of an indefinite-lived intangible asset for
in-process
research and development. This intangible asset would only be amortized over the respective estimated useful lives of any products that receive appropriate regulatory approvals, if any. Until such time it will be subject to impairment testing. Property, plant and equipment acquired from Spring Bank is expected to be sold shortly after completion of the Exchange and is recorded at estimated fair value less cost to sell. Additionally, a positive adjustment of $0.5 million to align the lease right of use asset and liability has been offset by a negative adjustment of $0.4 million to reflect the fact that Spring Bank’s lease for its headquarters and research facility, which
F-star
intends to sublease, is
off-market.
The right of use asset related to the lease will be amortized over the remaining lease term of seven years. Also, a liability of $0.2 million has been recognized for the estimated fair value of the CVRs provided to Spring Bank shareholders. The estimate of fair value of the CVR is very preliminary, relies significantly on information which is available in the public domain and given the uncertainties inherent this preliminary estimate is highly subject to change as more complete information is obtained. The change in fair value of the CVRs will be updated each reporting period. The Company currently does not have a basis to evaluate the potential impact on earnings prospectively. The related deferred tax effect of these adjustments has also been recognized.
|
D. |
Represents an adjustment to record goodwill resulting from the Exchange. Goodwill represents the excess of the preliminary estimated purchase price over the estimated fair value of Spring Bank identified net assets.
|
E. |
To reflect the accrued liabilities that are assumed by
F-star
of approximately $2.2 million in severance cost payable to Spring Bank officers, $4.3 million for estimated transaction costs directly attributable to the closing of the Exchange. The $4.3 million in transaction costs includes the following costs to be incurred by Spring Bank: $1.0 million for investment banking services, and $0.8 million in legal, accounting and other expenses; and the following are transaction costs to be incurred by
F-star:
$2.5 million in legal, accounting and other expenses. These pro forma transaction costs are not reflected in the unaudited pro forma condensed combined statements of operations as these amounts are not expected to have a continuing effect on the operating results of the combined company.
|
F. |
To reflect (1) the elimination of Spring Bank’s historical stockholders’ equity and (2) the issuance of Spring Bank common shares in exchange for
F-star’s
ordinary shares to finance the acquisition.
|
G. |
Reflects the pro forma weighted average shares outstanding, including the issuance of common shares to effect the Exchange, without giving effect to the proposed reverse stock split. Shares issued to
|
finance the transaction assumes that immediately prior to the closing of the exchange that all of the issued and outstanding Seed Preference Shares and Series A Preference Shares of
F-star
will convert into approximately 1.5 million ordinary shares of
F-star,
and all outstanding
F-star
convertible loan notes will convert into 12.6 million ordinary shares of
F-star.
Shares issued to finance the transaction also assumes the completion of the
Pre-Closing
Financing, described in A above, which will result in the issuance of approximately 16.8 million ordinary shares of
F-star.
|
Note 4
|
Conversion of Reporting Currency for
F-star
Entities
|
Note 5
|
Combination of
F-star
Entities
|
Historical U.S.Dollar 2019 | ||||||||||||||||||||
F-star
(Year Ended Dec. 31) |
GmbH
(Period Ended May 6) |
Beta
(Period Ended May 6) |
Eliminations |
F-Star
Reorganization Combined |
||||||||||||||||
Revenue
|
$ | 27.9 | $ | 10.3 | $ | 10.3 | $ | (18.6 | ) | $ | 29.9 | |||||||||
Operating Expenses:
|
||||||||||||||||||||
Costs related to collaborative arrangements
|
22.8 | 1.6 | 2.5 | (6.9 | ) | 20.0 | ||||||||||||||
Research and development
|
41.7 | 3.4 | 6.6 | (1.0 | ) | 50.7 | ||||||||||||||
General and administrative
|
15.7 | 4.4 | 1.2 | 21.3 | ||||||||||||||||
Other operating (income) expense, net
|
(0.5 | ) | (0.8 | ) | — | (1.3 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total operating expenses
|
79.8 | 8.6 | 10.3 | (7.9 | ) | 90.8 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss from operations
|
(51.8 | ) | 1.6 | — | (10.7 | ) | (60.9 | ) | ||||||||||||
Interest income (expense), net
|
(0.3 | ) | — | (0.1 | ) | (0.4 | ) | |||||||||||||
Change in fair value of liabilities
|
(1.4 | ) | — | — | (1.4 | ) | ||||||||||||||
Other
non-operating
income (expense), net
|
(0.1 | ) | — | — | (0.1 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss before tax
|
(53.6 | ) | 1.6 | (0.1 | ) | (10.7 | ) | (62.8 | ) | |||||||||||
Income tax benefit (expense)
|
8.9 | — | 0.8 | — | 9.7 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss
|
$ | (44.7 | ) | $ | 1.6 | $ | 0.7 | $ | (10.7 | ) | $ | (53.1 | ) | |||||||
|
|
|
|
|
|
|
|
|
|
Allocation by Function | ||||||||||||||||
Expense by
Nature (per Audited Financial Statements) |
Costs Related
to Collaborative Arrangements |
Research and
Development |
General and
Administrative |
|||||||||||||
Raw materials and consumables used
|
$ | 1.5 | $ | — | $ | 1.5 | $ | — | ||||||||
Depreciation, amortization and loss on disposals
|
0.6 | — | 0.3 | 0.3 | ||||||||||||
Employee expenses
|
3.8 | 1.6 | 0.6 | 1.6 | ||||||||||||
Other expenses
|
3.5 | — | 1.0 | 2.5 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 9.4 | $ | 1.6 | $ | 3.4 | $ | 4.4 | ||||||||
|
|
|
|
|
|
|
|
Note 6
|
Conversion of
F-star
from IFRS to U.S. GAAP
|
V. |
Intangible assets have been adjusted by a net $29.2 million ($22.2 million increase for reversal of amortization and impairment – see Y below – followed by a $51.5 million reduction) to remove
in-process
research and development intangible assets acquired outside of a business combination that would not be eligible for capitalization under U.S. GAAP. Related to this adjustment, associated deferred tax liabilities have also been removed and shareholders’ equity has been adjusted accordingly. Note that a significant amount of the equity impact has been reflected in additional paid in capital as the capitalized intangibles relate to a pre
F-star
reorganization settlement of transaction between group entities, the effect of which was booked directly to additional paid in capital under IFRS.
|
W. |
Goodwill has been increased and accumulated deficit has been decreased by $0.4 million to reverse the effect of an impairment charge that would not have been required under U.S. GAAP because under U.S. GAAP the
F-star
business would be considered a single reporting unit for purposes of goodwill impairment testing, while IFRS required testing at a more granular level with multiple cash generating units. The related income statement impact of the impairment reversal has been included in the 2019 as a reduction of research and development expense.
|
X. |
Amounts classified as costs related to collaborative arrangements have been reclassified to research and development expense to conform to the typical presentation of collaboration costs by peer companies reporting under U.S. GAAP.
|
Y. |
Research and development expense, as adjusted to reflect the above reclassification, has been reduced by $17.2 million for the year ended December 31, 2019 and $0.7 million for the six months ended June 30, 2020 to remove amortization and impairment costs related to the purchased
in-process
research and development that would not have been capitalized under U.S. GAAP. Adjustment has also been made for the related income tax effects, reducing the income tax benefit by $1.4 million and $0.4 million for the year ended December 31, 2019 and the six months ended June 30, 2020, respectively. Note that no adjustment was made to increase research and development expense for purchased
in-process
research and development as the capitalized amounts related to transactions outside of the periods covered by the income statements presented.
|
Z. |
Income tax benefit and research and development expense have been decreased to reclassify refundable tax credits of $5.1 million and $3.4 million for the year ended December 31, 2019 and the six months ended June 30, 2020, respectively, that are presented in the income tax line under IFRS, but are not considered to be an element of income tax accounting under U.S. GAAP.
|
F-Star
IFRS |
Adjustments |
F-star
GAAP Adjusted |
Notes | |||||||||||||
Assets
|
||||||||||||||||
Current assets
|
||||||||||||||||
Cash and cash equivalents
|
$ | 2.7 | $ | — | $ | 2.7 | ||||||||||
Marketable securities
|
— | — | — | |||||||||||||
Trade and other receivables
|
2.5 | — | 2.5 | |||||||||||||
Prepaid expenses and other current assets
|
4.2 | — | 4.2 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total current assets
|
9.4 | — | 9.4 | |||||||||||||
Property and equipment, net
|
1.0 | — | 1.0 | |||||||||||||
Lease right of use assets
|
0.2 | — | 0.2 | |||||||||||||
Intangible assets, net
|
41.3 | (29.2 | ) | 12.1 | V, Y | |||||||||||
Other assets
|
0.1 | — | 0.1 | |||||||||||||
Goodwill
|
3.5 | 0.4 | 3.9 | W | ||||||||||||
|
|
|
|
|
|
|||||||||||
Total assets
|
$ | 55.5 | $ | (28.8 | ) | $ | 26.7 | |||||||||
|
|
|
|
|
|
|||||||||||
Liabilities and Stockholders’ Equity
|
|
|||||||||||||||
Current liabilities:
|
||||||||||||||||
Accounts payable
|
$ | 12.3 | $ | — | $ | 12.3 | ||||||||||
Accrued expenses and other current liabilities
|
0.6 | — | 0.6 | |||||||||||||
Lease liability
|
0.2 | — | 0.2 | |||||||||||||
Convertible notes
|
17.8 | — | 17.8 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total current liabilities
|
30.8 | — | 30.8 | |||||||||||||
Non-current
liabilities:
|
||||||||||||||||
Lease liability, noncurrent
|
— | — | — | |||||||||||||
Other long-term liabilities
|
1.6 | (1.6 | ) | — | V | |||||||||||
|
|
|
|
|
|
|||||||||||
Total
non-current
liabilities
|
1.6 | (1.6 | ) | — | ||||||||||||
Stockholders’ equity:
|
||||||||||||||||
Preferred Stock
|
— | — | — | |||||||||||||
Common Stock
|
0.2 | — | 0.2 | |||||||||||||
Additional
paid-in
capital
|
55.9 | (29.1 | ) | 26.8 | V | |||||||||||
Accumulated other comprehensive income
|
— | — | — | |||||||||||||
Accumulated deficit
|
(33.1 | ) | 1.9 | (31.2 | ) | V, W | ||||||||||
|
|
|
|
|
|
|||||||||||
Total stockholders’ equity (deficit)
|
23.0 | (27.2 | ) | (4.2 | ) | |||||||||||
|
|
|
|
|
|
|||||||||||
Total liabilities and stockholders’ equity
|
$ | 55.5 | $ | (28.8 | ) | $ | 26.7 | |||||||||
|
|
|
|
|
|
F-Star
IFRS |
Adjustments |
F-star
GAAP Adjusted |
Notes | |||||||||||||
Revenue
|
$ | 1.9 | $ | — | $ | 1.9 | ||||||||||
Operating Expenses:
|
||||||||||||||||
Cost related to collaborative arrangements
|
0.4 | (0.4 | ) | — | X | |||||||||||
Research and development
|
9.3 | (3.4 | ) | 5.9 | W, X, Y, Z | |||||||||||
General and administrative
|
6.3 | — | 6.3 | |||||||||||||
Other operating (income) expense, net
|
1.2 | — | 1.2 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total operating expenses
|
17.2 | (3.8 | ) | 13.4 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Loss from operations
|
(15.3 | ) | — | (11.5 | ) | |||||||||||
Interest income (expense), net
|
(0.5 | ) | — | (0.5 | ) | |||||||||||
Change in fair value of liabilities
|
(1.9 | ) | — | (1.9 | ) | |||||||||||
Other
non-operating
income (expense), net
|
— | — | — | |||||||||||||
|
|
|
|
|
|
|||||||||||
Loss before tax
|
(17.7 | ) | (3.8 | ) | (13.9 | ) | ||||||||||
Income tax benefit (expense)
|
3.4 | 3.4 | — | Y, Z | ||||||||||||
|
|
|
|
|
|
|||||||||||
Net loss
|
$ | (14.3 | ) | $ | (0.4 | ) | $ | (13.9 | ) | |||||||
|
|
|
|
|
|
F-Star
Combined IFRS
(1)
|
Adjustments |
F-Star
GAAP Adjusted |
Notes | |||||||||||||
Revenue
|
$ | 29.9 | $ | — | $ | 29.9 | ||||||||||
Operating Expenses:
|
||||||||||||||||
Cost related to collaborative arrangements
|
20.0 | (20.0 | ) | — | X | |||||||||||
Research and development
|
50.7 | (8.8 | ) | 41.9 | W, X, Y, Z | |||||||||||
General and administrative
|
21.3 | 21.3 | ||||||||||||||
Other operating (income) expense, net
|
(1.3 | ) | (1.3 | ) | ||||||||||||
|
|
|
|
|
|
|||||||||||
Total operating expenses
|
90.8 | (28.8 | ) | 61.9 | ||||||||||||
|
|
|
|
|||||||||||||
Loss from operations
|
(60.9 | ) | (32.0 | ) | ||||||||||||
Interest income (expense), net
|
(0.4 | ) | (0.4 | ) | ||||||||||||
Change in fair value of liabilities
|
(1.5 | ) | (1.5 | ) | ||||||||||||
Other
non-operating
income (expense), net
|
— | — | ||||||||||||||
|
|
|
|
|
|
|||||||||||
Loss before tax
|
(62.8 | ) | (33.9 | ) | ||||||||||||
Income tax benefit (expense)
|
9.7 | (8.2 | ) | 1.5 | Y, Z | |||||||||||
|
|
|
|
|
|
|||||||||||
Net loss
|
$ | (53.1 | ) | $ | 20.6 | $ | (32.5 | ) | ||||||||
|
|
|
|
|
|
(1) |
See Note 5 for discussion of the
F-star
reorganization and combination of
F-star
and predecessor entities.
|
Page
|
||||
Audited Financial Statements
|
||||
F-2 | ||||
Consolidated Financial Statements:
|
||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 |
F-28 | ||||
F-29 | ||||
F-30 | ||||
F-32 | ||||
F-33 |
December 31,
|
||||||||
2019
|
2018
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 28,709 | $ | 14,724 | ||||
Marketable securities
|
25,746 | 32,914 | ||||||
Prepaid expenses and other current assets
|
3,522 | 1,649 | ||||||
|
|
|
|
|||||
Total current assets
|
57,977 | 49,287 | ||||||
Marketable securities, long-term
|
— | 16,804 | ||||||
Property and equipment, net
|
2,234 | 2,319 | ||||||
Operating lease
right-of-use
|
2,717 | — | ||||||
Restricted cash
|
234 | 234 | ||||||
Other assets
|
35 | 167 | ||||||
|
|
|
|
|||||
Total
|
$ | 63,197 | $ | 68,811 | ||||
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 2,210 | $ | 1,880 | ||||
Accrued expenses and other current liabilities
|
2,438 | 2,367 | ||||||
Accrued interest payable
|
403 | — | ||||||
Operating lease liabilities, current
|
355 | — | ||||||
|
|
|
|
|||||
Total current liabilities
|
5,406 | 4,247 | ||||||
Convertible term loan, net of unamortized discount
|
19,070 | — | ||||||
Warrant liabilities
|
299 | 8,511 | ||||||
Operating lease liabilities, noncurrent
|
2,869 | — | ||||||
Other long-term liabilities
|
27 | 193 | ||||||
|
|
|
|
|||||
Total liabilities
|
27,671 | 12,951 | ||||||
|
|
|
|
|||||
Commitments and contingencies (Note 12)
|
||||||||
Stockholders’ equity:
|
||||||||
Preferred stock, $0.0001 par value—authorized, 10,000,000 shares at December 31, 2019 and 2018; no shares issued or outstanding at December 31, 2019 and 2018
|
— | — | ||||||
Common stock, $0.0001 par value—authorized, 200,000,000 shares at December 31, 2019 and 2018; 16,513,763 and 16,434,614 shares issued and outstanding outstanding at December 31, 2019 and 2018, respectively
|
2 | 2 | ||||||
Additional
paid-in
capital
|
161,924 | 157,931 | ||||||
Accumulated deficit
|
(126,165 | ) | (102,068 | ) | ||||
Accumulated other comprehensive loss
|
(235 | ) | (5 | ) | ||||
|
|
|
|
|||||
Total stockholders’ equity
|
35,526 | 55,860 | ||||||
|
|
|
|
|||||
Total
|
$ | 63,197 | $ | 68,811 | ||||
|
|
|
|
Year Ended December 31,
|
||||||||
2019
|
2018
|
|||||||
Operating expenses:
|
||||||||
Research and development
|
$ | 23,270 | $ | 19,751 | ||||
General and administrative
|
9,751 | 8,719 | ||||||
|
|
|
|
|||||
Total operating expenses
|
33,021 | 28,470 | ||||||
|
|
|
|
|||||
Loss from operations
|
(33,021 | ) | (28,470 | ) | ||||
Other income (expense):
|
||||||||
Interest income
|
1,254 | 999 | ||||||
Interest expense
|
(542 | ) | — | |||||
Change in fair value of warrant liabilities
|
8,212 | 4,617 | ||||||
|
|
|
|
|||||
Net loss
|
(24,097 | ) | (22,854 | ) | ||||
Unrealized gain (loss) on marketable securities
|
(230 | ) | 18 | |||||
|
|
|
|
|||||
Comprehensive loss
|
$ | (24,327 | ) | $ | (22,836 | ) | ||
|
|
|
|
|||||
Net loss per common share:
|
||||||||
Basic
|
$ | (1.46 | ) | $ | (1.59 | ) | ||
|
|
|
|
|||||
Diluted
|
$ | (1.46 | ) | $ | (1.88 | ) | ||
|
|
|
|
|||||
Weighted-average number of shares outstanding:
|
||||||||
Basic
|
16,454,083 | 14,372,174 | ||||||
|
|
|
|
|||||
Diluted
|
16,454,083 | 14,618,976 | ||||||
|
|
|
|
Common Stock
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Other
Comprehensive
Income (Loss)
|
Total
Stockholders’
Equity
|
||||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||
Balance at December 31, 2017
|
12,961,993 | $ | 1 | $ | 113,984 | $ | (79,214 | ) | $ | (23 | ) | $ | 34,748 | |||||||||||
Stock-based compensation
|
— | — | 2,662 | — | — | 2,662 | ||||||||||||||||||
Issuance of common stock for services rendered
|
9,213 | — | 114 | — | — | 114 | ||||||||||||||||||
Issuance of common stock in connection with offering, net of issuance costs
|
3,246,079 | 1 | 37,959 | — | — | 37,960 | ||||||||||||||||||
Issuance of common stock in connection with
at-the-market
|
217,329 | — | 3,212 | — | — | 3,212 | ||||||||||||||||||
Net unrealized gain on marketable securities
|
— | — | — | — | 18 | 18 | ||||||||||||||||||
Net loss
|
— | — | — | (22,854 | ) | — | (22,854 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2018
|
16,434,614 | $ | 2 | $ | 157,931 | $ | (102,068 | ) | $ | (5 | ) | $ | 55,860 | |||||||||||
Stock-based compensation
|
— | — | 3,130 | — | — | 3,130 | ||||||||||||||||||
Issuance of common stock for services rendered
|
78,549 | — | 261 | — | — | 261 | ||||||||||||||||||
Issuance of common stock in connection with
at-the-market
|
600 | — | 6 | — | — | 6 | ||||||||||||||||||
Issuance of warrants in connection with term loan
|
— | — | 552 | — | — | 552 | ||||||||||||||||||
Issuance of warrants to a service provider
|
— | — | 19 | — | — | 19 | ||||||||||||||||||
Offering costs in connection with common stock offering
|
— | — | 25 | — | — | 25 | ||||||||||||||||||
Net unrealized loss on marketable securities
|
— | — | — | — | (230 | ) | (230 | ) | ||||||||||||||||
Net loss
|
— | — | — | (24,097 | ) | — | (24,097 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 30, 2019
|
16,513,763 | $ | 2 | $ | 161,924 | $ | (126,165 | ) | $ | (235 | ) | $ | 35,526 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||
2019
|
2018
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$ | (24,097 | ) | $ | (22,854 | ) | ||
Adjustments for:
|
||||||||
Depreciation and amortization
|
357 | 288 | ||||||
Loss on disposal of property and equipment
|
— | 52 | ||||||
Operating lease
right-of-use
|
263 | — | ||||||
Change in fair value of warrant liabilities
|
(8,212 | ) | (4,617 | ) | ||||
Non-cash
interest expense
|
86 | 337 | ||||||
Non-cash
investment income
|
(28 | ) | — | |||||
Non-cash
stock-based compensation
|
3,367 | 2,776 | ||||||
Non-cash
issuance of warrants to a service provider
|
19 | — | ||||||
Changes in operating assets and liabilities:
|
||||||||
Prepaid expenses and other current assets
|
(1,873 | ) | (1,069 | ) | ||||
Other assets
|
132 | (132 | ) | |||||
Accounts payable
|
330 | 180 | ||||||
Accrued expenses and other liabilities
|
358 | (205 | ) | |||||
Accrued interest payable
|
403 | — | ||||||
Operating lease liabilities
|
(160 | ) | — | |||||
|
|
|
|
|||||
Net cash used in operating activities
|
(29,055 | ) | (25,244 | ) | ||||
|
|
|
|
|||||
Cash flows from investing activities:
|
||||||||
Proceeds from sale of marketable securities
|
38,770 | 34,869 | ||||||
Purchases of marketable securities
|
(15,000 | ) | (58,000 | ) | ||||
Purchases of property and equipment
|
(272 | ) | (1,972 | ) | ||||
|
|
|
|
|||||
Net cash provided by (used in) investing activities
|
23,498 | (25,103 | ) | |||||
|
|
|
|
|||||
Cash flows from financing activities:
|
||||||||
Proceeds from term loan and warrants
|
20,000 | — | ||||||
Issuance costs in connection with term loan and warrants
|
(464 | ) | — | |||||
Proceeds from issuance of common stock, net of issuance costs
|
— | 37,960 | ||||||
Proceeds from issuance of common stock in connection with
at-the-market
|
6 | 3,212 | ||||||
|
|
|
|
|||||
Cash provided by financing activities
|
19,542 | 41,172 | ||||||
|
|
|
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
13,985 | (9,175 | ) | |||||
Cash, cash equivalents and restricted cash, beginning of period
|
14,958 | 24,133 | ||||||
|
|
|
|
|||||
Cash, cash equivalents and restricted cash, end of period
|
$ | 28,943 | $ | 14,958 | ||||
|
|
|
|
|||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid for taxes
|
$ | 30 | $ | 3 | ||||
|
|
|
|
|||||
Cash paid for interest, net
|
$ | 53 | $ | — | ||||
|
|
|
|
1.
|
NATURE OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Asset Category
|
Useful Life
|
|
Equipment |
5-7
years
|
|
Furniture and fixtures | 5 years | |
Leasehold improvements |
Lesser of 10 years or the remaining
term of the respective lease
|
• |
expenses incurred under agreements with third parties, including contract research organizations, or CROs, that conduct research, preclinical activities and clinical trials on the Company’s behalf as well as contract manufacturing organizations, or CMOs, that manufacture drug products for use in the Company’s preclinical and clinical trials;
|
• |
salaries, benefits and other related costs, including stock-based compensation expense, for personnel in the Company’s research and development functions;
|
• |
costs of outside consultants, including their fees, stock-based compensation and related travel expenses;
|
• |
the cost of laboratory supplies and acquiring, developing and manufacturing preclinical study and clinical trial materials;
|
• |
costs related to compliance with regulatory requirements; and
|
• |
facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.
|
2.
|
NET LOSS PER SHARE
|
Year Ended
December 31,
|
||||
2019
|
||||
Net loss
|
$ | (24,097 | ) | |
Weighted-average number of shares outstanding - basic and diluted
|
16,454,083 | |||
Net loss per common share - basic and diluted
|
$ | (1.46 | ) |
Year Ended
December 31,
|
||||
2018
|
||||
Net loss
|
$ | (22,854 | ) | |
Less: decrease in change in fair value of warrant liabilities
|
(4,617 | ) | ||
|
|
|||
Net loss available to common shareholders
|
$ | (27,471 | ) | |
|
|
|||
Weighted-average number of shares outstanding:
|
||||
Basic
|
14,372,174 | |||
Effect of dilutive securities:
|
||||
Common stock warrants
|
246,802 | |||
|
|
|||
Dilutive potential common shares
|
14,618,976 | |||
|
|
|||
Net loss per common share:
|
||||
Basic
|
$ | (1.59 | ) | |
|
|
|||
Diluted
|
$ | (1.88 | ) | |
|
|
Year Ended December 31,
|
||||||||
2019
|
2018
|
|||||||
Convertible debt
|
2,329,143 | — | ||||||
Common stock warrants
|
1,927,124 | 28,347 | ||||||
Stock options
|
1,901,665 | 1,349,565 |
3.
|
INVESTMENTS
|
December 31,
|
December 31,
|
|||||||
2019
|
2018
|
|||||||
Investments - Current:
|
||||||||
Debt securities - available for sale
|
$ | 25,746 | $ | 32,914 | ||||
|
|
|
|
|||||
Total
|
$ | 25,746 | $ | 32,914 | ||||
|
|
|
|
|||||
Investments - Noncurrent:
|
||||||||
Debt securities - available for sale
|
$ | — | $ | 16,804 | ||||
|
|
|
|
|||||
Total
|
$ | — | $ | 16,804 | ||||
|
|
|
|
At December 31, 2019
|
||||||||||||||||
Cost
Basis
|
Unrealized
Gains
|
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
Investments - Current:
|
||||||||||||||||
Corporate bonds
|
$ | 4,990 | $ | — | $ | (58 | ) | $ | 4,932 | |||||||
United States treasury securities
|
20,979 | — | (165 | ) | 20,814 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 25,969 | $ | — | $ | (223 |
)
(1)
|
$ | 25,746 | |||||||
|
|
|
|
|
|
|
|
(1)
|
$(12) of unrealized losses are included in the cash and cash equivalents balance as of December 31, 2019, a total of $(235) net unrealized losses at December 31, 2019.
|
At December 31, 2018
|
||||||||||||||||
Cost
Basis
|
Unrealized
Gains
|
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
Investments - Current:
|
||||||||||||||||
Corporate bonds
|
$ | 16,028 | $ | — | $ | (19 | ) | $ | 16,009 | |||||||
United States treasury securities
|
16,913 | — | (8 | ) | 16,905 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 32,941 | $ | — | $ | (27 | ) | $ | 32,914 | |||||||
|
|
|
|
|
|
|
|
|||||||||
Investments - Noncurrent:
|
||||||||||||||||
Corporate bonds
|
$ | 4,930 | $ | 2 | $ | — | $ | 4,932 | ||||||||
United States treasury securities
|
11,852 | 20 | — | 11,872 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 16,782 | $ | 22 | $ | — | $ | 16,804 | ||||||||
|
|
|
|
|
|
|
|
Amortized Cost
|
Fair Value
|
|||||||
Due in one year or less
|
$ | 25,969 | $ | 25,746 | ||||
Due after one year through two years
|
— | — | ||||||
|
|
|
|
|||||
Total
|
$ | 25,969 | $ | 25,746 | ||||
|
|
|
|
4.
|
PROPERTY AND EQUIPMENT, NET
|
December 31,
2019 |
December 31,
2018 |
|||||||
Equipment
|
$ | 1,278 | $ | 1,064 | ||||
Furniture and fixtures
|
450 | 400 | ||||||
Leasehold improvements
|
1,356 | 1,347 | ||||||
|
|
|
|
|||||
Total property and equipment
|
3,084 | 2,811 | ||||||
Less: accumulated depreciation
|
(850 | ) | (492 | ) | ||||
|
|
|
|
|||||
Property and equipment, net
|
$ | 2,234 | $ | 2,319 | ||||
|
|
|
|
5.
|
FAIR VALUE MEASUREMENTS
|
Fair Value Measurement at
December 31, 2019
|
||||||||||||||||
Carrying
Value
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant
other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||||||||||
Assets:
|
||||||||||||||||
Money market funds
(1)
|
$ | 21,065 | $ | 21,065 | $ | — | $ | — | ||||||||
United States treasury securities
(1)
|
5,982 | 5,982 | ||||||||||||||
Fixed income securities
|
25,746 | — | 25,746 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 52,793 | $ | 21,065 | $ | 31,728 | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities:
|
||||||||||||||||
Warrant liabilities
|
$ | 299 | $ | — | $ | — | $ | 299 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 299 | $ | — | $ | — | $ | 299 | ||||||||
|
|
|
|
|
|
|
|
Fair Value Measurement at
December 31, 2018
|
||||||||||||||||
Carrying
Value
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant
other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||||||||||
Assets:
|
||||||||||||||||
Money market funds
(1)
|
$ | 13,264 | $ | 13,264 | $ | — | $ | — | ||||||||
Fixed income securities
|
49,718 | — | 49,718 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 62,982 | $ | 13,264 | $ | 49,718 | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities:
|
||||||||||||||||
Warrant liabilities
|
$ | 8,511 | $ | — | $ | — | $ | 8,511 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 8,511 | $ | — | $ | — | $ | 8,511 | ||||||||
|
|
|
|
|
|
|
|
(1) |
Money market funds and United States treasury securities with maturities of 90 days or less at the date of purchase are included within cash and cash equivalents in the accompanying consolidated balance sheets and are recognized at fair value.
|
November Private
Placement Warrants
|
||||
Balance at December 31, 2017
|
$ | 13,128 | ||
Change in fair value
|
(4,617 | ) | ||
|
|
|||
Balance at December 31, 2018
|
$ | 8,511 | ||
Change in fair value
|
(8,212 | ) | ||
|
|
|||
Balance at December 31, 2019
|
$ | 299 | ||
|
|
6.
|
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
|
December 31,
|
December 31,
|
|||||||
2019
|
2018
|
|||||||
Preclinical and clinical studies
|
$ | 1,473 | $ | 941 | ||||
Compensation and benefits
|
614 | 830 | ||||||
Accounting and legal
|
240 | 227 | ||||||
Other
|
111 | 369 | ||||||
|
|
|
|
|||||
Total accrued expenses and other current liabilities
|
$ | 2,438 | $ | 2,367 | ||||
|
|
|
|
7.
|
WARRANTS
|
For the Year Ended
December 31,
|
||||||||
2019
|
2018
|
|||||||
Risk-free interest rate
|
1.6 | % | 2.5 | % | ||||
Expected term (in years)
|
1.9 | 2.9 | ||||||
Expected volatility
|
100.0 | % | 78.1 | % | ||||
Expected dividend yield
|
0 | % | 0 | % |
Warrants
|
||||
Outstanding at December 31, 2017
|
1,787,124 | |||
Grants
|
— | |||
Exercises
|
— | |||
Expirations/cancellations
|
(125,000 | ) | ||
|
|
|||
Outstanding at December 31, 2018
|
1,662,124 | |||
Grants
|
265,000 | |||
Exercises
|
— | |||
Expirations/cancellations
|
— | |||
|
|
|||
Outstanding at December 31, 2019
|
1,927,124 | |||
|
|
8.
|
STOCKHOLDERS’ EQUITY
|
Options
|
Weighted-
Average
Exercise Price
Per Share
|
Aggregate
Intrinsic
Value
|
||||||||||
Options outstanding at December 31, 2017
|
988,565 | $ | 10.83 | $ | 2,617,859 | |||||||
Granted
|
311,000 | 12.28 | — | |||||||||
Exercised
|
— | — | — | |||||||||
Cancelled
|
— | — | — | |||||||||
Options outstanding at December 31, 2018
|
1,299,565 | $ | 11.18 | $ | 2,617,859 | |||||||
Granted
|
395,500 | 9.61 | — | |||||||||
Exercised
|
— | — | — | |||||||||
Cancelled
|
(22,750 | ) | 13.36 | — | ||||||||
|
|
|||||||||||
Options outstanding at December 31, 2019
|
1,672,315 | $ | 10.78 | $ | — | |||||||
|
|
|
|
|
|
|||||||
Options exercisable at December 31, 2019
|
1,072,811 | $ | 11.13 | $ | — | |||||||
|
|
|
|
|
|
For the Year Ended
December 31,
|
||||||||
2019
|
2018
|
|||||||
Risk-free interest rate
|
2.5 | % | 2.5 | % | ||||
Expected term (in years)
|
5.9 | 5.9 | ||||||
Expected volatility
|
81.1 | % | 82.5 | % | ||||
Expected dividend yield
|
0 | % | 0 | % |
Restricted
Stock Units
|
Weighted-Average
Grant Date
Fair Value
|
|||||||
Total nonvested units at December 31, 2018
|
— | $ | — | |||||
Granted
|
203,700 | 8.49 | ||||||
Vested
|
— | — | ||||||
Cancelled
|
(64,350 | ) | 9.83 | |||||
|
|
|
|
|||||
Total nonvested units at December 31, 2019
|
139,350 | $ | 7.86 | |||||
|
|
|
|
For the Year Ended
December 31, |
||||||||
2019
|
2018
|
|||||||
Stock-based compensation:
|
||||||||
Research and development
|
$ | 1,223 | $ | 843 | ||||
General and administrative
|
2,144 | 1,933 | ||||||
|
|
|
|
|||||
Total Stock-based compensation
|
$ | 3,367 | $ | 2,776 | ||||
|
|
|
|
December 31,
|
||||||||
2019
|
2018
|
|||||||
IPO Warrants
|
28,347 | 28,347 | ||||||
November Private Placement Warrants
|
1,633,777 | 1,633,777 | ||||||
Convertible Term Loan and Accrued Interest Payable
|
2,329,143 | — | ||||||
Pontifax Warrants
|
250,000 | — | ||||||
September 2019 Warrants
|
15,000 | — | ||||||
2015 Amended and Restated Stock Incentive Plan
|
2,160,338 | 2,238,887 | ||||||
Inducement Awards
|
90,000 | 50,000 | ||||||
|
|
|
|
|||||
Total
|
6,506,605 | 3,951,011 | ||||||
|
|
|
|
9.
|
CONVERTIBLE TERM LOAN
|
December 31,
2019
|
||||
2020
|
$ | — | ||
2021
|
2,500 | |||
2022
|
10,000 | |||
2023
|
7,500 | |||
|
|
|||
Total principal payments
|
$ | 20,000 | ||
Less: unamortized debt discount
|
(930 | ) | ||
|
|
|||
Term loan, long-term
|
$ | 19,070 | ||
|
|
10.
|
LEASES
|
For the Year Ended
December 31,
|
||||
2019
|
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
||||
Operating cash flow from operating leases (in thousands)
|
$ | 417 | ||
Right-of-use
|
||||
Operating leases (in thousands)
|
$ | 2,980 | ||
Weighted Average Remaining Lease Term
|
||||
Operating leases
|
8.3 years | |||
Weighted Average Discount Rate
|
||||
Operating leases
|
8.0 | % |
Year
|
||||
2020
|
$ | 588 | ||
2021
|
508 | |||
2022
|
450 | |||
2023
|
462 | |||
2024
|
474 | |||
Thereafter
|
1,931 | |||
|
|
|||
Total lease payments
|
$ | 4,413 | ||
Less: present value discount
|
(1,189 | ) | ||
|
|
|||
Total
|
$ | 3,224 | ||
|
|
Year
|
||||
2019
|
$ | 417 | ||
2020
|
588 | |||
2021
|
508 | |||
2022
|
450 | |||
2023
|
462 | |||
Thereafter
|
2,405 | |||
|
|
|||
Total minimum lease payments
|
$ | 4,830 | ||
|
|
11.
|
INCOME TAXES
|
Year Ended December 31,
|
||||||||
2019
|
2018
|
|||||||
U.S. statutory federal income tax rate
|
(21.0 | )% | (21.0 | )% | ||||
State income taxes, net of federal income tax benefit
|
(8.4 | )% | (7.6 | )% | ||||
Warrant adjustment
|
(7.2 | )% | (4.2 | )% | ||||
Permanent items
|
0.7 | % | 0.6 | % | ||||
R&D credit
|
(0.6 | )% | (0.6 | )% | ||||
Change in valuation allowance
|
36.5 | % | 32.7 | % | ||||
Change in federal rate impact
|
— | — | ||||||
Other
|
— | 0.1 | % | |||||
|
|
|
|
|||||
Effective income tax rate
|
0.0 | % | 0.0 | % | ||||
|
|
|
|
December 31,
|
||||||||
2019
|
2018
|
|||||||
Net operating loss carryforwards
|
$ | 31,637 | $ | 23,582 | ||||
Research and development credits
|
798 | 649 | ||||||
Lease liability
|
881 | — | ||||||
Accrued expenses
|
173 | 209 | ||||||
License payments
|
561 | 612 | ||||||
Stock based compensation
|
2,004 | 1,383 | ||||||
Other – net
|
101 | 138 | ||||||
Deferred tax asset
|
36,155 | 26,573 | ||||||
|
|
|
|
|||||
Valuation allowance
|
(35,389 | ) | (26,536 | ) | ||||
Net deferred tax asset
|
$ | 766 | $ | 37 | ||||
|
|
|
|
|||||
Right of use assets
|
$ | (742 | ) | $ | — | |||
|
|
|
|
|||||
Property and equipment
|
(24 | ) | (37 | ) | ||||
|
|
|
|
|||||
Net deferred tax liability
|
$ | (766 | ) | $ | — | |||
|
|
|
|
|||||
Net deferred tax asset and liability
|
$ | — | $ | — | ||||
|
|
|
|
12.
|
COMMITMENTS AND CONTINGENCIES
|
13.
|
401(k) PLAN
|
14.
|
RELATED PARTY TRANSACTIONS
|
15.
|
SUBSEQUENT EVENTS
|
June 30,
2020 |
December 31,
2019 |
|||||||
ASSETS
|
|
(unaudited) |
|
|||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 8,531 | $ | 28,709 | ||||
Marketable securities
|
14,990 | 25,746 | ||||||
Prepaid expenses and other current assets
|
2,717 | 3,522 | ||||||
|
|
|
|
|||||
Total current assets
|
26,238 | 57,977 | ||||||
Property and equipment, net
|
2,043 | 2,234 | ||||||
Operating lease
right-of-use
|
2,576 | 2,717 | ||||||
Restricted cash
|
234 | 234 | ||||||
Other assets
|
— | 35 | ||||||
|
|
|
|
|||||
Total
|
$ | 31,091 | $ | 63,197 | ||||
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 2,530 | $ | 2,210 | ||||
Accrued expenses and other current liabilities
|
2,239 | 2,438 | ||||||
Accrued interest payable
|
— | 403 | ||||||
Operating lease liabilities, current
|
364 | 355 | ||||||
|
|
|
|
|||||
Total current liabilities
|
5,133 | 5,406 | ||||||
Convertible term loan, net of unamortized discount
|
— | 19,070 | ||||||
Warrant liabilities
|
38 | 299 | ||||||
Operating lease liabilities, noncurrent
|
2,688 | 2,869 | ||||||
Other long-term liabilities
|
— | 27 | ||||||
|
|
|
|
|||||
Total liabilities
|
7,859 | 27,671 | ||||||
|
|
|
|
|||||
Commitments and contingencies (Note 11)
|
||||||||
Stockholders’ equity:
|
||||||||
Preferred stock, $0.0001 par value—authorized, 10,000,000 shares at June 30, 2020 and December 31, 2019; no shares issued or outstanding at June 30, 2020 and December 31, 2019
|
— | — | ||||||
Common stock, $0.0001 par value—authorized, 200,000,000 shares at June 30, 2020 and December 31, 2019; 17,248,545 and 16,513,763 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively
|
2 | 2 | ||||||
Additional
paid-in
capital
|
164,118 | 161,924 | ||||||
Accumulated deficit
|
(140,887 | ) | (126,165 | ) | ||||
Accumulated other comprehensive loss
|
(1 | ) | (235 | ) | ||||
|
|
|
|
|||||
Total stockholders’ equity
|
23,232 | 35,526 | ||||||
|
|
|
|
|||||
Total
|
$ | 31,091 | $ | 63,197 | ||||
|
|
|
|
For the Three Months Ended
June 30, |
For the Six Months Ended
June 30, |
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
$ | 3,204 | $ | 7,275 | $ | 8,507 | $ | 12,842 | ||||||||
General and administrative
|
2,164 | 2,490 | 5,043 | 5,300 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses
|
5,368 | 9,765 | 13,550 | 18,142 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations
|
(5,368 | ) | (9,765 | ) | (13,550 | ) | (18,142 | ) | ||||||||
Other income (expense):
|
||||||||||||||||
Interest income
|
44 | 325 | 285 | 686 | ||||||||||||
Interest expense
|
(35 | ) | — | (511 | ) | — | ||||||||||
Loss on extinguishment of convertible term loan
|
(1,207 | ) | — | (1,207 | ) | — | ||||||||||
Change in fair value of warrant liabilities
|
22 | 4,885 | 261 | 7,706 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
(6,544 | ) | (4,555 | ) | (14,722 | ) | (9,750 | ) | ||||||||
Unrealized gain/(loss) on marketable securities
|
157 | (97 | ) | 234 | (213 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss
|
$ | (6,387 | ) | $ | (4,652 | ) | $ | (14,488 | ) | $ | (9,963 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per common share—basic and diluted
|
$ | (0.38 | ) | $ | (0.28 | ) | $ | (0.88 | ) | $ | (0.59 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Weighted-average number of shares outstanding—basic and diluted
|
17,052,088 | 16,443,379 | 16,787,919 | 16,440,192 | ||||||||||||
|
|
|
|
|
|
|
|
For the Three Months Ended
June 30, 2020
|
Common Stock
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Other
Comprehensive
Income (Loss)
|
Total
Stockholders’
Equity
|
|||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||
Balance at March 31, 2020
|
16,582,444 | $ | 2 | $ | 162,771 | $ | (134,343 | ) | $ | (158 | ) | $ | 28,272 | |||||||||||
Stock-based compensation
|
— | — | 449 | — | — | 449 | ||||||||||||||||||
Issuance of common stock for services rendered
|
17,006 | — | 25 | — | — | 25 | ||||||||||||||||||
Issuance of common stock in connection with
at-the-market
|
649,095 | 819 | 819 | |||||||||||||||||||||
Convertible term loan warrant amendment
|
54 | 54 | ||||||||||||||||||||||
Net unrealized gain on marketable securities
|
— | — | — | — | 157 | 157 | ||||||||||||||||||
Net loss
|
— | — | — | (6,544 | ) | — | (6,544 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at June 30, 2020
|
17,248,545 | $ | 2 | $ | 164,118 | $ | (140,887 | ) | $ | (1 | ) | $ | 23,232 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
For the Three Months Ended
June 30, 2019
|
Common Stock
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Other
Comprehensive
Income (Loss)
|
Total
Stockholders’
Equity
|
|||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||
Balance at March 31, 2019
|
16,442,532 | $ | 2 | $ | 158,928 | $ | (107,263 | ) | $ | (121 | ) | $ | 51,546 | |||||||||||
Stock-based compensation
|
— | — | 982 | — | — | 982 | ||||||||||||||||||
Issuance of common stock for services rendered
|
16,023 | — | 59 | — | — | 59 | ||||||||||||||||||
Issuance of common stock in connection with
at-the-market
|
600 | 6 | 6 | |||||||||||||||||||||
Net unrealized loss on marketable securities
|
— | — | — | — | (97 | ) | (97 | ) | ||||||||||||||||
Net loss
|
— | — | — | (4,555 | ) | — | (4,555 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at June 30, 2019
|
16,459,155 | $ | 2 | $ | 159,975 | $ | (111,818 | ) | $ | (218 | ) | $ | 47,941 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended
June 30, 2020
|
Common Stock
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Other
Comprehensive
Income (Loss)
|
Total
Stockholders’
Equity
|
|||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||
Balance at December 31, 2019
|
16,513,763 | $ | 2 | $ | 161,924 | $ | (126,165 | ) | $ | (235 | ) | $ | 35,526 | |||||||||||
Stock-based compensation
|
— | — | 1,241 | — | — | 1,241 | ||||||||||||||||||
Issuance of common stock for services rendered
|
43,887 | — | 50 | — | — | 50 | ||||||||||||||||||
Issuance of common stock in connection with
at-the-market
|
690,895 | 849 | 849 | |||||||||||||||||||||
Convertible term loan warrant amendment
|
54 | 54 | ||||||||||||||||||||||
Net unrealized gain on marketable securities
|
— | — | — | — | 234 | 234 | ||||||||||||||||||
Net loss
|
— | — | — | (14,722 | ) | — | (14,722 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at June 30, 2020
|
17,248,545 | $ | 2 | $ | 164,118 | $ | (140,887 | ) | $ | (1 | ) | $ | 23,232 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
For the Six Months Ended
June 30, 2019
|
Common Stock
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Other
Comprehensive
Income (Loss)
|
Total
Stockholders’
Equity
|
|||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||
Balance at December 31, 2018
|
16,434,614 | $ | 2 | $ | 157,931 | $ | (102,068 | ) | $ | (5 | ) | $ | 55,860 | |||||||||||
Stock-based compensation
|
— | — | 1,895 | — | — | 1,895 | ||||||||||||||||||
Issuance of common stock for services rendered
|
23,941 | — | 143 | — | — | 143 | ||||||||||||||||||
Issuance of common stock in connection with
at-the-market
|
600 | 6 | 6 | |||||||||||||||||||||
Net unrealized loss on marketable securities
|
— | — | — | — | (213 | ) | (213 | ) | ||||||||||||||||
Net loss
|
— | — | — | (9,750 | ) | — | (9,750 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at June 30, 2019
|
16,459,155 | $ | 2 | $ | 159,975 | $ | (111,818 | ) | $ | (218 | ) | $ | 47,941 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$ | (14,722 | ) | $ | (9,750 | ) | ||
Adjustments for:
|
||||||||
Depreciation and amortization
|
191 | 171 | ||||||
Operating lease
right-of-use
|
141 | 130 | ||||||
Change in fair value of warrant liabilities
|
(261 | ) | (7,706 | ) | ||||
Loss on extinguishment of convertible term loan
|
1,207 | — | ||||||
Non-cash
interest expense
|
77 | — | ||||||
Non-cash
investment income (expense)
|
(244 | ) | 72 | |||||
Non-cash
stock-based compensation
|
1,291 | 2,013 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Prepaid expenses and other current assets
|
805 | (753 | ) | |||||
Other assets
|
35 | 132 | ||||||
Accounts payable
|
320 | (155 | ) | |||||
Accrued expenses and other liabilities
|
(629 | ) | 1,081 | |||||
Operating lease liabilities
|
(172 | ) | — | |||||
|
|
|
|
|||||
Net cash used in operating activities
|
(11,961 | ) | (14,765 | ) | ||||
|
|
|
|
|||||
Cash flows from investing activities:
|
||||||||
Proceeds from sale of marketable securities
|
32,234 | 16,787 | ||||||
Purchases of marketable securities
|
(21,000 | ) | (6,000 | ) | ||||
Purchases of property and equipment
|
— | (205 | ) | |||||
|
|
|
|
|||||
Net cash provided by investing activities
|
11,234 | 10,582 | ||||||
|
|
|
|
|||||
Cash flows from financing activities:
|
||||||||
Payment of convertible term loan and prepayment fee
|
(20,300 | ) | — | |||||
Proceeds from issuance of common stock in connection with
at-the-market
|
849 | 6 | ||||||
|
|
|
|
|||||
Cash (used in) provided by financing activities
|
(19,451 | ) | 6 | |||||
|
|
|
|
|||||
Net decrease in cash, cash equivalents and restricted cash
|
(20,178 | ) | (4,177 | ) | ||||
Cash, cash equivalents and restricted cash, beginning of period
|
28,943 | 14,958 | ||||||
|
|
|
|
|||||
Cash, cash equivalents and restricted cash, end of period
|
$ | 8,765 | $ | 10,781 | ||||
|
|
|
|
|||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid for taxes
|
$ | 7 | $ | 17 | ||||
|
|
|
|
|||||
Cash paid for interest, net
|
$ | 837 | $ | — | ||||
|
|
|
|
Asset Category
|
Useful Life
|
|
Equipment |
5-7
years
|
|
Furniture and fixtures | 5 years | |
Leasehold improvements |
Lesser of 10 years or the remaining
term of the respective lease
|
• |
expenses incurred under agreements with third parties, including contract research organizations, or CROs, that conduct research, preclinical activities and clinical trials on the Company’s behalf as well as contract manufacturing organizations, or CMOs, that manufacture drug products for use in the Company’s preclinical and clinical trials;
|
• |
salaries, benefits and other related costs, including stock-based compensation expense, for personnel in the Company’s research and development functions;
|
• |
costs of outside consultants, including their fees, stock-based compensation and related travel expenses;
|
• |
the cost of laboratory supplies and acquiring, developing and manufacturing preclinical study and clinical trial materials;
|
• |
costs related to compliance with regulatory requirements; and
|
• |
facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.
|
For the Three Months Ended
June 30, |
For the Six Months Ended
June 30, |
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Net loss
|
$ | (6,544 | ) | $ | (4,555 | ) | $ | (14,722 | ) | $ | (9,750 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Weighted-average number of shares outstanding—basic and diluted
|
17,052,088 | 16,443,379 | 16,787,919 | 16,440,192 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per common share—basic and diluted
|
$ | (0.38 | ) | $ | (0.28 | ) | $ | (0.88 | ) | $ | (0.59 | ) | ||||
|
|
|
|
|
|
|
|
For the Three and
Six Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
Common stock warrants
|
1,927,124 | 1,662,124 | ||||||
Stock options and inducement awards
|
1,606,275 | 1,714,815 | ||||||
Restricted stock units
|
534,000 | 185,800 |
June 30,
2020 |
December 31,
2019 |
|||||||
Investments—Current:
|
||||||||
Debt securities—available for sale
|
$ | 14,990 | $ | 25,746 | ||||
|
|
|
|
|||||
Total
|
$ | 14,990 | $ | 25,746 | ||||
|
|
|
|
At June 30, 2020
|
||||||||||||||||
Cost
Basis
|
Accumulated
Unrealized
Gains
|
Accumulated
Unrealized
Losses
|
Fair
Value |
|||||||||||||
Investments—Current:
|
||||||||||||||||
United States treasury securities
|
$ | 14,991 | $ | — | $ | (1 | ) | $ | 14,990 | |||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 14,991 | $ | — | $ | (1 | ) | $ | 14,990 | |||||||
|
|
|
|
|
|
|
|
|||||||||
At December 31, 2019
|
||||||||||||||||
Cost
Basis
|
Accumulated
Unrealized
Gains
|
Accumulated
Unrealized
Losses
|
Fair
Value |
|||||||||||||
Investments—Current:
|
||||||||||||||||
Corporate bonds
|
$ | 4,990 | $ | — | $ | (58 | ) | $ | 4,932 | |||||||
United States treasury securities
|
20,979 | — | (165 | ) | 20,814 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 25,969 | $ | — | $ | (223 |
)
(1)
|
$ | 25,746 | |||||||
|
|
|
|
|
|
|
|
Amortized Cost
|
Fair Value
|
|||||||
Due in one year or less
|
$ | 14,991 | $ | 14,990 | ||||
|
|
|
|
|||||
Total
|
$ | 14,991 | $ | 14,990 | ||||
|
|
|
|
June 30,
2020 |
December 31,
2019 |
|||||||
Equipment
|
$ | 1,278 | $ | 1,278 | ||||
Furniture and fixtures
|
423 | 450 | ||||||
Leasehold improvements
|
1,356 | 1,356 | ||||||
|
|
|
|
|||||
Total property and equipment
|
3,057 | 3,084 | ||||||
Less: accumulated depreciation and amortization
|
(1,014 | ) | (850 | ) | ||||
|
|
|
|
|||||
Property and equipment, net
|
$ | 2,043 | $ | 2,234 | ||||
|
|
|
|
Fair Value Measurement at
June 30, 2020
|
||||||||||||||||
Carrying
Value
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant
other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||||||||||
Assets:
|
||||||||||||||||
Money market funds
(1)
|
$ | 7,012 | $ | 7,012 | $ | — | $ | — | ||||||||
United States treasury securities
|
14,990 | — | 14,990 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 22,002 | $ | 7,012 | $ | 14,990 | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities:
|
||||||||||||||||
Warrant liabilities
|
$ | 38 | $ | — | $ | — | $ | 38 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 38 | $ | — | $ | — | $ | 38 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Fair Value Measurement at
December 31, 2019
|
||||||||||||||||
Carrying
Value
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant
other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||||||||||
Assets:
|
||||||||||||||||
Money market funds
(1)
|
$ | 21,065 | $ | 21,065 | $ | — | $ | — | ||||||||
United States treasury securities
(1)
|
5,982 | — | 5,982 | — | ||||||||||||
Fixed income securities
|
25,746 | — | 25,746 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 52,793 | $ | 21,065 | $ | 31,728 | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities:
|
||||||||||||||||
Warrant liabilities
|
$ | 299 | $ | — | $ | — | $ | 299 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 299 | $ | — | $ | — | $ | 299 | ||||||||
|
|
|
|
|
|
|
|
(1)
|
Money market funds and United States treasury securities with maturities of less than 90 days at the date of purchase are included within cash and cash equivalents in the accompanying consolidated balance sheets and are recognized at fair value.
|
November Private
Placement Warrants
|
||||
Balance at December 31, 2018
|
$ | 8,511 | ||
Change in fair value
|
(8,212 | ) | ||
|
|
|||
Balance at December 31, 2019
|
299 | |||
Change in fair value
|
(261 | ) | ||
|
|
|||
Balance at June 30, 2020
|
$ | 38 | ||
|
|
June 30,
2020 |
December 31,
2019 |
|||||||
Preclinical and clinical studies
|
$ | 1,124 | $ | 1,473 | ||||
Compensation and benefits
|
765 | 614 | ||||||
Accounting and legal
|
254 | 240 | ||||||
Other
|
96 | 111 | ||||||
|
|
|
|
|||||
Total accrued expenses and other current liabilities
|
$ | 2,239 | $ | 2,438 | ||||
|
|
|
|
June 30,
2020
|
December 31,
2019
|
|||||||
Risk-free interest rate
|
0.2 | % | 1.6 | % | ||||
Expected term (in years)
|
1.4 | 1.9 | ||||||
Expected volatility
|
80.9 | % | 100.0 | % | ||||
Expected dividend yield
|
0 | % | 0 | % |
Warrants
|
||||
Outstanding at December 31, 2018
|
1,662,124 | |||
Grants
|
265,000 | |||
Exercises
|
— | |||
Expirations/cancellations
|
— | |||
|
|
|||
Outstanding at December 31, 2019
|
1,927,124 | |||
Grants
|
— | |||
Exercises
|
— | |||
Expirations/cancellations
|
— | |||
|
|
|||
Outstanding at June 30, 2020
|
1,927,124 | |||
|
|
Options
|
Weighted-
Average
Exercise Price
Per Share
|
Aggregate
Intrinsic
Value
|
||||||||||
Outstanding at December 31, 2018
|
1,299,565 | $ | 11.18 | $ | 881,385 | |||||||
Granted
|
395,500 | 9.61 | — | |||||||||
Exercised
|
— | — | — | |||||||||
Cancelled
|
(22,750 | ) | 13.36 | — | ||||||||
|
|
|||||||||||
Outstanding at December 31, 2019
|
1,672,315 | 10.78 | — | |||||||||
Granted
|
270,000 | 1.44 | — | |||||||||
Exercised
|
— | — | — | |||||||||
Cancelled
|
(426,040 | ) | 10.45 | — | ||||||||
|
|
|||||||||||
Options outstanding at June 30, 2020
|
1,516,275 | $ | 9.21 | $ | — | |||||||
|
|
|
|
|
|
|||||||
Options exercisable at June 30, 2020
|
1,017,853 | $ | 10.79 | $ | — | |||||||
|
|
|
|
|
|
For the Six Months Ended June 30,
|
||||||||
2020
|
2019
|
|||||||
Risk-free interest rate
|
0.7 | % | 2.6 | % | ||||
Expected term (in years)
|
5.9 | 6.0 | ||||||
Expected volatility
|
82.8 | % | 81.1 | % | ||||
Expected dividend yield
|
0 | % | 0 | % |
Restricted
Stock Units
|
Weighted-Average
Grant Date
Fair Value
|
|||||||
Total nonvested units at December 31, 2019
|
139,350 | $ | 7.86 | |||||
Granted
|
559,000 | 1.41 | ||||||
Vested
|
— | — | ||||||
Cancelled
|
(164,350 | ) | 6.88 | |||||
|
|
|
|
|||||
Total nonvested units at June 30, 2020
|
534,000 | $ | 1.07 | |||||
|
|
|
|
For the Three Months
Ended June 30, |
For the Six Months
Ended June 30, |
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Stock-based compensation:
|
||||||||||||||||
Research and development
|
$ | 171 | $ | 339 | $ | 446 | $ | 656 | ||||||||
General and administrative
|
303 | 702 | 845 | 1,357 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Stock-based compensation
|
$ | 474 | $ | 1,041 | $ | 1,291 | $ | 2,013 | ||||||||
|
|
|
|
|
|
|
|
June 30,
|
December 31,
|
|||||||
2020
|
2019
|
|||||||
IPO warrants
|
28,347 | 28,347 | ||||||
November private placement warrants
|
1,633,777 | 1,633,777 | ||||||
Convertible term loan
|
— | 2,329,143 | ||||||
Pontifax warrants
|
250,000 | 250,000 | ||||||
September 2019 warrants
|
15,000 | 15,000 | ||||||
Amended and restated 2015 stock incentive plan
|
3,266,451 | 2,160,338 | ||||||
Inducement awards
|
90,000 | 90,000 | ||||||
|
|
|
|
|||||
Total
|
5,283,575 | 6,506,605 | ||||||
|
|
|
|
For the Three Months
Ended June 30, |
For the Six
Months Ended June 30, |
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Cash paid for amounts included in the measurement of lease liabilities:
|
||||||||||||||||
Operating cash flow from operating leases (in thousands)
|
$ | 147 | $ | 91 | $ | 291 | $ | 130 | ||||||||
Right-of-use
|
||||||||||||||||
Operating leases (in thousands)
|
$ | — | $ | 2,980 | $ | — | $ | 2,980 |
Year
|
||||
2020 (excluding the six months ended June 30, 2020)
|
$ | 297 | ||
2021
|
508 | |||
2022
|
450 | |||
2023
|
462 | |||
2024
|
474 | |||
Thereafter
|
1,931 | |||
|
|
|||
Total lease payments
|
$ | 4,122 | ||
Less: present value discount
|
(1,070 | ) | ||
|
|
|||
Total
|
$ | 3,052 | ||
|
|
Page
|
||||
Audited Financial Statements
|
||||
F-53 | ||||
F-118 | ||||
F-169 | ||||
F-211 |
F-54 | ||||
F-56 | ||||
F-57 | ||||
F-58 | ||||
F-59 | ||||
F-60 |
Notes
|
Year ended
December 31, 2019
£
|
Restated*
Year ended
December 31, 2018
£
|
Restated*
Year ended
December 31, 2017
£
|
|||||||||||
Revenue
|
5 |
|
21,882,228
|
|
29,996,604 | 11,027,179 | ||||||||
Costs related to collaborative arrangements
|
6 |
|
(17,960,094
|
)
|
(13,892,433 | ) | (6,345,668 | ) | ||||||
Research & development costs
|
|
(32,672,545
|
)
|
— | — | |||||||||
General & administrative expenses
|
|
(12,294,739
|
)
|
(398,926 | ) | (616,048 | ) | |||||||
Other income
|
7 |
|
112,931
|
|
— | — | ||||||||
Other gains
|
8 |
|
309,863
|
|
195,177 | 70,661 | ||||||||
|
|
|
|
|
|
|||||||||
(Loss)/profit from operations
|
9 |
|
(40,622,356
|
)
|
15,900,422 | 4,136,124 | ||||||||
Fair value losses on financial liabilities at fair value through profit or loss (FVTPL)
|
21 |
|
(1,106,313
|
)
|
— | — | ||||||||
Finance income
|
11 |
|
8,412
|
|
4,308 | — | ||||||||
Finance costs
|
11 |
|
(255,554
|
)
|
— | — | ||||||||
|
|
|
|
|
|
|||||||||
(Loss)/profit before tax from continuing operations
|
|
(41,975,811
|
)
|
15,904,730 | 4,136,124 | |||||||||
Income tax credit/(charge)
|
12 |
|
7,016,499
|
|
(2,636,132 | ) | (656,864 | ) | ||||||
|
|
|
|
|
|
|||||||||
(Loss)/profit for the year attributable to equity holders of the parent
|
|
(34,959,312
|
)
|
13,268,598 | 3,479,260 | |||||||||
|
|
|
|
|
|
|||||||||
Items that may be reclassified to profit or loss in subsequent periods:
|
||||||||||||||
Foreign exchange arising on consolidation
|
|
77,375
|
|
— | — | |||||||||
|
|
|
|
|
|
|||||||||
Other comprehensive income for the period
|
|
77,375
|
|
— | — | |||||||||
|
|
|
|
|
|
|||||||||
Total comprehensive (loss)/income attributable to owners of the parent
|
|
(34,881,937
|
)
|
13,268,598 | 3,479,260 | |||||||||
|
|
|
|
|
|
|||||||||
(Loss)/earnings per share for profit attributable to the shareholders of the parent:
|
||||||||||||||
Basic and diluted (loss)/earnings per share
|
28 |
|
(2.37
|
)
|
1.47 | 0.38 |
*
|
See note 4.9 for explanation of restatement of prior year deferred tax.
|
Notes
|
December 31,
2019
£
|
Restated*
December 31,
2018
£
|
Restated*^
December 31,
2017
£
|
|||||||||||||
Non-current
assets
|
||||||||||||||||
Goodwill
|
13 |
|
2,811,827
|
|
— | — | ||||||||||
Intangible assets
|
13 |
|
34,134,321
|
|
17,984,743 | 9,448,623 | ||||||||||
Property, plant and equipment
|
14 |
|
1,086,781
|
|
— | — | ||||||||||
Right-of-use
|
15 |
|
462,520
|
|
— | — | ||||||||||
Financial assets at FVTPL
|
16 |
|
42,662
|
|
— | — | ||||||||||
|
|
|
|
|
|
|||||||||||
38,538,111
|
17,984,743 | 9,448,623 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
Current assets
|
||||||||||||||||
Cash and cash equivalents
|
17 |
|
3,736,229
|
|
6,458,139 | 3,780,060 | ||||||||||
Current tax assets
|
|
8,114,658
|
|
190,000 | — | |||||||||||
Trade and other receivables
|
18 |
|
2,713,144
|
|
346,242 | 735,535 | ||||||||||
|
|
|
|
|
|
|||||||||||
14,564,031
|
6,994,381 | 4,515,595 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
Total assets
|
|
53,102,142
|
|
24,979,124 | 13,964,218 | |||||||||||
|
|
|
|
|
|
|||||||||||
Equity
|
||||||||||||||||
Issued share capital
|
19 |
|
177,768
|
|
1 | 91 | ||||||||||
Other reserves
|
20 |
|
45,261,794
|
|
90 | — | ||||||||||
(Accumulated losses)/retained earnings
|
20 |
|
(16,907,806
|
)
|
15,861,034 | 3,479,260 | ||||||||||
|
|
|
|
|
|
|||||||||||
Total equity
|
|
28,531,756
|
|
15,861,125 | 3,479,351 | |||||||||||
|
|
|
|
|
|
|||||||||||
Non-current
liabilities
|
||||||||||||||||
Deferred revenue
|
5 |
|
—
|
|
— | 2,495,919 | ||||||||||
Lease liability
|
15 |
|
39,745
|
|
— | — | ||||||||||
Deferred tax
|
|
1,655,295
|
|
2,973,578 | 336,841 | |||||||||||
|
|
|
|
|
|
|||||||||||
1,695,040
|
2,973,578 | 2,832,760 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
Current liabilities
|
||||||||||||||||
Convertible notes held at FVTPL
|
21 |
|
11,364,454
|
|
— | — | ||||||||||
Corporate tax liabilities
|
|
84,317
|
|
— | 320,023 | |||||||||||
Trade and other payables
|
22 |
|
10,621,957
|
|
1,555,382 | 1,341,879 | ||||||||||
Deferred revenue
|
5 |
|
339,558
|
|
4,589,039 | 5,990,205 | ||||||||||
Lease liability
|
15 |
|
465,060
|
|
— | — | ||||||||||
|
|
|
|
|
|
|||||||||||
Total current liabilities
|
|
22,875,346
|
|
6,144,421 | 7,652,107 | |||||||||||
|
|
|
|
|
|
|||||||||||
Total equity and liabilities
|
|
53,102,142
|
|
24,979,124 | 13,964,218 | |||||||||||
|
|
|
|
|
|
*
|
See note 4.9 for explanation of restatement of prior year deferred tax.
|
^ |
See note 4.10 for explanation of change in accounting policy.
|
Notes
|
Share
capital
£
|
Other
reserves
£
|
Retained
earnings/
(accumulated
losses)
£
|
Total equity
£
|
||||||||||||||
Balance as of December 30, 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Profit for the financial period and comprehensive income as originally stated
|
— | — | 3,816,101 | 3,816,101 | ||||||||||||||
Transactions with owners of the Company, recognised directly in equity
|
||||||||||||||||||
Proceeds from shares issued on incorporation
|
|
91
|
|
— | — | 91 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2017 as originally stated
|
|
91
|
|
|
—
|
|
|
3,816,101
|
|
|
3,816,192
|
|
||||||
|
|
|
|
|
|
|
|
|||||||||||
Restatement of prior year deferred tax
|
4.9 |
|
—
|
|
— | (336,841 | ) | (336,841 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||||
Restated at December 31, 2017
|
|
91
|
|
|
—
|
|
|
3,479,260
|
|
|
3,479,351
|
|
||||||
Adoption of new accounting standard
|
4.10 | — | — | (886,824 | ) | (886,824 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Restated at 1 January 2018
|
|
91
|
|
|
—
|
|
|
2,592,436
|
|
|
2,592,527
|
|
||||||
|
|
|
|
|
|
|
|
|||||||||||
Profit for the financial period and total comprehensive income as originally stated
|
— | — | 15,905,335 | 15,905,335 | ||||||||||||||
Restatement* of prior year deferred tax
|
4.9 | — | — | (2,636,737 | ) | (2,636,737 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Restated* profit for the financial period and comprehensive income
|
— | — | 13,268,598 | 13,268,598 | ||||||||||||||
Arising on corporate reorganization
α
|
(90 | ) | 90 | — | — | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Restated at December 31, 2018
|
|
1
|
|
|
90
|
|
|
15,861,034
|
|
|
15,861,125
|
|
||||||
|
|
|
|
|
|
|
|
|||||||||||
Loss for the financial year
|
— | — | (34,959,312 | ) | (34,959,312 | ) | ||||||||||||
Other comprehensive income
|
— | — | 77,375 | 77,375 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total comprehensive loss
|
— | — | (34,881,937 | ) | (34,881,937 | ) | ||||||||||||
Transactions with owners in their capacity as owners
|
||||||||||||||||||
Share based payment charge
|
23 | — | — | 2,113,097 | 2,113,097 | |||||||||||||
Exercise of share options
|
19 | 352 | — | — | 352 | |||||||||||||
Issues of shares on corporate reorganization, business combination and acquisition of asset
|
19,20 | 177,415 | 45,261,704 | — | 45,439,119 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
At December 31, 2019
|
|
177,768
|
|
|
45,261,794
|
|
|
(16,907,806
|
)
|
|
28,531,756
|
|
||||||
|
|
|
|
|
|
|
|
α |
Prior year share capital has been restated to reflect the share capital of the legal acquirer.
|
Notes
|
Year ended
December 31, 2019
£
|
Year ended
December 31, 2018
£
|
Year ended
December 31, 2017
£
|
|||||||||||
Cash flows from operating activities
|
||||||||||||||
(Loss)/profit for the financial year before tax
|
|
(41,975,811
|
)
|
15,904,730 | 4,136,124 | |||||||||
Adjustments for:
|
||||||||||||||
Share-based payment expense
|
23 |
|
2,113,097
|
|
— | — | ||||||||
Net finance cost
|
11 |
|
247,142
|
|
— | — | ||||||||
Net exchange gains
|
|
(182,802
|
)
|
— | — | |||||||||
Amortization of intangible assets
|
13 |
|
1,689,151
|
|
1,083,875 | 398,290 | ||||||||
Depreciation of tangible fixed assets
|
14,15 |
|
671,178
|
|
— | — | ||||||||
Loss on disposal of tangible fixed asset
|
9 |
|
10,333
|
|
— | — | ||||||||
Loss on disposal of intangible asset
|
|
3,953,127
|
|
— | — | |||||||||
Impairment of intangible assets
|
13 |
|
6,608,387
|
|
— | — | ||||||||
Impairment of goodwill
|
13 |
|
298,625
|
|
— | — | ||||||||
Fair value losses on financial liabilities through profit or loss
|
21 |
|
1,106,313
|
|
— | — | ||||||||
Trade and other receivables
|
18 |
|
153,369
|
|
389,293 | (735,535 | ) | |||||||
Trade and other payables
|
22 |
|
4,402,391
|
|
213,503 | 1,341,879 | ||||||||
Change in deferred revenue
|
|
(4,909,097
|
)
|
(3,897,085 | ) | 8,486,124 | ||||||||
Adoption of new accounting standard
|
4.10 |
|
—
|
|
(886,824 | ) | — | |||||||
|
|
|
|
|
|
|||||||||
Adjusted (loss)/ profit before tax
|
|
(25,814,597
|
)
|
12,807,492 | 13,626,882 | |||||||||
Proceeds from sale of intangible assets
|
|
8,620,965
|
|
— | — | |||||||||
|
|
|
|
|
|
|||||||||
Cash (used in)/generated from operating activities
|
|
(17,193,632
|
)
|
12,807,492 | 13,626,882 | |||||||||
Corporation tax received (paid)
|
|
636,677
|
|
(509,418 | ) | — | ||||||||
|
|
|
|
|
|
|||||||||
Net cash flows (used in)/generated from operating activities
|
|
(16,556,955
|
)
|
12,298,074 | 13,626,882 | |||||||||
|
|
|
|
|
|
|||||||||
Cash flows from investing activities
|
||||||||||||||
Proceeds from sale of tangible assets
|
|
1,579
|
|
— | — | |||||||||
Payments to acquire intangible assets
|
13 |
|
(100,000
|
)
|
(9,619,995 | ) | (9,846,913 | ) | ||||||
Cash acquired with acquisition of subsidiaries*
|
26 |
|
4,194,521
|
|
— | — | ||||||||
Interest received
|
11 |
|
8,412
|
|
— | — | ||||||||
|
|
|
|
|
|
|||||||||
Net cash generated from/(used in) investing activities
|
|
4,104,512
|
|
(9,619,995 | ) | (9,846,913 | ) | |||||||
|
|
|
|
|
|
|||||||||
Cash flows from financing activities
|
||||||||||||||
Proceeds from issue of ordinary shares
|
19 |
|
19
|
|
— | 91 | ||||||||
Principal elements of lease payments
|
15 |
|
(296,094
|
)
|
— | — | ||||||||
Interest paid on leases
|
15 |
|
(22,394
|
)
|
— | — | ||||||||
Proceeds from convertible debt
|
21 |
|
10,051,963
|
|
— | — | ||||||||
|
|
|
|
|
|
|||||||||
Net cash generated from financing activities
|
|
9,733,494
|
|
— | 91 | |||||||||
|
|
|
|
|
|
|||||||||
Net (decrease)/increase in cash and cash equivalents
|
|
(2,718,949
|
)
|
2,678,079 | 3,780,060 | |||||||||
Cash and cash equivalents at the beginning of the year
|
|
6,458,139
|
|
3,780,060 | — | |||||||||
Effects of exchange rate changes on cash and cash equivalents
|
|
(2,961
|
)
|
— | — | |||||||||
|
|
|
|
|
|
|||||||||
Cash and cash equivalents at end of year
|
17 |
|
3,736,229
|
|
6,458,139 | 3,780,060 | ||||||||
|
|
|
|
|
|
* |
Consideration for acquisition of subsidiaries was entirely in the form of issued shares
|
Presentation by Nature
|
Presentation by function
|
|||||||||||||||||||
Other
expenses £ |
Total
£ |
Costs related to
collaborative arrangements £ |
General &
administrative expenses £ |
Total
£ |
||||||||||||||||
Year ended December 31, 2018
|
14,291,359 |
|
14,291,359
|
|
13,892,433 | 398,926 |
|
14,291,359
|
|
|||||||||||
Year ended December 31, 2017
|
6,961,716 |
|
6,961,716
|
|
6,345,668 | 616,048 |
|
6,961,716
|
|
• |
application of a single discount rate to a portfolio of leases with reasonably similar characteristics
|
• |
reliance on previous assessments on whether leases are onerous as an alternative to performing an impairment review — there were no onerous contracts as at January 1, 2019
|
• |
accounting for operating leases with a remaining lease term of less than 12 months as at January 1, 2019 as short-term leases
|
• |
use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease
|
• |
electing to not separate lease and
non-lease
components and instead accounting for both as if it were one lease component
|
• |
payments associated with short-term leases of equipment and vehicles and all leases of low value assets are recognized on a straight-line basis as an expense in profit or loss.
|
• |
right-of-use
|
• |
lease liability — increase by £800,899
|
F-star
Therapeutics Limited, Cambridge, U.K.
|
pounds sterling | |
F-star
Delta Limited, Cambridge, U.K.
|
pounds sterling | |
F-star
GmbH, Vienna, Austria
|
euro | |
F-star
Biotechnology Limited, Cambridge, U.K.
|
pounds sterling | |
F-star
Alpha Limited, Cambridge, U.K.
|
pounds sterling | |
F-star
Beta Limited, Cambridge, U.K.
|
pounds sterling | |
F-star
Therapeutics LLC, Delaware, U.S
|
U.S. dollar |
a. |
assets and liabilities for each date of consolidated statements of financial position presented are translated at the closing rate as of the date of that consolidated statement of financial position;
|
b. |
income and expenses for each consolidated statement of comprehensive (loss)/income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and
|
c. |
all resulting exchange differences are recognized in other comprehensive income.
|
Leasehold property improvements, right of use assets
|
Lesser of useful life or period of the lease | |
Plant and machinery
|
20% on cost | |
Office equipment, fixtures and fittings
|
33% on cost |
Intellectual Property Rights
|
Over the remaining life of the relevant patents (full life assumed to be 20 years). This results in a range of UELs between 20 and 7 years |
• |
measured at fair value
|
• |
measured at amortized cost
|
• |
each performance obligation contains multiple deliverables; and
|
• |
resource expended has been assessed as the most accurate method of measuring progress towards completion of each performance obligation.
|
• |
The contract involves the use of an identified asset
|
• |
The group has the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use; and
|
• |
The group controls the use of the asset, which can be indicated by either:
|
• |
The group having the right to operate the asset.
|
• |
The group having designed an asset in a way which predetermines how it will be used and for what purpose.
|
December 31, 2019
£
|
December 31, 2018
£
|
December 31, 2017
£
|
||||||||||
U.S. dollars
|
|
2,414,595
|
|
83,088 | 238,700 | |||||||
Pounds sterling
|
|
37,795
|
|
— | — | |||||||
Euros
|
|
51,887
|
|
5,265,362 | 47,465 | |||||||
Swiss Francs
|
|
(230,988
|
)
|
— | — |
December 31, 2019
£
|
December 31, 2018
£
|
December 31, 2017
£
|
||||||||||
Exchange rate +10%
|
||||||||||||
U.S. dollars
|
(219,509 | ) | (7,553 | ) | (27,100 | ) | ||||||
Pounds sterling
|
(3,436 | ) | — | — | ||||||||
Euros
|
(4,717 | ) | (478,699 | ) | (4,315 | ) | ||||||
Swiss Francs
|
20,999 | — | — |
Customer
|
Year ended
December 31, 2019
|
Year ended
December 31, 2018
|
Year ended
December 31, 2017
|
|||||||||
Merck
|
91 | % | 100 | % | 100 | % | ||||||
Denali
|
9 | % | — | — |
December 31, 2019
£
|
December 31, 2018
£
|
December 31, 2017
£
|
||||||||||
Payable in less than one year
|
||||||||||||
Borrowings
|
|
11,571,021
|
|
— | — | |||||||
Other payables
|
|
10,621,957
|
|
1,555,382 | 1,341,879 | |||||||
Lease liability
|
|
465,060
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
|
22,658,038
|
|
1,555,382 | 1,341,879 | ||||||||
|
|
|
|
|
|
|||||||
Payable in one to two years
|
||||||||||||
Lease liability
|
|
39,910
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
|
39,910
|
|
— | — | ||||||||
|
|
|
|
|
|
|||||||
Impact of discounting
non-current
liabilities
|
|
(165
|
)
|
— | — | |||||||
|
|
|
|
|
|
|||||||
Total financial liabilities
|
|
22,697,783
|
|
1,555,382 | 1,341,879 | |||||||
|
|
|
|
|
|
• |
Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1)
|
• |
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2)
|
• |
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3)
|
• |
The former shareholding in
F-star
Delta Limited was exchanged for the largest proportion of shares in the combined company
|
• |
The fair value of the assets of
F-star
Delta Limited is the largest of the entities involved in this transaction
|
• |
Alpha — holds the intellectual property rights for one early stage clinical molecule, which is not currently being developed. It has no income streams, other than interest income earned on loans to other
F-star
group entities. Alpha does not employ an organized workforce and does not currently utilize one via any contractual arrangements. In the absence of processes and the ability to generate outputs, the acquisition of Alpha was deemed by management to be an asset acquisition
|
• |
Beta — holds the intellectual property rights for several early discovery stage assets and two preclinical assets. Although Beta does not employ its own workforce it has a contracted right to access the workforce of GmbH or the ability to contract with other workforces and has the ability to create outputs via partnering or collaboration arrangements and so was deemed to be a business by management.
|
• |
GmbH — holds the intellectual property rights for several
non-immuno-oncology
assets that are being developed under a collaboration agreement with a partner. GmbH employs its own workforce and the ability to create outputs and as such was deemed a business by management.
|
Increase probability by 10%:
|
£ | 407,438 | ||
Decrease probability by 10%:
|
£ | (407,438 | ) |
2019
|
2018
|
2017
|
||||||||||
Discount factor
|
13.0 | % | 13.5 | % | 13.5 | % |
2019
|
2018
|
|||||||||||||||
Discount factor
|
From
|
To
|
From
|
To
|
||||||||||||
Asset 1 (FS118)
1
|
|
N/A
|
|
|
N/A
|
|
13.5 | % | 16.4 | % | ||||||
Asset 2 (FS231)/(FS220)
2
|
|
N/A
|
|
|
N/A
|
|
13.5 | % | 14.7 | % | ||||||
Asset 3 (FS122)
3
|
|
N/A
|
|
|
N/A
|
|
13.5 | % | 14.7 | % | ||||||
Asset 4 (FS422)/(FS129)
|
13.0 | % | 22.9 | % | 13.5 | % | 14.3 | % | ||||||||
Asset 5 (FS131)
2
|
|
N/A
|
|
|
N/A
|
|
13.5 | % | 14.3 | % |
1
|
See
Non-partnered
assets — cost approach
|
2
|
Asset was fully impaired during the current year — see note 13.
|
3
|
Asset was derecognized in the current year — see note 13.
|
• |
The values assigned to the assumptions represented the directors’ assessment of the future trends in the relevant industry and have been based on historical data from both external and internal sources.
|
• |
The discount rate was estimated based on cost of equity and cost of debt.
|
• |
The cash flow projections included specific development estimates including cost of sales, cost of research & development, probability of success and amount and timing of projected future revenue.
|
FS118
|
||||
Obsolescence factor
|
||||
2019 investment
|
30 | % | ||
2018 investment
|
40 | % | ||
2017 investment
|
40 | % | ||
Value inflection events
|
||||
Investigational New Drug (IND) application approval
|
5 | % | ||
Phase 1 commencement
|
10 | % | ||
Partnering renegotiation
|
5 | % |
Assumption
|
Approach to determining values
|
|
Obsolescence factor |
This relates to the cost incurred on an asset in a given year which has been discounted for an estimate of
non-productive
spend in that year (i.e. expenditure which has not been deemed to have increased the value of the asset). Management assessed this by examining all activities carried out in each year and determining the productivity of each activity.
|
|
Value inflection event |
These are events that would result in an increase or decrease of the value of an asset. Publicly traded comparable companies were identified that experienced similar events and the equity value was calculated
one-day
prior to the associated news release, as well as
one-day,
five-days,
10-days
and
30-days
post news release to measure the increase or decrease in value.
|
Asset
|
Asset Type
|
Method used to estimate recoverability
|
||
FS21 | Partnered asset | NPV of probability — adjusted future cash flows | ||
FS120 |
Non-partnered
assets
|
Cost approach | ||
FS222 |
Non-partnered
assets
|
Cost approach |
Asset
|
Asset Type
|
Method used to estimate recoverability
|
||
Partnered Neuroscience assets | Partnered asset | NPV of probability — adjusted future cash flows |
FS120
|
FS222
|
|||||||
Obsolescence factor
|
||||||||
2019 investment
|
30 | % | 25 | % | ||||
2018 investment
|
40 | % | 90 | % | ||||
2017 investment
|
40 | % | 99 | % | ||||
Value inflection events
|
||||||||
Candidate selection
|
3 | % | 3 | % | ||||
Manufacturing process determined
|
12.5 | % | 12.5 | % |
• |
Discount factor: 13.0%
|
• |
The values assigned to the key assumptions represented management’s assessment of the future trends in the relevant industry and have been based on historical data from both external and internal sources.
|
• |
The discount rate was estimated based on cost of equity and cost of debt.
|
FS120
|
FS222
|
|||||||
Obsolescence factor
|
||||||||
2019 investment
|
0 | % | 25 | % | ||||
2018 investment
|
50 | % | 50 | % | ||||
2017 investment
|
80 | % | 80 | % | ||||
Value inflection events
|
||||||||
Candidate selection
|
3 | % | 3 | % | ||||
Manufacturing process determined
|
12.5 | % | 12.5 | % |
Statement of financial position (extract)
|
December 31,
2018
£
|
Adjustment
£
|
Restated
December 31,
2018
£
|
|||||||||
Deferred tax
|
— | 2,973,578 | 2,973,578 | |||||||||
Non-current
liabilities
|
— | 2,973,578 | 2,973,578 | |||||||||
Net assets
|
18,834,703 | (2,973,578 | ) | 15,861,125 |
Statement of financial position (extract)
|
December 31,
2018
£
|
Adjustment
£
|
Restated
December 31,
2018
£
|
|||||||||
Retained earnings
|
|
18,497,771
|
|
|
(2,636,737
|
)
|
|
15,861,034
|
|
|||
Total equity
|
|
18,497,862
|
|
|
(2,636,737
|
)
|
|
15,861,125
|
|
|||
Total equity and liabilities
|
|
24,979,124
|
|
|
—
|
|
|
24,979,124
|
|
Statement of comprehensive (loss)/income (extract)
|
Year ended
December 31, 2018
£
|
Adjustment
£
|
Restated
Year ended
December 31, 2018
£
|
|||||||||
Income tax credit/(charge)
|
605 | (2,636,737 | ) | (2,636,132 | ) | |||||||
Profit for the financial year and total comprehensive income
|
|
15,905,335
|
|
|
(2,636,737
|
)
|
|
13,268,598
|
|
Statement of financial position (extract)
|
December 31,
2017
£
|
Adjustment
£
|
Restated
December 31,
2017
£
|
|||||||||
Deferred tax
|
— | 336,841 | 336,841 | |||||||||
Total
non-current
liabilities
|
|
2,495,919
|
|
|
336,841
|
|
|
2,832,760
|
|
|||
Net assets
|
|
3,816,192
|
|
|
(336,841
|
)
|
|
3,479,351
|
|
Statement of financial position (extract)
|
December 31,
2017
£
|
Adjustment
£
|
Restated
December 31,
2017
£
|
|||||||||
Retained earnings
|
3,816,101 | (336,841 | ) | 3,479,260 | ||||||||
Total equity
|
|
3,816,192
|
|
|
(336,841
|
)
|
|
3,479,351
|
|
|||
Total equity and liabilities
|
|
13,964,218
|
|
|
—
|
|
|
13,964,218
|
|
Statement of comprehensive (loss)/income (extract)
|
Year ended
December 31, 2017
£
|
Adjustment
£
|
Restated
Year ended
December 31, 2017
£
|
|||||||||
Income tax credit/(charge)
|
(320,023 | ) | (336,841 | ) | (656,864 | ) | ||||||
Profit for the financial year and total comprehensive income
|
|
3,816,101
|
|
|
(336,841
|
)
|
|
3,479,260
|
|
Statements of financial position (extract)
|
IAS 18 carrying
amount
December 31, 2017
£
|
Remeasurement
£
|
IFRS 15 carrying
amount
January 1, 2018
£
|
|||||||||
Non-current
liabilities — deferred revenue
|
2,495,919 | 260,831 | 2,756,750 | |||||||||
Current liabilities — deferred revenue
|
5,990,205 | 625,993 | 6,616,198 |
Note
|
£
|
|||||||
Balance as of December 31, 2017 as originally stated
|
|
3,816,101
|
|
|||||
Restatement of deferred tax balance
|
4.9 | (336,841 | ) | |||||
Change in accounting policy (above)
|
(886,824 | ) | ||||||
|
|
|||||||
Restated balance at January 1, 2018
|
|
2,592,436
|
|
|||||
|
|
Provision of R&D services & licensing income
|
Year ended
December 31, 2019
£
|
Year ended
December 31, 2018
£
|
Restated^
Year ended
December 31, 2017
£
|
|||||||||
Europe
|
|
20,000,126
|
|
29,996,604 | 11,027,179 | |||||||
U.S
|
|
1,882,102
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
Total
|
|
21,882,228
|
|
29,996,604 | 11,027,179 | |||||||
|
|
|
|
|
|
|||||||
Timing of recognition:
|
||||||||||||
At a point in time
|
|
9,807,914
|
|
— | — | |||||||
Over time
|
|
12,074,314
|
|
29,996,604 | 11,027,179 | |||||||
|
|
|
|
|
|
|||||||
Total
|
|
21,882,228
|
|
29,996,604 | 11,027,179 | |||||||
|
|
|
|
|
|
^ |
See note 4.10 for explanation of change in accounting policy.
|
• |
Grant of intellectual property licenses
|
• |
Provision of R&D services for development of the Fcabs
|
• |
Option for the grant of Intellectual Property Rights
|
• |
Provision of R&D services
|
Year ended
December 31, 2019
£
|
Year ended
December 31, 2018
£
|
Year ended
December 31, 2017
£
|
||||||||||
Deferred revenue related to upfront licensing fee, milestone income and R&D services income
|
|
339,558
|
|
4,589,039 | 8,486,124 | |||||||
|
|
|
|
|
|
Year ended
December 31, 2019
£
|
Year ended
December 31, 2018
£
|
Year ended
December 31, 2017
£
|
||||||||||
Contract liabilities as of January 1
|
|
4,589,039
|
|
8,486,124 | — | |||||||
Adoption of new accounting standard (note 4.11)
|
|
—
|
|
886,824 | — | |||||||
Contract assets acquired on business combination
|
|
659,616
|
|
— | — | |||||||
Additional amounts deferred in the period
|
|
24,815
|
|
1,585,398 | 8,486,124 | |||||||
Revenue recognized in the period included in opening contract liability
|
|
(4,589,038
|
)
|
(6,369,307 | ) | — | ||||||
Revenue recognized in the period included in acquired contract liability
|
|
(344,874
|
)
|
— | — | |||||||
|
|
|
|
|
|
|||||||
Contract liabilities as of December 31
|
|
339,558
|
|
4,589,039 | 8,486,124 | |||||||
|
|
|
|
|
|
2019
£
|
2018
£
|
2017
£
|
||||||||||
Transaction price allocated to outstanding performance obligations
|
|
3,185,408
|
|
10,393,242 | 28,448,480 | |||||||
|
|
|
|
|
|
Year ended
December 31, 2019
£
|
Year ended
December 31, 2018
£
|
Year ended
December 31, 2017
£
|
||||||||||
Derecognition of intangible asset
|
12,574,092 | — | — | |||||||||
Amortization
|
621,211 | 1,083,875 | 398,290 | |||||||||
Direct labor cost
|
2,274,867 | 4,823,750 | 2,304,480 | |||||||||
External R&D costs
|
2,489,924 | 7,984,808 | 3,642,898 | |||||||||
|
|
|
|
|
|
|||||||
|
17,960,094
|
|
|
13,892,433
|
|
|
6,345,668
|
|
||||
|
|
|
|
|
|
Year ended
December 31, 2019
£
|
Year ended
December 31, 2018
£
|
Year ended
December 31, 2017
£
|
||||||||||
Rental income
|
|
111,289
|
|
— | — | |||||||
Interest received on overdue trade receivable balances
|
|
1,642
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
|
112,931
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
Year ended
December 31, 2019
£
|
Year ended
December 31, 2018
£
|
Year ended
December 31, 2017
£
|
||||||||||
Foreign exchange gains
|
|
309,863
|
|
195,177 | 70,661 |
Year ended
December 31, 2019
£
|
Year ended
December 31, 2018
£
|
Year ended
December 31, 2017
£
|
||||||||||
Charged to research and development costs:
|
||||||||||||
Depreciation of property, plant and equipment
|
|
337,126
|
|
— | — | |||||||
Amortization of intangible assets
|
|
1,067,940
|
|
— | — | |||||||
Impairment of intangible assets
|
|
6,608,387
|
|
— | — | |||||||
Impairment of goodwill
|
|
298,625
|
|
— | — | |||||||
Loss on disposal of property, plant and equipment
|
|
10,333
|
|
— | — | |||||||
Charged to general and administrative costs:
|
||||||||||||
Depreciation of property, plant and equipment (including right of use assets)
|
|
334,052
|
|
— | — |
Year ended
December 31, 2019
£
|
Year ended
December 31, 2018
£
|
Year ended
December 31, 2017
£
|
||||||||||
Wages and salaries, including restructuring costs
|
|
5,687,776
|
|
— | — | |||||||
Social security costs
|
|
633,240
|
|
— | — | |||||||
Pension costs — defined contribution plans
|
|
289,512
|
|
— | — | |||||||
Share options granted to directors and employees
|
|
2,113,097
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
Total employee benefit expense
|
|
8,723,625
|
|
— | — | |||||||
|
|
|
|
|
|
Year ended
December 31, 2019
£
|
Year ended
December 31, 2018
£
|
Year ended
December 31, 2017
£
|
||||||||||
Monthly average number of people (including executive directors) employed:
|
||||||||||||
Research and development
|
|
84
|
|
— | — | |||||||
Administration
|
|
32
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
Total average headcount
|
|
116
|
|
— | — | |||||||
|
|
|
|
|
|
Year ended
December 31, 2019
£
|
Year ended
December 31, 2018
£
|
Year ended
December 31, 2017
£
|
||||||||||
Compensation
|
|
1,577,034
|
|
313,021 | 185,326 | |||||||
Compensation for loss of office
|
|
152,033
|
|
73,203 | — | |||||||
Pension contributions to money purchase pension schemes
|
|
32,120
|
|
12,233 | 3,424 | |||||||
Share-based payment expense
|
|
1,293,281
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
|
3,054,468
|
|
|
398,457
|
|
|
188,750
|
|
||||
|
|
|
|
|
|
|||||||
Number of KMP accruing benefits under defined contributions
|
|
3
|
|
2 | 1 | |||||||
|
|
|
|
|
|
Year ended
December 31, 2019
£
|
Year ended
December 31, 2018
£
|
Year ended
December 31, 2017
£
|
||||||||||
Interest receivable
|
|
8,412
|
|
4,308 | — | |||||||
Foreign exchange gains
|
|
—
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
Total finance income on financial assets measured at amortized cost
|
|
8,412
|
|
4,308 | — | |||||||
|
|
|
|
|
|
Year ended
December 31, 2019
£
|
Year ended
December 31, 2018
£
|
Year ended
December 31, 2017
£
|
||||||||||
Bank interest payable and similar charges
|
|
7,877
|
|
— | — | |||||||
Interest on lease liability
|
|
22,394
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
Total finance costs on financial liabilities measured at amortized cost
|
|
30,271
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
Interest on convertible notes
|
|
154,491
|
|
— | — | |||||||
Foreign exchange loss
|
|
70,792
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
Total finance cost on financial liabilities held at FVTPL
|
|
225,283
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|||||||
Total finance costs
|
|
255,554
|
|
— | — | |||||||
|
|
|
|
|
|
Year ended
December 31, 2019
£
|
Restated*
Year ended
December 31, 2018
£
|
Restated*
Year ended
December 31, 2017
£
|
||||||||||
Current tax:
|
||||||||||||
Corporation tax (credit)/charge
|
|
(4,934,076
|
)
|
74,805 | 320,023 | |||||||
Adjustments in respect of prior years
|
|
—
|
|
(75,410 | ) | — | ||||||
|
|
|
|
|
|
|||||||
Total current tax (credit)/charge
|
|
(4,934,076
|
)
|
(605 | ) | 320,023 | ||||||
|
|
|
|
|
|
|||||||
Deferred income tax:
|
||||||||||||
(Credited)/ debited to statement of comprehensive (loss)/income
|
|
(2,082,423
|
)
|
2,636,737 | 336,841 | |||||||
|
|
|
|
|
|
|||||||
Total deferred tax benefit
|
|
(2,082,423
|
)
|
2,636,737 | 336,841 | |||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|||||||
Income tax (credit)/charge attributable to profit from continuing operations
|
|
(7,016,499
|
)
|
2,636,132 | 656,864 | |||||||
|
|
|
|
|
|
* |
See note 4.9 for explanation of restatement of prior year deferred tax.
|
Year ended
December 31, 2019
£
|
Restated*
Year ended
December 31, 2018
£
|
Restated*
Year ended
December 31, 2017
£
|
||||||||||
(Loss)/profit before tax
|
|
(41,975,811
|
)
|
15,904,730 | 4,136,124 | |||||||
Tax calculated at the UK tax rate of 19% (2018: 19%, 2017: 19.25%)
|
|
(7,975,404
|
)
|
3,021,899 | 796,369 | |||||||
Tax effects of:
|
||||||||||||
Expenses not deductible for tax purposes
|
|
5,800,331
|
|
205,935 | — | |||||||
Additional deduction for research and development expenditure
|
|
(4,038,288
|
)
|
— | — | |||||||
Surrender of tax losses for R&D tax credit
|
|
1,726,034
|
|
— | — | |||||||
Impact of reinvestment relief
|
|
(2,552,721
|
)
|
(516,292 | ) | (139,505 | ) | |||||
Differences in overseas tax rates
|
|
17,361
|
|
— | — | |||||||
Utilization of brought forward losses
|
|
(27,690
|
)
|
— | — | |||||||
Losses carried forward
|
|
35,732
|
|
— | — | |||||||
Adjustments in respect of prior years
|
|
—
|
|
(75,410 | ) | — | ||||||
Other differences
|
|
(1,854
|
)
|
— | — | |||||||
|
|
|
|
|
|
|||||||
Tax (credit)/charge for the year
|
|
(7,016,499
|
)
|
2,636,132 | 656,864 | |||||||
|
|
|
|
|
|
Unutilized
tax losses
£
|
Temporary
differences
arising on
fair value adjustments
£
|
Temporary
difference arising on application of reinvestment relief
£
|
Share
based payments
£
|
Accelerated
capital allowances £ |
Total
£
|
|||||||||||||||||||
At December 30, 2016
|
— | — | — | — | — |
|
—
|
|
||||||||||||||||
Credited/(charged in the year)
|
83,828 | — | (420,669 | ) | — | — | (336,841 | ) | ||||||||||||||||
At December 31, 2017 (restated*)
|
|
83,828
|
|
|
—
|
|
|
(420,669
|
)
|
|
—
|
|
|
—
|
|
|
(336,841
|
)
|
||||||
Credited/(charged in the year)
|
— | — | (2,636,737 | ) | — | — | (2,636,737 | ) | ||||||||||||||||
At December 31, 2018 (restated*)
|
|
83,828
|
|
|
—
|
|
|
(3,057,406
|
)
|
|
—
|
|
|
—
|
|
|
(2,973,578
|
)
|
||||||
Arising on acquisition of subsidiaries
|
1,530,610 | (2,245,790 | ) | — | 218,602 | (267,562 | ) |
|
(764,140
|
)
|
||||||||||||||
Credited in the year
|
96,808 | 589,798 | 1,022,633 | 359,273 | 13,911 |
|
2,082,423
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
At December 31, 2019
|
|
1,711,246
|
|
|
(1,655,992
|
)
|
|
(2,034,773
|
)
|
|
577,875
|
|
|
(253,651
|
)
|
|
(1,655,295
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
* |
See note 4.9 for explanation of restatement of prior year deferred tax.
|
Goodwill
£
|
Intellectual
property rights
£
|
Total
£
|
||||||||||
Cost
|
||||||||||||
As at December 30, 2016
|
— | — | — | |||||||||
Additions
|
— | 9,846,913 | 9,846,913 | |||||||||
|
|
|
|
|
|
|||||||
As at December 31, 2017
|
|
—
|
|
|
9,846,913
|
|
|
9,846,913
|
|
|||
|
|
|
|
|
|
|||||||
Additions
|
— | 9,619,995 | 9,619,995 | |||||||||
|
|
|
|
|
|
|||||||
As at December 31, 2018
|
|
—
|
|
|
19,466,908
|
|
|
19,466,908
|
|
|||
|
|
|
|
|
|
|||||||
Additions
|
— | 100,000 | 100,000 | |||||||||
Acquired with subsidiaries (see note 26)
|
3,110,452 | 13,393,627 | 16,504,079 | |||||||||
Additions due to settlement of
pre-existing
relationships (see note 26)
|
— | 23,527,581 | 23,527,581 | |||||||||
Disposals
|
— | (12,756,672 | ) | (12,756,672 | ) | |||||||
|
|
|
|
|
|
|||||||
As at December 31, 2019
|
|
3,110,452
|
|
|
43,731,444
|
|
|
46,841,896
|
|
|||
|
|
|
|
|
|
|||||||
Amortization and impairment
|
||||||||||||
As at December 30, 2016
|
— | — | — | |||||||||
Amortization charge
|
— | 398,290 | 398,290 | |||||||||
|
|
|
|
|
|
|||||||
As as December 31, 2017
|
|
—
|
|
|
398,290
|
|
|
398,290
|
|
|||
|
|
|
|
|
|
|||||||
Charge for the year
|
— | 1,083,875 | 1,083,875 | |||||||||
|
|
|
|
|
|
|||||||
As at December 31, 2018
|
|
—
|
|
|
1,482,165
|
|
|
1,482,165
|
|
|||
|
|
|
|
|
|
|||||||
Charge for the year
|
— | 1,689,151 | 1,689,151 | |||||||||
Impairment
|
298,625 | 6,608,387 | 6,907,012 | |||||||||
Disposals
|
— | (182,580 | ) | (182,580 | ) | |||||||
|
|
|
|
|
|
|||||||
As at December 31, 2019
|
|
298,625
|
|
|
9,597,123
|
|
|
9,895,748
|
|
|||
|
|
|
|
|
|
|||||||
Net book value
|
||||||||||||
At December 30, 2016
|
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
At January 1, 2018
|
— | 9,448,623 | 9,448,623 | |||||||||
|
|
|
|
|
|
|||||||
At December 31, 2018
|
— | 17,984,743 | 17,984,743 | |||||||||
|
|
|
|
|
|
|||||||
At December 31, 2019
|
|
2,811,827
|
|
|
34,134,321
|
|
|
36,946,148
|
|
|||
|
|
|
|
|
|
CGU
|
Carrying
Value at acquisition
GBP
|
Allocation
of Goodwill
GBP
|
||||||
FS122
|
10,787,290 | 908,783 | ||||||
FS422
|
5,035,085 | 424,184 | ||||||
FS118
|
7,705,206 | 649,130 | ||||||
FS21
|
3,544,694 | 298,625 | ||||||
FS120
|
4,829,105 | 406,831 | ||||||
FS222
|
3,928,892 | 330,992 | ||||||
Partnered Neuroscience assets
|
1,090,935 | 91,907 | ||||||
|
|
|
|
|||||
|
36,921,207
|
|
|
3,110,452
|
|
|||
|
|
|
|
Leasehold
improvements £ |
Laboratory
equipment
£
|
Office
equipment, fixtures & fittings
£
|
Total
£
|
|||||||||||||
Cost
|
||||||||||||||||
As at December 31, 2018 and December 31, 2017
|
— |
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Acquisitions (see note 27)
|
10,740 | 1,315,604 | 165,785 | 1,492,129 | ||||||||||||
Disposals
|
— | — | (17,155 | ) | (17,155 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
As at December 31, 2019
|
|
10,740
|
|
|
1,315,604
|
|
|
148,630
|
|
|
1,474,974
|
|
||||
|
|
|
|
|
|
|
|
|||||||||
Accumulated depreciation
|
||||||||||||||||
As at December 31, 2018 and December 31, 2017
|
— |
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Charge for the year
|
4,091 | 337,126 | 52,219 | 393,436 | ||||||||||||
Disposals
|
— | — | (5,243 | ) | (5,243 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
As at December 31, 2019
|
|
4,091
|
|
|
337,126
|
|
|
46,976
|
|
|
388,193
|
|
||||
|
|
|
|
|
|
|
|
|||||||||
Net book value
|
||||||||||||||||
As at December 31, 2018 and December 31 2017
|
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
At December 31, 2019
|
|
6,649
|
|
|
978,478
|
|
|
101,654
|
|
|
1,086,781
|
|
||||
|
|
|
|
|
|
|
|
December 31,
2019
Total
£
|
||||
Right-of-use
|
||||
Cost
|
||||
As at January 1, 2019
|
— | |||
Acquisitions (see note 26)
|
740,262 | |||
|
|
|||
As at December 31, 2019
|
|
740,262
|
|
|
|
|
|||
Accumulated depreciation
|
||||
As at January 1, 2019
|
— | |||
Depreciation charge for the year
|
277,742 | |||
|
|
|||
As at December 31, 2019
|
|
277,742
|
|
|
|
|
|||
Net book value
|
||||
As at January 1, 2019 & December 31, 2018
|
— | |||
|
|
|||
At December 31, 2019
|
|
462,520
|
|
|
|
|
Lease liabilities
|
December 31,
2019
Total
£
|
|||
Current
|
465,060 | |||
Non-current
|
39,745 | |||
|
|
|||
As at December 31, 2019
|
|
504,805
|
|
|
|
|
2019
Depreciation
charge
£
|
2019
Interest
cost
£
|
2019
Total
£
|
||||||||||
Right-of-use
|
277,742 | — | 277,742 | |||||||||
Lease liability — buildings
|
— | 22,394 | 22,394 | |||||||||
|
|
|
|
|
|
|||||||
|
277,742
|
|
|
22,394
|
|
|
300,136
|
|
||||
|
|
|
|
|
|
Buildings
Total
£
|
||||
Less than one year
|
478,923 | |||
One to two years
|
39,910 | |||
|
|
|||
Total undiscounted lease liability as at December 31, 2019
|
|
518,833
|
|
|
|
|
|||
Impact of discounting
|
(14,028 | ) | ||
|
|
|||
Carrying amount of liability
|
|
504,805
|
|
|
|
|
Year ended
December 31,
2019
Total
£
|
||||
Lease interest paid
|
22,394 | |||
Principal elements of lease payments
|
296,094 | |||
|
|
|||
|
318,488
|
|
||
|
|
Total
£
|
||||
Balance January 1, 2019
|
— | |||
Unlisted participation rights acquired (see note 27)
|
42,743 | |||
Foreign currency translation
|
(81 | ) | ||
|
|
|||
Balance December 31, 2019
|
|
42,662
|
|
|
|
|
December 31,
2019
£
|
December 31,
2018
£
|
December 31,
2017
£
|
||||||||||
Cash at bank and in hand
|
|
3,736,229
|
|
6,458,139 | 3,780,060 | |||||||
|
|
|
|
|
|
|||||||
Balances per statement of cash flows
|
|
3,736,229
|
|
6,458,139 | 3,780,060 | |||||||
|
|
|
|
|
|
Note
|
Lease
liabilities
£
|
Borrowings
£
|
Total
£
|
|||||||||||||
At December 31, 2018 and December 31, 2017
|
— | — |
|
—
|
|
|||||||||||
Cash flows
|
(318,488 | ) | 10,051,963 |
|
9,733,475
|
|
||||||||||
Non-cash
changes
|
||||||||||||||||
Acquired with subsidiaries
|
800,899 | — |
|
800,899
|
|
|||||||||||
Interest charged
|
22,394 | 154,491 |
|
176,885
|
|
|||||||||||
Fair value adjustment on borrowings
|
22 | — | 1,106,313 |
|
1,106,313
|
|
||||||||||
Foreign exchange differences
|
— | 51,687 |
|
51,687
|
|
|||||||||||
|
|
|
|
|
|
|||||||||||
At December 31, 2019
|
504,805 | 11,364,454 |
|
11,869,259
|
|
|||||||||||
|
|
|
|
|
|
December 31,
2019
£
|
December 31,
2018
£
|
December 31,
2017
£
|
||||||||||
Trade receivables from contracts with customers
|
|
4,588
|
|
— | — | |||||||
Prepayments and accrued income
|
|
1,875,313
|
|
259,112 | 672,254 | |||||||
Social security and other taxes
|
|
641,671
|
|
— | — | |||||||
Other receivables
|
|
191,572
|
|
87,130 | 63,281 | |||||||
|
|
|
|
|
|
|||||||
|
2,713,144
|
|
|
346,242
|
|
|
735,535
|
|
||||
|
|
|
|
|
|
December 31,
2019
£
|
Restated*
December 31,
2018
£
|
Restated^
December 31,
2017
£
|
||||||||||
Share capital
|
|
177,768
|
|
1 | 91 | |||||||
Other reserves
|
||||||||||||
Group restructuring reserve
|
|
76,745,484
|
|
— | — | |||||||
Reverse acquisition reserve
|
|
(31,483,690
|
)
|
90 | — | |||||||
|
|
|
|
|
|
|||||||
|
45,261,794
|
|
90 | — | ||||||||
(Accumulated losses)/retained earnings
|
|
(16,907,806
|
)
|
15,861,034 | 3,479,260 | |||||||
|
|
|
|
|
|
|||||||
Capital managed
|
|
28,531,756
|
|
15,861,125 | 3,479,351 | |||||||
|
|
|
|
|
|
December 31,
2019
£
|
December 31,
2018
£
|
December 31,
2017
£
|
||||||||||
Current
|
||||||||||||
Lease liability
|
|
465,060
|
|
— | — | |||||||
Convertible notes held at FVTPL (unsecured)
|
|
11,364,454
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
|
11,829,514
|
|
— | — | ||||||||
|
|
|
|
|
|
|||||||
Non-current
|
||||||||||||
Lease liability
|
|
39,745
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
|
39,745
|
|
— | — | ||||||||
|
|
|
|
|
|
|||||||
Total
|
|
11,869,259
|
|
— | — | |||||||
|
|
|
|
|
|
December 31,
2019
£
|
December 31,
2018
£
|
December 31,
2017
£
|
||||||||||
Face value of the notes issued
|
|
10,051,963
|
|
— | — | |||||||
Fair value adjustment through profit or loss
|
|
1,106,313
|
|
— | — | |||||||
Interest charged
|
|
154,491
|
|
— | — | |||||||
Foreign exchange loss
|
|
51,687
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
Current liability
|
|
11,364,454
|
|
— | — | |||||||
|
|
|
|
|
|
Convertible
notes at FVPL
£
|
||||
Balance at December 31, 2018 and December 31, 2017
|
— | |||
Losses recognized in statement of comprehensive (loss)/income
|
1,106,313 | |||
|
|
|||
Balance at December 31, 2019
|
|
1,106,313
|
|
|
|
|
2019
Fair value
£
|
2019
Amortized cost
£
|
2018 and 2017
Fair value
£
|
2018 and 2017
Amortized cost
£
|
|||||||||||||
Convertible notes
|
|
11,364,454
|
|
|
10,258,141
|
|
— | — | ||||||||
|
|
|
|
|
|
|
|
22.
|
Trade and other payables
|
December 31,
2019
£
|
December 31,
2018
£
|
December 31,
2017
£
|
||||||||||
Due within one year
|
||||||||||||
Trade payables and other payables
|
|
3,854,667
|
|
469,953 | 315,041 | |||||||
Amounts owed to related parties
|
|
—
|
|
616,945 | 784,378 | |||||||
Accrued expenses
|
|
6,558,635
|
|
468,484 | 242,460 | |||||||
Other creditors
|
|
208,655
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
|
10,621,957
|
|
1,555,382 | 1,341,879 | ||||||||
|
|
|
|
|
|
23.
|
Share-based payments
|
GmbH
|
Alpha
|
Beta
|
Delta
|
|||||
Exchange ratio for shares in FTL |
For each share held in GmbH, the shareholders received 3.34526 shares of series A preferred shares, seed preferred shares, or ordinary shares in FTL depending on the liquidation rights contractually attached to the original shares held in GmbH.
Holders of options to purchase ordinary
|
For each series A preferred share and/or ordinary share held in Alpha, the shareholders received 0.06473 ordinary shares in FTL
Holders of options to purchase ordinary shares of Alpha also swapped their existing options for new options to purchase ordinary shares of FTL at the
|
For each series A preferred share and/or ordinary share held in Beta, the shareholders received 0.68939 ordinary shares in FTL
Holders of options to purchase ordinary shares of Beta also swapped their existing options for new options to purchase ordinary shares of FTL at
|
For each ordinary share held in Delta, the shareholders received one ordinary share in FTL
(Note: There are no holders of options to purchase ordinary
|
GmbH
|
Alpha
|
Beta
|
Delta
|
|||||
shares of GmbH also swapped their existing options for new options to purchase ordinary shares of FTL at the same exchange ratio of 3.34526. | same exchange ratio of 0.06473. | the same exchange ratio of 0.68939. | shares in Delta) | |||||
Total number and class of shares issued by FTL to shareholders | 1,441,418 series A preferred shares, 103,611 seed preferred shares and 125,715 ordinary shares | 570,387 ordinary shares | 6,446,843 ordinary shares | 9,053,538 ordinary shares |
2019
Number
|
2019
Weighted
average exercise price |
|||||||
Outstanding at January 1
|
— | — | ||||||
Granted in the period (including replacement of legacy options issued as FTL options)
|
2,398,986 | £ | 0.64 | |||||
Exercised in the period
|
(35,148 | ) | £ | 0.00 | ||||
Forfeited in the period
|
(59,132 | ) | £ | 0.01 | ||||
|
|
|
|
|||||
Outstanding at December 31
|
|
2,304,706
|
|
£
|
0.67
|
|
||
|
|
|
|
|||||
Exercisable at December 31
|
|
559,813
|
|
£
|
0.47
|
|
||
|
|
|
|
Grant date
|
Expiry date
|
Remaining
contractual life
(months)
|
Exercise
price |
2019
Number
|
||||||
June 14, 2019
|
June 14, 2029 | 114 | £0.00 - £0.05 | 370,347 | ||||||
June 14, 2019
|
June 14, 2029 | 114 | $1.87 | 939,954 | ||||||
June 14, 2019
|
June 14, 2029 | 114 | £0.01 | 923,455 | ||||||
July 1, 2019
|
July 1, 2029 | 114 | £0.01 | 950 | ||||||
December 18, 2019
|
December 18, 2029 | 120 | $1.61 | 35,000 | ||||||
December 18, 2019
|
December 18, 2029 | 120 | £0.01 | 35,000 | ||||||
|
|
|||||||||
|
2,304,706
|
|
||||||||
|
|
June 14, 2019
(US Grants)
|
June 14, 2019 &
July 1, 2019
(UK Grants)
|
December 18,
2019
(US Grants)
|
December 18,
2019
(UK Grants)
|
|||||||||||||
Share price at grant date
|
£ | 2.45 | £ | 2.45 | £ | 1.70 | £ | 1.70 | ||||||||
Exercise price
|
£ | 1.47 | £ | 0.01 | £ | 1.22 | £ | 0.01 | ||||||||
Term (years)
|
5.054 | 5.054 | 5.054 | 5.054 | ||||||||||||
Expected volatility
|
70.03 | % | 70.03 | % | 70.31 | % | 70.31 | % | ||||||||
Expected dividends expressed as a dividend yield
|
0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||
Risk-free rate
|
1.85 | % | 1.85 | % | 1.74 | % | 1.74 | % | ||||||||
Fair value per option
|
£
|
1.7057
|
|
£
|
2.4590
|
|
£
|
1.1611
|
|
£
|
1.7577
|
|
December 31,
2019
£
|
||||
Cancelled options
|
24,307 | |||
Modified options
|
41,389 | |||
New options with alternative vesting schedule
|
900,714 | |||
New options with standard vesting
|
1,146,687 | |||
|
|
|||
|
2,113,097
|
|
||
|
|
December 31,
2019
£ |
||||
Research and development
|
437,139 | |||
General and administration
|
1,675,958 | |||
|
|
|||
Total recognized in consolidated statement of comprehensive (loss)/income
|
|
2,113,097
|
|
|
|
|
Number of
options |
||||
Replacement legacy options issued as FTL options
|
|
405,495
|
|
|
Vested options as at June 14, 2019
|
|
(371,369
|
)
|
|
|
|
|||
Post-corporate reorganization legacy options issued as FTL options
|
|
34,126
|
|
|
|
|
24.
|
Commitments
|
25.1
|
Corporate reorganization, business combination and asset acquisition
|
25.2
|
Parent entity
|
Country of
incorporation |
Nature of business
|
Proportion of ordinary
shares held by parent
(%)
|
Direct/
indirect |
|||||||
F-star
Alpha Limited
|
UK | Research & development | 100 | % | Direct | |||||
F-star
Beta Limited
|
UK | Research & development | 100 | % | Direct | |||||
F-star
Delta Limited
|
UK | Research & development | 100 | % | Direct | |||||
F-star
Biotechnology Limited
|
UK | Research & development | 100 | % | Indirect | |||||
F-star
Biotechnologische
Forschungs-und
Entwicklungsges.m.b.H
|
Austria | Intermediate holding company | 100 | % | Direct | |||||
F-star
Therapeutics LLC
|
US | Research & development | 100 | % | Indirect |
25.3
|
Convertible notes
|
25.4
|
Key management personnel (including directors)
|
R&D
recharges
2019
£
|
Other
recharges 2019
£
|
R&D
recharges
2018
£
|
Other
recharges 2018
£
|
|||||||||||||
Expenses
|
||||||||||||||||
Beta
|
1,863,660 | 483,653 | 8,013,172 | — | ||||||||||||
F-star
Biotechnology Limited
|
206,221 | — | 488,726 | 113,163 | ||||||||||||
GmbH
|
— | 11,536 | — | 82,464 | ||||||||||||
2019
£
|
2018
£
|
|||||||||||||||
Payable as at December 31
|
||||||||||||||||
Beta
|
— | — |
|
—
|
|
(412,156 | ) | |||||||||
F-star
Biotechnology Limited
|
— | — |
|
—
|
|
(187,892 | ) | |||||||||
GmbH
|
— | — |
|
—
|
|
(16,897 | ) | |||||||||
Intangible asset acquisitions
|
||||||||||||||||
Acquired from Beta
|
— | — |
|
—
|
|
9,619,995 |
R&D
recharges
2017
£
|
Other
recharges 2017
£
|
|||||||
Expenses
|
||||||||
Beta
|
4,224,732 | — | ||||||
F-star
Biotechnology Limited
|
1,039,396 | — |
2017
£
|
||||
Payable as at December 31
|
||||
Beta
|
(730,489 | ) | ||
F-star
Biotechnology Limited
|
(34,831 | ) | ||
Intangible asset acquisitions
|
||||
Acquired from Beta
|
9,846,913 |
£
|
||||
Cash
|
— | |||
Other current assets
|
— | |||
Intangible assets
|
— | |||
Current liabilities
|
— | |||
|
|
|||
|
—
|
|
||
|
|
£
|
||||
Purchase consideration
|
||||
Ordinary shares issued
|
|
4,219,308
|
|
|
|
|
|||
Total purchase consideration
|
|
4,219,308
|
|
|
|
|
£
|
||||
Cash
|
|
915,436
|
|
|
Other current assets
|
|
4,157,960
|
|
|
Intangible assets
|
|
12,302,691
|
|
|
Current liabilities
|
|
(14,714,909
|
)
|
|
Goodwill
|
|
1,558,130
|
|
|
|
|
|||
|
4,219,308
|
|
||
|
|
Asset
|
FV
£
|
Description
|
||||
FS21
|
3,544,694 |
Contracted future cash flows relating to a drug candidate that has been licensed to a collaboration partner
|
||||
FS120
|
4,829,105 |
Internally developed drug candidate, for which Beta holds the IP rights
|
||||
FS222
|
3,928,892 |
Internally developed drug candidate, for which Beta holds the IP rights
|
||||
|
|
|||||
|
12,302,691
|
|
||||
|
|
26.3
|
GmbH Group
|
£
|
||||
Purchase consideration
|
||||
Preferred and ordinary shares issued
|
|
7,155,411
|
|
|
|
|
|||
Total purchase consideration
|
|
7,155,411
|
|
|
|
|
Total
£
|
||||
Cash
|
|
722,631
|
|
|
Other current assets
|
|
13,830,265
|
|
|
Property and equipment (net)
|
|
1,492,129
|
|
|
Right of use assets (net)
|
|
740,262
|
|
|
Intangible assets
|
|
1,090,935
|
|
|
Unlisted participation rights
|
|
42,743
|
|
|
Current liabilities
|
|
(11,962,256
|
)
|
|
Other
non-current
liabilities
|
|
(353,620
|
)
|
|
Goodwill
|
|
1,552,322
|
|
|
|
|
|||
|
7,155,411
|
|
||
|
|
Asset
|
FV
£
|
Description
|
||||
Neuroscience assets
|
1,090,935 | Contracted future cash flows relating to two drug candidates that have been licensed to a collaboration partner | ||||
|
|
|||||
|
1,090,935
|
|
||||
|
|
27.
|
Subsequent events
|
• |
inputs into the
cost-to-cost
|
• |
assessment of impairment of the carrying value of group intangible assets
|
28.
|
(Losses)/earnings per share
|
Year ended
December 31,
2019
£
|
Restated*
Year ended
December 31, 2018
£
|
Restated*
Year ended
December 31, 2017
£
|
||||||||||
(Losses)/earnings per share for the year:
|
||||||||||||
— basic and diluted
|
|
(2.37
|
)
|
1.47 | 0.38 | |||||||
2019
Number
|
2018
Number
|
2017
Number
|
||||||||||
Weighted average number of ordinary shares for basic losses/earnings per share
|
|
13,734,903
|
|
9,053,658 | 9,053,658 | |||||||
Effect of dilution (share options and convertible debt)
|
|
—
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
Weighted average number of ordinary shares adjusted for the effect of dilution
|
|
13,734,903
|
|
9,053,658 | 9,053,658 | |||||||
|
|
|
|
|
|
Note
|
Period ended
May 6,
2019
€
|
Year ended
December 31,
2018
€
|
Year ended
December 31,
2017
€
|
|||||||||||
Revenue
|
5 |
|
9,057,540
|
|
21,088,390 | 15,749,415 | ||||||||
Other income
|
6 |
|
591,221
|
|
505,032 | 231,538 | ||||||||
Raw materials and consumables used
|
|
(1,338,846
|
)
|
(3,959,930 | ) | (2,958,089 | ) | |||||||
Depreciation, amortization and loss on disposal
|
|
(453,934
|
)
|
(835,458 | ) | (559,383 | ) | |||||||
Employee expenses
|
7 |
|
(3,369,435
|
)
|
(7,994,504 | ) | (6,853,326 | ) | ||||||
Other expenses
|
|
(3,087,303
|
)
|
(7,428,919 | ) | (5,613,168 | ) | |||||||
|
|
|
|
|
|
|||||||||
Operating profit/(loss)
|
8 |
|
1,399,243
|
|
1,374,611 | (3,013 | ) | |||||||
Finance income
|
9 |
|
124,549
|
|
163,781 | 116,215 | ||||||||
Finance costs
|
9 |
|
(108,521
|
)
|
(223,377 | ) | (201,265 | ) | ||||||
|
|
|
|
|
|
|||||||||
Net finance income/ (costs)
|
|
16,028
|
|
(59,596 | ) | (85,050 | ) | |||||||
|
|
|
|
|
|
|||||||||
Profit/(loss) before tax on ordinary activities
|
|
1,415,271
|
|
1,315,015 | (88,063 | ) | ||||||||
Income tax (charge)/credit
|
10 |
|
(49,384
|
)
|
195,154 | 225,401 | ||||||||
|
|
|
|
|
|
|||||||||
Profit for the period
|
|
1,365,887
|
|
1,510,169 | 137,338 | |||||||||
|
|
|
|
|
|
|||||||||
Profit attributable to owners of the parent
|
|
1,365,887
|
|
1,510,169 | 137,338 | |||||||||
All profits and losses relate to continuing operations
|
||||||||||||||
Other comprehensive income:
|
||||||||||||||
Items that may be subsequently reclassified to profit or loss
|
||||||||||||||
Currency translation differences
|
|
(426,280
|
)
|
72,676 | 44,356 | |||||||||
|
|
|
|
|
|
|||||||||
Other comprehensive (loss)/income for the period
|
|
(426,280
|
)
|
72,676 | 44,356 | |||||||||
|
|
|
|
|
|
|||||||||
Total comprehensive income attributable to owners of the parent
|
|
939,607
|
|
1,582,845 | 181,694 | |||||||||
|
|
|
|
|
|
|||||||||
Earnings per share for profit attributable to the shareholders of the Company:
|
||||||||||||||
Basic earnings per share
|
26 |
|
2.26
|
|
2.50 | 0.23 | ||||||||
Diluted earnings per share
|
26 |
|
2.15
|
|
2.50 | 0.23 |
Note
|
2019
€
|
2018
€
|
2017
€
|
|||||||||||||
ASSETS
|
||||||||||||||||
Non-current
assets
|
||||||||||||||||
Intangible assets, net
|
11 |
|
184,450
|
|
193,375 | 218,875 | ||||||||||
Property, plant and equipment, net
|
12 |
|
2,604,367
|
|
1,887,676 | 1,949,721 | ||||||||||
Financial assets at fair value through profit or loss
|
13 |
|
50,000
|
|
50,000 | 100,000 | ||||||||||
|
|
|
|
|
|
|||||||||||
Total
non-current
assets
|
|
2,838,817
|
|
2,131,051 | 2,268,596 | |||||||||||
|
|
|
|
|
|
|||||||||||
Current assets
|
||||||||||||||||
Cash and cash equivalents
|
15 |
|
848,854
|
|
2,052,922 | 3,133,482 | ||||||||||
Corporate tax receivables
|
|
514,698
|
|
502,585 | 711,934 | |||||||||||
Trade and other receivables
|
14 |
|
15,746,374
|
|
13,856,170 | 7,483,677 | ||||||||||
|
|
|
|
|
|
|||||||||||
Total current assets
|
|
17,109,926
|
|
16,411,677 | 11,329,093 | |||||||||||
|
|
|
|
|
|
|||||||||||
Total assets
|
|
19,948,743
|
|
18,542,728 | 13,597,689 | |||||||||||
|
|
|
|
|
|
|||||||||||
EQUITY AND LIABILITIES
|
||||||||||||||||
Equity attributable to owners of the parent
|
||||||||||||||||
Share capital — ordinary
|
19 |
|
604,694
|
|
604,694 | 604,694 | ||||||||||
Capital reserves
|
19 |
|
28,599,822
|
|
28,599,822 | 28,599,822 | ||||||||||
Share-based payment
|
22 |
|
3,171,248
|
|
3,140,934 | 3,083,838 | ||||||||||
Foreign exchange reserve
|
19 |
|
(411,990
|
)
|
14,290 | (58,386 | ) | |||||||||
Accumulated losses
|
19 |
|
(32,532,857
|
)
|
(33,836,306 | ) | (28,328,236 | ) | ||||||||
|
|
|
|
|
|
|||||||||||
Total equity
|
|
(569,083
|
)
|
(1,476,566 | ) | 3,901,732 | ||||||||||
|
|
|
|
|
|
|||||||||||
Liabilities
|
||||||||||||||||
Non-current
liabilities
|
||||||||||||||||
Deferred revenue
|
5 |
|
—
|
|
815,115 | — | ||||||||||
Lease liability
|
18 |
|
413,657
|
|
— | — | ||||||||||
|
|
|
|
|
|
|||||||||||
Total
non-current
liabilities
|
|
413,657
|
|
815,115 | — | |||||||||||
|
|
|
|
|
|
|||||||||||
Current liabilities
|
||||||||||||||||
Borrowings
|
16 |
|
9,056,202
|
|
7,464,111 | 7,573,318 | ||||||||||
Corporation tax payable
|
|
229,690
|
|
198,059 | 48,142 | |||||||||||
Deferred revenue
|
5 |
|
6,257,849
|
|
9,023,106 | — | ||||||||||
Trade and other payables
|
17 |
|
4,032,422
|
|
2,518,903 | 2,074,497 | ||||||||||
Lease liability
|
18 |
|
528,006
|
|
— | — | ||||||||||
|
|
|
|
|
|
|||||||||||
Total current liabilities
|
|
20,104,169
|
|
19,204,179 | 9,695,957 | |||||||||||
|
|
|
|
|
|
|||||||||||
Total equity and liabilities
|
|
19,948,743
|
|
18,542,728 | 13,597,689 | |||||||||||
|
|
|
|
|
|
Note
|
Share
capital
€
|
Capital
reserves
€
|
Share-
based
payment
€
|
Foreign
exchange reserve
€
|
Accumulated
losses
€
|
Total
equity
€
|
||||||||||||||||||||||
Balance as of December 31, 2018
|
|
604,694
|
|
|
28,599,822
|
|
|
3,140,934
|
|
|
14,290
|
|
|
(33,836,306
|
)
|
|
(1,476,566
|
)
|
||||||||||
Adoption of new accounting standard (note 2.4 ii)
|
— | — | — | — | (62,438 | ) | (62,438 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Revised balance as of January 1, 2019
|
|
604,694
|
|
|
28,599,822
|
|
|
3,140,934
|
|
|
14,290
|
|
|
(33,898,744
|
)
|
|
(1,539,004
|
)
|
||||||||||
Profit for the period ended May 6, 2019
|
— | — | — | — | 1,365,887 | 1,365,887 | ||||||||||||||||||||||
Other comprehensive loss
|
— | — | — | (426,280 | ) | — | (426,280 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(426,280
|
)
|
|
1,365,887
|
|
|
939,607
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Transactions with owners of the Company, recognized directly in equity
|
||||||||||||||||||||||||||||
Share-based payments
|
22 | — | — | 30,314 | — | — | 30,314 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance as of May 6, 2019
|
|
604,694
|
|
|
28,599,822
|
|
|
3,171,248
|
|
|
(411,990
|
)
|
|
(32,532,857
|
)
|
|
(569,083
|
)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Note
|
Share
capital
€
|
Capital
reserves
€
|
Share-
based
payment
€
|
Foreign
exchange reserve
€
|
Accumulated
losses
€
|
Total
equity
€
|
||||||||||||||||||||||
Balance as of December 31, 2017
|
604,694 | 28,599,822 | 3,083,838 | (58,386 | ) | (28,328,236 | ) | 3,901,732 | ||||||||||||||||||||
Adoption of new accounting standard (note 2.4 ii)
|
— | — | — | — | (7,018,239 | ) | (7,018,239 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Revised balance as of January 1, 2018
|
604,694 | 28,599,822 | 3,083,838 | (58,386 | ) | (35,346,475 | ) | (3,116,507 | ) | |||||||||||||||||||
Profit for the year ended December 31, 2018
|
— | — | — | — | 1,510,169 | 1,510,169 | ||||||||||||||||||||||
Other comprehensive income
|
— | — | — | 72,676 | — | 72,676 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total comprehensive income
|
— | — | — | 72,676 | 1,510,169 | 1,582,845 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Transactions with owners of the Company, recognized directly in equity
|
||||||||||||||||||||||||||||
Share-based payments
|
22 | — | — | 57,096 | — | — | 57,096 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance as of December 31, 2018
|
604,694 | 28,599,822 | 3,140,934 | 14,290 | (33,836,306 | ) | (1,476,566 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Note
|
Share
capital
€
|
Capital
reserves
€
|
Share-
based
payment
€
|
Foreign
exchange reserve
€
|
Accumulated
losses
€
|
Total
equity
€
|
||||||||||||||||||||||
Balance as of January 1, 2017
|
604,694 | 28,599,822 | 2,951,616 | (102,742 | ) | (28,465,574 | ) | 3,587,816 | ||||||||||||||||||||
Profit for the year ended December 31, 2017
|
— | — | — | — | 137,338 | 137,338 | ||||||||||||||||||||||
Other comprehensive income
|
— | — | — | 44,356 | — | 44,356 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total comprehensive income
|
— | — | — | 44,356 | 137,338 | 181,694 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Transactions with owners of the Company, recognized directly in equity
|
||||||||||||||||||||||||||||
Share-based payments
|
22 | — | — | 132,222 | — | — | 132,222 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance as of December 31, 2017
|
604,694 | 28,599,822 | 3,083,838 | (58,386 | ) | (28,328,236 | ) | 3,901,732 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Note
|
Period ended
May 6,
2019
€
|
Year ended
December 31,
2018
€
|
Year ended
December 31,
2017
€
|
|||||||||||||
Cash flows from operating activities
|
||||||||||||||||
Profit/(loss) before taxes attributable to the owners of the parent
|
|
1,415,271
|
|
1,315,015 | (88,063 | ) | ||||||||||
Adjustments for:
|
||||||||||||||||
Share-based payment expense
|
22 |
|
30,314
|
|
57,096 | 132,222 | ||||||||||
Net finance (income)/cost
|
|
(16,028
|
)
|
59,596 | 85,050 | |||||||||||
Foreign exchange (gains)/losses
|
|
(179,368
|
)
|
194,481 | 117,854 | |||||||||||
Amortization
|
11 |
|
8,925
|
|
25,500 | 25,500 | ||||||||||
Depreciation
|
12 |
|
445,009
|
|
795,253 | 533,883 | ||||||||||
Loss on disposal of fixed assets
|
|
—
|
|
10,406 | — | |||||||||||
(Increase)/decrease in trade and other receivables
|
14 |
|
(1,890,204
|
)
|
353,776 | (1,065,077 | ) | |||||||||
Increase in trade and other payables
|
17 |
|
1,513,519
|
|
444,406 | 328,230 | ||||||||||
Change in deferred revenue
|
5 |
|
(3,580,372
|
)
|
9,838,221 | — | ||||||||||
Change in fair value of financial assets (FVTPL)
|
13 |
|
—
|
|
50,000 | — | ||||||||||
Adoption of new accounting standard*
|
2.4 ii |
|
—
|
|
(7,018,239 | ) | — | |||||||||
|
|
|
|
|
|
|||||||||||
Cash (used in)/generated from operating activities
|
|
(2,252,934
|
)
|
6,125,511 | 69,599 | |||||||||||
Corporation tax received/(paid)
|
|
—
|
|
554,433 | (342,546 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Net cash flows (used in)/generated from operating activities
|
|
(2,252,934
|
)
|
6,679,944 | (272,947 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Cash flows generated from/(used in) investing activities:
|
||||||||||||||||
Payments to acquire property, plant and equipment
|
12 |
|
(13,930
|
)
|
(772,132 | ) | (962,811 | ) | ||||||||
Issue of loan to related party
|
24 |
|
—
|
|
(6,889,366 | ) | (5,622,335 | ) | ||||||||
Repayment of loan granted to related party
|
24 |
|
—
|
|
— | 2,273,764 | ||||||||||
Proceeds from sale of assets
|
|
—
|
|
— | 100,000 | |||||||||||
Payment to acquire assets
|
|
—
|
|
— | (100,000 | ) | ||||||||||
Interest received
|
|
140,994
|
|
143,715 | 94,462 | |||||||||||
|
|
|
|
|
|
|||||||||||
Net cash flows generated from/ (used in) investing activities
|
|
127,064
|
|
(7,517,783 | ) | (4,216,920 | ) | |||||||||
|
|
|
|
|
|
|||||||||||
Cash flows generated from/ (used in) financing activities:
|
||||||||||||||||
Proceeds from loans
|
|
1,150,563
|
|
— | 2,360,367 | |||||||||||
Lease interest paid
|
18 |
|
(10,233
|
)
|
— | — | ||||||||||
Interest paid
|
|
(123,909
|
)
|
(217,148 | ) | (180,968 | ) | |||||||||
Repayment of loans
|
|
—
|
|
— | (100,000 | ) | ||||||||||
Principal element of lease payments
|
18 |
|
(171,473
|
)
|
— | — | ||||||||||
|
|
|
|
|
|
|||||||||||
Net cash flows generated from /(used in) financing activities
|
|
844,948
|
|
(217,148 | ) | 2,079,399 | ||||||||||
|
|
|
|
|
|
|||||||||||
Net decrease in cash and cash equivalents
|
|
(1,280,922
|
)
|
(1,054,987 | ) | (2,410,468 | ) | |||||||||
Cash and cash equivalents as of beginning of period
|
|
2,052,922
|
|
3,133,482 | 5,548,417 | |||||||||||
Foreign exchange gain/(loss) on cash and cash equivalents
|
|
76,854
|
|
(25,573 | ) | (4,467 | ) | |||||||||
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents as of end of period
|
15 |
|
848,854
|
|
2,052,922 | 3,133,482 | ||||||||||
|
|
|
|
|
|
Reconciliation of movement in liabilities from financing activities
|
Period ended
May 6,
2019
€
|
Year ended
December 31,
2018
€
|
Year ended
December 31,
2017
€
|
|||||||||
At 1 January
|
|
7,464,111
|
|
7,573,318 | 5,602,669 | |||||||
Cash flows
|
|
844,948
|
|
(217,148 | ) | 2,079,399 | ||||||
Non-cash
changes
|
||||||||||||
Adoption of new accounting standard (see note 2)
|
|
1,025,736
|
|
— | — | |||||||
Foreign exchange
|
|
561,218
|
|
(115,436 | ) | (302,666 | ) | |||||
Interest charged
|
|
101,852
|
|
223,377 | 193,916 | |||||||
|
|
|
|
|
|
|||||||
At May 6/ December 31
|
|
9,997,865
|
|
7,464,111 | 7,573,318 | |||||||
|
|
|
|
|
|
€
|
Note
|
Original classification
under IAS 39 |
New
classification under IFRS 9 |
Original carrying
amount under
IAS 39
|
New carrying
amount under
IFRS 9
|
|||||||||||||||
Financial assets
|
||||||||||||||||||||
Trade and other receivables
|
(a) |
Loans and
receivables |
|
Amortized
cost |
|
2,405,424 | 2,405,424 | |||||||||||||
Cash and cash equivalents
|
Loans and
receivables |
|
Amortized
cost |
|
|
3,133,482
|
|
3,133,482 | ||||||||||||
Loan to related party
|
(b) |
Loans and
receivables |
|
Amortized
cost |
|
|
4,438,735
|
|
4,438,735 | |||||||||||
Equity securities
|
(c) |
Available-for-sale
|
|
FVTPL
— equity instrument |
|
100,000 | 100,000 | |||||||||||||
|
|
|
|
|||||||||||||||||
Total Financial Assets
|
|
10,077,641
|
|
|
10,077,641
|
|
||||||||||||||
|
|
|
|
|||||||||||||||||
Financial liabilities
|
||||||||||||||||||||
Trade payables and accruals
|
Other financial
liabilities |
|
|
Amortized
cost |
|
1,582,402 | 1,582,402 | |||||||||||||
Loan from related party
|
(d) |
Other financial
liabilities |
|
Amortized
cost |
|
7,573,318 | 7,573,318 | |||||||||||||
|
|
|
|
|||||||||||||||||
Total Financial Liabilities
|
|
9,155,720
|
|
|
9,155,720
|
|
||||||||||||||
|
|
|
|
(a) |
Trade and other receivables: Trade and other receivables that were classified as loans and receivables under IAS 39 are now classified as amortized cost. The group applies the IFRS 9 simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance for all trade receivables and contract assets.
|
(b) |
Loan to related party: Loans to related parties that were classified as loans and receivables under IAS 39 are now classified as amortized cost. The loan is repayable on demand and so the group applies an expected credit losses model on assumption that repayment is demanded as of the reporting date.
|
(c) |
Equity securities: These investments have been reclassified from
available-for
sale to fair value through profit and loss. They do not meet the IFRS 9 criteria for classification at amortized cost, because their cash flows do not represent solely payments of principal and interest.
|
(d) |
Trade payables and accruals and loan from related party: IFRS 9 largely retains the existing requirements in IAS 39 for the classification and measurement of financial liabilities.
|
Statement of financial position (extract)
|
IAS 18 carrying
amount
December 31, 2017
€
|
Remeasurement
€
|
IFRS 15 carrying
amount
January 1, 2018
€ |
|||||||||
Deferred revenue
|
— | 7,018,239 | 7,018,239 |
€
|
||||
Balance as at December 31, 2017 as originally stated
|
(28,328,236 | ) | ||
Change in accounting policy
|
(7,018,239 | ) | ||
|
|
|||
Restated total equity as at January 1, 2018
|
|
(35,346,475
|
)
|
|
|
|
• |
application of a single discount rate to a portfolio of leases with reasonably similar characteristics
|
• |
reliance on previous assessments on whether leases are onerous as an alternative to performing an impairment review – there were no onerous contracts as at January 1, 2019
|
• |
accounting for operating leases with a remaining lease term of less than 12 months as at January 1, 2019 as short-term leases
|
• |
use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease
|
• |
elect to not separate lease and
non-lease
components and instead account for both as if it were one lease component
|
• |
payments associated with short-term leases of equipment and vehicles and all leases of low value assets are recognized on a straight-line basis as an expense in profit or loss.
|
€
|
||||
Operating lease commitments disclosed as at December 31, 2018
|
|
1,110,576
|
|
|
Effect of discounting those lease commitments at an annual discount rate of 5%
|
(80,635 | ) | ||
Less short-term leases not recognized as a liability
|
(26,197 | ) | ||
|
|
|||
Lease liability recognized as at January 1, 2019
|
|
1,003,744
|
|
|
|
|
• |
right-of-use
|
• |
lease liability — increase by €1,003,744
|
F-star
Biotechnology Limited, Cambridge, U.K.
|
pounds sterling | |
F-star
Therapeutics LLC, Delaware, U.S.
|
U.S. dollar |
a. |
assets and liabilities for each date of consolidated statements of financial position presented are translated at the closing rate as of the date of that consolidated statement of financial position;
|
b. |
income and expenses for each consolidated statement of comprehensive income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect
|
of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and |
c. |
all resulting exchange differences are recognized in other comprehensive income.
|
Leasehold property improvements, right of use assets | Lesser of useful life or period of the lease | |
Plant and machinery | 20% on cost | |
Office equipment, fixtures and fittings | 33% on cost |
• |
Patents (once filed)—Over the period of the relevant patents (assumed to be 20 years once filed)
|
• |
measured at fair value
|
• |
measured at amortized cost
|
• |
each performance obligation contains multiple deliverables; and
|
• |
resource expended has been assessed as the most accurate method of measuring progress towards completion of each performance obligation.
|
• |
The contract involves the use of an identified asset
|
• |
The group has the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use; and
|
• |
The group controls the use of the asset, which can be indicated by either:
|
• |
The group having the right to operate the asset.
|
• |
The group having designed an asset in a way which predetermines how it will be used and for what purpose.
|
May 6,
2019
€
|
December 31,
2018
€
|
December 31,
2017
€
|
||||||||||
Payable in less than one year
|
||||||||||||
Other borrowings
|
|
9,056,202
|
|
7,464,111 | 7,573,318 | |||||||
Other payables
|
|
1,139,884
|
|
788,349 | 1,198,578 | |||||||
Lease liability
|
|
563,098
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
10,759,184
|
8,252,460
|
8,771,896
|
||||||||||
Payable in one to two years
|
||||||||||||
Lease liability
|
|
422,323
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
422,323
|
—
|
—
|
||||||||||
|
|
|
|
|
|
|||||||
Total financial liabilities
|
|
11,181,507
|
|
8,252,460 | 8,771,896 | |||||||
|
|
|
|
|
|
May 6,
2019
€
|
December 31,
2018
€
|
December 31,
2017
€
|
||||||||||
U.S dollars
|
46,964 | 542,514 | (88,731 | ) | ||||||||
Pounds sterling
|
50,043 | 8,315 | 3,685,131 | |||||||||
Euros
|
64,891 | 673,352 | 21,379 |
Effect on net result of the period/equity
|
||||||||||||
May 6,
2019
€
|
December 31,
2018
€
|
December 31,
2017
€
|
||||||||||
Exchange Rate +10%
|
||||||||||||
U.S dollars
|
3,053 | 7,844 | 11,375 | |||||||||
Pounds sterling
|
5,004 | 832 | 56,964 | |||||||||
Euros
|
5,017 | 1,113 | 4,619 |
Consolidated statements of comprehensive income (extract)
|
As
previously reported
2018
€
|
Adjustment
2018
€
|
As revised
2018
€
|
|||||||||
Profit before tax
|
1,315,015 | — | 1,315,015 | |||||||||
Profit before tax multiplied by the prevailing rate of Austrian corporation tax for the period 2018 of 25%
|
328,754 | (657,508 | ) | (328,754 | ) | |||||||
EFFECTS OF:
|
||||||||||||
Different tax rates in subsidiaries
|
195,935 | (429,966 | ) | (234,031 | ) | |||||||
Expenses directly recognised in equity
|
12,658 | (25,316 | ) | (12,658 | ) | |||||||
Additional deduction for R&D expenditure
|
(378,528 | ) | 757,056 | 378,528 | ||||||||
Surrender of tax losses for repayable R&D credits
|
158,614 | (951,177 | ) | (792,563 | ) | |||||||
R&D tax credits
|
— | 511,089 | 511,089 | |||||||||
Change in deferred tax assets not recognised
|
(1,522,068 | ) | 1,522,068 | — | ||||||||
Impact of change in accounting policy
|
1,333,465 | (1,547,740 | ) | (214,275 | ) | |||||||
Utilisation of brought forward tax losses
|
— | 916,206 | 916,206 | |||||||||
Other effects
|
65,930 | (94,712 | ) | (28,782 | ) | |||||||
|
|
|
|
|
|
|||||||
Tax credit for the current year
|
|
194,760
|
|
|
—
|
|
|
194,760
|
|
|||
Tax related to previous period
|
394 | — | 394 | |||||||||
|
|
|
|
|
|
|||||||
Total tax credit
|
|
195,154
|
|
|
—
|
|
|
195,154
|
|
|||
|
|
|
|
|
|
Consolidated statements of comprehensive income (extract)
|
As
previously reported
2017
€
|
Adjustment
2017
€
|
As
revised
2017
€
|
|||||||||
Corporate tax credit — current period
|
210,809 | 29,184 | 239,993 | |||||||||
Corporate tax — prior periods
|
|
14,592
|
|
|
(29,184
|
)
|
|
(14,592
|
)
|
|||
|
|
|
|
|
|
|||||||
Total credit
|
|
225,401
|
|
|
—
|
|
|
225,401
|
|
|||
|
|
|
|
|
|
|||||||
Loss before tax
|
(88,063 | ) | — | (88,063 | ) | |||||||
Profit before tax multiplied by the prevailing rate of Austrian corporation tax for the period 2017 of 25%
|
(22,016 | ) | 44,032 | 22,016 | ||||||||
EFFECTS OF:
|
||||||||||||
Different tax rates in subsidiaries
|
101,087 | (151,909 | ) | (50,822 | ) | |||||||
Expenditure not deductible for tax purposes
|
1,599 | (3,198 | ) | (1,599 | ) | |||||||
Expenses directly recognised in equity
|
25,790 | (51,580 | ) | (25,790 | ) | |||||||
Additional deduction for R&D expenditure
|
(195,195 | ) | 390,390 | 195,195 | ||||||||
Surrender of tax losses for repayable R&D credits
|
85,210 | (170,420 | ) | (85,210 | ) | |||||||
Change in deferred tax assets not recognised
|
195,083 | (195,083 | ) | — | ||||||||
Utilisation of brought forward tax losses
|
— | 195,083 | 195,083 | |||||||||
Other effects
|
19,251 | (28,131 | ) | (8,880 | ) | |||||||
|
|
|
|
|
|
|||||||
Tax credit for the current year
|
|
210,809
|
|
|
29,184
|
|
|
239,993
|
|
|||
Tax related to previous period
|
14,592 | (29,184 | ) | (14,592 | ) | |||||||
|
|
|
|
|
|
|||||||
Total tax credit
|
|
225,401
|
|
|
—
|
|
|
225,401
|
|
|||
|
|
|
|
|
|
YEAR ENDED DECEMBER 31, 2017
|
Licensing
income
€
|
Milestone
income
€
|
Provision of
R&D services
€
|
Total
€
|
||||||||||||
Revenue from related parties in the UK
|
2,310,131 | 1,141,320 | 12,297,964 | 15,749,415 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
2,310,131 | 1,141,320 | 12,297,964 | 15,749,415 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Timing of recognition:
|
||||||||||||||||
At a point in time
|
— | 1,141,320 | — | 1,141,320 | ||||||||||||
Over time
|
2,310,131 | — | 12,297,964 | 14,608,095 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
2,310,131 | 1,141,320 | 12,297,964 | 15,749,415 | ||||||||||||
|
|
|
|
|
|
|
|
^ |
See note 2.4ii for details of a change in accounting policy.
|
• |
Grant of intellectual property licenses
|
• |
Provision of R&D services for development of the Fcabs
|
• |
Grant of intellectual property rights
|
• |
Provision of R&D services
|
Period ended
May 6, 2019
€
|
Year ended
December 31, 2018
€
|
Year ended
December 31, 2017
€
|
||||||||||
Deferred revenue related to upfront licensing fee, milestone income and R&D services income
|
|
6,257,849
|
|
9,838,221 | — | |||||||
|
|
|
|
|
|
Deferred revenue related to licensing income
|
Period ended
May 6, 2019
€
|
Year ended
December 31, 2018
€
|
Year ended
December 31, 2017
€
|
|||||||||
Contract liabilities as of January 1
|
|
9,838,221
|
|
— | — | |||||||
Adoption of new accounting standard (note 2.4ii)
|
|
—
|
|
6,922,742 | — | |||||||
Additional amounts deferred in the period
|
|
607,191
|
|
7,660,740 | — | |||||||
Revenue recognized in the period included in opening contract liability
|
|
(4,187,563
|
)
|
(4,745,261 | ) | — | ||||||
|
|
|
|
|
|
|||||||
Contract liabilities as of May 6 and December 31
|
|
6,257,849
|
|
9,838,221 | — | |||||||
|
|
|
|
|
|
Period ended
May 6, 2019
€
|
Year ended
December 31, 2018
€
|
Year ended
December 31, 2017
€
|
||||||||||
Aggregate amount of the transaction price
|
|
6,257,849
|
|
9,838,221 | — | |||||||
|
|
|
|
|
|
Period ended
May 6, 2019
€
|
Year ended
December 31, 2018
€
|
Year ended
December 31, 2017
€
|
||||||||||
Recharges
|
|
51,998
|
|
505,032 | 224,235 | |||||||
Foreign exchange gains
|
|
539,223
|
|
— | 7,303 | |||||||
|
|
|
|
|
|
|||||||
591,221
|
505,032 | 231,538 | ||||||||||
|
|
|
|
|
|
Period ended
May 6, 2019
€
|
Year ended
December 31, 2018
€
|
Year ended
December 31, 2017
€
|
||||||||||
Salaries
|
|
2,798,538
|
|
6,729,531 | 5,748,866 | |||||||
Employee share option scheme
|
|
30,314
|
|
57,096 | 132,222 | |||||||
Social security costs
|
|
283,322
|
|
781,373 | 641,602 | |||||||
Expenses for pensions and similar benefits
|
|
257,261
|
|
426,504 | 330,636 | |||||||
|
|
|
|
|
|
|||||||
3,369,435
|
7,994,504 | 6,853,326 | ||||||||||
|
|
|
|
|
|
Period ended
May 6, 2019
€
|
Year ended
December 31, 2018
€
|
Year ended
December 31, 2017
€
|
||||||||||
Full-time staff
|
104 | 99 | 79 | |||||||||
|
|
|
|
|
|
|||||||
104 | 99 | 79 | ||||||||||
|
|
|
|
|
|
Period ended
May 6, 2019
€
|
Year ended
December 31, 2018
€
|
Year ended
December 31, 2017
€
|
||||||||||
Compensation
|
|
390,213
|
|
1,412,053 | 1,194,307 | |||||||
Compensation for loss of office
|
|
—
|
|
330,301 | — | |||||||
Company pension contributions to money purchase pension schemes
|
|
8,375
|
|
55,184 | 53,115 | |||||||
Share-based payment charge
|
|
6,519
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
405,107
|
1,797,538 | 1,247,422 | ||||||||||
|
|
|
|
|
|
Period ended
May 6, 2019
€
|
Year ended
December 31, 2018
€
|
Year ended
December 31, 2017
€
|
||||||||||
Operating profit/(loss) contains:
|
||||||||||||
Profit/ (loss) on exchange differences
|
|
539,223
|
|
(237,752 | ) | (123,615 | ) | |||||
R&D expenditure
|
|
1,678,294
|
|
4,674,222 | 3,696,122 |
Period ended
May 6, 2019
€
|
Year ended
December 31, 2018
€
|
Year ended
December 31, 2017
€
|
||||||||||
Interest income from related parties
|
|
124,549
|
|
163,161 | 116,215 | |||||||
Other interest income
|
|
—
|
|
620 | — | |||||||
|
|
|
|
|
|
|||||||
124,549
|
163,781 | 116,215 | ||||||||||
|
|
|
|
|
|
Period ended
May 6, 2019
€
|
Year ended
December 31, 2018
€
|
Year ended
December 31, 2017
€
|
||||||||||
Interest expense related to borrowings from related parties
|
|
98,288
|
|
223,377 | 196,591 | |||||||
Lease interest
|
|
10,233
|
|
— | — | |||||||
Other interest expense
|
|
—
|
|
— | 207 | |||||||
Loss on foreign exchange
|
|
—
|
|
— | 4,467 | |||||||
|
|
|
|
|
|
|||||||
108,521
|
223,377 | 201,265 | ||||||||||
|
|
|
|
|
|
Period ended
May 6, 2019
€
|
Year ended
December 31, 2018
€
|
Year ended
December 31, 2017
€
|
||||||||||
Corporate tax (charge)/ credit – current period
|
|
(49,384
|
)
|
194,760 | 239,993 | |||||||
Corporate tax – prior periods
|
|
—
|
|
394 | (14,592 | ) | ||||||
|
|
|
|
|
|
|||||||
Total credit
|
|
(49,384
|
)
|
195,154 | 225,401 | |||||||
|
|
|
|
|
|
Period ended
May 6, 2019
€
|
Year ended
December 31, 2018
€
|
Year ended
December 31, 2017
€
|
||||||||||
Profit/(loss) before tax
|
|
1,415,271
|
|
1,315,015 | (88,063 | ) | ||||||
Profit before tax multiplied by the prevailing rate of Austrian corporate tax for the periods 2019, 2018 and 2017 of 25%
|
|
(353,818
|
)
|
(328,754 | ) | 22,016 | ||||||
EFFECTS OF:
|
||||||||||||
Different tax rates in subsidiaries
|
|
53,859
|
|
(234,031 | ) | (50,822 | ) | |||||
Expenditure not deductible for tax purposes
|
|
(89,333
|
)
|
— | (1,599 | ) | ||||||
Expenses directly recognized in equity
|
|
(5,760
|
)
|
(12,658 | ) | (25,790 | ) | |||||
Additional deduction for R&D expenditure
|
|
209,622
|
|
378,528 | 195,195 | |||||||
Surrender of tax losses for repayable R&D credit
|
|
—
|
|
(792,563 | ) | (85,210 | ) | |||||
R&D tax credits
|
|
—
|
|
511,089 | — | |||||||
Impact of change in accounting policy
|
|
—
|
|
(214,275 | ) | — | ||||||
Utilization of brought forward tax losses
|
|
102,785
|
|
916,206 | 195,083 | |||||||
Accelerated capital allowances
|
|
3,551
|
|
— | — | |||||||
Other effects
|
|
29,710
|
|
(28,782 | ) | (8,880 | ) | |||||
|
|
|
|
|
|
|||||||
Tax credit for the current year
|
|
(49,384
|
)
|
194,760 | 239,993 | |||||||
Tax related to previous period
|
|
—
|
|
394 | (14,592 | ) | ||||||
|
|
|
|
|
|
|||||||
Total tax credit
|
|
(49,384
|
)
|
195,154 | 225,401 | |||||||
|
|
|
|
|
|
* |
See note 4.5 for revision of previously issued financial statements for correction of an immaterial error
|
Software
€
|
Patents
€
|
Total
€
|
||||||||||
Cost
|
||||||||||||
Opening balance January 1, 2019
|
|
—
|
|
|
510,000
|
|
|
510,000
|
|
|||
|
|
|
|
|
|
|||||||
Balance at May 6, 2019
|
|
—
|
|
|
510,000
|
|
|
510,000
|
|
|||
|
|
|
|
|
|
|||||||
Accumulated amortization
|
||||||||||||
Opening balance January 1, 2019
|
|
—
|
|
|
316,625
|
|
|
316,625
|
|
|||
Amortization charge
|
|
—
|
|
|
8,925
|
|
|
8,925
|
|
|||
|
|
|
|
|
|
|||||||
Balance as of May 6, 2019
|
|
—
|
|
|
325,550
|
|
|
325,550
|
|
|||
|
|
|
|
|
|
|||||||
Carrying amount as of May 6, 2019
|
|
—
|
|
|
184,450
|
|
|
184,450
|
|
|||
|
|
|
|
|
|
Software
€
|
Patents
€
|
Total
€
|
||||||||||
Cost
|
||||||||||||
Opening balance January 1, 2018
|
5,104 | 510,000 | 515,104 | |||||||||
Disposals
|
(5,104 | ) | — | (5,104 | ) | |||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2018
|
— | 510,000 | 510,000 | |||||||||
|
|
|
|
|
|
|||||||
Accumulated amortization
|
||||||||||||
Opening balance January 1, 2018
|
5,104 | 291,125 | 296,229 | |||||||||
Disposals
|
(5,104 | ) | — | (5,104 | ) | |||||||
Amortization charge
|
— | 25,500 | 25,500 | |||||||||
|
|
|
|
|
|
|||||||
Balance as of December 31, 2018
|
— | 316,625 | 316,625 | |||||||||
|
|
|
|
|
|
|||||||
Carrying amount as of December 31, 2018
|
— | 193,375 | 193,375 | |||||||||
|
|
|
|
|
|
Software
€
|
Patents
€
|
Total
€
|
||||||||||
Cost
|
||||||||||||
Balance at January 1, 2017 and December 31, 2017
|
5,104 | 510,000 | 515,104 | |||||||||
|
|
|
|
|
|
|||||||
Accumulated amortization
|
||||||||||||
Opening balance January 1, 2017
|
5,104 | 265,625 | 270,729 | |||||||||
Amortization charge
|
— | 25,500 | 25,500 | |||||||||
|
|
|
|
|
|
|||||||
Balance as of December 31, 2017
|
5,104 | 291,125 | 296,229 | |||||||||
|
|
|
|
|
|
|||||||
Carrying amount as of December 31, 2017
|
|
—
|
|
218,875 | 218,875 | |||||||
|
|
|
|
|
|
Leasehold
improvements
€
|
Plant and
machinery
€
|
Office
equipment
€
|
Fixtures and
Fittings
€
|
Right-of-use
€
|
Total
€
|
|||||||||||||||||||
Cost
|
||||||||||||||||||||||||
Opening balance January 1, 2019
|
|
244,761
|
|
|
3,425,365
|
|
|
105,853
|
|
|
234,047
|
|
|
941,306
|
|
|
4,951,332
|
|
||||||
Currency translation
|
14,735 | 206,201 | 6,372 | 14,089 | 57,649 | 299,046 | ||||||||||||||||||
Additions
|
13,930 | — | — | — | 44,925 | 58,855 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance as of May 6, 2019
|
|
273,426
|
|
|
3,631,566
|
|
|
112,225
|
|
|
248,136
|
|
|
1,043,880
|
|
|
5,309,233
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Accumulated depreciation
|
||||||||||||||||||||||||
Opening balance January 1, 2019
|
|
234,149
|
|
|
1,758,171
|
|
|
79,144
|
|
|
50,886
|
|
|
—
|
|
|
2,122,350
|
|
||||||
Currency translation
|
14,365 | 110,569 | 5,188 | 3,667 | 3,718 | 137,507 | ||||||||||||||||||
Depreciation
|
12,284 | 215,992 | 19,372 | 27,569 | 169,792 | 445,009 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance as at May 6, 2019
|
|
260,798
|
|
|
2,084,732
|
|
|
103,704
|
|
|
82,122
|
|
|
173,510
|
|
|
2,704,866
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Carrying amount as of May 6, 2019
|
|
12,628
|
|
|
1,546,834
|
|
|
8,521
|
|
|
166,014
|
|
|
870,370
|
|
|
2,604,367
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
Leasehold
improvements
€
|
Plant and
machinery
€
|
Office
equipment
€
|
Fixtures and
Fittings
€
|
Total
€
|
||||||||||||||||
Cost
|
||||||||||||||||||||
Opening balance January 1, 2018
|
178,977 | 3,172,770 | 148,637 | 12,504 | 3,512,888 | |||||||||||||||
Currency translation
|
(3,827 | ) | (52,392 | ) | (1,529 | ) | (3,937 | ) | (61,685 | ) | ||||||||||
Additions
|
77,796 | 468,856 | — | 225,480 | 772,132 | |||||||||||||||
Disposals
|
(8,185 | ) | (163,869 | ) | (41,255 | ) | — | (213,309 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2018
|
244,761 | 3,425,365 | 105,853 | 234,047 | 4,010,026 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Accumulated depreciation
|
||||||||||||||||||||
Opening balance January 1, 2018
|
109,790 | 1,355,628 | 90,210 | 7,539 | 1,563,167 | |||||||||||||||
Currency translation
|
(3,768 | ) | (27,370 | ) | (1,180 | ) | (849 | ) | (33,167 | ) | ||||||||||
Depreciation
|
136,312 | 583,376 | 31,369 | 44,196 | 795,253 | |||||||||||||||
Disposals
|
(8,185 | ) | (153,463 | ) | (41,255 | ) | — | (202,903 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as at December 31, 2018
|
234,149 | 1,758,171 | 79,144 | 50,886 | 2,122,350 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Carrying amount as of December 31, 2018
|
10,612 | 1,667,194 | 26,709 | 183,161 | 1,887,676 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
Leasehold
improvements
€
|
Plant &
machinery
€
|
Office
equipment
€
|
Fixtures &
Fittings
€
|
Total
€
|
||||||||||||||||
Cost
|
||||||||||||||||||||
Opening balance January 1, 2017
|
172,077 | 2,338,865 | 139,635 | 13,350 | 2,663,927 | |||||||||||||||
Currency translation
|
(6,397 | ) | (97,152 | ) | (9,455 | ) | (846 | ) | (113,850 | ) | ||||||||||
Additions
|
13,297 | 931,057 | 18,457 | — | 962,811 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2017
|
178,977 | 3,172,770 | 148,637 | 12,504 | 3,512,888 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Accumulated depreciation
|
||||||||||||||||||||
Opening balance January 1, 2017
|
58,571 | 949,345 | 68,535 | 3,637 | 1,080,088 | |||||||||||||||
Currency translation
|
(2,853 | ) | (40,369 | ) | (7,315 | ) | (267 | ) | (50,804 | ) | ||||||||||
Depreciation
|
54,072 | 446,652 | 28,990 | 4,169 | 533,883 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2017
|
109,790 | 1,355,628 | 90,210 | 7,539 | 1,563,167 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Carrying amount as of December 31, 2017
|
69,187 | 1,817,142 | 58,427 | 4,965 | 1,949,721 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
May 6,
2019
€
|
December 31,
2018
€
|
December 31,
2017
€
|
||||||||||
Unlisted participation rights
|
50,000 | 50,000 | 100,000 | |||||||||
|
|
|
|
|
|
|||||||
Total
|
50,000 | 50,000 | 100,000 | |||||||||
|
|
|
|
|
|
May 6,
2019
€
|
December 31,
2018
€
|
December 31,
2017
€
|
||||||||||
DUE WITHIN ONE YEAR
|
||||||||||||
Prepayments
|
|
1,048,720
|
|
863,965 | 639,518 | |||||||
Loans to related parties
|
|
11,820,314
|
|
11,165,004 | 4,438,735 | |||||||
Trade receivables from related parties
|
|
1,532,977
|
|
1,336,933 | 1,097,401 | |||||||
Other receivables
|
|
1,344,363
|
|
490,268 | 1,308,023 | |||||||
|
|
|
|
|
|
|||||||
Total
|
|
15,746,374
|
|
13,856,170 | 7,483,677 | |||||||
|
|
|
|
|
|
May 6,
2019
€
|
December 31,
2018
€
|
December 31,
2017
€
|
||||||||||
Cash and bank balances
|
848,854
|
2,052,922 | 3,133,482 | |||||||||
|
|
|
|
|
|
|||||||
Total
|
848,854
|
2,052,922 | 3,133,482 | |||||||||
|
|
|
|
|
|
May 6,
2019
€
|
December 31,
2018
€
|
December 31,
2017
€
|
||||||||||
Borrowings from related parties
|
|
9,056,202
|
|
7,464,111 | 7,573,318 | |||||||
|
|
|
|
|
|
|||||||
Total
|
|
9,056,202
|
|
7,464,111 | 7,573,318 | |||||||
|
|
|
|
|
|
May 6,
2019
€
|
December 31,
2018
€
|
December 31,
2017
€
|
||||||||||
Due within one year
|
||||||||||||
Trade payables and other payables
|
|
1,139,884
|
|
788,349 | 1,198,578 | |||||||
Accruals
|
|
2,221,023
|
|
1,242,961 | 492,095 | |||||||
Tax and social security costs
|
|
671,515
|
|
487,593 | 383,824 | |||||||
|
|
|
|
|
|
|||||||
Total
|
|
4,032,422
|
|
2,518,903 | 2,074,497 | |||||||
|
|
|
|
|
|
May 6,
2019
€
|
||||
Maturity analysis – contractual undiscounted cash flows
|
||||
Less than one year
|
|
563,098
|
|
|
One to two years
|
|
422,323
|
|
|
|
|
|||
Total undiscounted lease liability as at May 6, 2019
|
|
985,421
|
|
|
|
|
May 6,
2019
€
|
||||
Lease liabilities included in the consolidated statements of financial position
|
||||
Current
|
|
528,006
|
|
|
Non-current
|
|
413,657
|
|
|
|
|
|||
|
941,663
|
|
||
|
|
May 6,
2019
€
|
||||
Amounts recognized in the consolidated statements of comprehensive income
|
||||
Finance cost - Interest on lease liabilities
|
|
10,233
|
|
|
Other expenses - Expenses related to short-term leases (including low value and short-term leases)
|
|
120,940
|
|
|
|
|
|||
|
131,173
|
|
||
|
|
May 6,
2019
€
|
||||
Amounts recognized in the consolidated statements of cash flows
|
||||
Lease interest paid
|
|
10,233
|
|
|
Principal elements of lease payments
|
|
171,473
|
|
|
|
|
|||
|
181,706
|
|
||
|
|
2018
EUR
|
2017
EUR
|
|||||||
Within one year
|
|
557,321
|
|
783,902 | ||||
Later than one year and not later than five years
|
|
553,255
|
|
283,356 | ||||
|
|
|
|
|||||
Total
|
|
1,110,576
|
|
1,067,258 | ||||
|
|
|
|
May 6,
2019
€
|
December 31,
2018
€
|
December 31,
2017
€
|
||||||||||
Share capital
|
|
604,694
|
|
604,694 | 604,694 | |||||||
Capital reserves
|
|
28,599,822
|
|
28,599,822 | 28,599,822 | |||||||
Share-based payment
|
|
3,171,248
|
|
3,140,934 | 3,083,838 | |||||||
Accumulated losses and foreign exchange reserve
|
|
(32,944,847
|
)
|
(33,822,016 | ) | (28,386,622 | ) | |||||
|
|
|
|
|
|
|||||||
Capital managed
|
|
(569,083
|
)
|
(1,476,566 | ) | 3,901,732 | ||||||
|
|
|
|
|
|
21.
|
Post-employment benefit obligations
|
22.
|
Share based payments
|
Granted
in period ended May 6, 2019 |
Granted
in previous years |
|||||||
Exercise price
|
€ | 10.00 | € | nil | ||||
Share price at date of grant
|
€ | 3.38 | € | 60.00 | ||||
Vesting period (years)
|
4 | 4 | ||||||
Expected volatility
|
70.0 | % | 55 | % | ||||
Expected exit date
|
06/14/2024 | 12/31/2017 | ||||||
Expected life in years
|
5.1 | 2.4 | ||||||
Risk-free rate
|
1.85 | % | 0.25 | % | ||||
Expected dividends expressed as a dividend yield
|
0 | % | 0 | % | ||||
Fair value per option
|
€ | 1.19 | € | 30.00 |
2019
Number |
2019
Weighted average exercise price |
|||||||
Outstanding at January 1
|
|
101,417.1
|
|
— | ||||
Granted in the period
|
|
15,117.4
|
|
€ | 10.00 | |||
Forfeited in the period
|
|
—
|
|
— | ||||
|
|
|
|
|||||
Outstanding at May 6
|
|
116,534.5
|
|
€ | 0.77 | |||
|
|
|
|
|||||
Exercisable at May 6
|
|
—
|
|
— | ||||
|
|
|
|
2018
Number |
2018
Weighted average exercise price |
|||||||
Outstanding at January 1
|
101,423.1 | — | ||||||
Forfeited in the period
|
(6.0 | ) | — | |||||
|
|
|
|
|||||
Outstanding at December 31
|
101,417.1 | — | ||||||
|
|
|
|
|||||
Exercisable at December 31
|
|
—
|
|
— | ||||
|
|
|
|
2017
Number |
2017
Weighted average exercise price |
|||||||
Outstanding at January 1
|
103,098.9 | — | ||||||
Forfeited in the period
|
(1,675.8 | ) | — | |||||
|
|
|
|
|||||
Outstanding at December 31
|
101,423.1 | — | ||||||
|
|
|
|
|||||
Exercisable at December 31
|
— | — | ||||||
|
|
|
|
23.
|
Commitments
|
24.
|
Related party transactions
|
24.1
|
Owners
|
24.2
|
Key management personnel
|
24.3
|
F-star
Alpha Limited
|
May 6,
2019
€
|
December 31,
2018
€
|
December 31,
2017
€
|
||||||||||
Income and recharges
|
|
—
|
|
127,654 | 1,008,826 | |||||||
Receivable balance outstanding
|
|
—
|
|
125,498 | 3,251 | |||||||
Interest expense
|
|
(98,288
|
)
|
(223,435 | ) | (196,591 | ) | |||||
Loan balance outstanding
|
|
(9,056,202
|
)
|
(7,464,111 | ) | 7,573,318 |
24.4
|
F-star
Beta Limited
|
May 6, 2019
€ |
December 31,
2018 € |
December 31,
2017 € |
||||||||||
Income and recharges
|
|
7,904,295
|
|
16,018,289 | 13,282,545 | |||||||
Interest income
|
|
124,549
|
|
163,204 | 116,215 | |||||||
Balance outstanding
|
|
13,313,490
|
|
12,111,852 | 5,408,560 |
24.5
|
Denali BBB Holdings Limited (formerly
F-star
Gamma Limited)
|
24.6
|
F-star
Delta Limited
|
May 6,
2019
€
|
December 31,
2018
€
|
December 31,
2017
€
|
||||||||||
Income and recharges
|
|
237,271
|
|
678,965 | 1,235,323 | |||||||
Balance outstanding
|
|
39,801
|
|
208,373 | 60,668 |
24.7
|
F-star
Therapeutics Limited
|
May 6,
2019 € |
December 31,
2018 € |
|||||||
Recharges
|
|
698,218
|
|
— | ||||
Balance included within other debtors
|
|
698,218
|
|
— |
25.
|
Corporate governance
|
26.
|
Earnings per share
|
Period ended
May 6, 2019 € |
Year ended
December 31, 2018 € |
Year ended
December 31, 2017 € |
||||||||||
Earnings
|
||||||||||||
Earnings for the purposes of basic and diluted earnings per share
|
|
213,364
|
|
235,902 | 21,453 | |||||||
|
|
|
|
|
|
|||||||
Period ended
May 6,
2019
€
|
Year ended
December 31,
2018
€
|
Year ended
December 31,
2017
€
|
||||||||||
Number of shares
|
||||||||||||
Weighted average number of ordinary shares for the purposes of basic earnings per share
|
|
94,459
|
|
94,459 | 94,459 | |||||||
Effect of share options
|
|
4,883
|
|
— | — | |||||||
Weighted average number of ordinary shares for the purposes of diluted earnings per share
|
|
99,342
|
|
94,459 | 94,459 | |||||||
Basic earnings per share
|
|
2.26
|
|
2.500 | 0.23 | |||||||
Diluted earnings per share
|
|
2.15
|
|
2.500 | 0.23 |
27.
|
Subsequent events
|
Period ended
May 6,
2019
|
Year ended
December 31,
2018^
|
Year ended
December 31,
2017^
|
||||||||||||
Note
|
£
|
£ | £ | |||||||||||
Revenue
|
5 |
|
7,902,856
|
|
17,394,263 | 14,993,243 | ||||||||
Costs related to collaborative arrangements
|
6 |
|
(1,863,660
|
)
|
(6,719,286 | ) | (3,289,171 | ) | ||||||
Research & development costs
|
|
(5,106,552
|
)
|
(12,048,753 | ) | (11,933,309 | ) | |||||||
General & administrative expenses
|
|
(908,791
|
)
|
(345,485 | ) | (352,053 | ) | |||||||
Other gains
|
7 |
|
—
|
|
815 | 166,352 | ||||||||
Other expenses
|
|
(58,036
|
)
|
(20,212 | ) | — | ||||||||
|
|
|
|
|
|
|||||||||
Loss on operations
|
8 |
|
(34,183
|
)
|
(1,738,658 | ) | (414,938 | ) | ||||||
Finance costs
|
9 |
|
(103,216
|
)
|
(144,677 | ) | (101,825 | ) | ||||||
|
|
|
|
|
|
|||||||||
Loss before tax from continuing operations
|
|
(137,399
|
)
|
(1,883,335 | ) | (516,763 | ) | |||||||
|
|
|
|
|
|
|||||||||
Corporation tax benefit
|
11 |
|
639,359
|
|
2,415,968 | 705,465 | ||||||||
|
|
|
|
|
|
|||||||||
Profit for the year and total comprehensive income attributable to equity holders of the parent
|
|
501,960
|
|
532,633 | 188,702 | |||||||||
|
|
|
|
|
|
|||||||||
Earnings per share for profit attributable to the shareholders of the Company
|
||||||||||||||
Basic earnings per share
|
21 |
|
0.05
|
|
0.06 | 0.02 | ||||||||
Diluted earnings per share
|
21 |
|
0.05
|
|
0.06 | 0.02 |
May 6,
2019
|
December 31,
2018
|
December 31,
2017
|
||||||||||||||
Note
|
£
|
£ | £ | |||||||||||||
ASSETS
|
||||||||||||||||
Non-current
assets
|
||||||||||||||||
Intangible assets, net
|
12 |
|
533,949
|
|
483,949 | — | ||||||||||
Current assets
|
||||||||||||||||
Trade and other receivables
|
13 |
|
1,208,343
|
|
784,512 | 834,893 | ||||||||||
Corporation tax receivable
|
11 |
|
3,069,341
|
|
2,429,980 | 2,285,135 | ||||||||||
Cash and cash equivalents
|
14 |
|
915,436
|
|
5,709,474 | 1,909,973 | ||||||||||
|
|
|
|
|
|
|||||||||||
Total current assets
|
|
5,193,120
|
|
8,923,966 | 5,030,001 | |||||||||||
|
|
|
|
|
|
|||||||||||
Total assets
|
|
5,727,069
|
|
9,407,915 | 5,030,001 | |||||||||||
|
|
|
|
|
|
|||||||||||
EQUITY AND LIABILITIES
|
||||||||||||||||
Capital and reserves
|
||||||||||||||||
Issued capital
|
15 |
|
93
|
|
91 | 91 | ||||||||||
Accumulated losses
|
|
(7,976,643
|
)
|
(9,167,282 | ) | (391,138 | ) | |||||||||
|
|
|
|
|
|
|||||||||||
Total equity
|
|
(7,976,550
|
)
|
(9,167,191 | ) | (391,047 | ) | |||||||||
|
|
|
|
|
|
|||||||||||
Current liabilities
|
||||||||||||||||
Trade and other payables
|
17 |
|
13,352,608
|
|
12,184,899 | 5,421,048 | ||||||||||
Deferred revenue
|
5 |
|
351,011
|
|
6,390,207 | — | ||||||||||
|
|
|
|
|
|
|||||||||||
Total liabilities
|
|
13,703,619
|
|
18,575,106 | 5,421,048 | |||||||||||
|
|
|
|
|
|
|||||||||||
Total equity and liabilities
|
|
5,727,069
|
|
9,407,915 | 5,030,001 | |||||||||||
|
|
|
|
|
|
Issued
capital |
Accumulated
losses |
Total equity | ||||||||||||||
Note
|
£
|
£ | £ | |||||||||||||
Balance as of January 1, 2017
|
|
91
|
|
|
(708,026
|
)
|
|
(707,935
|
)
|
|||||||
Profit for the financial year and total comprehensive income
|
— | 188,702 | 188,702 | |||||||||||||
Transactions with owners of the Company, recognized directly in equity
|
||||||||||||||||
Share-based payments
|
18 | — | 128,186 | 128,186 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2017
|
|
91
|
|
|
(391,138
|
)
|
|
(391,047
|
)
|
|||||||
|
|
|
|
|
|
|||||||||||
Change in accounting policy (note 2.4)
|
— | (9,340,724 | ) | (9,340,724 | ) | |||||||||||
Revised balance as of January 1, 2018
|
|
91
|
|
|
(9,731,862
|
)
|
|
(9,731,771
|
)
|
|||||||
Profit for the financial year and total comprehensive income
|
— | 532,633 | 532,633 | |||||||||||||
Transactions with owners of the Company, recognized directly in equity
|
||||||||||||||||
Share-based payments
|
18 | — | 31,947 | 31,947 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2018
|
|
91
|
|
|
(9,167,282
|
)
|
|
(9,167,191
|
)
|
|||||||
|
|
|
|
|
|
|||||||||||
Balance as of January 1, 2019
|
|
91
|
|
|
(9,167,282
|
)
|
|
(9,167,191
|
)
|
|||||||
Profit for the financial period and total comprehensive income
|
— | 501,960 | 501,960 | |||||||||||||
Transactions with owners of the Company, recognized directly in equity
|
||||||||||||||||
Issue of ordinary share capital
|
2 | — | 2 | |||||||||||||
Share-based payments
|
18 | — | 688,679 | 688,679 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Balance as of May 6, 2019
|
|
93
|
|
|
(7,976,643
|
)
|
|
(7,976,550
|
)
|
|||||||
|
|
|
|
|
|
Period
ended
May 6,
2019
|
Year
ended
December 31,
2018
|
Year
ended
December 31,
2017
|
||||||||||||||
Note
|
£
|
£ | £ | |||||||||||||
Cash flows from operating activities
|
||||||||||||||||
Loss before tax
|
|
(137,399
|
)
|
(1,883,335 | ) | (516,763 | ) | |||||||||
Adjustments for:
|
||||||||||||||||
Share-based payments charge
|
18 |
|
688,679
|
|
31,947 | 128,186 | ||||||||||
Finance costs
|
9 |
|
103,216
|
|
144,677 | 101,825 | ||||||||||
Loss on disposal on fixed asset
|
|
—
|
|
933,536 | — | |||||||||||
Amortization
|
|
—
|
|
44,096 | — | |||||||||||
(Increase)/decrease in trade and other receivables
|
13 |
|
(423,831
|
)
|
50,381 | (285,455 | ) | |||||||||
Increase in trade payables
|
17 |
|
1,187,037
|
|
637,731 | 455,546 | ||||||||||
Decrease in deferred income
|
5 |
|
(6,039,196
|
)
|
6,390,207 | (2,841,850 | ) | |||||||||
Adoption of new accounting standard
|
2.4 |
|
—
|
|
(9,340,724 | ) | — | |||||||||
|
|
|
|
|
|
|||||||||||
Adjusted loss before tax
|
|
(4,621,494
|
)
|
(2,991,484 | ) | (2,958,511 | ) | |||||||||
Proceeds from sale of intangible assets
|
|
—
|
|
962,000 | 984,691 | |||||||||||
|
|
|
|
|
|
|||||||||||
Cash used in operating activities
|
|
(4,621,494
|
)
|
(2,029,484 | ) | (1,973,820 | ) | |||||||||
Corporation tax received
|
11 |
|
—
|
|
2,271,123 | — | ||||||||||
|
|
|
|
|
|
|||||||||||
Net cash used in operating activities
|
|
(4,621,494
|
)
|
241,639 | (1,973,820 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Cash used in investing activities
|
||||||||||||||||
Payments to acquire intangible assets
|
12 |
|
(50,000
|
)
|
(2,423,581 | ) | (984,691 | ) | ||||||||
|
|
|
|
|
|
|||||||||||
Net cash used in investing activities
|
|
(50,000
|
)
|
(2,423,581 | ) | (984,691 | ) | |||||||||
|
|
|
|
|
|
|||||||||||
Cash flows from financing activities
|
||||||||||||||||
Proceeds of loan from related party
|
19 |
|
—
|
|
6,108,876 | 4,750,000 | ||||||||||
Repayment of loan from related party
|
19 |
|
—
|
|
— | (2,000,000 | ) | |||||||||
Interest paid
|
|
(122,544
|
)
|
(127,433 | ) | (82,767 | ) | |||||||||
Receipt for unpaid share capital
|
|
—
|
|
— | 2 | |||||||||||
|
|
|
|
|
|
|||||||||||
Net cash (used in)/generated from financing activities
|
|
(122,544
|
)
|
5,981,443 | 2,667,235 | |||||||||||
|
|
|
|
|
|
|||||||||||
Net (decrease)/increase in cash and cash equivalents
|
|
(4,794,038
|
)
|
3,799,501 | (291,276 | ) | ||||||||||
Cash and cash equivalents as of beginning of year
|
|
5,709,474
|
|
1,909,973 | 2,201,249 | |||||||||||
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents as of end of period
|
14 |
|
915,436
|
|
5,709,474 | 1,909,973 | ||||||||||
|
|
|
|
|
|
Reconciliation of movement in liabilities from financing activities
|
Period
ended
May 6,
2019
|
Year
ended
December 31,
2018
|
Year
ended
December 31,
2017
|
|||||||||
£
|
£ | £ | ||||||||||
Beginning of period
|
|
10,067,634
|
|
3,941,514 | 1,172,454 | |||||||
Cash flows
|
|
(122,544
|
)
|
5,981,443 | 2,667,235 | |||||||
Non-cash
charges
|
||||||||||||
Interest charged
|
|
103,216
|
|
144,677 | 101,825 | |||||||
|
|
|
|
|
|
|||||||
End of period
|
|
10,048,306
|
|
10,067,634 | 3,941,514 | |||||||
|
|
|
|
|
|
1.
|
General information
|
2.
|
Summary of significant accounting policies
|
2.1
|
Basis of preparation
|
Presentation by nature
|
Presentation by function
|
|||||||||||||||||||||||||||
Other
expenses £ |
Total
£ |
Costs related to
collaborative arrangements £ |
Research &
development costs £ |
General &
administrative expenses £ |
Other
expenses £ |
Total
£ |
||||||||||||||||||||||
Year ended December 31, 2018
|
19,133,736 |
|
19,133,736
|
|
6,719,286 | 12,048,753 | 345,485 | 20,212 |
|
19,133,736
|
|
|||||||||||||||||
Year ended December 31, 2017
|
15,574,533 |
|
15,574,533
|
|
3,289,171 | 11,933,309 | 352,053 | — |
|
15,574,533
|
|
2.2
|
Going concern
|
2.3
|
Estimates and judgments
|
2.4
|
New standards, amendments and IFRIC interpretations
|
Note
|
Original
classification under IAS 39 |
New
classification under IFRS 9 |
Original
carrying amount under
IAS 39
£
|
New
carrying amount under IFRS 9
£
|
||||||||||||||||
Financial assets
|
(a) | |||||||||||||||||||
Trade and other receivables
|
Loans and
receivables |
|
Amortised cost | 813,245 | 813,245 | |||||||||||||||
Cash and cash equivalents
|
Loans and
receivables |
|
Amortised cost | 1,909,973 | 1,909,973 | |||||||||||||||
|
|
|
|
|||||||||||||||||
Total financial assets
|
|
2,723,218
|
|
|
2,723,218
|
|
||||||||||||||
|
|
|
|
|||||||||||||||||
Financial liabilities
|
(b) | |||||||||||||||||||
Trade payables and accruals
|
Other financial
liabilities |
|
Amortised cost | 616,813 | 616,813 | |||||||||||||||
Amounts due to related parties
|
Other financial
liabilities |
|
Amortised cost | 4,804,235 | 4,804,235 | |||||||||||||||
|
|
|
|
|||||||||||||||||
Total financial liabilities
|
|
5,421,048
|
|
|
5,421,048
|
|
||||||||||||||
|
|
|
|
(a) |
Trade and other receivables: Trade and other receivables that were classified as loans and receivables under IAS 39 are now classified as amortized cost. The Company applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets.
|
(b) |
Trade payables and accruals: IFRS 9 largely retains the existing requirements in IAS 39 for the classification and measurement of financial liabilities.
|
Statement of financial position (extract)
|
IAS 18
carrying amount
December 31,
2017
£
|
Remeasurement
£
|
IFRS 15
carrying amount
January 1,
2018
£
|
|||||||||
Current liabilities—deferred revenue
|
— | 9,340,724 | 9,340,724 |
Note
|
£
|
|||||||
Balance as at December 31, 2017 as originally stated
|
(391,138 | ) | ||||||
Change in accounting policy
|
(9,340,724 | ) | ||||||
|
|
|
|
|||||
Total equity as at January 1, 2018
|
|
(9,731,862
|
)
|
|||||
|
|
|
|
2.5
|
Foreign currency translation
|
2.6
|
Intangible assets
|
Intellectual Property Rights | Over the remaining life of the relevant patents (full life assumed to be 20 years). This results in a range of UELs between 20 and 7 years |
2.7
|
Impairment of
non-financial
assets
|
2.8
|
Financial instruments
|
i.
|
Financial assets
|
ii.
|
Financial liabilities
|
2.9
|
Offsetting financial instruments
|
2.10
|
Trade and other receivables
|
2.11
|
Cash and cash equivalents
|
2.14
|
Current and deferred income tax
|
2.15
|
Share-based payments
|
2.16
|
Revenue recognition
|
• |
each performance obligation contains multiple deliverables; and
|
• |
resource expended has been assessed as the most accurate method of measuring progress towards completion of each performance obligation.
|
2.17
|
Costs related to collaborative arrangements
|
2.18
|
Operating segments
|
3.
|
Financial risk management
|
3.1
|
Liquidity risk
|
3.3
|
Currency risk
|
% change |
May 6,
2019 £ |
2018
£
|
2017
£
|
|||||||||||||
Euro
|
10 | % |
|
(48,301
|
)
|
(131,240 | ) | (66,668 | ) | |||||||
U.S. dollar
|
10 | % |
|
(6,277
|
)
|
(234 | ) | (37 | ) | |||||||
Swiss franc (CHF)
|
10 | % |
|
—
|
|
1,670 |
|
—
|
|
3.4
|
Credit risk
|
3.5
|
Impairment of financial assets
|
3.6
|
Capital management
|
4.
|
Critical accounting estimates and judgments
|
4.1
|
Judgments and estimates utilized to determine the amount and timing of revenue recognition
|
4.2
|
Useful life and impairment of intangible assets – key estimates
|
May 6,
2019 |
||||
Obsolescence factor
|
||||
2019 investment
|
25 | % | ||
2018 investment
|
50 | % | ||
2017 investment
|
80 | % | ||
Value inflection events
|
||||
Candidate selection
|
3 | % | ||
CMC process determined
|
12.5 | % |
Assumption
|
Approach to determining values
|
|
Obsolescence factor
|
This relates to the cost incurred on an asset in a given year which has been discounted for an estimate of
non-productive
spend in that year (i.e. expenditure which has not been deemed to have increased the value of the asset). Management assessed this by examining all activities carried out in each year and determining the productivity of each activity.
|
|
Value inflection event
|
These are events that would result in an increase or decrease of the value of an asset. Publicly traded comparable companies were identified that experienced similar events and the equity value was calculated
one-day
prior to the associated news release, as well as
one-day,
five-days,
10-days
and
30-days
post news release to measure the increase or decrease in value.
|
• |
The values assigned to the key assumptions represented management’s assessment of the future trends in the relevant industry and have been based on historical data from both external and internal source.
|
• |
The discount rate was estimated based on cost of equity and cost of debt.
|
• |
The cash flow projections included specific development estimates including cost of sales, cost of R&D, probability of success and amount and timing of projected future revenue.
|
4.3
|
Revision of Previously Issued Financial Statements
|
Intangible asset disclosure – note 12
(extract) |
As previously
reported
Patents
2018
£
|
Adjustment
Patents
2018
£
|
As revised
Patents
2018
£
|
|||||||||
Costs at beginning of period
|
— | — | ||||||||||
Additions
|
1,461,581 | 962,000 | 2,423,581 | |||||||||
Disposals
|
(961,581 | ) | (962,000 | ) | (1,923,581 | ) | ||||||
|
|
|
|
|
|
|||||||
Cost at end of period
|
500,000 | — | 500,000 | |||||||||
|
|
|
|
|
|
|||||||
Total intangible assets
|
|
483,949
|
|
— |
|
483,949
|
|
|||||
|
|
|
|
|
|
|||||||
Statement of cash flows (extract)
|
As previously
reported
2018
£
|
Adjustment
2018
£
|
As revised
2018
£
|
|||||||||
Payments to acquire intangible assets
|
— | 962,000 | 962,000 | |||||||||
Net cash used in operating activities
|
(720,361 | ) | 962,000 | 241,639 | ||||||||
Payments to acquire intangible assets
|
(1,461,581 | ) | (962,000 | ) | (2,423,581 | ) | ||||||
Net cash used in investing activities
|
|
(1,461,581
|
)
|
|
(962,000
|
)
|
|
(2,423,581
|
)
|
|||
Intangible asset disclosure – note 12
(extract) |
As previously
reported
Patents
2017
£
|
Adjustment
Patents
2017
£
|
As revised
Patents
2017
£
|
|||||||||
Costs at beginning of period
|
— | — | — | |||||||||
Additions
|
— | 984,691 | 984,691 | |||||||||
Disposals
|
— | (984,691 | ) | (984,691 | ) | |||||||
|
|
|
|
|
|
|||||||
Cost at end of period
|
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total intangible assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|||||||
Statement of cash flows (extract)
|
As previously
reported
2017
£
|
Adjustment
2017
£
|
As revised
2017
£
|
|||||||||
Proceeds from sale of intangible assets
|
— | 984,691 | 984,691 | |||||||||
Net cash used in operating activities
|
|
(2,958,511
|
)
|
|
984,691
|
|
|
(1,973,820
|
)
|
5.
|
Revenue
|
Provision of Licensing and R&D services
|
Period to
May 6,
2019
£
|
12 months
December 31,
2018
£
|
||||||
Revenue from related party
|
|
7,902,856
|
|
17,394,263 | ||||
|
|
|
|
|||||
Total
|
|
7,902,856
|
|
17,394,263 | ||||
|
|
|
|
|||||
Timing of recognition:
|
||||||||
Over time
|
|
7,902,856
|
|
17,394,263 | ||||
|
|
|
|
|||||
Total
|
|
7,902,856
|
|
17,394,263 | ||||
|
|
|
|
YEAR ENDED DECEMBER 31, 2017
|
Licensing
income^
£
|
Provision of
R&D
services
£
|
Total^
£
|
|||||||||
Revenue from related party in the United Kingdom
|
9,846,913 | 2,304,480 | 12,151,393 | |||||||||
|
|
|
|
|
|
|||||||
Timing of recognition:
|
||||||||||||
At a point in time
|
9,846,913 | — | 9,846,913 | |||||||||
Over time
|
— | 2,304,480 | 2,304,480 | |||||||||
|
|
|
|
|
|
|||||||
Total from United Kingdom
|
9,846,913 | 2,304,480 | 12,151,393 | |||||||||
|
|
|
|
|
|
|||||||
Revenue from European Union*
|
2,841,850 | — | 2,841,850 | |||||||||
|
|
|
|
|
|
|||||||
Timing of recognition:
|
||||||||||||
Over time
|
2,841,850 | — | 2,841,850 | |||||||||
|
|
|
|
|
|
|||||||
Total from European Union
|
2,841,850 | — | 2,841,850 | |||||||||
|
|
|
|
|
|
|||||||
Total
|
12,688,763 | 2,304,480 | 14,993,243 | |||||||||
|
|
|
|
|
|
* |
In the year ended December 31, 2017, the licensing income from a third party in the European Union represents the revenue recognized from the grant of intellectual property rights and the provisions of R&D services, which is deemed by management to represent a single performance obligation.
|
• |
Grant of intellectual property rights for the purpose of evaluating the work performed by the Company
|
• |
Provision of R&D services
|
• |
Grant of intellectual property rights
|
• |
Provision of R&D services
|
a.
|
Assets and liabilities related to contracts with customers
|
Period ended
May 6,
2019
|
Year ended
December 31,
2018
|
Year ended
December 31,
2017
|
||||||||||
£
|
£ | £ | ||||||||||
Deferred revenue related to upfront licensing fee, milestone income and R&D services income
|
|
351,011
|
|
6,390,207 | — | |||||||
|
|
|
|
|
|
b.
|
Revenue recognized in relation to contract liabilities
|
Period ended
May 6,
2019
|
Year ended
December 31,
2018
|
Year ended
December 31,
2017
|
||||||||||
Deferred revenue related to licensing income
|
£
|
£ | £ | |||||||||
Contract liabilities at beginning of period (originally)
|
|
6,390,207
|
|
— | 2,841,850 | |||||||
Adoption of new accounting standard (2.4ii)
|
|
—
|
|
9,340,724 | — | |||||||
Additional amounts deferred in the period
|
|
240,450
|
|
3,470,504 | — | |||||||
Revenue recognized in the period included in opening contract liability
|
|
(6,279,646
|
)
|
(6,421,021 | ) | (2,841,850 | ) | |||||
|
|
|
|
|
|
|||||||
Contract liabilities at end of period
|
|
351,011
|
|
6,390,207 | — | |||||||
|
|
|
|
|
|
Period ended
May 6,
2019
|
Year ended
December 31,
2018
|
Year ended
December 31,
2017
|
||||||||||
£
|
£ | £ | ||||||||||
Transaction price allocated to outstanding performance obligation
|
|
351,011
|
|
6,390,207 | 9,340,724 | |||||||
|
|
|
|
|
|
6.
|
Costs related to collaborative arrangements
|
Period ended
May 6,
2019
|
Year ended
December 31, 2018 |
Year ended
December 31, 2017 |
||||||||||
£
|
£ | £ | ||||||||||
Derecognition of intangible asset
|
— | 1,895,536 | 984,691 | |||||||||
Direct labor cost
|
1,863,660 | 4,823,750 | 2,304,480 | |||||||||
|
|
|
|
|
|
|||||||
|
1,863,660
|
|
|
6,719,286
|
|
|
3,289,171
|
|
||||
|
|
|
|
|
|
7.
|
Other gains
|
Period ended
May 6,
2019
|
Year ended
December 31,
2018
|
Year ended
December 31,
2017
|
||||||||||
£
|
£ | £ | ||||||||||
Gain on foreign exchange differences
|
|
—
|
|
— | 166,352 | |||||||
Interest receivable
|
|
—
|
|
815 | — | |||||||
|
|
|
|
|
|
|||||||
|
—
|
|
815 | 166,352 | ||||||||
|
|
|
|
|
|
8.
|
Loss from operations
|
Period ended
May 6,
2019
|
Year ended
December 31,
2018
|
Year ended
December 31,
2017
|
||||||||||
£
|
£ | £ | ||||||||||
Charged to research and development costs:
|
||||||||||||
Amortization of intangible assets
|
|
—
|
|
44,096 | — | |||||||
Charged to general and administrative costs:
|
||||||||||||
Share based payment charge
|
|
688,679
|
|
31,947 | 128,186 |
9.
|
Finance costs
|
Period ended
May 6,
2019
|
Year ended
December 31,
2018
|
Year ended
December 31,
2017
|
||||||||||
£
|
£ | £ | ||||||||||
Interest payable on loan from related party
|
|
103,216
|
|
144,677 | 101,825 | |||||||
|
|
|
|
|
|
10.
|
Key management personnel remuneration
|
Period ended
May 6,
2019
|
Year ended
December 31,
2018
|
Year ended
December 31,
2017
|
||||||||||
£
|
£ | £ | ||||||||||
Aggregate compensation
|
|
161,038
|
|
563,437 | 476,552 | |||||||
Compensation for loss of office
|
|
—
|
|
131,797 | — | |||||||
Company pension contributions to money purchase pension schemes
|
|
3,456
|
|
22,019 | 21,194 | |||||||
Share-based payment charge
|
|
688,679
|
|
— | — | |||||||
|
|
|
|
|
|
|||||||
|
853,173
|
|
717,253 | 497,746 | ||||||||
|
|
|
|
|
|
11.
|
Corporation tax benefit
|
Period ended
May 6,
2019
|
Year ended
December 31,
2018
|
Year ended
December 31,
2017
|
||||||||||
£
|
£ | £ | ||||||||||
Current benefit for the year
|
|
639,359
|
|
2,429,980 | 705,465 | |||||||
Adjustments for current tax of prior periods
|
|
—
|
|
(14,012 | ) | — | ||||||
|
|
|
|
|
|
|||||||
Total current tax benefit
|
|
639,359
|
|
2,415,968 | 705,465 | |||||||
|
|
|
|
|
|
Period ended
May 6,
2019
|
Year ended
December 31,
2018
|
Year ended
December 31,
2017
|
||||||||||
£
|
£ | £ | ||||||||||
Loss before tax
|
|
(137,399
|
)
|
(1,883,335 | ) | (516,763 | ) | |||||
|
|
|
|
|
|
|||||||
Profit/ loss before tax multiplied by the standard rate of corporation tax in the United Kingdom for the year of 19% (2017: 19.25%)
|
|
26,106
|
|
357,834 | 99,459 | |||||||
|
|
|
|
|
|
Period ended
May 6,
2019
|
Year ended
December 31,
2018
|
Year ended
December 31,
2017
|
||||||||||
£
|
£ | £ | ||||||||||
Additional deduction for R&D expenditure
|
|
962,732
|
|
1,799,715 | 861,611 | |||||||
Surrender of tax losses for R&D tax credit
|
|
(857,989
|
)
|
(3,904,716 | ) | (936,399 | ) | |||||
Share-based payments
|
|
(130,849
|
)
|
(6,070 | ) | (24,671 | ) | |||||
Tax credits on R&D expenditure
|
|
639,359
|
|
2,429,980 | 705,465 | |||||||
Expenses not deducted for tax purposes
|
|
—
|
|
(21,501 | ) | — | ||||||
Adjustment for current tax prior periods
|
|
—
|
|
(14,012 | ) | — | ||||||
Impact of change in accounting policy
|
|
—
|
|
1,774,738 | — | |||||||
|
|
|
|
|
|
|||||||
Actual tax benefit for the period/year
|
|
639,359
|
|
2,415,968 | 705,465 | |||||||
|
|
|
|
|
|
Period ended
May 6,
2019
|
Year ended
December 31,
2018
|
Year ended
December 31,
2017
|
||||||||||
£
|
£ | £ | ||||||||||
Share-based payments
|
|
276,149
|
|
159,074 | 153,643 | |||||||
Carried forward tax losses
|
|
644,751
|
|
644,751 | — | |||||||
|
|
|
|
|
|
|||||||
Deferred tax asset (unrecognized)
|
|
920,900
|
|
803,825 | 153,643 | |||||||
|
|
|
|
|
|
12.
|
Intangible assets
|
Patents
May 6,
2019
£
|
Restated*
Patents
2018
£
|
Restated*
Patents
2017
£
|
||||||||||
Costs at beginning of period
|
|
500,000
|
|
— | — | |||||||
Additions
|
|
50,000
|
|
2,423,581 | 984,691 | |||||||
Disposals
|
|
—
|
|
(1,923,581 | ) | (984,691 | ) | |||||
|
|
|
|
|
|
|||||||
Cost at end of period
|
|
550,000
|
|
500,000 |
|
—
|
|
|||||
|
|
|
|
|
|
|||||||
Accumulated amortization at beginning of period
|
|
16,051
|
|
— | — | |||||||
Amortization charge
|
|
—
|
|
44,096 | — | |||||||
Disposals
|
|
—
|
|
(28,045 | ) | — | ||||||
|
|
|
|
|
|
|||||||
Accumulated amortization at end of period
|
|
16,051
|
|
16,051 |
|
—
|
|
|||||
|
|
|
|
|
|
|||||||
Net book value as of May 6, /December 31,
|
|
533,949
|
|
483,949 |
|
—
|
|
|||||
|
|
|
|
|
|
* |
See note 4.3 for for revision of previously issued financial statements for correction of an error.
|
13.
|
Trade and other receivables
|
May 6,
2019
|
2018 | 2017 | ||||||||||
Due within one year
|
|
£
|
|
£ | £ | |||||||
Unpaid share capital
|
|
2
|
|
— | — | |||||||
Amounts due from related parties
|
|
603,701
|
|
416,236 | 730,489 | |||||||
VAT recoverable
|
|
119,722
|
|
121,278 | 82,756 | |||||||
Prepayments
|
|
484,918
|
|
246,998 | 21,648 | |||||||
|
|
|
|
|
|
|||||||
|
1,208,343
|
|
784,512 | 834,893 | ||||||||
|
|
|
|
|
|
14.
|
Cash and cash equivalents
|
May 6,
2019
£
|
2018
£
|
2017
£
|
||||||||||
Cash and bank balances
|
|
915,436
|
|
5,709,474 | 1,909,973 | |||||||
|
|
|
|
|
|
15.
|
Issued capital
|
May 6,
2019
£
|
2018
£ |
2017
£ |
||||||||||
Issued capital
|
|
93
|
|
91 | 91 | |||||||
|
|
|
|
|
|
May 6,
2019
£
|
2018
£ |
2017
£ |
||||||||||
239,311 unpaid ordinary shares as at May 6, 2019 (December 31, 2018 and 2017, nil)
|
|
2
|
|
— | — | |||||||
1,189,098 at May 6, 2019 and December 31, 2018 (2017: 1,189,098) fully paid ordinary shares of £0.00001
|
|
12
|
|
12 | 12 | |||||||
27,188 at May 6, 2019 and December 31, 2018 (2017: 27,188) fully paid deferred ordinary shares of £0.00001
|
|
—
|
|
— | — | |||||||
7,923,146 at May 6, 2019 and December 31, 2018 (2017: 7,923,146) fully paid series A preferred shares of £0.00001
|
|
79
|
|
79 | 79 | |||||||
|
|
|
|
|
|
|||||||
|
93
|
|
91 | 91 | ||||||||
|
|
|
|
|
|
(a) |
First in paying to the holders of the deferred ordinary shares, if any, a total of one penny for the entire class of Deferred Shares (which payment shall be deemed satisfied by payment to any one holder of Deferred Shares); and
|
(b) |
Secondly, the balance of the surplus assets (if any) shall be distributed among the holders of the ordinary shares (including those that are exercised under the rules of the share option scheme) and the preference shares pro rata (as if the ordinary shares and preferred shares constituted one and the same class).
|
16.
|
Financial instruments
|
a.
|
Maturity of financial liabilities
|
May 6,
2019
|
December 31,
2018
|
December 31,
2017
|
||||||||||
Amounts repayable:
|
|
£
|
|
£ | £ | |||||||
In one year or less
|
|
13,352,608
|
|
12,184,899 | 5,421,048 | |||||||
|
|
|
|
|
|
b.
|
Financial Instruments by Category
|
May 6,
2019
Amortized
cost
|
2018
Amortized
cost
|
2017
Amortized
cost
|
||||||||||
Assets
|
|
£
|
|
£ | £ | |||||||
Cash and cash equivalents
|
|
915,436
|
|
5,709,474 | 1,909,973 | |||||||
Trade and other receivables (excluding VAT recoverable and prepayments)
|
|
603,701
|
|
416,236 | 730,489 | |||||||
|
|
|
|
|
|
|||||||
|
1,519,137
|
|
|
6,125,710
|
|
|
2,640,462
|
|
||||
|
|
|
|
|
|
May 6,
2019 Financial
liabilities measured at amortized cost |
2018
Financial
liabilities measured at amortized
cost
|
2017
Financial
Liabilities
measured at
amortized
cost
|
||||||||||
Liabilities
|
|
£
|
|
£ | £ | |||||||
Trade and other payables
|
|
13,352,608
|
|
12,184,899 | 5,421,048 | |||||||
|
|
|
|
|
|
17.
|
Trade and other payables
|
May 6,
2019
£
|
2018
£
|
2017
£
|
||||||||||
Trade payables
|
|
179,218
|
|
626,589 | 440,810 | |||||||
Amount due to related parties
|
|
11,318,271
|
|
10,955,911 | 4,804,235 | |||||||
Accrued expenses
|
|
1,855,119
|
|
602,399 | 176,003 | |||||||
|
|
|
|
|
|
|||||||
|
13,352,608
|
|
12,184,899 | 5,421,048 | ||||||||
|
|
|
|
|
|
May 6,
2019
£
|
2018
£
|
2017
£
|
||||||||||
Pound sterling
|
|
13,260,920
|
|
11,950,214 | 5,043,950 | |||||||
Euro
|
|
82,952
|
|
177,659 | 376,567 | |||||||
U.S. dollar
|
|
8,736
|
|
38,652 | 531 | |||||||
Swiss franc
|
|
—
|
|
18,374 | — | |||||||
|
|
|
|
|
|
|||||||
|
13,352,608
|
|
12,184,899 | 5,421,048 | ||||||||
|
|
|
|
|
|
18.
|
Share-based payments
|
May 6,
2019 |
May 6,
2019 |
2018 | 2018 | 2017 | 2017 | |||||||||||||||||||
Number
|
Weighted
average exercise price |
Number |
Weighted
average exercise price |
Number |
Weighted
average exercise price |
|||||||||||||||||||
Outstanding as of the beginning of period
|
|
219,884
|
|
|
0.00001
|
|
223,218 | 0.00001 | 239,649 | 0.00001 | ||||||||||||||
Options forfeited
|
|
—
|
|
|
0.00001
|
|
(3,334 | ) | 0.00001 | (16,431 | ) | 0.00001 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Outstanding as of the end of period
|
|
219,884
|
|
|
0.00001
|
|
219,884 | 0.00001 | 223,218 | 0.00001 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Exercisable as of the end of period
|
|
—
|
|
|
—
|
|
— | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Exercise price
of share option |
Fair value
as of date of grant |
|||||||||||||
Grant date
|
Scheme
|
|
£
|
|
|
£
|
|
|
Number
|
|
||||
April – September 2015
|
F-star
Beta Limited Share Option Scheme
|
0.00001 | 4.53 | 139,849 | ||||||||||
April – September 2016
|
F-star
Beta Limited Share Option Scheme
|
0.00001 | 4.53 | 99,800 |
19.
|
Related party transactions
|
Expenses
|
Payable
|
|||||||||||||||||||||||
Period ended
May 6, |
Year ended
December 31, |
Period ended
May 6, |
Balance as of
December 31, |
|||||||||||||||||||||
2019
|
2018 | 2017 |
2019
|
2018 | 2017 | |||||||||||||||||||
£
|
£ | £ |
£
|
£ | £ | |||||||||||||||||||
Costs/licenses
|
||||||||||||||||||||||||
Recharged from related party
|
|
4,226,502
|
|
13,302,779 | 11,946,845 |
|
1,449,185
|
|
853,785 | 837,311 |
Income
|
Receivable
|
|||||||||||||||||||||||
Period ended
May 6, |
Year ended
December 31, |
Period ended
May 6, |
Balance as of
December 31, |
|||||||||||||||||||||
2019
|
2018 | 2017 |
2019
|
2018 | 2017 | |||||||||||||||||||
£
|
£ | £ |
£
|
£ | £ | |||||||||||||||||||
Costs/licenses
|
||||||||||||||||||||||||
Recharged to related party
|
|
8,332,624
|
|
17,633,167 | 14,071,644 |
|
603,701
|
|
416,236 | 730,489 |
20.
|
Commitments
|
21.
|
Earnings per share
|
Earnings
|
May 6,
2019
£
|
2018
£ |
2017
£ |
|||||||||
Earnings for the purposes of basic and diluted earnings per ordinary share
|
|
72,369
|
|
69,299 | 24,551 | |||||||
|
|
|
|
|
|
|||||||
Number of shares
|
May 6,
2019
£
|
2018
£ |
2017
£ |
|||||||||
Weighted average number of shares for the purposes of basic and diluted earnings per ordinary share
|
|
1,305,882
|
|
1,189,098 | 1,189,098 | |||||||
|
|
|||||||||||
Basic earnings per ordinary share
|
|
0.05
|
|
0.06 | 0.02 | |||||||
Diluted earnings per ordinary share
|
|
0.05
|
|
0.06 | 0.02 |
21.
|
Subsequent events
|
F-213
|
||||
F-214 | ||||
F-215 | ||||
F-216 |
6 months ended
|
||||||||||
Notes
|
June 30,
2020
£
|
June 30,
2019
£
|
||||||||
Revenue
|
3 |
|
1,537,440
|
|
20,153,798 | |||||
Costs related to collaborative arrangements
|
4 |
|
(332,804
|
)
|
(17,436,956 | ) | ||||
Research & development costs
|
6 |
|
(7,422,539
|
)
|
(9,574,755 | ) | ||||
General & administrative expenses
|
6 |
|
(4,960,307
|
)
|
(3,764,447 | ) | ||||
Other income
|
5 |
|
371,115
|
|
— | |||||
Other expenses
|
|
(1,282,426
|
)
|
(242,656 | ) | |||||
|
|
|
|
|||||||
Loss from operations
|
|
(12,089,521
|
)
|
(10,865,016 | ) | |||||
|
|
|
|
|||||||
Fair value losses on financial liabilities at fair value
through profit or loss (FVTPL)
|
9 |
|
(1,508,796
|
)
|
— | |||||
Finance income
|
|
8,290
|
|
857 | ||||||
Finance costs
|
|
(437,548
|
)
|
— | ||||||
|
|
|
|
|||||||
Loss before tax from continuing operations
|
|
(14,027,575
|
)
|
(10,864,159 | ) | |||||
|
|
|
|
|||||||
Income tax credit
|
|
2,691,554
|
|
755,926 | ||||||
|
|
|
|
|||||||
Loss for the year attributable to equity holders of the parent
|
|
(11,336,021
|
)
|
(10,108,233 | ) | |||||
|
|
|
|
|||||||
Items that may be reclassified to profit or loss in subsequent periods:
|
||||||||||
Foreign exchange arising on consolidation
|
|
566,551
|
|
430,639 | ||||||
|
|
|
|
|||||||
Other comprehensive income for the period
|
|
566,551
|
|
430,639 | ||||||
|
|
|
|
|||||||
Total comprehensive loss attributable to owners of the parent
|
|
(10,769,470
|
)
|
(9,677,594 | ) | |||||
|
|
|
|
|||||||
Loss per share for profit attributable to the shareholders of the parent:
|
||||||||||
Basic and diluted loss per share
|
14 |
|
(0.64
|
)
|
(0.86 | ) |
Notes
|
June 30,
2020
£
|
December 31,
2019
£
|
||||||||||
Non-current
assets
|
||||||||||||
Goodwill
|
|
2,811,827
|
|
2,811,827 | ||||||||
Intangible assets
|
|
33,368,882
|
|
34,134,321 | ||||||||
Property, plant and equipment
|
|
814,023
|
|
1,086,781 | ||||||||
Right-of-use
|
|
218,907
|
|
462,520 | ||||||||
Financial assets held at FVTPL
|
7 |
|
45,712
|
|
42,662 | |||||||
|
|
|
|
|||||||||
|
37,259,351
|
|
38,538,111 | |||||||||
Current assets
|
||||||||||||
Cash and cash equivalents
|
8 |
|
2,155,101
|
|
3,736,229 | |||||||
Current tax assets
|
|
3,448,073
|
|
8,114,658 | ||||||||
Trade and other receivables
|
|
2,019,879
|
|
2,713,144 | ||||||||
|
|
|
|
|||||||||
|
7,623,053
|
|
14,564,031 | |||||||||
|
|
|
|
|||||||||
Total assets
|
|
44,882,404
|
|
53,102,142 | ||||||||
|
|
|
|
|||||||||
Equity
|
||||||||||||
Issued share capital
|
|
178,109
|
|
177,768 | ||||||||
Other reserves
|
|
45,261,794
|
|
45,261,794 | ||||||||
Accumulated losses
|
|
(26,817,953
|
)
|
(16,907,806 | ) | |||||||
|
|
|
|
|||||||||
Total equity
|
|
18,621,950
|
|
28,531,756 | ||||||||
|
|
|
|
|||||||||
Non-current
liabilities
|
||||||||||||
Lease liability
|
9 |
|
—
|
|
39,745 | |||||||
Deferred tax
|
|
1,297,333
|
|
1,655,295 | ||||||||
|
|
|
|
|||||||||
|
1,297,333
|
|
1,695,040 | |||||||||
Current liabilities
|
||||||||||||
Convertible notes held at FVTPL
|
9 |
|
14,404,757
|
|
11,364,454 | |||||||
Corporate tax liabilities
|
|
95,496
|
|
84,317 | ||||||||
Trade and other payables
|
|
9,898,729
|
|
10,621,957 | ||||||||
Deferred revenue
|
3 |
|
321,243
|
|
339,558 | |||||||
Lease liability
|
9 |
|
242,896
|
|
465,060 | |||||||
|
|
|
|
|||||||||
Total current liabilities
|
|
24,963,121
|
|
22,875,346 | ||||||||
|
|
|
|
|||||||||
Total equity and liabilities
|
|
44,882,404
|
|
53,102,142 | ||||||||
|
|
|
|
Notes
|
Share
capital
£
|
Other
reserves
£
|
(Retained
earnings)/
accumulated
losses
£
|
Total equity
£
|
||||||||||||||||
Balance at January 1, 2019
|
|
1
|
|
|
90
|
|
|
15,861,034
|
|
|
15,861,125
|
|
||||||||
Loss for the half year
|
— | — | (10,108,233 | ) | (10,108,233 | ) | ||||||||||||||
Other comprehensive income
|
|
—
|
|
— | 430,639 | 430,639 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
|
1
|
|
|
90
|
|
|
6,183,440
|
|
|
6,183,531
|
|
|||||||||
Transactions with owners in their capacity as owners
|
||||||||||||||||||||
Share based payment charge
|
10 | — | — | 1,018,812 | 1,018,812 | |||||||||||||||
Issues of shares on capital reorganization, business combination and acquisition of asset
|
177,415 | 45,261,704 | — | 45,439,119 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Balance at June 30, 2019
|
|
177,416
|
|
|
45,261,794
|
|
|
7,202,252
|
|
|
52,641,462
|
|
||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Balance as at January 1, 2020
|
|
177,768
|
|
|
45,261,794
|
|
|
(16,907,806
|
)
|
|
28,531,756
|
|
||||||||
Loss for the half year
|
— | — | (11,336,021 | ) | (11,336,021 | ) | ||||||||||||||
Other comprehensive income
|
— | — | 566,551 | 566,551 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
|
177,768
|
|
|
45,261,794
|
|
|
(27,677,276
|
)
|
|
17,762,286
|
|
|||||||||
Transactions with owners in their capacity as owners
|
||||||||||||||||||||
Share based payment charge
|
10 | — | — | 859,323 | 859,323 | |||||||||||||||
Exercise of share options
|
341 | — | — | 341 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
At June 30, 2020
|
|
178,109
|
|
|
45,261,794
|
|
|
(26,817,953
|
)
|
|
18,621,950
|
|
||||||||
|
|
|
|
|
|
|
|
6 months ended
|
||||||||||||
Notes
|
June 30, 2020
£
|
June 30, 2019
£
|
||||||||||
Cash flows from operating activities
|
||||||||||||
Loss for the half year before tax
|
|
(14,027,575
|
)
|
(10,864,159 | ) | |||||||
Adjustments for:
|
— | |||||||||||
Share-based payment expense
|
10 |
|
859,323
|
|
1,018,812 | |||||||
Net finance cost
|
|
427,663
|
|
(857 | ) | |||||||
Net exchange loss
|
|
1,280,538
|
|
244,563 | ||||||||
Amortization of intangible assets
|
4,6 |
|
776,249
|
|
766,836 | |||||||
Depreciation on tangible fixed assets and right of use assets
|
6 |
|
470,201
|
|
164,910 | |||||||
Loss on disposal of tangible fixed asset
|
|
5,625
|
|
— | ||||||||
Loss on disposal of intangible asset
|
|
—
|
|
3,953,127 | ||||||||
Impairment of intangible assets
|
6 |
|
—
|
|
1,800,684 | |||||||
Fair value losses on financial liabilities through profit or loss
|
9 |
|
1,508,796
|
|
— | |||||||
Trade and other receivables
|
|
693,265
|
|
(9,490,006 | ) | |||||||
Trade and other payables
|
|
(723,228
|
)
|
4,819,776 | ||||||||
Change in deferred revenue
|
|
(18,315
|
)
|
(4,717,253 | ) | |||||||
|
|
|
|
|||||||||
Adjusted loss before tax
|
|
(8,747,458
|
)
|
(12,303,567 | ) | |||||||
Proceeds from sale of intangible assets
|
|
—
|
|
8,620,965 | ||||||||
|
|
|
|
|||||||||
Cash used in operating activities
|
|
(8,747,458
|
)
|
(3,682,602 | ) | |||||||
Corporation tax received
|
|
7,019,203
|
|
— | ||||||||
|
|
|
|
|||||||||
Net cash flows used in operating activities
|
|
(1,728,255
|
)
|
(3,682,602 | ) | |||||||
|
|
|
|
|||||||||
Cash flows from investing activities
|
||||||||||||
Payments to acquire intangible assets
|
|
—
|
|
(100,000 | ) | |||||||
Cash acquired on business combinations*
|
|
—
|
|
4,194,521 | ||||||||
Interest received
|
|
8,290
|
|
857 | ||||||||
|
|
|
|
|||||||||
Net cash generated from investing activities
|
|
8,290
|
|
4,095,378 | ||||||||
|
|
|
|
|||||||||
Cash flows from financing activities
|
||||||||||||
Principal elements of lease payments
|
|
(221,364
|
)
|
(83,374 | ) | |||||||
Interest paid on leases
|
|
(9,885
|
)
|
(5,497 | ) | |||||||
Proceeds from convertible debt
|
9 |
|
405,357
|
|
— | |||||||
|
|
|
|
|||||||||
Net cash generated from/(used in) financing activities
|
|
174,108
|
|
(88,871 | ) | |||||||
|
|
|
|
|||||||||
Net (decrease)/increase in cash and cash equivalents
|
|
(1,545,857
|
)
|
323,905 | ||||||||
Cash and cash equivalents at the beginning of the year
|
8 |
|
3,736,229
|
|
6,458,139 | |||||||
Effects of exchange rate changes on cash and cash equivalents
|
|
(35,271
|
)
|
(8,804 | ) | |||||||
|
|
|
|
|||||||||
Cash and cash equivalents at end of period
|
|
2,155,101
|
|
6,773,240 | ||||||||
|
|
|
|
* |
Consideration for acquisition of subsidiaries in the business combination was entirely the form of issued shares
|
1.
|
Basis of preparation
|
1.1
|
New standards, amendments and IFRIC interpretations
|
1.2
|
Income tax benefit
|
1.3
|
Government grants
|
2.
|
Critical accounting estimates and judgments
|
2.1
|
Fair value of financial instruments
|
• |
Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1)
|
• |
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2)
|
• |
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3)
|
Increase probability by 10%:
|
£ | 402,653 | ||
Decrease probability by 10%:
|
£ | (402,653 | ) |
2.2
|
Intangible asset impairment review
|
3
|
Revenue
|
6 months ended
|
||||||||
Provision of R&D services & licensing income
|
June 30,
2020
£
|
June 30,
2019
£
|
||||||
Europe
|
|
949,955
|
|
18,874,427 | ||||
U.S.
|
|
587,485
|
|
1,279,371 | ||||
|
|
|
|
|||||
Total
|
|
1,537,440
|
|
20,153,798 | ||||
|
|
|
|
|||||
Timing of recognition:
|
||||||||
At a point in time
|
|
—
|
|
9,785,951 | ||||
Over time
|
|
1,537,440
|
|
10,367,847 | ||||
|
|
|
|
|||||
Total
|
|
1,537,440
|
|
20,153,798 | ||||
|
|
|
|
3.1
|
Assets and liabilities related to contracts with customers
|
June 30,
2020
£
|
December 31,
2019
£
|
|||||||
Deferred revenue related to upfront licensing fee, milestone income and R&D services income
|
|
321,243
|
|
339,558 | ||||
|
|
|
|
3.2
|
Revenue recognized in relation to contract liabilities
|
June 30,
2020
£
|
December 31,
2019
£
|
|||||||
Contract liabilities as of January 1/July 1
|
|
339,558
|
|
531,401 | ||||
Additional amounts deferred in the period
|
|
149,766
|
|
— | ||||
Revenue recognized in the period included in opening contract liability
|
|
(168,081
|
)
|
(191,843 | ) | |||
|
|
|
|
|||||
Contract liabilities as of June 30/ December 31
|
|
321,243
|
|
339,558 | ||||
|
|
|
|
3.3
|
Unsatisfied long-term intellectual property licensing contract
|
June 30,
2020
£
|
December 31,
2019
£
|
|||||||
Transaction price allocated to outstanding performance obligations
|
|
1,971,249
|
|
3,185,408 | ||||
|
|
|
|
4
|
Costs related to collaborative arrangements
|
6 months
ended
June 30,
2020
£
|
6 months
ended
June 30,
2019
£
|
|||||||
Derecognition of intangible asset
|
|
—
|
|
12,574,093 | ||||
Amortization
|
|
169,427
|
|
476,429 | ||||
Direct labor cost
|
|
119,697
|
|
1,928,920 | ||||
External R&D costs
|
|
43,680
|
|
2,457,514 | ||||
|
|
|
|
|||||
|
332,804
|
|
17,436,956 | |||||
|
|
|
|
5
|
Other Income
|
6 months ended
|
||||||||
June 30,
2020
£
|
June 30,
2019
£
|
|||||||
Government grants
|
|
371,115
|
|
— | ||||
|
|
|
|
|||||
|
371,115
|
|
— |
6
|
Profit and loss information
|
6 months ended
|
||||||||
June 30,
2020
£
|
June 30,
2019
£
|
|||||||
Charged to research and development costs:
|
||||||||
Depreciation of property, plant and equipment
|
|
225,358
|
|
78,757 | ||||
Amortization of intangible assets
|
|
606,822
|
|
290,407 | ||||
Impairment of intangible assets
|
|
—
|
|
1,800,684 | ||||
Charged to general and administrative costs:
|
||||||||
Depreciation of property, plant and equipment (including right of use assets)
|
|
244,843
|
|
86,153 | ||||
Loss on disposal of tangible fixed assets
|
|
5,625
|
|
— |
7.
|
Financial assets at fair value through profit or loss
|
June 30,
2020
£
|
December 31,
2019
£
|
|||||||
Balance January 1/ July 1
|
|
42,662
|
|
44,808 | ||||
Foreign currency translation
|
|
3,050
|
|
(2,146 | ) | |||
|
|
|
|
|||||
Balance June 30/ December 31
|
|
45,712
|
|
42,662 | ||||
|
|
|
|
8.
|
Cash and cash equivalents
|
June 30,
2020
£
|
December 31,
2019
£
|
|||||||
Cash at bank and in hand
|
|
2,155,101
|
|
3,736,229 | ||||
|
|
|
|
|||||
Balances per statement of cash flows
|
|
2,155,101
|
|
3,736,229 | ||||
|
|
|
|
Lease
liabilities
£
|
Borrowings
£
|
Total
£
|
||||||||||
At 1 January 2019
|
— | — |
|
—
|
|
|||||||
Cash flows
|
(88,871 | ) | — |
|
(88,871
|
)
|
||||||
Non-cash
changes
|
||||||||||||
Acquired with subsidiary
|
800,898 | — |
|
800,898
|
|
|||||||
Interest charged
|
5,497 | — |
|
5,497
|
|
|||||||
|
|
|
|
|
|
|||||||
At June 30, 2019
|
717,524 | — |
|
717,524
|
|
|||||||
|
|
|
|
|
|
|||||||
At January 1, 2020
|
504,805 | 11,364,454 |
|
11,869,259
|
|
|||||||
Cash flows
|
(231,249 | ) | 405,357 |
|
174,108
|
|
||||||
Non-cash
changes
|
||||||||||||
Interest charged
|
9,885 | 427,663 |
|
437,548
|
|
|||||||
Fair value adjustment on borrowings
|
— | 1,508,796 |
|
1,508,796
|
|
|||||||
Foreign exchange differences
|
— | 698,487 |
|
698,487
|
|
|||||||
Termination of lease
|
(40,545 | ) | — |
|
(40,545
|
)
|
||||||
|
|
|
|
|
|
|||||||
At June 30, 2020
|
242,896 | 14,404,757 |
|
14,647,653
|
|
|||||||
|
|
|
|
|
|
9.
|
Loans and borrowings
|
June 30,
2020
£
|
December 31,
2019
£
|
|||||||
Current
|
||||||||
Lease liability
|
|
242,896
|
|
465,060 | ||||
Convertible notes held at FVTPL (unsecured)
|
|
14,404,757
|
|
11,364,454 | ||||
|
|
|
|
|||||
|
14,647,653
|
|
11,829,514 | |||||
|
|
|
|
|||||
Non-current
|
||||||||
Lease liability
|
|
—
|
|
39,745 | ||||
|
|
|
|
|||||
|
—
|
|
39,745 | |||||
|
|
|
|
|||||
Total
|
|
14,647,653
|
|
11,869,259 | ||||
|
|
|
|
June 30,
2020
£
|
December 31,
2019
£
|
|||||||
Value of the notes issued
|
|
10,457,320
|
|
10,051,963 | ||||
Cumulative fair value adjustment through profit and loss
|
|
2,615,109
|
|
1,106,313 | ||||
Interest charged
|
|
582,154
|
|
154,491 | ||||
Foreign exchange loss on revaluation
|
|
750,174
|
|
51,687 | ||||
|
|
|
|
|||||
Current liability
|
|
14,404,757
|
|
11,364,454 | ||||
|
|
|
|
Convertible
notes at FVPL
£
|
||||
Balance at January 1, 2020
|
1,106,313 | |||
Loss recognized in consolidated statement of comprehensive loss
|
1,508,796 | |||
|
|
|||
Balance at June 30, 2020
|
|
2,615,109
|
|
|
|
|
2020
Fair value
£
|
2020
Amortized cost
£
|
2019
Fair value
£
|
2019
Amortized cost
£
|
|||||||||||||
Convertible notes
|
|
14,404,757
|
|
|
11,789,648
|
|
|
11,364,454
|
|
|
10,258,141
|
|
||||
|
|
|
|
|
|
|
|
10.
|
Share-based payments
|
2020
Number
|
2020
Weighted
average exercise
price
|
2019
Number
|
2019
Weighted
average
exercise
price
|
|||||||||||||
Outstanding at January 1
|
2,304,706 | £ | 0.47 | — | — | |||||||||||
Granted in the period
|
215,144 | £ | 0.03 | 2,327,736 | £ | 0.60 | ||||||||||
Exercised in the period
|
(34,133 | ) | £ | 0.01 | — | — | ||||||||||
Forfeited in the period
|
(162,083 | ) | £ | 0.65 | — | — | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding at June 30
|
|
2,323,634
|
|
£
|
0.58
|
|
|
2,327,736
|
|
£
|
0.60
|
|
||||
|
|
|
|
|
|
|
|
|||||||||
Exercisable at June 30
|
|
1,627,483
|
|
£
|
0.60
|
|
|
374,612
|
|
£
|
0.01
|
|
||||
|
|
|
|
|
|
|
|
Grant date
|
Expiry date
|
Remaining
contractual life
(months)
|
Exercise price
|
2020
Number
|
||||||||
June 14, 2019
|
June 14, 2029
|
108 | £0.00—£0.05 | 350,118 | ||||||||
June 14, 2019
|
June 14, 2029
|
108 | $1.87 | 869,205 | ||||||||
June 14, 2019
|
June 14, 2029
|
108 | £0.01 | 818,317 | ||||||||
July 1, 2019
|
July 1, 2029
|
108 | £0.01 | 850 | ||||||||
December 18, 2019
|
December 18, 2029
|
114 | $1.61 | 35,000 | ||||||||
December 18, 2019
|
December 18, 2029
|
114 | £0.01 | 35,000 | ||||||||
April 14, 2020
|
April 14, 2030
|
118 | £0.01 | 117,344 | ||||||||
June 23, 2020
|
June 23, 2030
|
120 | £0.01 | 94,500 | ||||||||
June 23, 2020
|
June 23, 2030
|
120 | $1.39 | 3,300 | ||||||||
|
|
|||||||||||
|
2,323,634
|
|
||||||||||
|
|
June 23,
2020
(US Grants)
|
June 23,
2020
(UK Grants)
|
April 14,
2020
(UK grants)
|
June 14,
2019
(US grants)
|
June 14,
2019 & July 1, 2019
(UK grants)
|
||||||||||||||||
Share price at grant date
|
£ | 1.38 | £ | 1.38 | £ | 1.38 | £ | 2.45 | £ | 2.45 | ||||||||||
Exercise price
|
£ | 1.12 | £ | 0.01 | £ | 0.01 | £ | 1.47 | £ | 0.01 | ||||||||||
Term (years)
|
5.054 | 5.054 | 5.054 | 5.054 | 5.054 | |||||||||||||||
Expected volatility
|
98.30 | % | 98.30 | % | 98.30 | % | 70.03 | % | 70.03 | % | ||||||||||
Expected dividends expressed as a dividend yield
|
0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||
Risk-free rate
|
0.33 | % | 0.00 | % | 0.17 | % | 1.85 | % | 1.85 | % | ||||||||||
Fair value per option
|
£
|
1.0588
|
|
£
|
1.3812
|
|
£
|
1.3770
|
|
£
|
1.7057
|
|
£
|
2.4590
|
|
2020
£
|
2019
£
|
|||||||
Cancelled options
|
— | 24,307 | ||||||
Modified options
|
15,718 | 7,977 | ||||||
New options with alternative vesting schedule
|
128,953 | 333,688 | ||||||
New options with standard vesting
|
714,652 | 652,840 | ||||||
|
|
|
|
|||||
|
859,323
|
|
|
1,018,812
|
|
|||
|
|
|
|
2020
£
|
2019
£
|
|||||||
Research and development
|
169,341 | 80,203 | ||||||
General and administration
|
689,982 | 938,609 | ||||||
|
|
|
|
|||||
Total recognized in consolidated statement of comprehensive loss
|
|
859,323
|
|
|
1,018,812
|
|
||
|
|
|
|
11.
|
Commitments
|
12.
|
Related parties
|
R&D
recharges
6 months
ended
June 30,
2019
£
|
Other
recharges
6 months
ended
June 30,
2019
£
|
|||||||
Expenses recharged from:
|
||||||||
F-star
Beta Limited
|
1,863,660 | 483,653 | ||||||
F-star
Biotechnology Limited
|
206,221 | — | ||||||
F-star
Biotechnologische
Forschungs-und
Entwicklungsges.m.b.H
|
— | 11,536 |
13.
|
Subsequent events
|
• |
inputs into the
cost-to-cost
|
• |
assessment of impairment of the carrying value of intangible assets.
|
14.
|
Loss per share
|
6 months ended
|
||||||||
June 30,
2020
£
|
June 30,
2019
£
|
|||||||
Loss per share attributable to ordinary shares for the period:
|
||||||||
— basic and diluted
|
|
(0.64
|
)
|
(0.86 | ) | |||
2020
Number
|
2019
Number
|
|||||||
Weighted average number of ordinary shares for basic and diluted losses per share
|
|
16,243,171
|
|
11,224,160 |
ARTICLE 1 THE ACQUISITION
|
A-2 | |||||
1.1
|
The Acquisition
|
A-2 | ||||
1.2
|
Closing
|
A-2 | ||||
1.3
|
Company Name Change
|
A-2 | ||||
1.4
|
F-Star
Securities
|
A-2 | ||||
1.5
|
Calculation of Net Cash
|
A-3 | ||||
1.6
|
F-Star
Loan Notes
|
A-4 | ||||
1.7
|
Contingent Value Rights
|
A-5 | ||||
1.8
|
Preliminary Consents and Associated Acknowledgments of Sellers
|
A-6 | ||||
1.9
|
Delivery of Acquisition Consideration
|
A-6 | ||||
1.10
|
Power of Attorney
|
A-7 | ||||
1.11
|
No Further Rights
|
A-8 | ||||
1.12
|
Additional Actions
|
A-8 | ||||
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF
F-STAR
|
A-8 | |||||
2.1
|
Organization and Qualification; Charter Documents
|
A-9 | ||||
2.2
|
Capital Structure
|
A-9 | ||||
2.3
|
Authority;
Non-Contravention;
Approvals
|
A-11 | ||||
2.4
|
F-Star
Financial Statements; No Undisclosed Liabilities
|
A-11 | ||||
2.5
|
Absence of Certain Changes or Events
|
A-13 | ||||
2.6
|
Taxes
|
A-13 | ||||
2.7
|
Intellectual Property
|
A-14 | ||||
2.8
|
Compliance with Legal Requirements
|
A-16 | ||||
2.9
|
Legal Proceedings; Orders
|
A-18 | ||||
2.10
|
Brokers’ and Finders’ Fees
|
A-19 | ||||
2.11
|
Employee Benefit Plans
|
A-19 | ||||
2.12
|
Title to Assets; Real Property
|
A-20 | ||||
2.13
|
Environmental Matters
|
A-20 | ||||
2.14
|
Labor Matters
|
A-21 | ||||
2.15
|
F-Star
Contracts
|
A-21 | ||||
2.16
|
Books and Records
|
A-22 | ||||
2.17
|
Insurance
|
A-23 | ||||
2.18
|
Government Contracts
|
A-23 | ||||
2.19
|
Interested Party Transactions
|
A-23 | ||||
2.20
|
Disclosure; Company Information
|
A-23 | ||||
2.21
|
Anti-Takeover Statutes Not Applicable
|
A-24 | ||||
2.22
|
Ownership of Company Capital Stock
|
A-24 | ||||
2.23
|
F-Star
Pre-Closing
Financing
|
A-24 | ||||
2.24
|
Exclusivity of Representations; Reliance
|
A-24 | ||||
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF COMPANY
|
A-25 | |||||
3.1
|
Organization and Qualification; Charter Documents
|
A-25 | ||||
3.2
|
Capital Structure
|
A-25 | ||||
3.3
|
Authority;
Non-Contravention;
Approvals
|
A-27 | ||||
3.4
|
Anti-Takeover Statutes Not Applicable
|
A-27 | ||||
3.5
|
SEC Filings; Company Financial Statements; No Undisclosed Liabilities
|
A-28 | ||||
3.6
|
Absence of Certain Changes or Events
|
A-29 | ||||
3.7
|
Taxes
|
A-29 | ||||
3.8
|
Intellectual Property
|
A-30 | ||||
3.9
|
Compliance with Legal Requirements
|
A-32 | ||||
3.10
|
Legal Proceedings; Orders
|
A-34 | ||||
3.11
|
Brokers’ and Finders’ Fees
|
A-35 |
3.12
|
Employee Benefit Plans
|
A-35 | ||||
3.13
|
Title to Assets; Real Property
|
A-36 | ||||
3.14
|
Environmental Matters
|
A-37 | ||||
3.15
|
Labor Matters
|
A-37 | ||||
3.16
|
Company Contracts
|
A-37 | ||||
3.17
|
Books and Records
|
A-39 | ||||
3.18
|
Insurance
|
A-39 | ||||
3.19
|
Code of Ethics
|
A-39 | ||||
3.20
|
Opinion of Financial Advisor
|
A-39 | ||||
3.21
|
Shell Company Status
|
A-40 | ||||
3.22
|
Government Contracts
|
A-40 | ||||
3.23
|
Interested Party Transactions
|
A-40 | ||||
3.24
|
Bank Accounts; Deposits
|
A-40 | ||||
3.25
|
Disclosure; Company Information
|
A-40 | ||||
3.26
|
Exclusivity of Representations; Reliance
|
A-40 | ||||
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLERS
|
A-41 | |||||
4.1
|
Ownership of
F-Star
Share Capital and Loan Notes
|
A-41 | ||||
4.2
|
Authority;
Non-Contravention
|
A-41 | ||||
4.3
|
Tax Matters
|
A-42 | ||||
4.4
|
Disclosure; Seller Information
|
A-42 | ||||
4.5
|
Ownership of Company Capital Stock; Affiliates
|
A-42 | ||||
4.6
|
Exclusivity of Representations; Reliance
|
A-42 | ||||
ARTICLE 5 CONDUCT OF BUSINESS PENDING THE CLOSING
|
A-43 | |||||
5.1
|
Conduct of Company Business
|
A-43 | ||||
5.2
|
Conduct of
F-Star
Business
|
A-45 | ||||
ARTICLE 6 ADDITIONAL AGREEMENTS
|
A-48 | |||||
6.1
|
Registration Statement; Proxy Statement
|
A-48 | ||||
6.2
|
Company Stockholders’ Meeting
|
A-49 | ||||
6.3
|
Access to Information; Confidentiality
|
A-50 | ||||
6.4
|
Regulatory Approvals and Related Matters
|
A-51 | ||||
6.5
|
Director Indemnification and Insurance
|
A-51 | ||||
6.6
|
Notification of Certain Matters
|
A-53 | ||||
6.7
|
Public Announcements
|
A-53 | ||||
6.8
|
Conveyance Taxes
|
A-54 | ||||
6.9
|
Board of Directors and Officers
|
A-54 | ||||
6.10
|
Non-Solicitation
by Company and
F-Star
|
A-54 | ||||
6.11
|
Restrictions on Transfer
|
A-56 | ||||
6.12
|
Joinder Agreements; Seller
Lock-Up
Agreements
|
A-57 | ||||
6.13
|
Listing; Symbol
|
A-57 | ||||
6.14
|
Section 16 Compliance
|
A-57 | ||||
6.15
|
F-Star
Share Incentives
|
A-57 | ||||
6.16
|
F-Star
Replacement ESOP
|
A-61 | ||||
6.17
|
Allocation Certificate
|
A-61 | ||||
6.18
|
Employee Matters
|
A-61 | ||||
6.19
|
Disclosure Schedules
|
A-62 | ||||
6.20
|
Tax Matters
|
A-62 | ||||
6.21
|
Legends
|
A-62 | ||||
6.22
|
Permitted Dispositions; Approved Development Transaction
|
A-63 | ||||
6.23
|
Company Reverse Stock Split
|
A-63 | ||||
6.24
|
Company Options and Company RSUs
|
A-63 | ||||
6.25
|
Stockholder Litigation
|
A-63 | ||||
6.26
|
Termination of Contracts
|
A-64 |
6.27
|
Company Lease Obligations
|
A-64 | ||||
6.28
|
F-Star
Financials
|
A-64 | ||||
6.29
|
Articles of Association
|
A-64 | ||||
6.30
|
Equity Commitment Exchange
|
A-64 | ||||
6.31
|
F-Star
Pre-Closing
Financing
|
A-64 | ||||
ARTICLE 7 CONDITIONS TO THE CLOSING
|
A-64 | |||||
7.1
|
Conditions to Obligation of Each Party to Effect the Acquisition
|
A-64 | ||||
7.2
|
Additional Conditions to Obligations of
F-Star
and Sellers
|
A-65 | ||||
7.3
|
Additional Conditions to Obligations of Company
|
A-66 | ||||
ARTICLE 8 TERMINATION
|
A-67 | |||||
8.1
|
Termination
|
A-67 | ||||
8.2
|
Effect of Termination
|
A-69 | ||||
8.3
|
Expenses; Termination Fees
|
A-69 | ||||
ARTICLE 9 GENERAL PROVISIONS
|
A-70 | |||||
9.1
|
Notices
|
A-70 | ||||
9.2
|
Amendment
|
A-71 | ||||
9.3
|
Headings
|
A-71 | ||||
9.4
|
Severability
|
A-71 | ||||
9.5
|
Entire Agreement
|
A-72 | ||||
9.6
|
Successors and Assigns
|
A-72 | ||||
9.7
|
Parties in Interest
|
A-72 | ||||
9.8
|
Waiver
|
A-72 | ||||
9.9
|
Remedies Cumulative; Specific Performance
|
A-72 | ||||
9.10
|
Governing Law; Venue; Waiver of Jury Trial
|
A-72 | ||||
9.11
|
Counterparts and Exchanges by Electronic Transmission or Facsimile
|
A-73 | ||||
9.12
|
Attorney Fees
|
A-73 | ||||
9.13
|
Cooperation
|
A-73 | ||||
9.14
|
Limited Survival of Representations and Warranties
|
A-73 | ||||
9.15
|
Construction
|
A-73 |
Exhibit A | Certain Definitions | |
Exhibit B |
Form of Company
Lock-up
Agreement
|
|
Exhibit C |
Form of Seller
Lock-up
Agreement
|
|
Exhibit D | Form of Company Voting Agreement | |
Exhibit
E-1
|
Form of STING Agonist CVR Agreement | |
Exhibit E-2
|
Form of STING Antagonist CVR Agreement | |
Exhibit F | Form of Deed of Termination – Shareholders’ Agreement | |
Exhibit G | Form of Joinder Agreement | |
Exhibit H | Sample Net Cash Calculation | |
Exhibit I | Closing Articles of Association | |
Exhibit J | Sample Exchange Ratio Calculation |
Schedule I
|
Sellers
|
|
Schedule II
|
Company
Lock-up
Agreement Parties
|
|
Schedule III-A
|
Seller
Lock-up
Agreement Parties
|
|
Schedule III-B
|
Additional Seller
Lock-up
Agreement Parties
|
|
Schedule IV
|
Company Voting Agreement Parties
|
|
Schedule V
|
F-Star
Pre-Closing
Financing Subscription Amounts
|
|
Schedule VI
|
Company Director and Officer Resignations
|
|
Schedule 5.1
|
Conduct of Company Business
|
|
Schedule 5.1(t)
|
Vendors
|
|
Schedule 5.2
|
Conduct of
F-Star
Business
|
|
Schedule 6.9
|
Director and Officer Appointees
|
|
Schedule 6.26
|
Termination of Contracts
|
F-STAR
THERAPEUTICS LIMITED
|
||
By: |
/s/ Eliot Forster, Ph.D.
|
|
Name: Eliot Forster, Ph.D. | ||
Title: President and Chief Executive Officer | ||
SPRING BANK PHARMACEUTICALS, INC.
|
||
By: |
/s/ Martin Driscoll
|
|
Name: Martin Driscoll | ||
Title: President and Chief Executive Officer | ||
SELLERS
|
||
ATLAS VENTURE FUND VII, L.P. | ||
By: |
Atlas Venture Associates VII, L.P.
|
|
Its general partner | ||
By: |
Atlas Venture Associates VII, Inc.
|
|
Its general partner | ||
By: |
/s/ Travis MacInnes
|
|
Name: Travis MacInnes | ||
Title: Authorised Signatory | ||
ATLAS VENTURE OPPORTUNITY FUND I, L.P. | ||
By: |
Atlas Venture Associates Opportunity I, L.P.
|
|
Its general partner | ||
By: |
Atlas Venture Associates Opportunity I, LLC
|
|
Its general partner | ||
By: |
/s/ Ommer Chohan
|
|
Name: Ommer Chohan | ||
Title: Authorised Signatory |
COOPERATIEVE AESCAP VENTURE I U.A. | ||
By: AESCAP VENTURE MANAGEMENT B.V. | ||
Its acting manager | ||
By: |
/s/ Patrick Krol
|
|
Name: Patrick Krol | ||
Title: Authorised Signatory | ||
By: |
/s/ Hans Bosman
|
|
Name: Hans Bosman | ||
Title: Authorised Signatory | ||
TVM LIFE SCIENCE VENTURES VI GMBH & CO. KG, Munich | ||
By: | TVM CAPITAL GMBH | |
Its general partner and liquidator | ||
By: |
/s/ Stefan Fischer
|
|
Name: Stefan Fischer | ||
Title: Authorised Signatory | ||
By: |
/s/ Josef Moosholzer
|
|
Name: Josef Moosholzer | ||
Title: Authorised Signatory |
TVM LIFE SCIENCE VENTURES VI LIMITED PARTNERSHIP, Cayman Islands | ||
By: | TVM LIFE SCIENCE VENTURES VI CAYMAN LIMITED | |
Its general partner | ||
By: |
/s/ Stefan Fischer
|
|
Name: Stefan Fischer | ||
Title: Authorised Signatory | ||
By: |
/s/ Josef Moosholzer
|
|
Name: Josef Moosholzer | ||
Title: Authorised Signatory |
MP HEALTHCARE VENTURE MANAGEMENT, INC. | ||
By: |
/s/ Jeffrey Moore
|
|
Name: Jeffrey Moore | ||
Title: Authorised Signatory |
MERCK VENTURES BV | ||
By: |
/s/ Jasper Bos
|
|
Name: Jasper Bos | ||
Title: Authorised Signatory | ||
By: |
/s/ Hakan Goker
|
|
Name: Hakan Goker | ||
Title: Authorised Signatory | ||
S.R. ONE, LIMITED | ||
By: |
/s/ Karen Narolewski Engel
|
|
Name: Karen Narolewski Engel | ||
Title: Vice President | ||
NOVO HOLDINGS A/S | ||
By: |
/s/ John P. Fitzpatrick
|
|
Name: John P. Fitzpatrick | ||
Title: Acting Attorney | ||
JSH BIOTECH APS | ||
By: |
/s/ John Haurum
|
|
Name: John Haurum | ||
Title: Authorised Signatory | ||
ARK INVEST APS | ||
By: |
/s/ John Haurum
|
|
Name: John Haurum | ||
Title: Authorised Signatory | ||
/s/ John Haurum
|
||
John Haurum | ||
/s/ Eliot Forster
|
||
Eliot Forster
|
||
/s/ Jonathan Milner
|
||
Jonathan Milner
|
||
/s/ John P. Fitzpatrick, power of attorney
|
||
Michael John Davies
|
||
/s/ John P. Fitzpatrick, power of attorney
|
||
Jacqueline Doody
|
/s/ John P. Fitzpatrick, power of attorney
|
||
Gordana Wozniak-Knopp
|
||
/s/ John P. Fitzpatrick, power of attorney
|
||
Mihriban Tuna
|
||
/s/ John P. Fitzpatrick, power of attorney
|
||
Florian Ruker
|
||
/s/ John P. Fitzpatrick, power of attorney
|
||
Jane Dancer
|
||
/s/ John P. Fitzpatrick, power of attorney
|
||
Haijun Sun
|
||
/s/ John P. Fitzpatrick, power of attorney
|
||
Tolga Hassan
|
||
/s/ John P. Fitzpatrick, power of attorney
|
||
Neil Brewis | ||
/s/ John P. Fitzpatrick, power of attorney
|
||
John Edwards | ||
/s/ John P. Fitzpatrick, power of attorney
|
||
Kathleen Courtemanche |
Exhibits
|
||
Exhibit F | Form of Deed of Termination – Shareholders’ Agreement | |
Exhibit H: | Sample Net Cash Calculation | |
Exhibit J: | Sample Exchange Ratio Calculation | |
Schedules
:
|
||
Schedule I | Sellers | |
Schedule II |
Company
Lock-up
Agreement Parties
|
|
Schedule III-A
|
Seller
Lock-up
Agreement Parties
|
|
Schedule
III-B
|
Additional Seller
Lock-up
Agreement Parties
|
|
Schedule IV | Company Voting Agreement Parties | |
Schedule V |
F-Star
Pre-Closing
Financing Subscription Amounts
|
|
Schedule VI | Company Director and Officer Resignations | |
Schedule 5.1 | Conduct of Company Business | |
Schedule 5.1(t) | Vendors | |
Schedule 6.9 | Director and Officer Appointees | |
Schedule 6.26 | Termination of Contracts |
Part 2.7 – Intellectual Property
|
Part 2.9(a) – Legal Proceedings; Orders
|
Part 2.10 – Brokers’ and Finders’ Fees
|
Part 2.11 – Employee Benefit Plans
|
Part 2.12 – Title to Assets; Real Property
|
Part 2.15
– F-Star
Contracts
|
Part 2.17(b) – Insurance
|
Part 2.19 – Interested Party Transactions
|
Part 4.1 – Ownership of
F-Star
Issued Share Capital and Loan Notes
|
Part 4.5 – Ownership of Company Capital Stock
|
Company Disclosure Schedule
|
Part 3.1(a) – Organization and Qualification
|
Part 3.2(b) – Company Options and Company RSU
|
Part 3.2(c) – Company Warrants
|
Part 3.2(d) – Restrictive Rights
|
Part 3.3(c) –
Non-Contravention
|
Part 3.5(e) – Undisclosed Liabilities
|
Part 3.6 – Absence of Certain Changes or Events
|
Part 3.7(d) – Tax Matters
|
Part 3.8 – Intellectual Property
|
Part 3.9 – Compliance with Legal Requirements
|
Part 3.10(a) – Legal Proceedings; Orders
|
Part 3.11 – Brokers’ and Finders’ Fees
|
Part 3.12 – Employee Benefit Plans
|
Part 3.13 – Title to Assets; Real Property
|
Part 3.15(a) – Labor Matters
|
Part 3.16 – Material Contracts
|
Part 3.18 – Insurance
|
Part 3.23 – Interested Party Transactions
|
Part 3.24 – Bank Accounts; Deposits
|
• |
“
Aggregate Valuation
plus
(b) the
F-Star
Post-Financing Valuation.
|
• |
“
Company Allocation Percentage
|
• |
“
Company Outstanding Shares
Section 1.4(c)
, the total number of shares of Company Common Stock outstanding immediately prior to the Closing expressed on a fully-diluted basis and calculated using the treasury stock method, assuming, without limitation or duplication, (a) the exercise of each Company Option outstanding and unexercised immediately prior to the Closing that has an exercise price less than or equal to the then current trading price for shares of Company Common Stock (i.e.,
“in-the-money”
“in-the-money”
provided
,
however
, that (i) the Company $1.41 Options shall be included in the calculation of Company Outstanding Shares and (ii) the Company $2.08 Warrants shall be excluded from the calculation of Company Outstanding Shares. For the avoidance of doubt, except as expressly provided above, shares of Company Common Stock issuable upon the exercise of Company Options or Company Warrants that are not
in-the-money
|
• |
“
Company Valuation
provided
,
however
, to the extent that (a) Net Cash determined pursuant to
Section 1.5
is less than Fifteen Million Dollars ($15,000,000) (such amount, as may be adjusted pursuant to the following proviso, the “
Adjustment Threshold
Section 1.5
is $14,000,000), and (b) Net Cash determined pursuant to
Section 1.5
is more than Seventeen Million Dollars ($17,000,000) (such amount, as may be adjusted pursuant to the following proviso, the “
Upward Adjustment Threshold
Section 1.5
is $18,000,000);
provided
that if the Closing shall not have occurred on or prior to October 30, 2020, then the Adjustment Threshold and the Upward Adjustment Threshold shall automatically decrease by $250,000 on such date and shall further decrease by the same amount on the last day of each thirty
(30)-day
period occurring thereafter until the Closing.
|
• |
“
F-Star
Allocation Percentage
F-Star
Post-Financing Valuation by (ii) the Aggregate Valuation.
|
• |
“
F-Star
Outstanding Shares
Section 1.4(c)
, the total number of
F-Star
Ordinary Shares outstanding immediately prior to the Closing expressed on a fully-diluted basis and calculated using the treasury stock method, assuming, without limitation or duplication, (i) the Conversions, (ii) the exercise of all
F-Star
Options outstanding as of immediately prior to the Closing, (iii) the issuance of
F-Star
Ordinary Shares upon the vesting of all
F-Star
RSUs outstanding as of immediately prior to the Closing, (iv) the consummation of the
F-Star
Pre-Closing
Financing and the issuance of
F-Star
Ordinary Shares pursuant to the
F-Star
Pre-Closing
Financing Agreements (including the
|
conversion of any 2019 Loan Notes issued in respect of any Equity Commitment Exchange), and (v) the issuance of
F-Star
Ordinary Shares in respect of all other options, warrants or rights to receive
F-Star
Ordinary Shares that will be outstanding immediately prior to the Closing.
|
• |
“
F-Star
Post-Financing Valuation
F-Star
Pre-Money
Valuation
minus
(ii) the
F-Star
Valuation Adjustment, if any,
plus
(iii) the
F-Star
Pre-Closing
Financing Proceeds.
|
• |
“
F-Star
Pre-Closing
Financing Proceeds
F-Star
in the
F-Star
Pre-Closing
Financing.
|
• |
“
F-Star
Pre-Money
Valuation
pre-money
valuation attributed to
F-Star
in the
F-Star
Pre-Closing
Financing.
|
• |
“
F-Star
Transaction Shares
F-Star
Allocation Percentage.
|
• |
“
F-Star
Valuation Adjustment
|
• |
“
Post-Closing Company Shares
|
(i) |
offer, pledge, sell, contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer, assign or dispose of (or enter into any transaction that is designed to, or could reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any Affiliate of the undersigned or any Person in privity with the undersigned or any Affiliate of the undersigned), or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), with respect to, any shares of Company Common Stock or any securities convertible into or exercisable or exchangeable for Company Common Stock (including without limitation, Company Common Stock or such other securities which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the SEC and securities which may be issued upon exercise of a stock option or warrant) (collectively, the “
Stockholder’s Shares
”);
|
(ii) |
enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Company Common Stock or such other securities, in each case above, that are currently or hereafter owned either of record or beneficially (as defined in Rule
13d-3
under the Exchange Act) by the undersigned and whether any such transaction described in this clause (ii) or clause (i) above is to be settled by delivery of Company Common Stock or such other securities, in cash or otherwise;
|
(iii) |
make any demand for or exercise any similar right with respect to the registration of any shares of Company Common Stock or any security convertible into or exercisable or exchangeable for Company Common Stock;
|
(iv) |
except for the Company Voting Agreement, grant any proxies or powers of attorney with respect to any of the Stockholders’ Shares, deposit any of the Stockholder’s Shares into a voting trust or enter into a voting agreement or similar arrangement or commitment with respect to any of the Stockholder’s Shares; or
|
(v) |
publicly disclose the intention to do any of the foregoing.
|
(a) |
transfers of Company Common Stock or securities convertible into or exercisable or exchangeable for Company Common Stock:
|
(i) |
if the undersigned is a natural person, (A) to a Family Member or a trust formed for the benefit of the undersigned or the undersigned’s Family Member, (B) the undersigned’s estate, (C) by bona fide gift, will or intestacy, or (D) any partnership, corporation or limited liability company which is controlled by the undersigned or any such Family Member(s);
|
(ii) |
if the undersigned is a corporation, partnership or other business entity, (A) to another corporation, partnership or other business entity that is an affiliate (as defined under Rule
12b-2
of the Exchange Act) of the undersigned, including investment funds or other entities under common control or management with the undersigned, (B) any distribution or dividend to equity holders (including, without limitation, general or limited partners and members) of the undersigned (including upon the liquidation and dissolution of the undersigned pursuant to a plan of liquidation approved by the undersigned’s equity holders) or (C) as a bona fide gift to a charitable organization; or
|
(iii) |
if the undersigned is a trust, to a grantor or beneficiary of the trust;
|
(b) |
the exercise of options or warrants to purchase shares of Company Common Stock or the receipt of shares of Company Common Stock upon the vesting of restricted stock awards or vesting and settlement of restricted stock units or performance share units and any related transfer of shares of Company Common Stock to Company or sales of Company Common Stock (i) deemed to occur upon the cashless exercise of such options or exercise of such warrants or (ii) for the purpose of paying the exercise price of such options or warrants or for paying taxes (including estimated taxes) due as a result of the exercise of such options or warrants or as a result of the vesting of such shares of Company Common Stock under such restricted stock awards or the vesting and settlement of such restricted stock units or performance share units (or the disposition to Company of any shares of restricted stock granted pursuant to the terms of any employee benefit plan);
provided
|
(c) |
transfers by the undersigned of securities acquired in the open market following the Closing; or
|
(d) |
the establishment of a trading plan that satisfies all of the requirements of Rule
10b5-1
under the Exchange Act (a
“10b5-1
Plan”) for the transfer of shares of Company Common Stock;
provided
that no transfers or sales of Company Common Stock or securities convertible into, or exchangeable or
|
exercisable for, Company Common Stock, shall be made pursuant to such
10b5-1
Plan prior to the expiration of the
Lock-Up
Period;
provided
further
, that if any announcement or filing under the Exchange Act regarding the establishment or existence of such
10b5-1
Plan shall be required or made voluntarily by the undersigned, the Company or any other person prior to the expiration of the
Lock-Up
Period, such announcement shall include a statement that sales under such
10b5-1
Plan will not occur until after the expiration of the
Lock-Up
Period;
|
(vi) |
offer, pledge, sell, contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer, assign or dispose of (or enter into any transaction that is designed to, or could reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any Affiliate of the undersigned or any Person in privity with the undersigned or any Affiliate of the undersigned), or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), with respect to, any shares of Company Common Stock or any securities convertible into or exercisable or exchangeable for Company Common Stock (including without limitation, Company Common Stock or such other securities which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the SEC and securities which may be issued upon exercise of a stock option or warrant) (collectively, the “
Stockholder’s Shares
”);
|
(vii) |
enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Company Common Stock or such other securities, in each case above, that are currently or hereafter owned either of record or beneficially (as defined in Rule
13d-3
under the Exchange Act) by the undersigned and whether any such transaction described in this clause (ii) or clause (i) above is to be settled by delivery of Company Common Stock or such other securities, in cash or otherwise;
|
(viii) |
make any demand for or exercise any similar right with respect to the registration of any shares of Company Common Stock or any security convertible into or exercisable or exchangeable for Company Common Stock;
|
(ix) |
grant any proxies or powers of attorney with respect to any of the Stockholders’ Shares, deposit any of the Stockholder’s Shares into a voting trust or enter into a voting agreement or similar arrangement or commitment with respect to any of the Stockholder’s Shares; or
|
(x) |
publicly disclose the intention to do any of the foregoing.
|
(e) |
transfers of Company Common Stock or securities convertible into or exercisable or exchangeable for Company Common Stock:
|
(iv) |
if the undersigned is a natural person, (A) to a Family Member or a trust formed for the benefit of the undersigned or the undersigned’s Family Member, (B) the undersigned’s estate, (C) by bona fide gift, will or intestacy, or (D) any partnership, corporation or limited liability company which is controlled by the undersigned or any such Family Member(s);
|
(v) |
if the undersigned is a corporation, partnership or other business entity, (A) to another corporation, partnership or other business entity that is an affiliate (as defined under Rule
12b-2
of the Exchange Act) of the undersigned, including investment funds or other entities under common control or management with the undersigned, (B) any distribution or dividend to equity holders (including, without limitation, general or limited partners and members) of the undersigned (including upon the liquidation and dissolution of the undersigned pursuant to a plan of liquidation approved by the undersigned’s equity holders) or (C) as a bona fide gift to a charitable organization; or
|
(vi) |
if the undersigned is a trust, to a grantor or beneficiary of the trust;
|
(f) |
the exercise of options or warrants to purchase shares of Company Common Stock or the receipt of shares of Company Common Stock upon the vesting of restricted stock awards or vesting and settlement of restricted stock units or performance share units and any related transfer of shares of Company Common Stock to Company or sales of Company Common Stock (i) deemed to occur upon the cashless exercise of such options or exercise of such warrants or (ii) for the purpose of paying the exercise price of such options or warrants or for paying taxes (including estimated taxes) due as a result of the exercise of such options or warrants or as a result of the vesting of such shares of Company Common Stock under such restricted stock awards or the vesting and settlement of such restricted stock units or performance share units (or the disposition to Company of any shares of restricted stock granted pursuant to the terms of any employee benefit plan);
provided
|
(g) |
transfers by the undersigned of securities acquired in the open market following the Closing;
|
(h) |
the establishment of a trading plan that satisfies all of the requirements of Rule
10b5-1
under the Exchange Act (a
“10b5-1
Plan”) for the transfer of shares of Company Common Stock;
provided
that no transfers or sales of Company Common Stock or securities convertible into, or exchangeable or exercisable for, Company Common Stock, shall be made pursuant to such
10b5-1
Plan prior to the expiration of the
Lock-Up
Period;
provided
further
, that if any announcement or filing under the
|
Exchange Act regarding the establishment or existence of such
10b5-1
Plan shall be required or made voluntarily by the undersigned, the Company or any other person prior to the expiration of the
Lock-Up
Period, such announcement shall include a statement that sales under such
10b5-1
Plan will not occur until after the expiration of the
Lock-Up
Period; or
|
(i) |
the sale of shares of Company Common Stock by the holders of options granted by
F-Star
pursuant to the
F-star
EMI Share Option Scheme, the
F-star
Alpha Limited Share Option Scheme and the
F-star
Beta Limited Share Option Scheme, for the purpose of paying the exercise price of such options or for paying taxes (including estimated taxes, and including also any primary or secondary national insurance contributions in the United Kingdom for which the holders of such options are liable) due as a result of the exercise, waiver or release of such options; or
|
(j) |
the number of shares of Company Common Stock, if any, received in exchange for ordinary shares of
F-Star
purchased in the
F-Star
Pre-Closing
Financing,
|
Very truly yours,
|
||||||
Print Name of Stockholder:
|
|
|||||
Signature (for individuals)
|
||||||
Signature (for entities)
|
||||||
By:
|
|
|||||
Name:
|
|
|||||
Title:
|
|
F-STAR
THERAPEUTICS LTD.
|
||
By: |
|
|
Name: |
|
|
Title: |
|
STOCKHOLDER
|
||
By: |
|
|
Name: |
|
|
Title: |
|
COMPANY:
|
||
[●] | ||
By: |
|
|
Name:
|
||
Title:
|
||
F-STAR:
|
||
[●] | ||
By: |
|
|
Name:
|
||
Title:
|
||
RIGHTS AGENT:
|
||
[
]
|
By: |
|
|
Name:
|
||
Title:
|
By: |
|
|
Name:
|
||
Title:
|
[●] | ||
with a copy (which shall not constitute notice) to: | ||
[●]; |
[●] | ||
with a copy (which shall not constitute notice) to: | ||
[●]; and |
[●] | ||
with a copy (which shall not constitute notice) to: | ||
[●] |
COMPANY:
|
||
[
]
|
||
By: |
|
|
Name:
|
||
Title:
|
F-STAR:
|
||
[●]
|
||
By: |
|
|
Name:
|
||
Title:
|
RIGHTS AGENT:
|
||
[●] | ||
By: |
|
|
Name:
|
||
Title:
|
HOLDER REPRESENTATIVE:
|
||
[●] | ||
By: |
|
|
Name:
|
||
Title:
|
SHAREHOLDER
|
||
|
||
Name
|
||
|
||
Signature
|
||
|
||
Print name of signatory, if signing for an entity
|
||
|
||
Print title of signatory, if signing for an entity
|
F-STAR
THERAPEUTICS LIMITED
|
||
By:
|
|
|
Name:
|
|
|
Title:
|
|
[COMPANY]
|
||||
By:
|
|
|
||
Name:
|
|
|
||
Title:
|
|
|
||
Dated:
|
|
1
|
Definitions and interpretation
|
1.1 |
In these articles, unless the context requires otherwise:
|
1.2 |
Save as otherwise specifically provided in these articles, words and expressions which have particular meanings in the Model Articles have the same meanings in these articles, subject to which and unless the context otherwise requires, words and expressions which have particular meanings in the CA 2006 have the same meanings in these articles.
|
1.3 |
Headings in these articles are used for convenience only and shall not affect the construction or interpretation of these articles.
|
1.4 |
A reference in these articles to an “article” is a reference to the relevant article of these articles unless expressly provided otherwise.
|
1.5 |
Unless expressly provided otherwise, a reference to a statute, statutory provision or subordinate legislation is a reference to it as it is in force from time to time, taking account of:
|
1.5.1 |
any subordinate legislation made under it, whether before or after the date of adoption of these articles; and
|
1.5.2 |
any amendment or
re-enactment,
whether before or after the date of adoption of these articles and includes any statute, statutory provision or subordinate legislation which it amends or
re-enacts.
|
1.6 |
Any phrase introduced by the terms “
including
include
in particular
|
1.7 |
A reference in these articles to a “
subsidiary
holding company
undertaking
subsidiary undertaking
parent undertaking
|
1.8 |
Any words importing the singular include the plural and vice versa and words importing any gender include the other genders.
|
1.9 |
The Model Articles apply to the company, except in so far as they are modified or excluded by, or are inconsistent with, these articles.
|
1.10 |
Articles 7, 8, 9(1) and (3), 11(2) and (3), 13, 14(1), (2), (3) and (4), 17(2) and 17(3) 19, 27, 28, 29, 31, 44(2), 49, 52 and 53 of the Model Articles do not apply to the company.
|
2
|
Liability of members
|
2.1 |
The liability of the members is limited to the amount, if any, unpaid on the shares held by them.
|
3 |
Directors
’
general authority
|
3.1 |
Subject to the articles, the directors are responsible for the management of the company’s business, for which purpose they may exercise all the powers of the company.
|
4
|
Shareholders
’
reserve power
|
4.1 |
The shareholders may, by special resolution, direct the directors to take, or refrain from taking, specified action.
|
4.2 |
No such special resolution invalidates anything which the directors have done before the passing of the resolution.
|
5
|
Directors may delegate
|
5.1 |
Subject to the articles, the directors may delegate any of the powers which are conferred on them under the articles:
|
5.1.1 |
to such person or committee;
|
5.1.2 |
by such means (including by power of attorney);
|
5.1.3 |
to such an extent;
|
5.1.4 |
in relation to such matters or territories; and
|
5.1.5 |
on such terms and conditions; as they think fit.
|
5.2 |
If the directors so specify, any such delegation may authorise further delegation of the directors’ powers by any person to whom they are delegated.
|
5.3 |
The directors may revoke any delegation in whole or part, or alter its terms and conditions.
|
6
|
Committees
|
6.1 |
Committees to which the directors delegate any of their powers must follow procedures which are based as far as they are applicable on those provisions of the articles which govern the taking of decisions by directors.
|
6.2 |
The directors may make rules of procedure for all or any committees, which prevail over rules derived from the articles if they are not consistent with them.
|
7
|
Directors to take decisions collectively
|
7.1 |
The general rule about decision-making by directors is that any decision of the directors must be either a majority decision at a meeting or a decision taken in accordance with article 8.
|
7.2 |
If:
|
7.2.1 |
the company only has one director for the time being; and
|
7.2.2 |
no provision of the articles requires it to have more than one director the general rule does not apply, and the director may (for so long as he remains the sole director) take decisions without regard to any of the provisions of the articles relating to directors’ decision-making.
|
8
|
Unanimous decisions
|
8.1 |
A decision of the directors is taken in accordance with this article when all eligible directors indicate to each other by any means that they share a common view on a matter.
|
8.2 |
Such a decision may take the form of a resolution in writing, where each eligible director has signed one or more copies of it, or to which each eligible director has otherwise indicated agreement in writing.
|
8.3 |
A decision may not be taken in accordance with this article if the eligible directors would not have formed a quorum at such a meeting.
|
9
|
Calling a directors
’
meeting
|
9.1 |
Any director may call a directors’ meeting by giving not less than five business days’ notice of the meeting (or such lesser notice as all the directors may agree) to the directors or by authorising the company secretary (if any) to give such notice.
|
9.2 |
Notice of a directors’ meeting shall be given to each director in writing.
|
10
|
Quorum for directors
’
meetings
|
10.1 |
Subject to article 10.2, the quorum for the transaction of business at a meeting of directors is any two eligible directors or, where there is only one director in office for the time being and no provision of the articles requires the company to have more than one director, that director.
|
10.2 |
For the purposes of any meeting (or part of a meeting) held pursuant to article 13 to authorise a director’s conflict, if there is only one eligible director in office other than the conflicted director(s), the quorum for such meeting (or part of a meeting) shall be one eligible director.
|
11
|
Casting vote
|
11.1 |
If the numbers of votes for and against a proposal at a meeting of directors are equal, the chairman or other director chairing the meeting has a casting vote.
|
11.2 |
Article 11.1 shall not apply in respect of a particular meeting (or part of a meeting) if, in accordance with the articles, the chairman or other director is not an eligible director for the purposes of that meeting (or part of a meeting).
|
12
|
Transactions or other arrangements with the company
|
12.1 |
Subject to the provisions of CA 2006 and provided he has declared the nature and extent of any interest of his (unless the circumstances in any of sections 177(5) and 177(6) or sections 182(5) and 182(6) CA 2006 apply, in which case no disclosure is required), a director who is in any way, whether directly or indirectly, interested in an existing or proposed transaction or arrangement with the company, notwithstanding his office:
|
12.1.1 |
may be a party to, or otherwise interested in, any transaction or arrangement with the company or in which the company is otherwise (directly or indirectly) interested;
|
12.1.2 |
may act by himself or his firm in a professional capacity for the company (otherwise than as auditor) and he or his firm shall be entitled to remuneration for professional services as if he were not a director;
|
12.1.3 |
may be a director or other officer of, or employed by, or a party to a transaction or arrangement with, or otherwise interested in, any body corporate promoted by the company or in which the company is otherwise (directly or indirectly) interested;
|
12.1.4 |
shall not, save as he may otherwise agree, be accountable to the company for any benefit which he (or a person connected with him (as defined in section 252 CA 2006)) derives from any such contract, transaction or arrangement or from any such office or employment or from any interest in any such body corporate which he is permitted to hold or enter into by virtue of articles 12.1.1, 12.1.2 or 12.1.3 and no such contract, transaction or arrangement shall be liable to be avoided on the grounds of any such interest or benefit nor shall the receipt of any such remuneration or other benefit constitute a breach of his duty under section 176 CA 2006; and
|
12.1.5 |
shall subject to article 13.2, be an eligible director for the purposes of any proposed decision of the directors (or committee of directors) and shall be entitled to vote at a meeting of directors (or of a committee of the directors) or participate in any unanimous decision on any matter referred to in articles 12.1.1 to 12.1.3 (inclusive) or on any resolution which in any way concerns or relates to a matter in which he has, directly or indirectly, any kind of interest whatsoever and if he shall vote on any such resolution his vote shall be counted.
|
12.2 |
For the purposes of this article 12, references to proposed decisions and decision-making processes include any directors’ meeting or part of a directors’ meeting.
|
13
|
Directors
’
conflicts of interest
|
13.1 |
A director shall be authorised for the purposes of section 175 CA 2006 to act or continue to act as a director of the company notwithstanding that at the time of his appointment or subsequently he also holds office as a director or other officer of, or is employed by, or is otherwise interested in (including by the holding of shares), any other group company from time to time and no further authorisation under article 13.2 shall be necessary in respect of any such interest.
|
13.2 |
For the purposes of section 175 CA 2006, the directors may authorise any matter proposed to them in accordance with these articles which would, if not so authorised, involve a breach of duty by a director under that section, including, without limitation, any matter which relates to a situation in which a director has, or can have, a direct or indirect interest which conflicts, or possibly may conflict, with the interests of the company (a “
Conflict
|
13.2.1 |
any requirement as to quorum at the meeting at which the matter is considered is met without counting the director in question or any other interested director; and
|
13.2.2 |
the matter was agreed to without their voting or would have been agreed to if their votes had not been counted.
|
13.3 |
A director shall be under no duty to the company with respect to any information which he obtains or has obtained otherwise than as a director of the company and in respect of which he owes a duty of confidentiality to another person. However, to the extent that his relationship with that other person gives
|
rise to a Conflict, this article applies only if the existence of that relationship has been authorised pursuant to article 13.1 or by the directors pursuant to article 13.2. In particular, the director shall not be in breach of the general duties he owes to the company by virtue of sections 171 to 177 CA 2006 (inclusive) because he fails: |
13.3.1 |
to disclose any such information to the board or to any director or other officer or employee of the company; and/or
|
13.3.2 |
to use or apply any such information in performing his duties as a director of the company.
|
13.4 |
Where the existence of a director’s relationship with another person has been authorised pursuant to article 13.1 or by the directors pursuant to article 13.2 and his relationship with that person gives rise to a Conflict, the director shall not be in breach of the general duties he owes to the company by virtue of sections 171 to 177 CA 2006 (inclusive) because he:
|
13.4.1 |
absents himself from meetings of the board at which any matter relating to the Conflict will or may be discussed or from the discussion of any such matter at a meeting or otherwise; and/or
|
13.4.2 |
makes arrangements not to receive documents and information relating to any matter which gives rise to the Conflict sent or supplied by the company and/or for such documents and information to be received and read by a professional adviser, for so long as he reasonably believes such Conflict subsists.
|
13.5 |
The provisions of articles 13.3 and 13.4 are without prejudice to any equitable principle or rule of law which may excuse the director from:
|
13.5.1 |
disclosing information, in circumstances where disclosure would otherwise be required under these articles; or
|
13.5.2 |
attending meetings or discussions or receiving documents and information as referred to in article 13.4, in circumstances where such attendance or receipt of such documents and information would otherwise be required under these articles.
|
13.6 |
A director is not required, by reason of being a director (or because of the fiduciary relationship established by reason of being a director), to account to the company for any remuneration, profit or other benefit which he derives from or in connection with a relationship involving a Conflict which has been authorised in accordance with article 13.1 or by the directors pursuant to article 13.2 or by the company in general meeting (subject in each case to any terms, limits or conditions attaching to that authorisation) and no contract shall be liable to be avoided on such grounds.
|
14
|
Records of decisions to be kept
|
14.1 |
Where decisions of the directors are taken by electronic means, such decisions shall be recorded by the directors in permanent form, so that they may be read with the naked eye.
|
15
|
Number of directors
|
15.1 |
Unless otherwise determined by notice given by the Parent Company, the number of directors (other than alternate directors) shall not be subject to any maximum but shall not be less than one. A sole director shall have all the powers, duties and discretions conferred on or vested in the directors by these articles.
|
16
|
Methods of appointing directors
|
16.1 |
Any person who is willing to act as a director, and is permitted by law to do so, may be appointed to be a director:
|
16.1.1 |
by notice given by the Parent Company pursuant to article 37; or
|
16.1.2 |
by ordinary resolution; or
|
16.1.3 |
by a decision of the directors.
|
17
|
Termination of director
’
s appointment
|
17.1 |
Article 18 of the Model Articles is amended by:
|
17.1.1 |
the insertion of the words “as director” after the words “resigning from office,” in paragraph (f); and
|
17.1.2 |
the insertion of the words “a notice in writing is served on the director and the company by the Parent Company pursuant to article 37 removing that person from office as director.” as a new paragraph (g) at the end of that article.
|
18
|
Directors
’
remuneration
|
18.1 |
Directors may undertake any services for the company that the Parent Company decides.
|
18.2 |
Directors are entitled to such remuneration as the Parent Company determines:
|
18.2.1 |
for their services to the company as directors; and
|
18.2.2 |
for any other service which they undertake for the company.
|
18.3 |
Subject to the articles, a director’s remuneration may:
|
18.3.1 |
take any form; and
|
18.3.2 |
include any arrangements in connection with the payment of a pension, allowance or gratuity, or any death, sickness or disability benefits, to or in respect of that director.
|
18.4 |
Unless the Parent Company decides otherwise, directors’ remuneration accrues from day to day.
|
19
|
Directors’ expenses
|
19.1 |
Article 20 of the Model Articles is amended by:
|
19.1.1 |
the deletion of the word “may” and insertion of the word “shall” in its place before the words “pay any reasonable expenses”; and
|
19.1.2 |
the insertion of the words “[(including alternate directors)] and the company secretary (if any)” before the words “properly incur”.
|
20
|
Appointment and removal of alternate directors
|
20.1 |
Any director (“
appointor
|
20.2 |
Any appointment or removal of an alternate must be effected by notice in writing to the company (marked for the attention of the chairman or company secretary (if any)) signed by the appointor, or in any other manner approved by the directors.
|
20.3 |
The notice must:
|
20.3.1 |
identify the proposed alternate; and
|
20.3.2 |
in the case of a notice of appointment, contain a statement signed by the proposed alternate that he is willing to act as the alternate of the director giving the notice.
|
21
|
Rights and responsibilities of alternate directors
|
21.1 |
An alternate director may act as alternate director to more than one director and has the same rights in relation to any decision of the directors as the alternate’s appointor.
|
21.2 |
Except as the articles specify otherwise, alternate directors:
|
21.2.1 |
are deemed for all purposes to be directors;
|
21.2.2 |
are liable for their own acts and omissions;
|
21.2.3 |
are subject to the same restrictions as their appointors; and
|
21.2.4 |
are not deemed to be agents of or for their appointors and, in particular (without limitation), each alternate director shall be entitled to receive notice of all meetings of directors and of all meetings of committees of directors of which his appointor is a member.
|
21.3 |
A person who is an alternate director but not, in the absence of such appointment, a director:
|
21.3.1 |
may be counted as participating for the purposes of determining whether a quorum is present (but only if that person’s appointor is not participating);
|
21.3.2 |
may participate in a unanimous decision of the directors (but only if his appointor is an eligible director in relation to that decision, but does not participate); and
|
21.3.3 |
shall not be counted as more than one director for the purposes of articles 21.3.1 and 21.3.2.
|
21.4 |
A director who is also an alternate director is entitled, in the absence of his appointor, to a separate vote on behalf of his appointor, in addition to his own vote on any decision of the directors (provided that his appointor is an eligible director in relation to that decision).
|
21.5 |
An alternate director may be paid expenses and may be indemnified by the company to the same extent as his appointor but is not entitled to receive any remuneration from the company for serving as an alternate director except such part of the alternate’s appointor’s remuneration as the appointor may direct by notice in writing made to the company.
|
22
|
Termination of alternate directorship
|
22.1 |
An alternate director’s appointment as an alternate terminates:
|
22.1.1 |
when the alternate’s appointor revokes the appointment by notice to the company in writing (marked for the attention of the chairman or company secretary (if any)) specifying when it is to terminate;
|
22.1.2 |
on the occurrence, in relation to the alternate, of any event which, if it occurred in relation to the alternate’s appointor, would result in the termination of the appointor’s appointment as a director;
|
22.1.3 |
on the death of the alternate’s appointor;
|
22.1.4 |
when the alternate’s appointor’s appointment as a director terminates; or
|
22.1.5 |
when the Parent Company revokes the appointment by notice to the alternate, the alternate’s appointor and the company in writing.
|
23
|
Secretary
|
23.1 |
Subject to the prior approval in writing by the Parent Company, the directors may appoint any person who is willing to act as the secretary for such term, at such remuneration and upon such conditions as they may think fit and from time to time remove such person and to appoint a replacement, in each case by a decision of the directors.
|
24
|
Directors
’
authority to allot shares
|
24.1 |
Save to the extent authorised by these articles, or authorised from time to time by the Parent Company, the directors shall not exercise any power to allot shares or to grant rights to subscribe for, or to convert any security into, any shares in the company.
|
25
|
Exclusion of statutory
pre-emption
rights
|
25.1 |
Pursuant to section 567 CA 2006, the provisions of section 561 CA 2006 (existing shareholders’ right of
pre-emption)
and section 562 CA 2006 (communication of
pre-emption
offers to shareholders) shall not apply to an allotment of equity securities (as defined in section 560 CA 2006) made by the company.
|
26
|
Replacement share certificates
|
26.1 |
In article 25(2)(c) of the Model Articles, the words “evidence, indemnity and the payment of a reasonable fee” are deleted and replaced with the words “evidence and indemnity”.
|
27
|
Share transfers
|
27.1 |
Article 26 of the Model Articles is amended by the deletion of paragraph (5) of that article and the insertion in its place of the following:
|
28
|
Drag Rights
|
28.1 |
In this Article 28, references to the “
SEA
Buyer
1
|
28.2 |
Notwithstanding any other provisions in these Articles, if the Company issues any shares (other than to Buyer, any subsidiary of Buyer, any parent undertaking of Buyer or any subsidiary of such parent undertaking, or any nominee of Buyer (each a “
Buyer Company
SEA Record Time
|
28.3 |
Notwithstanding any other provision of these Articles, as set out in Article 28.2 and in accordance with (and subject to) the terms of the SEA, any shares issued by the Company to any person (other than a Buyer Company) after the SEA Record Time (a “New Member”) (each a
“Post-SEA
Share”) shall be issued on terms that they shall on the Closing Date (as defined in the SEA) or, if later, on issue, be immediately transferred to Buyer (or such other person as it may direct) (the “Purchaser”), who shall be obliged to acquire each
Post-SEA
Share in consideration for and conditional upon the issue to the New Member of the Acquisition Consideration as if such New Member had been a party to the SEA as a Seller thereunder and as if each
Post-SEA
Share is or was (as applicable) an
F-Star
Share at the SEA Record Time.
|
28.4 |
To give effect to any transfer of
Post-SEA
Shares required pursuant to Article 28.3, the Company may appoint any person as attorney and/or agent for the New Member to transfer the
Post-SEA
Shares to the Purchaser and/or its nominees and do all such other things and execute and deliver all such documents or deeds as may in the opinion of such attorney or agent be necessary or desirable to vest the
Post-SEA
Shares in the Purchaser and pending such vesting to exercise all such rights attaching to the
Post-SEA
Shares as the Purchaser may direct. If an attorney or agent is so appointed, the New Member shall not thereafter (except to the extent that the attorney or agent fails to act in accordance with the directions of the Purchaser) be entitled to exercise any rights attaching to the
Post-SEA
Shares unless so agreed in writing by the Purchaser. The attorney or agent shall be empowered to execute and deliver as transferor a form of transfer or instructions of transfer on behalf of the New
|
1
|
If the SEA is entered into, a copy of the SEA will be published here:
https://www.sec.gov/cgi-bin/browse-edgar?action=getcurrent
|
Member (or any subsequent holder) in favour of the Purchaser and the Company may give a good receipt for the consideration for the
Post-SEA
Shares and may register the Purchaser as holder thereof and issue to it certificate for the same. The Company shall not be obliged to issue a certificate to the New Member for the
Post-SEA
Shares. The Purchaser shall issue such number of Company Common Stock as is required to be issued to the New Member in consideration for such transfer as soon as practicable and in any event no later than 14 days after the date on which the
Post-SEA
Shares are issued to the New Member. This Article shall not apply to the Investors.
|
28.5 |
If the SEA shall not have become effective by the applicable date referred to in (or otherwise set in accordance with) section 1.2 of the SEA, this Article 28 shall cease to be of any effect.
|
28.6 |
Subject to Article 28.5 but notwithstanding any other provision of these Articles, following the SEA Record Time, no Shares shall be transferred by any Shareholder without the consent of the Buyer (acting reasonably) other than to the Purchaser and/or its nominees pursuant to the SEA, and both the Company and the board shall refuse to register the transfer of any Shares effected without such consent.
|
29
|
Payment of dividends and other distributions
|
29.1 |
Where a dividend or other sum which is a distribution is payable in respect of a share, it shall be paid by:
|
29.1.1 |
such method of payment as the Parent Company shall by notice to the directors direct in accordance with article 37; or
|
29.1.2 |
any other means of payment as the directors may agree with the distribution recipient in writing.
|
29.2 |
In the articles, “distribution recipient” means, in respect of a share in respect of which a dividend or other sum is payable:
|
29.2.1 |
the holder of the share; or
|
29.2.2 |
if the share has two or more joint holders, whichever of them is named first in the register of members.
|
30
|
Authority to capitalise and appropriation of capitalised sums
|
30.1 |
Article 36(1) of the Model Articles is amended by the deletion of the words “an ordinary resolution” and the insertion in their place of the words “the Parent Company by notice in writing in accordance with article 37“.
|
31
|
Quorum for general meetings
|
31.1 |
If the company has only one shareholder, one qualifying person present at a meeting is a quorum.
|
31.2 |
If the company has more than one shareholder, two qualifying persons present at a meeting are a quorum, unless each is a representative of a corporation or each is appointed as proxy of a shareholder and they are representatives of the same corporation or are proxies of the same shareholder.
|
31.3 |
For the purposes of these articles, a “
qualifying person
|
31.3.1 |
an individual who is a shareholder of the company;
|
31.3.2 |
a person authorised to act as the representative of a corporation in relation to the meeting; or
|
31.3.3 |
a person appointed as proxy of a shareholder in relation to the meeting.
|
32 |
Poll votes
|
32.1 |
A poll may be demanded at any general meeting by any qualifying person present and entitled to vote at the meeting.
|
32.2 |
Article 44(3) of the Model Articles is amended by the insertion of the words “A demand so withdrawn shall not invalidate the result of a show of hands declared before the demand was made.” as a new paragraph at the end of that article.
|
33
|
Proxies
|
33.1 |
Article 45(1)(d) of the Model Articles is deleted and replaced with the words “is delivered to the company in accordance with the articles not less than 48 hours before the time appointed for holding the meeting or adjourned meeting at which the right to vote is to be exercised and in accordance with any instructions contained in the notice of the general meeting (or adjourned meeting) to which they relate”.
|
33.2 |
Article 45(1) of the Model Articles is amended by the insertion of the words “and a proxy notice which is not delivered in such manner shall be invalid, unless the directors, in their discretion, accept the notice at any time before the meeting.” as a new paragraph at the end of that article.
|
34
|
Service of notices and other documents
|
34.1 |
Subject to articles 34.2 and 34.3, any notice, document or other information shall be deemed served on, or delivered to, the intended recipient:
|
34.1.1 |
if delivered by hand, on signature of a delivery receipt or at the time the notice, document or other information is left at the address; or
|
34.1.2 |
if sent by fax, at the time of transmission; or
|
34.1.3 |
if sent by
pre-paid
United Kingdom first class post, Signed For recorded delivery or Special Delivery Guaranteed to an address in the United Kingdom, at 9.00 am on the second business day after posting; or
|
34.1.4 |
if sent by
pre-paid
international airmail to an address outside the country from which it is sent, at 9.00 am on the fifth business day after posting; or
|
34.1.5 |
if sent by reputable international overnight courier to an address outside the country from which it is sent, on signature of a delivery receipt or at the time the notice, document or other information is left at the address; or
|
34.1.6 |
if sent or supplied by
e-mail,
one hour after the notice, document or information was sent or supplied; or
|
34.1.7 |
if sent or supplied by means of a website, when the material is first made available on the website or (if later) when the recipient receives (or is deemed to have received) notice of the fact that the material is available on the website; and
|
34.1.8 |
if deemed receipt under the previous paragraphs of this article 34.1 would occur outside business hours (meaning 9.00 am to 5.30 pm Monday to Friday on a day that is not a public holiday in the place of deemed receipt), at 9.00 am on the day when business next starts in the place of deemed receipt. For the purposes of this article, all references to time are to local time in the place of deemed receipt.
|
34.2 |
To prove service, it is sufficient to prove that:
|
34.2.1 |
if delivered by hand or by reputable international overnight courier, the notice was delivered to the correct address; or
|
34.2.2 |
if sent by fax, a transmission report was received confirming that the notice was successfully transmitted to the correct fax number; or
|
34.2.3 |
if sent by post or by international airmail, the envelope containing the notice was properly addressed, paid for and posted; or
|
34.2.4 |
if sent by
e-mail,
the notice was properly addressed and sent to the
e-mail
address of the recipient.
|
34.3 |
In proving that any notice, document or other information was properly addressed, it shall be sufficient to show that the notice, document or other information was addressed to an address permitted for the purpose by CA 2006.
|
35
|
Indemnity
|
35.1 |
Subject to the provisions of, and so far as may be consistent with, the Companies Acts and any other provision of law, but without prejudice to any indemnity to which a relevant officer may otherwise be entitled, the company shall indemnify every relevant officer out of the company’s assets against all costs, charges, losses, expenses and liabilities incurred by him as a relevant officer in the actual or purported execution and/or discharge of his duties and/or the actual or purported exercise of his powers and/or otherwise in relation to or in connection with his duties, powers or office, including (without prejudice to the generality of the foregoing) any liability incurred by him in relation to any proceedings (whether civil or criminal) or any regulatory investigation or action which relate to anything done or omitted or alleged to have been done or omitted by him as a relevant officer provided that, in the case of any director, any such indemnity shall not apply to any liability of that director:
|
35.1.1 |
to the company or to any of its associated companies;
|
35.1.2 |
to pay any fine imposed in criminal proceedings or any sum payable to a regulatory authority by way of penalty in respect of
non-compliance
with any requirement of a regulatory nature (however arising); or
|
35.1.3 |
incurred:
|
35.2 |
Subject to the provisions of, and so far as may be consistent with, the Companies Acts and any other provision of law, every director shall be entitled to have funds provided to him by the company to meet expenditure incurred or to be incurred in connection with any proceedings (whether civil or criminal)[, investigation or action] brought by any party which relate to anything done or omitted or alleged to have been done or omitted by him as a director, provided that he will be obliged to repay such amounts no later than:
|
35.2.1 |
in the event he is convicted in proceedings, the date when the conviction becomes final;
|
35.2.2 |
in the event of judgment being given against him in proceedings, the date when the judgment becomes final; or
|
35.2.3 |
in the event of the court refusing to grant him relief on any application under any statute for relief from liability, the date when refusal becomes final in each case where the conviction, judgment or refusal of relief by the court is final within the meaning stated in section 234(5) CA 2006.
|
3
6
|
Insurance
|
36.1 |
The directors shall purchase and maintain insurance, at the expense of the company, for the benefit of any relevant officer in respect of any relevant loss.
|
36.2 |
In this article a “
relevant loss
|
37
|
Matters requiring Parent Company consent
|
37.1 |
Whenever the Parent Company, or any subsidiary of the Parent Company, shall be the holder of not less than 90% of the issued ordinary shares of the company, the following provisions shall apply and to the extent of any inconsistency shall have overriding effect as against all other provisions of these articles.
|
37.2 |
The Parent Company may at any time and from time to time:
|
37.2.1 |
appoint any person to be a director of the company or remove from office any director howsoever appointed but so that in the case of a managing director or a director appointed to any other executive office his removal from office shall be deemed an act of the company and shall have effect without prejudice to any claim for damages for breach of any contract of service between him and the company;
|
37.2.2 |
impose restrictions on all or any of the powers of the directors to such extent as the Parent Company may by notice to the company prescribe.
|
37.3 |
Any appointment, removal or notice of the Parent Company made or given under this article 37 shall be in writing served on the company and signed on behalf of the Parent Company by any one of its directors or by its company secretary (if any) or by some other person duly authorised for the purpose.
|
Spring Bank Pharmaceuticals, Inc.
|
||
July 27, 2020
|
• |
Reviewed a draft of the Exchange Agreement dated July 26, 2020, and a draft of the CVR Agreements. Both the Exchange Agreement and the CVR Agreements were the most recent drafts made available to us prior to delivery of our Opinion;
|
• |
Reviewed and analyzed certain publicly available financial and other information for each of Spring Bank and
F-star,
respectively, including equity research on comparable companies and on Spring Bank, and certain other relevant financial and operating data furnished to us by the management of each of Spring Bank and
F-star,
respectively;
|
• |
Reviewed and analyzed certain relevant historical financial and operating data concerning
F-star
furnished to us by the management of
F-star;
|
• |
Discussed with certain members of the management of Spring Bank the historical and current business operations, financial condition and prospects of Spring Bank;
|
• |
Reviewed and analyzed certain operating results of
F-star
as compared to operating results and the reported price and trading histories of certain publicly traded companies that we deemed relevant;
|
• |
Reviewed and analyzed certain financial terms of the Exchange Agreement and the CVR Agreements as compared to the publicly available financial terms of certain selected business combinations that we deemed relevant;
|
• |
Reviewed and analyzed certain financial terms of completed initial public offerings for certain companies that we deemed relevant;
|
• |
Reviewed certain pro forma financial effects of the Acquisition; and
|
• |
Reviewed and analyzed such other information and such other factors, and conducted such other financial studies, analyses and investigations, as we deemed relevant for the purposes of our Opinion.
|
Spring Bank Pharmaceuticals, Inc.
|
||
July 27, 2020
|
Spring Bank Pharmaceuticals, Inc.
|
||
July 27, 2020
|
Spring Bank Pharmaceuticals, Inc.
|
||
July 27, 2020
|
Very truly yours, |
/s/ Ladenburg Thalmann & Co. Inc. |
Ladenburg Thalmann & Co. Inc. |
SPRING BANK PHARMACEUTICALS, INC.
|
||
By: | ||
Name: | ||
Title: |
SPRING BANK PHARMACEUTICALS, INC. | ||||
By: | ||||
Name: | ||||
Title: |
Item 20.
|
Indemnification of Directors and Officers
|
Item 21.
|
Exhibits and Financial Statement Schedules
|
Item 22.
|
Undertakings
|
(1) |
That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.
|
(2) |
That every prospectus: (i) that is filed pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act, each such post- effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
|
(3) |
To respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.
|
(4) |
To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.
|
Exhibit
Number
|
Description of Document
|
Filed
Herewith |
Incorporated by
Reference Herein from Form or Schedule |
Filing Date
|
SEC File/
Re. Number |
|||||
99.9
|
Proposed Certificate of Amendment to Amended and Restated Certificate of Incorporation of Spring Bank Pharmaceuticals, Inc. for Name Change (included as Annex D to the proxy statement/prospectus forming a part of this Registration Statement). | X | ||||||||
101.INS
|
XBRL Instance Document | X | ||||||||
101.SCH
|
XBRL Taxonomy Extension Schema Document | X | ||||||||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||
101.DEFXBRL
|
Taxonomy Extension Definition Linkbase Document | X | ||||||||
101.LABXBRL
|
Taxonomy Extension Label Linkbase Document | X | ||||||||
101.PREXBRL
|
Taxonomy Extension Presentation Linkbase Document | X |
* |
To be filed by amendment.
|
# |
Indicates a management contract or compensatory plan, contract or arrangement.
|
† |
Confidential treatment has been requested or granted as to certain portions, which portions have been omitted and filed separately with the SEC.
|
SPRING BANK PHARMACEUTICALS, INC.
|
/s/ Martin Driscoll |
Martin Driscoll |
President and Chief Executive Officer |
Name
|
Title
|
Date
|
||
/s/ Martin Driscoll
|
President and Chief Executive Officer
(Principal Executive Officer) |
August 28, 2020 | ||
/s/ Lori Firmani
Lori Firmani
|
Vice President of Finance
(Principal Financial and Accounting Officer) |
August 28, 2020 | ||
/s/ Scott Smith
Scott Smith
|
Chairman of the Board and Director
|
August 28, 2020
|
||
/s/ David Arkowitz
David Arkowitz
|
Director
|
August 28, 2020
|
||
/s/ Todd Brady, M.D., Ph.D.
Todd Brady, M.D., Ph.D.
|
Director
|
August 28, 2020
|
||
/s/ Timothy Clackson, Ph.D.
Timothy Clackson, Ph.D.
|
Director
|
August 28, 2020
|
Name
|
Title
|
Date
|
||
/s/ Kurt M. Eichler
Kurt M. Eichler
|
Director
|
August 28, 2020
|
||
/s/ Pamela Klein, M.D.
Pamela Klein, M.D.
|
Director
|
August 28, 2020
|
Exhibit 5.1 | ||||
One Financial Center Boston, MA 02111 617 542 6000 mintz.com |
August 28, 2020
Spring Bank Pharmaceuticals, Inc.
35 Parkwood Drive, Suite 210
Hopkinton, MA 01748
Ladies and Gentlemen:
We have acted as counsel to Spring Bank Pharmaceuticals, Inc., a Delaware corporation (the Company), in connection with the preparation and filing with the Securities and Exchange Commission (the Commission) of a registration statement on Form S-4 (including all exhibits thereto, the Registration Statement), for the registration under the Securities Act of 1933, as amended (the Securities Act), of 35,256,571 shares (as such number may be adjusted after giving effect to the reverse stock split referred to in the Registration Statement, the Shares) of the Companys common stock, par value $0.0001 per share, expected to be issued pursuant to that certain Share Exchange Agreement, dated as of July 29, 2020, by and among the Company, F-star Therapeutics Limited, a private company registered in England and Wales (F-star) and the holders of issued and outstanding capital shares and convertible loan notes of F-star party thereto (the Exchange Agreement).
In connection with this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of: (i) the Amended and Restated Certificate of Incorporation of the Company; (ii) the Amended and Restated Bylaws of the Company; (iii) certain resolutions of the Board of Directors of the Company (the Board) relating to the Exchange Agreement; and (iv) the Registration Statement. In addition, we have examined originals or copies, certified or otherwise identified to our satisfaction, of certain other corporate records, documents, instruments and certificates of public officials and of the Company, and we have made such inquiries of officers of the Company and public officials and considered such questions of law as we have deemed necessary for purposes of rendering the opinions set forth herein. Our opinions are limited to the matters stated herein and no opinion is implied or may be inferred beyond the matters expressly stated. As to certain factual matters, we have relied upon a certificate of an officer of the Company and have not sought to independently verify such matters. In addition, in rendering this opinion, we have assumed that prior to the issuance of any of the Shares, the Companys Amended and Restated Certificate of Incorporation of the Company, as amended, will be further amended to effect a reverse stock split as provided in the Registration Statement, and that all other approvals referred to in the Registration Statement relating to the issuance of the Shares have become effective.
MINTZ
August 28, 2020 Page 2 |
In rendering our opinion set forth below, we have assumed that (i) each document submitted to us is accurate and complete; (ii) each such document that is an original is authentic; (iii) each such document that is a copy conforms to an authentic original; and (iv) all signatures (other than signatures on behalf of the Company) on each such document are genuine. We have further assumed the legal capacity of natural persons, and we have assumed that each party to the documents we have examined or relied on (other than the Company) has the legal capacity or authority and has satisfied all legal requirements that are applicable to that party to the extent necessary to make such documents enforceable against that party.
Based upon, subject to and limited by the foregoing, we are of the opinion that the Shares of Common Stock, when issued in connection with the Exchange Agreement as set forth in the Registration Statement, will be validly issued, fully paid and non-assessable.
We express no opinion as to matters governed by any laws other than the Delaware General Corporation Law and the federal laws of the United States of America, as in effect on the date hereof.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm under the caption Legal Matters in the prospectus which forms part of the Registration Statement. In giving such permission, we do not admit hereby that we come within the category of persons whose consent is required under Section 7 of the Act, or the rules and regulations of the Commission thereunder. This opinion is expressed as of the date hereof, and we disclaim any undertaking to advise you of any subsequent changes in the facts stated or assumed herein or of any subsequent changes in applicable law.
Very truly yours, |
/s/ Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. |
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. |
Exhibit 8.1
Chrysler Center 666 Third Avenue New York, NY 10017 mintz.com |
August 28, 2020
Spring Bank Pharmaceuticals, Inc.,
35 Parkwood Drive, Suite 210
Hopkinton, MA 01748
(508) 473-5993
Ladies and Gentlemen:
We have acted as counsel to Spring Bank Pharmaceuticals, Inc., a Delaware corporation (Spring Bank), in connection with the transactions described in the Registration Statement on Form S-4 originally filed with the Securities and Exchange Commission on August 28, 2020 as amended through the date hereof (the Registration Statement) of which this exhibit is a part. All section references, unless otherwise indicated, are to the United States Internal Revenue Code of 1986, as amended (the Code). Capitalized terms not defined herein have the meanings set forth in the Registration Statement.
In preparing this opinion, we have examined and relied upon the Registration Statement, including the Prospectus included therein, the Share Exchange Agreement dated as of July 29, 2020 (the Share Exchange Agreement) by and among Spring Bank, F-Star Therapeutics Ltd., a company registered in England and Wales with company number 11532458 (F-Star), and certain holders of issued and outstanding capital shares of F-star and such other documents as we have deemed necessary or appropriate in order to enable us to render this opinion. In our examination of documents, we have assumed the authenticity of original documents, the accuracy of copies, the genuineness of signatures, and the legal capacity of signatories. We have also assumed that the transactions described in the Registration Statement will be consummated in accordance with the description in the Registration Statement.
In rendering this opinion, we have assumed without investigation or verification that the facts and statements set forth in the Registration Statement and the Share Exchange Agreement are true, correct and complete in all material respects; that the exchange will be completed in accordance with the Registration Statement and the Share Exchange Agreement; that any representation in any of the documents referred to herein that is made to the best of the knowledge and belief (or similar qualification) of any person or party is true, correct and complete without such qualification; and that, as to all matters for which a person or entity has represented that such person or entity is not a party to, does not have,
BOSTON LONDON LOS ANGELES NEW YORK SAN DIEGO SAN FRANCISCO WASHINGTON
MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
MINTZ
August 28, 2020 Page 2 |
or is not aware of, any plan, intention, understanding or agreement, there is no such plan, intention, understanding or agreement. Any inaccuracy in, or breach of, any of the aforementioned statements, representations or assumptions could adversely affect our opinion.
Our opinion is based on existing provisions of the Code, Treasury Regulations, judicial decisions, and rulings and other pronouncements of the Internal Revenue Service as in effect on the date of this opinion, all of which are subject to change (possibly with retroactive effect) or reinterpretation. No assurances can be given that a change in the law on which our opinion is based or the interpretation thereof will not occur or that such change will not affect the opinion expressed herein. We undertake no responsibility to advise of any such developments in the law.
Based on our examination of the foregoing items and subject to the limitations, qualifications, assumptions and caveats set forth herein, we confirm that the statements in the Registration Statement under the heading The Exchange Material U.S. Federal Income Tax Consequences of the Exchange to U.S. Holders, subject to the limitations and qualifications described therein, insofar as they relate to matters of United States federal income tax law, constitute our opinion of the material United States federal income tax consequences of the transactions described therein.
No opinion is expressed as to any matter not discussed herein.
We hereby consent to the use of our name under the heading The Exchange Material U.S. Federal Income Tax Consequences of the Exchange to U.S. Holders, and Legal Matters in the Registration Statement and to the filing of this opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the use in this Registration Statement on Form S-4 of Spring Bank Pharmaceuticals, Inc. of our report dated February 14, 2020, relating to the consolidated financial statements of Spring Bank Pharmaceuticals, Inc. and its subsidiaries, appearing in the Prospectus, which is part of this Registration Statement.
We also consent to the reference to our firm under the heading Experts in such Prospectus.
/s/ RSM US LLP
Boston, Massachusetts
August 28, 2020
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form S-4 of Spring Bank Pharmaceuticals, Inc. of our report dated August 28, 2020 relating to the financial statements of F-star Therapeutics Limited, which appears in this Registration Statement. We also consent to the reference to us under the heading Experts in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Cambridge, United Kingdom
August 28, 2020
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form S-4 of Spring Bank Pharmaceuticals, Inc. of our report dated August 28, 2020 relating to the financial statements of F-star Biotechnologische Forschungs-und Entwicklungsges.m.b.H, which appears in this Registration Statement. We also consent to the reference to us under the heading Experts in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Cambridge, United Kingdom
August 28, 2020
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form S-4 of Spring Bank Pharmaceuticals, Inc. of our report dated August 28, 2020 relating to the financial statements of F-star Beta Limited, which appears in this Registration Statement. We also consent to the reference to us under the heading Experts in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Cambridge, United Kingdom
August 28, 2020
Exhibit 99.1
SPRING BANK PHARMACEUTICALS, INC.
35 Parkwood Drive, Suite 210
Hopkinton, MA 01748
(508) 473-5993
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS
, 2020
THE BOARD OF DIRECTORS OF SPRING BANK PHARMACEUTICALS, INC.
SOLICITS THIS PROXY
The undersigned, revoking any previous proxies relating to these shares, hereby appoints Martin Driscoll and Lori Firmani, and each of them (with full power to act alone), the attorneys and proxies of the undersigned, with power of substitution to each, to vote all shares of the common stock of Spring Bank Pharmaceuticals, Inc. (Spring Bank) registered in the name provided in this Proxy which the undersigned is entitled to vote at the Special Meeting of stockholders, to be held at , Eastern time on , 2020 via live audio webcast at www.virtualshareholdermeeting.com/SBPH2020SM (the Special Meeting), and at any adjournments of the meeting, with all the powers the undersigned would have if personally present at the meeting. Without limiting the general authorization given by this Proxy, the proxies are, and each of them is, instructed to vote or act as follows on the proposals set forth in the Proxy.
This Proxy, when executed, will be voted in the manner directed herein. If you do not specify below how you want your shares to be voted, this Proxy will be voted FOR Proposals 1, 2, 3 and 4.
In their discretion the proxies are authorized to vote upon such other matters as may properly come before the meeting or any adjournments of the meeting.
If you wish to vote by telephone or Internet, please read the directions below.
1. Proposal to approve the issuance of Spring Bank common stock to holders of F-star Therapeutics Limited (F-star) share capital, including holders who purchase F-star securities prior to the closing of the Exchange (defined below), in accordance with the Share Exchange Agreement, dated as of July 29, 2020, by and among Spring Bank, F-star and the holders of issued and outstanding capital shares and convertible loan notes of F-star (the Exchange), in an amount representing more than 20% of the shares of Spring Bank common stock outstanding immediately prior to the Exchange, which shall also constitute stockholder approval of a change of control of Spring Bank, pursuant to Nasdaq Listing Rules 5635(a) and 5635(b), respectively.
☐ FOR | ☐ AGAINST | ☐ ABSTAIN |
2. Proposal to approve an amendment of Spring Banks certificate of incorporation to effect a reverse split of all outstanding shares of the Spring Bank common stock at a reverse stock split ratio as mutually agreed to by Spring Bank and F-star in the range of one new share for every to shares outstanding (or any number in between).
☐ FOR | ☐ AGAINST | ☐ ABSTAIN |
3. Proposal to approve an amendment to the amended and restated certificate of incorporation of Spring Bank to change the corporate name of Spring Bank from Spring Bank Pharmaceuticals, Inc. to F-star Therapeutics, Inc. effective upon the closing of the Exchange.
☐ FOR | ☐ AGAINST | ☐ ABSTAIN |
4. Proposal to approve a postponement or adjournment of the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1, 2 or 3.
☐ FOR | ☐ AGAINST | ☐ ABSTAIN |
☒ |
Please mark votes as in this example. |
The Board of Directors recommends a vote FOR Proposals 1, 2, 3 and 4.
Change of Address Please print new address below
☐ By checking this box, I/we consent to future access and delivery of Annual Reports and Proxy Statements electronically via the Internet. I/We understand that the Company may no longer distribute printed materials to me/us for any future stockholder meetings until this consent that I/we have given is revoked. I/we understand that I/we may revoke this consent to electronic access and delivery at any time.
Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such.
Signature: |
|
Date |
|
Signature: |
|
Date |
|
PLEASE CAST YOUR VOTE AS SOON AS POSSIBLE!
YOUR VOTE IS IMPORTANT! YOU CAN VOTE IN ONE OF THREE WAYS:
VOTE BY INTERNET:
24 HOURS A DAY, 7 DAYS A WEEK.
Have your proxy card in hand. You will be asked to enter a Control Number, which is located in the box in the lower right hand corner of this form. Follow the instructions at our Website Address:
http:// www.proxyvote.com.
OR
VOTE BY PHONE:
CALL TOLL-FREE 1-800-690-6903
24 HOURS A DAY, 7 DAYS A WEEK.
Have your proxy card in hand. You will be asked to enter a Control Number, which is located in the box in the lower right hand corner of this form.
Proposal 1, Issuance of Spring Bank common stock pursuant to Exchange: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
Proposal 2, Reverse Stock Split: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
Proposal 3, Spring Bank Name Change: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
Proposal 4, Postponement or Adjournment of Special Meeting: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1
Press 1 to consent to view future Annual Reports and Proxy Materials for this account via the Internet.
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1
OR
VOTE BY PROXY CARD:
Mark, sign and date your proxy card and return it promptly in the enclosed envelope.
NOTE: If you voted by Internet or telephone, THERE IS NO NEED TO MAIL BACK your proxy card.
THANK YOU FOR VOTING.
Exhibit 99.5
August 28, 2020
Spring Bank Pharmaceuticals, Inc.
35 Parkwood Drive, Suite 210
Hopkinton, MA 01748
Consent to Reference in Proxy Statement/Prospectus
Spring Bank Pharmaceuticals, Inc. (the Company) has filed a Registration Statement on Form S-4 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the Securities Act). In connection therewith, I hereby consent, pursuant to Rule 438 of the Securities Act, to the reference to me in the proxy statement/prospectus/information statement included in such registration statement as a future member of the board of directors of the Company.
Sincerely, |
/s/ Edward Benz, Jr., M.D. |
Name: Edward Benz, Jr., M.D. |
Exhibit 99.6
August 28, 2020
Spring Bank Pharmaceuticals, Inc.
35 Parkwood Drive, Suite 210
Hopkinton, MA 01748
Consent to Reference in Proxy Statement/Prospectus
Spring Bank Pharmaceuticals, Inc. (the Company) has filed a Registration Statement on Form S-4 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the Securities Act). In connection therewith, I hereby consent, pursuant to Rule 438 of the Securities Act, to the reference to me in the proxy statement/prospectus/information statement included in such registration statement as a future member of the board of directors of the Company.
Sincerely, |
/s/ Nessan Bermingham, Ph.D. |
Name: Nessan Bermingham, Ph.D. |
Exhibit 99.7
August 28, 2020
Spring Bank Pharmaceuticals, Inc.
35 Parkwood Drive, Suite 210
Hopkinton, MA 01748
Consent to Reference in Proxy Statement/Prospectus
Spring Bank Pharmaceuticals, Inc. (the Company) has filed a Registration Statement on Form S-4 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the Securities Act). In connection therewith, I hereby consent, pursuant to Rule 438 of the Securities Act, to the reference to me in the proxy statement/prospectus/information statement included in such registration statement as a future member of the board of directors of the Company.
Sincerely, |
/s/ Patrick Krol |
Name: Patrick Krol |
Exhibit 99.8
August 28, 2020
Spring Bank Pharmaceuticals, Inc.
35 Parkwood Drive, Suite 210
Hopkinton, MA 01748
Consent to Reference in Proxy Statement/Prospectus
Spring Bank Pharmaceuticals, Inc. (the Company) has filed a Registration Statement on Form S-4 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the Securities Act). In connection therewith, I hereby consent, pursuant to Rule 438 of the Securities Act, to the reference to me in the proxy statement/prospectus/information statement included in such registration statement as a future member of the board of directors of the Company.
Sincerely, |
/s/ Geoffrey Race |
Name: Geoffrey Race |