4D pharma plc (AIM: DDDD, NASDAQ: LBPS) (“4D”, the “Company” or,
together with its subsidiaries, the “Group”), a pharmaceutical
company leading the development of Live Biotherapeutics, is pleased
to announce the final results for the Group for the year ended 31
December 2020.
All details stated hereafter relate to the UK
IFRS accounts; the Group also produces US GAAP accounts, the
details of which are included in the Form 20-F to be filed with the
U.S. Securities and Exchange Commission.
Financial highlights for the
year:
● |
Total equity of £28.0 million (2019: £22.3 million) |
● |
Cash and cash equivalents (including cash on deposit) of £8.8
million (2019: £3.8 million) |
● |
Loss for the year and total comprehensive income for the year of
£25.9 million (2019: £23.7 million) |
● |
Adjusted loss per share of 22.80 pence (2019: 40.81pence) |
● |
Basic and diluted loss per share of 22.80 pence (2019: 36.75
pence) |
Operational highlights
● |
Announced safety and proof-of-concept clinical efficacy data for
lead Live Biotherapeutic MRx0518 in combination with checkpoint
inhibitor (ICI) Keytruda® in heavily pre-treated patients with
non-small cell lung cancer and renal cell carcinoma refractory to
prior ICIs |
● |
Presented the first clinical monotherapy data for a Live
Biotherapeutic in oncology with data from Part A of our clinical
trial of MRx0518 in the neoadjuvant setting |
● |
Launched a third clinical trial of MRx0518, in pancreatic cancer in
combination with stereotactic radiotherapy |
● |
Commencement and expansion of Part B of Phase I/II clinical trial
of MRx0518 in combination with Keytruda®, with inclusion of
additional tumor type cohorts and additional US sites added |
● |
Phase II data for Blautix® showing clinical activity in irritable
bowel syndrome with constipation (IBS-C) or with diarrhoea
(IBS-D) |
● |
Launch of a Phase II clinical trial of oral immuno-modulatory Live
Biotherapeutic MRx-4DP0004 for the treatment of patients
hospitalised with COVID-19 |
● |
Completed two fundraises by way of a Placing and Subscription
raising gross proceeds of approximately £30 million |
● |
Entered into a proposed merger agreement with Longevity Acquisition
Corporation (Longevity), a NASDAQ-listed Special Purpose
Acquisition Company (SPAC), and announced intention to seek NASDAQ
listing |
● |
Appointment of Prof. Axel Glasmacher as Non-Executive
Chairperson |
● |
Appointment of Dr. Katrin Rupalla as an independent Non-Executive
Director |
● |
Appointment of Glenn Dourado as Chief Business Officer |
Since the period end
● |
On 22 March 2021 the Company completed its previously announced
merger with Longevity and the listing of its ADSs on NASDAQ became
effective under the ticker ‘LBPS’; the following day 4D’s warrants
began trading on NASDAQ under the ticker ‘LBPSW’ |
● |
On 22 March 2021, the Company completed a £18.01 million ($25.03)
million gross fundraise by way of a private placement of ordinary
shares, with Directors intending to subscribe for a further £1.44
million ($2.0 million) following release of the year end
results |
● |
On 1 March 2021 we announced the appointment of Paul Maier as an
independent Non-Executive Director, and appointment of John Beck as
Chief Financial Officer |
● |
On 8 February 2021 we announced our second oncology clinical
collaboration and drug supply agreement, with Merck KGaA and
Pfizer, Inc. to evaluate MRx0518 in combination with ICI Bavencio®
as a first-line maintenance therapy for urothelial carcinoma |
Prof. Axel Glasmacher, Chairman of 4D pharma,
commented: “2020 was a transformational year for 4D: We were able
to publish first proof-of-concept data for MRx0518 in last-line
cancers and to initiate our NASDAQ listing. This creates a solid
foundation for the next steps towards bringing live biotherapeutics
to patients suffering from severe diseases. On behalf of the Board
I would like to thank everyone at 4D for an exceptional performance
under difficult circumstances.”
Duncan Peyton, Chief Executive Officer,
commented: “4D has made significant progress leading the field in
the development of Live Biotherapeutics, and made great strides
from a corporate perspective. In addition to the data we have
generated in the field of oncology, we completed our merger with
Longevity and obtained a NASDAQ listing which, together with a
concurrent fundraise, provides 4D with approximately $40 million of
additional capital and a solid financial footing moving forward.
This puts 4D pharma in a strong position to capitalise on multiple
data readouts from our ongoing trials in asthma and oncology as
well as facilitating the move into the clinic with our Parkinson’s
disease programme.”
The Annual Report, together with a notice of the
Company’s Annual General Meeting (“AGM”), will be posted to
shareholders and made available on the Company’s website,
www.4dpharmaplc.com, by 16 April 2021. The Annual General Meeting
will be held at 10 a.m (BST) on Monday 24th May 2021 at 9 Bond
Court, Leeds, LS1 2JZ. We continue to follow guidance from the UK
Government which limits public gatherings. To prevent issues and
remain compliant with the rules in force, persons, shareholders,
advisers and other guests will not be allowed to attend the AGM and
anyone seeking to attend the meeting in person will be refused
entry. We therefore encourage shareholders to submit any questions
they would like to pose to the Board to ir@4dpharmaplc.com so as to
be received no later than Wednesday 19th May 2021 . All emails
should be marked “AGM Question” in the subject line, and will
require a shareholder number. If the UK Government’s guidance
changes before the AGM and allows significant gatherings of people,
we will notify you via the Company’s website at
www.4dpharmaplc.com
Forward-Looking Statements
This announcement contains “forward-looking
statements.” All statements other than statements of historical
fact contained in this announcement, including without limitation
statements regarding future results form our clinical trials
including our move to the clinic with our Parkinsons and Bavencio
trial, the effect of our recent capital raise on the financial
footing of the Company, the timing for our shareholder mailing and
meeting and the intent of certain of our Directors to invest in our
ordinary shares are forward-looking statements within the meaning
of Section 27A of the United States Securities Act of 1933, as
amended (the “Securities Act”), and Section 21E of the United
States Securities Exchange Act of 1934, as amended (the “Exchange
Act”). Forward-looking statements are often identified by the words
“believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,”
“should,” “would,” “could,” “may,” “estimate,” “outlook” and
similar expressions, including the negative thereof. The absence of
these words, however, does not mean that the statements are not
forward-looking. These forward-looking statements are based on the
Company’s current expectations, beliefs and assumptions concerning
future developments and business conditions and their potential
effect on the Company. While management believes that these
forward-looking statements are reasonable as and when made, there
can be no assurance that future developments affecting the Company
will be those that it anticipates.
All of the Company’s forward-looking statements
involve known and unknown risks and uncertainties, some of which
are significant or beyond its control, and assumptions that could
cause actual results to differ materially from the Company’s
historical experience and its present expectations or projections.
The foregoing factors and the other risks and uncertainties that
could cause actual results to differ materially include delays or
changes to the nature and scope of our clinical trials, patient
response rates, the effect of current and future pandemics, the
timing and nature of future cash needs and those additional risks
and uncertainties described the documents filed by the Company with
the US Securities and Exchange Commission (“SEC”). The Company
wishes to caution you not to place undue reliance on any
forward-looking statements, which speak only as of the date hereof.
The Company undertakes no obligation to publicly update or revise
any of its forward-looking statements after the date they are made,
whether as a result of new information, future events or otherwise,
except to the extent required by law.
For further information please
contact:
4D Pharma plc
Duncan Peyton, Chief Executive Officer + 44
(0)113 895 0130Investor Relations ir@4dpharmaplc.com
N+1 Singer - Nominated Adviser and Joint
Broker +44 (0) 20 7496 3000Phil Davies / Iqra Amin / James
Fischer (Corporate Finance) / Tom Salvesen (Corporate Broking)
Bryan Garnier & Co. Limited - Joint
Broker +44 (0)20 7332 2500Dominic Wilson / Phil Walker
Image Box PRNeil Hunter /
Michelle BoxallTel +44 (0)20 8943
4685neil@ibcomms.agency / michelle@ibcomms.agencywww.4dpharmaplc.com]
Chairman and CEO’s
statement
Introduction
4D pharma’s strategy continues to be to pioneer
a novel class of safe and effective therapeutic derived from the
gut microbiome – Live Biotherapeutic Products – and to selectively
partner or potentially develop these through regulatory approval
and subsequent commercialisation.
During the year, we made significant progress
across our LBP clinical development programs. In April we announced
the successful completion of the Part A safety phase of our Phase
I/II clinical trial of lead immuno-oncology LBP candidate MRx0518
in combination with immune checkpoint inhibitor (ICI) Keytruda®
(pembrolizumab) in patients with solid tumors refractory to prior
ICI therapy. During Part A of this clinical trial, MRx0518 showed
no treatment-related serious adverse effects or drug
discontinuations and, importantly, no increase of immune-related
adverse events that are often associated with ICI therapy. The
safety review committee duly recommended to proceed to Part B of
the study, which is ongoing.
In August, we announced comprehensive clinical
benefit data from the 12 patients enrolled into Part A of the
trial. Five patients (42%) demonstrated clinical benefit (defined
as a complete response, partial response or stable disease for six
months or longer) on treatment with MRx0518 and Keytruda®,
including three patients achieving partial responses, an objective
response rate of 25%. To the best of our knowledge, we have
delivered the first ever proof-of-concept data in the treatment of
cancer using LBPs.
At the Society for Immunotherapy of Cancer
(SITC) Annual Meeting 2020 in November we announced the expansion
of the Part B of this study, with the inclusion of three additional
tumor type cohorts of triple-negative breast cancer, squamous cell
carcinoma of the head and neck, and microsatellite instability
high/mismatch repair deficient solid tumors, in addition to the
previously enrolling cohorts of renal cell carcinoma, non-small
cell lung cancer and bladder cancer.
In October 2020 we completed a Phase II clinical
trial investigating the efficacy of Blautix® in the treatment of
irritable bowel syndrome (IBS) which showed: (i) a statistically
significant increase in overall response in pre-planned analysis of
the combined IBS-C/D group compared to placebo; and (ii) a
positive, though non-significant increase in overall response in
both IBS-C and IBS-D cohorts, individually. The primary efficacy
endpoint of the trial was based on whether or not a subject, from
either the IBS-C or IBS-D cohorts, was considered an overall
responder. For a subject to be classed as an ‘overall responder’
they must have reported an improvement in their weekly (cohort
specific) symptoms (abdominal pain intensity and stool frequency or
consistency) for ≥50% of the treatment period.
In April 2020 we received MHRA acceptance for a
UK Phase II clinical trial of our immuno-modulatory LBP MRx-4DP0004
in patients hospitalised with COVID-19. MRx-4DP0004 is in an
ongoing Phase I/II clinical trial in asthma patients as an add-on
therapy to existing long-term maintenance therapy.
In support of our efforts to advance LBP
candidates into the clinic for the treatment of neurodegenerative
diseases such as Parkinson’s disease, in December 2020 we became an
industry partner of the Parkinson’s Progression Markers Initiative
(PPMI), a longitudinal study sponsored by The Michael J. Fox
Foundation for Parkinson’s Research to better understand
Parkinson’s disease and accelerate the development of new
treatments. 4D pharma representatives will join the Partner
Scientific Advisory Board closely involved in the design and
execution of the study, as well as a variety of PPMI Working
Groups.
In the year we made good progress in our
research collaboration with Merck Sharp & Dohme to discover and
develop vaccines in up to three indications. To date, we have
screened and characterised hundreds of LBPs with immuno-modulatory
potential and selected from this group lead LBPs with desirable
immuno-modulatory properties for further evaluation and
development.
In addition to continued progress in advancing
multiple development programs and therapeutic candidates, in
October 2020 the Company entered a definitive merger agreement with
Longevity Acquisition Corporation a publicly-traded special purpose
acquisition company (SPAC) and announced our intention to seek a
NASDAQ listing of 4D pharma American Depositary Shares (ADSs).
After the period end, on 22 March 2021, the merger was completed
and the listing of 4D pharma ADSs on NASDAQ became effective under
the ticker symbol ‘LBPS’; the associated warrants began trading on
NASDAQ on 23 March 2021 under the ticker ‘LBPSW’.
Update on the impact of
COVID-19
In 2020, the global COVID-19 pandemic affected
almost all aspects of the global economy and the pharmaceutical
industry, the Group included. In response to this unexpected and
unprecedented event, the Group took the situation very seriously
and heeded the advice of the UK, Spanish, Irish and US governments
and other authorities, utilising technology effectively to mitigate
this unprecedented disruption where possible. To protect the safety
of patients, the Group’s staff and the staff of the Company’s
collaborators, the Group limited non-essential activity at clinical
sites which in turn had an impact on patient recruitment for some
studies, resulting in some potential delays to expected clinical
readouts.
The likely duration of the disruption caused by
COVID-19 still remains uncertain, making it difficult to accurately
predict the impact on the Group’s operations and clinical
timelines. However, in light of this unprecedented situation the
Board of Directors carefully re-evaluated the Group’s strategic
priorities and near-to-mid-term objectives and took measures to
streamline the business and to prioritise allocation of capital and
resources to key programs set to deliver key clinical value drivers
for our shareholders.
The Group remains committed to reviewing the
rapidly evolving global situation and adapting its strategy and
operations accordingly.
Organisational changes, Board and
governance
In 2020 4D pharma welcomed decades of biopharma
experience to our Board and leadership team, providing invaluable
expertise to help guide the Company’s ongoing growth and
development.
In April, Prof. Axel Glasmacher was appointed
Chairperson from his previous role as Non-Executive Director. We
expect Prof. Glasmacher to be able to contribute his experience as
an oncology physician, Senior Vice President Global Clinical
R&D at Celgene and Board member of the Cancer Drug Development
Forum, to guide the clinical strategy of 4D’s LBPs including, but
not limited to, lead oncology candidate MRx0518.
In August the Board was pleased to welcome Dr.
Katrin Rupalla. Dr Rupalla’s appointment as a Non-Executive
Director was ratified in September. Dr. Rupalla is currently Senior
Vice President Regulatory Affairs, Medical Documentation and
R&D Quality at Lundbeck A/S (CPH: LUN), a CNS specialist
biotech, and before this spent several years in senior roles
overseeing the global development of blockbuster oncology products
at Merck & Co., Roche, Celgene and Bristol-Myers Squibb
(BMS).
In addition to expanding our Board of Directors,
we have also made important additions to our Executive management
team. In April we welcomed Glenn Dourado as our new Chief Business
Officer, bringing a wealth of expertise in biopharma business
development and strategy, with extensive experience particularly
with NASDAQ-listed biotechs and in the field of oncology, expanding
both our Business Development activities and also our US
footprint.
After the period end, in March 2021, we further
expanded our Board and management team, appointing John Beck as
Chief Financial Officer and Paul Maier as Non-Executive Director;
Mr Maier was also appointed Chair of 4D’s Audit and Risk Committee
and will serve as the Company’s ‘audit committee financial expert’
under QCA, SEC and NASDAQ rules. Mr. Beck brings over 30 years of
experience in financial and biopharmaceutical industry management
experience. This includes three previous positions as Chief
Financial Officer of publicly traded life sciences companies where
he achieved notable results in areas including finance, business
and corporate development, strategy, and commercialisation.
Mr. Maier has over 25 years of investor and
public relations, operational, regulatory, and finance expertise in
the healthcare industry. Mr. Maier was previously the Chief
Financial Officer of Sequenom Inc., where he was responsible for
raising over $360 million in equity and debt financings, expanding
institutional sell-side research analyst coverage, as well as
establishing and overseeing internal financial infrastructure.
Previously, he was Senior Vice President and Chief Financial
Officer of Ligand Pharmaceuticals (NASDAQ: LGND). He has also acted
as an independent financial consultant to life sciences companies.
Mr. Maier is currently a Board member of Eton Pharmaceuticals, Inc,
Biological Dynamics and International Stem Cell Corporation (OTCQB:
ISCO).
The Board is committed to maintaining high
standards of governance, both at Board level and operationally
throughout the business.
Group statement of total comprehensive
incomeFor the year ended 31 December 2020
|
|
|
|
|
31 December |
|
|
31 December |
|
|
|
|
|
|
2020 |
|
|
2019 |
|
|
|
Notes |
|
|
£000 |
|
|
£000 |
|
Revenue |
|
|
|
|
|
|
534 |
|
|
|
211 |
|
Research and development
costs |
|
|
|
|
|
|
(22,041 |
) |
|
|
(26,512 |
) |
Administrative expenses |
|
|
|
|
|
|
(9,079 |
) |
|
|
(4,359 |
) |
Foreign currency gains /
(losses) |
|
|
|
|
|
|
363 |
|
|
|
(1,006 |
) |
Other income |
|
|
|
|
|
|
45 |
|
|
|
34 |
|
Operating loss before
non-recurring items |
|
|
|
|
|
|
(30,178 |
) |
|
|
(31,632 |
) |
Non-recurring items |
|
|
|
|
|
|
— |
|
|
|
2,659 |
|
Operating loss after
non-recurring items |
|
|
|
|
|
|
(30,178 |
) |
|
|
(28,973 |
) |
Finance income |
|
|
|
|
|
|
5 |
|
|
|
61 |
|
Finance expense |
|
|
|
|
|
|
(173 |
) |
|
|
(514 |
) |
Loss before
taxation |
|
|
|
|
|
|
(30,346 |
) |
|
|
(29,426 |
) |
Taxation |
|
|
3 |
|
|
|
4,383 |
|
|
|
5,360 |
|
Loss for the
year |
|
|
|
|
|
|
(25,963 |
) |
|
|
(24,066 |
) |
Other comprehensive
income: |
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on
translating foreign operations |
|
|
|
|
|
|
110 |
|
|
|
379 |
|
Loss for the year and
total comprehensive income for the year |
|
|
|
|
|
|
(25,853 |
) |
|
|
(23,687 |
) |
Loss per
share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted for the
year |
|
|
4 |
|
|
|
(22.80 |
)p |
|
|
(36.75 |
)p |
The basic and diluted loss per share are the
same as the effect of share options is anti-dilutive.
Group statement of financial
positionAt 31 December 2020
|
|
|
|
|
At |
|
|
At |
|
|
|
|
|
|
31 December |
|
|
31 December |
|
|
|
|
|
|
2020 |
|
|
2019 |
|
|
|
Notes |
|
|
£000 |
|
|
£000 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment |
|
|
|
|
|
|
|
|
|
|
|
|
- Owned assets |
|
|
|
|
|
|
3,659 |
|
|
|
4,196 |
|
- Right-of-use assets |
|
|
|
|
|
|
835 |
|
|
|
964 |
|
Intangible assets |
|
|
|
|
|
|
14,025 |
|
|
|
13,988 |
|
Taxation receivables |
|
|
|
|
|
|
177 |
|
|
|
188 |
|
|
|
|
|
|
|
|
18,696 |
|
|
|
19,336 |
|
Current
assets |
|
|
|
|
|
|
|
|
|
|
|
|
Inventories |
|
|
|
|
|
|
291 |
|
|
|
198 |
|
Trade and other
receivables |
|
|
|
|
|
|
3,223 |
|
|
|
1,118 |
|
Taxation receivables |
|
|
|
|
|
|
4,436 |
|
|
|
6,122 |
|
Cash and cash equivalents |
|
|
|
|
|
|
8,775 |
|
|
|
3,836 |
|
|
|
|
|
|
|
|
16,725 |
|
|
|
11,274 |
|
Total
assets |
|
|
|
|
|
|
35,421 |
|
|
|
30,610 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables |
|
|
|
|
|
|
6,379 |
|
|
|
6,192 |
|
Lease liabilities |
|
|
|
|
|
|
73 |
|
|
|
68 |
|
|
|
|
|
|
|
|
6,452 |
|
|
|
6,260 |
|
Non-current
liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Lease liabilities |
|
|
|
|
|
|
986 |
|
|
|
1,043 |
|
Deferred tax |
|
|
3 |
|
|
|
13 |
|
|
|
964 |
|
|
|
|
|
|
|
|
999 |
|
|
|
2,007 |
|
Total
liabilities |
|
|
|
|
|
|
7,451 |
|
|
|
8,267 |
|
Net
assets |
|
|
|
|
|
|
27,970 |
|
|
|
22,343 |
|
Capital and
reserves |
|
|
|
|
|
|
|
|
|
|
|
|
Share capital |
|
|
5 |
|
|
|
329 |
|
|
|
164 |
|
Share premium account |
|
|
5 |
|
|
|
136,278 |
|
|
|
108,296 |
|
Merger reserve |
|
|
|
|
|
|
958 |
|
|
|
958 |
|
Translation reserve |
|
|
|
|
|
|
555 |
|
|
|
446 |
|
Other reserve |
|
|
|
|
|
|
(864 |
) |
|
|
(864 |
) |
Share-based payments
reserve |
|
|
|
|
|
|
3,497 |
|
|
|
367 |
|
Retained earnings |
|
|
|
|
|
|
(112,783 |
) |
|
|
(87,024 |
) |
Total
equity |
|
|
|
|
|
|
27,970 |
|
|
|
22,343 |
|
Group statement of changes in
equityFor the year ended 31 December 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based |
|
|
|
|
|
|
|
|
|
Share |
|
|
Share |
|
|
Merger |
|
|
Translation |
|
|
Other |
|
|
payment |
|
|
Retained |
|
|
Total |
|
|
|
capital |
|
|
premium |
|
|
reserve |
|
|
reserve |
|
|
reserve |
|
|
reserve |
|
|
earnings |
|
|
equity |
|
|
|
£000 |
|
|
£000 |
|
|
£000 |
|
|
£000 |
|
|
£000 |
|
|
£000 |
|
|
£000 |
|
|
£000 |
|
At 1 January
2019 |
|
|
164 |
|
|
|
108,296 |
|
|
|
958 |
|
|
|
67 |
|
|
|
(864 |
) |
|
|
708 |
|
|
|
(63,566 |
) |
|
|
45,763 |
|
Issue of share capital (net of
expenses) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total transactions
with owners recognised in equity for the year |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss and total comprehensive
income for the year |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
379 |
|
|
|
— |
|
|
|
— |
|
|
|
(24,066 |
) |
|
|
(23,687 |
) |
Lapsed options |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(608 |
) |
|
|
608 |
|
|
|
— |
|
Issue of share-based
compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
267 |
|
|
|
— |
|
|
|
267 |
|
At 31 December
2019 |
|
|
164 |
|
|
|
108,296 |
|
|
|
958 |
|
|
|
446 |
|
|
|
(864 |
) |
|
|
367 |
|
|
|
(87,024 |
) |
|
|
22,343 |
|
Issue of share capital (net of
expenses) |
|
|
165 |
|
|
|
27,906 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
28,071 |
|
Issue of Warrants (net of
expenses) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,110 |
|
|
|
— |
|
|
|
3,110 |
|
Exercise of Warrants |
|
|
— |
|
|
|
76 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(11 |
) |
|
|
— |
|
|
|
65 |
|
Total transactions
with owners recognised in equity for the year |
|
|
165 |
|
|
|
27,982 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,099 |
|
|
|
— |
|
|
|
31,246 |
|
Loss and total comprehensive
income for the year |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
109 |
|
|
|
— |
|
|
|
— |
|
|
|
(25,963 |
) |
|
|
(25,854 |
) |
Lapsed options |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(204 |
) |
|
|
204 |
|
|
|
— |
|
Issue of share-based
compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
235 |
|
|
|
— |
|
|
|
235 |
|
At 31 December
2020 |
|
|
329 |
|
|
|
136,278 |
|
|
|
958 |
|
|
|
555 |
|
|
|
(864 |
) |
|
|
3,497 |
|
|
|
(112,783 |
) |
|
|
27,970 |
|
Group cash flow statementFor
the year ended 31 December 2020
|
|
|
|
|
Year to |
|
|
Year to |
|
|
|
|
|
|
31 December |
|
|
31 December |
|
|
|
|
|
|
2020 |
|
|
2019 |
|
|
|
Notes |
|
|
£000 |
|
|
£000 |
|
Loss after
taxation |
|
|
|
|
|
|
(25,963 |
) |
|
|
(24,066 |
) |
Adjustments for: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of property,
plant and equipment |
|
|
|
|
|
|
1,003 |
|
|
|
1,065 |
|
Amortisation of intangible
assets |
|
|
|
|
|
|
203 |
|
|
|
216 |
|
Profit on disposal of
property, plant and equipment |
|
|
|
|
|
|
— |
|
|
|
(17 |
) |
Loss on disposal of intangible
assets |
|
|
|
|
|
|
— |
|
|
|
29 |
|
Lease liabilities included in
the Income statement |
|
|
|
|
|
|
135 |
|
|
|
159 |
|
Finance income |
|
|
|
|
|
|
(5 |
) |
|
|
(61 |
) |
Finance expense |
|
|
|
|
|
|
173 |
|
|
|
514 |
|
Release of contingent
consideration |
|
|
|
|
|
|
— |
|
|
|
(2,659 |
) |
Share-based compensation |
|
|
|
|
|
|
3,334 |
|
|
|
267 |
|
Cash flows from operations
before movements in working capital |
|
|
|
|
|
|
(21,120 |
) |
|
|
(24,553 |
) |
Changes in working
capital: |
|
|
|
|
|
|
|
|
|
|
|
|
(Increase)/decrease in
inventories |
|
|
|
|
|
|
(93 |
) |
|
|
92 |
|
(Increase)/decrease in trade
and other receivables |
|
|
|
|
|
|
(2,105 |
) |
|
|
130 |
|
Decrease/(increase) in
taxation receivables |
|
|
|
|
|
|
1,697 |
|
|
|
(780 |
) |
(Decrease)/increase in trade
and other payables |
|
|
|
|
|
|
(1,052 |
) |
|
|
3,555 |
|
Cash outflow from
operating activities |
|
|
|
|
|
|
(22,673 |
) |
|
|
(21,556 |
) |
Cash flows from
investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant
and equipment |
|
|
|
|
|
|
(163 |
) |
|
|
(538 |
) |
Purchase of software and other
intangibles |
|
|
|
|
|
|
(15 |
) |
|
|
(57 |
) |
Cash received on disposal of
assets |
|
|
|
|
|
|
— |
|
|
|
43 |
|
Monies drawn from deposit |
|
|
|
|
|
|
— |
|
|
|
10,174 |
|
Net cash
(outflow)/inflow from investing activities |
|
|
|
|
|
|
(178 |
) |
|
|
9,622 |
|
Cash flows from
financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issues of
ordinary share capital |
|
|
5 |
|
|
|
29,740 |
|
|
|
— |
|
Expenses on issue of
shares |
|
|
5 |
|
|
|
(1,594 |
) |
|
|
— |
|
Lease liability payments |
|
|
|
|
|
|
(188 |
) |
|
|
(197 |
) |
Interest received |
|
|
|
|
|
|
5 |
|
|
|
94 |
|
Interest paid |
|
|
|
|
|
|
(173 |
) |
|
|
(180 |
) |
Net cash
inflow/(outflow) from financing activities |
|
|
|
|
|
|
27,790 |
|
|
|
(283 |
) |
Increase/(decrease) in
cash and cash equivalents |
|
|
|
|
|
|
4,939 |
|
|
|
(12,217 |
) |
Cash and cash equivalents at
the start of the year |
|
|
|
|
|
|
3,836 |
|
|
|
16,053 |
|
Cash and cash
equivalents at the end of the year |
|
|
|
|
|
|
8,775 |
|
|
|
3,836 |
|
Notes
For the year ended 31 December 2020
1. Basis of preparation
The financial information set out herein does
not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The financial information for the year ended 31
December 2020 has been extracted from the Company’s audited
financial statements which were approved by the Board of Directors
on 31 March 2021 and which, if adopted by the members at the Annual
General Meeting, will be delivered to the Registrar of Companies
for England and Wales.
The financial information for the year ended 31
December 2019 has been extracted from the Company’s audited
financial statements which were approved by the Board of Directors
on 22 May 2020 and which drew attention to the material uncertainty
over the going concern basis of preparation but received an
unqualified audit opinion, did not contain a statement under
section 498(2) or (3) of the Companies Act 2006 and have been
delivered to the Registrar of Companies.The information in this
preliminary statement has been extracted from the audited financial
statements for the year ended 31 December 2020 and as such, does
not contain all the information required to be disclosed in the
financial statements prepared in accordance with the International
Financial Reporting Standards as adopted by the European Union
(‘IFRS’).
The Company is a public limited company
incorporated and domiciled in England & Wales and whose shares
are quoted on AIM, a market operated by The London Stock Exchange
and through American Depository Shares (ADS’s) listed on NASDAQ .
The Company is incorporated in England and Wales. The registered
office is 9 Bond Court, Leeds LS1 2JZ.
2. Going concern
The Group and parent company are subject to a
number of risks similar to those of other development stage
pharmaceutical companies. These risks include, amongst others,
generation of revenues in due course from the development portfolio
and risks associated with research, development and obtaining
regulatory approvals of its products. Ultimately, the attainment of
profitable operations is dependent on future uncertain events which
include obtaining adequate financing to fulfil the Group’s
commercial and development activities and generating a level of
revenue to support the Group’s cost structure.
The Directors have prepared detailed financial
forecasts and cash flows looking beyond twelve months from the date
of the approval of these financial statements. In developing these
forecasts, the Directors have made assumptions based upon their
view of the current and future economic conditions that are
expected to prevail over the forecast period. Shortly after the
year-end the Company completed the Merger with Longevity
Acquisition Corporation (Longevity) through the issue of new
ordinary shares. On completion cash in hand for Longevity was $14.8
million which is expected to add approximately £8.3 million ($11.6
million) in cash to the Company after the payment of costs and
settlement of liabilities. A further 4,320,000 warrants convertible
to Ordinary shares were also issued as part of the transaction
which, if exercised in full, would add approximately $29.0 million
in cash to the Company. Concurrently with the completion of the
Longevity transaction the Company issued new Ordinary shares in a
private placement which raised £18.0 million ($25.0 million) in
gross proceeds, with certain Directors intending to subscribe for a
further £1.44 million ($2.0 million) following release of the
Company’s results for the year ended 31 December 2020. Also, in
March 2021 our Spanish Subsidiary received a €1.0 million (£0.86
million) overdraft facility as part of the Spanish COVID-19 relief
package. The overdraft is unsecured, incurs annual interest at a
rate of 2.35% and is repayable at the end of the three-year term.
Given the additional funding from the items above, but excluding
both the possible redemption the Company warrants issued during the
February 2020 share issue (currently worth around £21.9 million)
and the warrants issued as part of the Longevity transaction, the
Directors estimate that the Group will have sufficient cash to fund
its operations into Q2 of 2022 and have prepared the financial
statements accordingly using a going concern basis.
3. Taxation
The tax credit is made up as follows:
|
|
Year to |
|
|
Year to |
|
|
|
31 December |
|
|
31 December |
|
|
|
2020 |
|
|
2019 |
|
|
|
£000 |
|
|
£000 |
|
Current income
tax |
|
|
|
|
|
|
|
|
Total current income tax |
|
|
(3,473 |
) |
|
|
(5,351 |
) |
Adjustment in respect of prior
years |
|
|
42 |
|
|
|
(9 |
) |
Total income tax
credit recognised in the year |
|
|
(3,431 |
) |
|
|
(5,360 |
) |
Current deferred
tax |
|
|
|
|
|
|
|
|
Previously recognised deferred
tax gains offset against losses |
|
|
(940 |
) |
|
|
— |
|
Current year charge |
|
|
(12 |
) |
|
|
— |
|
Total deferred tax |
|
|
(952 |
) |
|
|
— |
|
Total income tax
credit recognised in the year |
|
|
(4,383 |
) |
|
|
(5,360 |
) |
The enacted UK corporation tax rate of 19% forms
the basis for the UK element of the deferred tax calculation noted
below, the equivalent rates used for Ireland and Spain were 12.5%
and 25% respectively. However, following the UK budget in 2021 the
chancellor announced an increase to the main rate of corporation
tax rate in the UK to 25% from April 2023, if applied this would
significantly increase the value of the unrecognised deferred tax
asset.
At 31 December 2020, the Group had tax losses
available for carry forward of approximately £66.6 million (31
December 2019: £48.3 million). The Group has not recognised
deferred tax assets relating to such earned forward losses of
approximately £12.6 million (31 December 2019: £6.8 million).
Group management considers that there is
insufficient evidence of future taxable income, taxable temporary
differences and feasible tax-planning strategies to utilise all of
the cumulative losses and therefore it is not considered certain
that the deferred tax assets will be realised in full. If future
income differs from current projections, this could significantly
impact the tax charge or benefit in future years.
4. Loss per share
(a) Basic and diluted
|
|
Year to |
|
|
Year to |
|
|
|
31 December |
|
|
31 December |
|
|
|
2020 |
|
|
2019 |
|
|
|
£000 |
|
|
£000 |
|
Loss for the year attributable
to equity shareholders |
|
|
(25,963 |
) |
|
|
(24,066 |
) |
Weighted average
number of shares |
|
|
|
|
|
|
|
|
Ordinary shares in issue |
|
|
113,851,960 |
|
|
|
65,493,842 |
|
Basic loss per share
(pence) |
|
|
(22.80 |
)p |
|
|
(36.75 |
)p |
The basic and diluted loss per share are the
same as the effect of share options and warrants is
anti-dilutive.
(b) Adjusted
Adjusted loss per share is calculated after
adjusting for the effect of non-recurring income and expenses in
relation to the reassessment of the contingent liability.
Reconciliation of adjusted loss after tax:
|
|
Year to |
|
|
Year to |
|
|
|
31 December |
|
|
31 December |
|
|
|
2020 |
|
|
2019 |
|
|
|
£000 |
|
|
£000 |
|
Reported loss after tax |
|
|
(25,963 |
) |
|
|
(24,066 |
) |
Non-recurring income |
|
|
— |
|
|
|
(2,659 |
) |
Adjusted loss after tax |
|
|
(25,963 |
) |
|
|
(26,725 |
) |
Adjusted basic loss
per share (pence) |
|
|
(22.80 |
)p |
|
|
(40.81 |
)p |
5. Share capital
|
|
Ordinary |
|
|
Share |
|
|
Share |
|
|
|
|
|
|
shares |
|
|
capital |
|
|
premium |
|
|
Total |
|
Group
and Company |
|
Number |
|
|
£000 |
|
|
£000 |
|
|
£000 |
|
Allotted, called up
and fully paid ordinary shares of 0.25p |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares as at
1 January 2019 & 31 December 2019 |
|
|
65,493,842 |
|
|
|
164 |
|
|
|
108,296 |
|
|
|
108,460 |
|
Placing and subscription 18
February 2020 |
|
|
44,000,000 |
|
|
|
110 |
|
|
|
21,890 |
|
|
|
22,000 |
|
Expenses of placing and
subscription on 18 February 2020 |
|
|
— |
|
|
|
— |
|
|
|
(1,065 |
) |
|
|
(1,065 |
) |
Warrants exercised (issued 18
February 2020) |
|
|
75,693 |
|
|
|
— |
|
|
|
76 |
|
|
|
76 |
|
Placing and subscription 13
July 2020 |
|
|
21,898,400 |
|
|
|
55 |
|
|
|
7,610 |
|
|
|
7,665 |
|
Expenses of placing and
subscription on 13 July 2020 |
|
|
— |
|
|
|
— |
|
|
|
(529 |
) |
|
|
(529 |
) |
Ordinary shares as at
31 December 2020 |
|
|
131,467,935 |
|
|
|
329 |
|
|
|
136,334 |
|
|
|
136,663 |
|
The balances classified as share capital and
share premium include the total net proceeds (nominal value and
share premium respectively) on issue of the Company’s equity share
capital. The entire share capital consists of 0.25 pence ordinary
shares.
Each ordinary 0.25 pence share is entitled
to:
|
● |
one vote in any circumstances; |
|
● |
Pari passu to dividend payments or any other distribution;
and, |
|
● |
Pari passu to participate in a distribution arising from a winding
up of the Company. |
The Company raised £22.0 million in gross
proceeds (£20.9 million net) on 18 February 2020 from a placing of
16,820,080 new ordinary shares and a subscription of 27,179,920 new
ordinary shares at an issue price of 50 pence per share. In
addition, each placee and subscriber was allotted one warrant for
every two ordinary shares subscribed in the fundraising. As a
result, a total of 22,000,000 warrants were allotted. Each warrant
entitles the holder to subscribe for one ordinary share at an
exercise price of 100p at any time up to the fifth anniversary of
admission.
The Company raised £7.7 million in gross
proceeds (£7.1 million net) on 13 July 2020 from a placing of
16,807,616 new ordinary shares and a subscription of 5,090,784 new
ordinary shares at an issue price of 35 pence per share.
6. Related party
transactions
Interest in Shares and
Warrants
During the year the Company undertook two
capital raises through the issue of shares and warrants. Details of
the Directors’ participation in these raises and other share
acquisitions is as follows:
Executive Directors |
|
Duncan Peyton CEO |
|
|
Dr Alex Stevenson CSO |
|
Shares and Warrants |
|
Number of shares |
|
|
Number ofwarrants |
|
|
£ |
|
|
Number of shares |
|
|
Number ofwarrants |
|
|
£ |
|
At 1 January 2020 |
|
|
6,455,075 |
|
|
|
— |
|
|
|
|
|
|
|
6,413,136 |
|
|
|
— |
|
|
|
|
|
Subscription on 18 February
2020 at £0.50 per share |
|
|
1,333,332 |
|
|
|
666,666 |
|
|
|
666,666 |
|
|
|
1,333,332 |
|
|
|
666,666 |
|
|
|
666,666 |
|
Total at 18 February 2020 |
|
|
7,788,407 |
|
|
|
666,666 |
|
|
|
666,666 |
|
|
|
7,746,468 |
|
|
|
666,666 |
|
|
|
666,666 |
|
Subscription on 13 July 2020
at £0.35 per share |
|
|
571,428 |
|
|
|
— |
|
|
|
200,000 |
|
|
|
571,428 |
|
|
|
— |
|
|
|
200,000 |
|
Total at 13 July 2020 |
|
|
8,359,835 |
|
|
|
666,666 |
|
|
|
866,666 |
|
|
|
8,317,896 |
|
|
|
666,666 |
|
|
|
866,666 |
|
Percentage of enlarged share
capital at 13 July 2020 |
|
|
6.36 |
% |
|
|
|
|
|
|
|
|
|
|
6.33 |
% |
|
|
|
|
|
|
|
|
Non-Executive Directors |
|
David Norwood* NED |
|
|
Prof. Axel Glasmacher NED |
|
Shares and Warrants |
|
Number of shares |
|
|
Number ofwarrants |
|
|
£ |
|
|
Number of shares |
|
|
Number ofwarrants |
|
|
£ |
|
At 1 January 2020 |
|
|
7,123,725 |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Subscription on 18 February
2020 at £0.50 per share |
|
|
1,333,336 |
|
|
|
666,668 |
|
|
|
666,668 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total at 18 February 2020 |
|
|
8,457,061 |
|
|
|
666,668 |
|
|
|
666,668 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Market based purchase 17 March
2020 at £0.28 per share |
|
|
100,000 |
|
|
|
— |
|
|
|
28,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Subscription on 13 July 2020
at £0.35 per share |
|
|
285,714 |
|
|
|
— |
|
|
|
100,000 |
|
|
|
30,000 |
|
|
|
— |
|
|
|
10,500 |
|
Total at 13 July 2020 |
|
|
8,842,775 |
|
|
|
666,668 |
|
|
|
794,668 |
|
|
|
30,000 |
|
|
|
— |
|
|
|
10,500 |
|
Percentage of enlarged share
capital at 13 July 2020 |
|
|
6.73 |
% |
|
|
|
|
|
|
|
|
|
|
0.02 |
% |
|
|
|
|
|
|
|
|
* |
David Norwood resigned as a Director on 30 September 2020. As his
shareholding was not sufficient for him to qualify as a substantial
shareholder, transactions after this date have been excluded. |
No warrants had been exercised by the existing
Directors at 31 December 2020.
Further details of shares issued and proceeds
from their issue can be found in note 21 to the full accounts.
Merger with Longevity Acquisition
Corporation
On 22 October 2020 the Company announced its
intention to merge with Longevity Acquisition Corporation
(Longevity), a Special Purpose Acquisition Company, and its
intention to seek a NASDAQ listing.
To secure the merger a backstop agreement was
put in place involving certain of the Directors and significant
shareholders (the “Backstop Investors”). The details of the
agreement at 31 December 2020 were as follows:
Backstop Arrangements and Related Party
Transactions
The current Longevity shareholders have the
right to redeem their shareholding in Longevity, even if the
requisite majority of Longevity shareholders approve the merger.
$14.6 million is currently held in a trust account by Longevity to
fund redemptions. Any redemptions by Longevity shareholders would
reduce the capital available to the enlarged group. Backstop
agreements have therefore been executed by Longevity, the Company
and Whale Management Corporation (“SPAC Sponsor”) with certain
investors, including Duncan Peyton and Alex Stevenson, (together
the “Backstop Investors”).
The Backstop Investors have committed to
subscribe for Longevity shares prior to completion so as to raise
up to $14.6 million in the event of redemptions by Longevity
shareholders. To secure the Backstop Arrangements, Longevity has
agreed to allot 700,000 Longevity shares to the Backstop Investors,
Whale has agreed to transfer 200,000 Longevity Shares to the
Backstop Investors, and the Company has agreed to allot up to
7,530,000 4D ordinary shares to the Backstop investors if and to
the extent outstanding warrants issued by Longevity are
exercised.
The Backstop arrangements also provide that,
subject to certain conditions, 4D may be required to file, within
thirty days after completion, a registration statement under the US
Securities Act registering the resale of the 4D ordinary shares
received by the Backstop Investors pursuant to the merger and the
Backstop arrangements. The Backstop Investors have agreed to loan
Longevity US$1.86 million, the proceeds of which will be used to
repay Whale for loans previously made by Whale to Longevity to fund
its launch costs. On completion, the enlarged group will repay this
sum to the Backstop Investors.
Related Party Transactions
The participation by Duncan Peyton (in the
amount of $1,075,862) and Alex Stevenson (in the amount of
$827,856) in the Backstop arrangements constitutes a related party
transaction for the purposes of the AIM Rules. In addition, Steve
Oliveira and connected parties, a substantial shareholder of the
Company (as defined by the AIM Rules) is participating in the
Backstop arrangements in the amount of $5 million (in aggregate).
The participation by Steve Oliveira and connected parties in the
Backstop Arrangements also constitutes a related party transaction
for the purposes of the AIM Rules.
The 4D Independent Directors, having consulted
with the Company’s nominated adviser, N+1 Singer, consider that the
terms of the related party transactions are fair and reasonable
insofar as Shareholders are concerned. In providing their advice to
the 4D Independent Directors, N+1 Singer have taken into account
the commercial assessments of the 4D Independent Directors.
Lock-up Agreements
Duncan Peyton and Alex Stevenson, being the
Chief Executive Officer and Chief Scientific Officer respectively,
will enter into lock-up agreements at completion. Under the terms
of the lock-up agreement, each of Mr Peyton and Dr Stevenson will
agree that, subject to certain limited exceptions, they will not
sell any consideration shares due to them under the terms of the
merger for a period of twelve months.
7. Subsequent events
Merger with Longevity Acquisition
Corporation
On 18 March 2021 (the “Closing Date”), the
transaction (the “Closing”) contemplated by the previously
announced Merger Agreement and BVI Plan of Merger (the “Merger”),
dated as of 21 October 2020 (the “Merger Agreement”), by and among
Longevity Acquisition Company (“Longevity”), 4D Pharma plc (“4D
Pharma”), and Dolphin Merger Sub Limited, a British Virgin Islands
company and a wholly-owned subsidiary of 4D Pharma (the “Merger
Sub”) was approved and the transaction was completed on 22 March
2021. The Merger Sub is the surviving entity (the “Surviving
Corporation”). As a result of the Merger, each Longevity share
issued and outstanding immediately prior to the completion of the
Merger was converted into the right to receive 7.5315 ordinary
shares of 4D Pharma payable in 4D Pharma ADSs (“American Depositary
Shares”) at a rate equal to one 4D Pharma ADS for every eight 4D
Pharma ordinary shares. 4D Pharma issued no fractional 4D Pharma
Shares or 4D Pharma ADSs in the Merger. Each warrant to purchase
Longevity Shares and right to receive Longevity Shares that was
outstanding immediately prior to the Closing was assumed by 4D
Pharma and automatically converted into a warrant to purchase
ordinary shares of 4D Pharma and a right to receive ordinary shares
of 4D Pharma, payable in 4D Pharma ADSs, respectively.
In connection with the Closing, certain holders
of Longevity common shares exercised their right to redeem those
shares in accordance with the Company’s organisational documents,
as amended, for cash at a price of approximately $11 per Ordinary
Share, for an aggregate of approximately $3,000. Pursuant to a
Backstop Agreement previously entered into between Longevity, 4D
Pharma, Longevity’s sponsor (Whale Capital Management the
“Sponsor”) and certain current shareholders of 4D Pharma and new
investors (such current shareholders of 4D Pharma and new
investors, collectively, the “Buyers”), the Buyers provided
financial backing of approximately $14.7 million to Longevity
immediately prior to the Closing, to cover against redemptions by
Longevity Shareholders. In view of the de minimis redemptions, the
backstop was not called upon. The consideration paid to the Buyers
pursuant to the Backstop Agreements consisted of 700,000 newly
issued Ordinary Longevity Shares, the transfer by Longevity’s
sponsor of 200,000 outstanding Longevity Shares, the grant of an
option to acquire up to an additional 400,000 outstanding Longevity
Shares from the Sponsor, and the commitment by 4D Pharma to grant
to the Buyers following the closing of the Merger warrants to
acquire up to 1,000,000 Longevity shares (equivalent to 7,530,000
shares in 4D Pharma) for 0.25 pence per ordinary share. In
connection with the Closing, and pursuant to the Merger Agreement,
(a) an aggregate of 28,298,192 Ordinary shares were issued in 4D
Pharma to Longevity shareholders and the Buyers, (b) 4D Pharma
assumed Longevity warrants to acquire and rights to receive an
aggregate of 16,268,040 ordinary shares in 4D Pharma, and (c)
2,750,000 shares of 4D Pharma were issued to a bank as an advisor
fee.
At the Closing, 4D Pharma entered into a Lock-up
Agreement with the Sponsor and certain shareholders of 4D. Pursuant
to the Lock-Up Agreement, each holder agreed that, subject to
certain exceptions, during the period ending twelve months after
the Closing, it will not (i) lend, offer, pledge, hypothecate,
encumber, donate, assign, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, directly or indirectly, any shares received
as consideration in the Merger (the “Restricted Securities”), (ii)
enter into any swap, short sale, hedge or other arrangement that
transfers to another, in whole or in part, any of the economic
consequences of ownership of the Restricted Securities, or (iii)
publicly disclose the intention to effect any transaction specified
in clause (i) or (ii), or (iv) make any demand for or exercise any
right with respect to the registration of any Longevity Shares.
As Longevity has no ongoing trade or business,
the Merger does not constitute a business combination under IFRS 3.
As such the transaction will be treated as a financing through the
issue of ordinary shares in 4D Pharma. At Closing, Longevity had
approximately $14.8 million of cash in hand on completion equating
to $11.6 million net of costs and will form part of the share
capital and share premium accounts in 4D Pharma.
NASDAQ Listing
On 22 March 2021, with the completion of the
Longevity transaction, the Company completed its NASDAQ Global
Market listing using American Depositary Shares (ADSs) under the
ticker ‘LBPS’ and the following day the warrants began trading
under the ‘LBPSW’ ticker. Ordinary shares can be converted at any
time to ADSs at a ratio of eight ordinary shares for one ADS. J.P
Morgan Chase bank, N.A. is acting as depositary bank for the ADSs
and the Company’s ordinary shares will continue to be admitted to
trading on AIM under the ticker ‘DDDD’
Private Placement Financing
On 17 March 2021, the Company announced that it
had entered into securities purchase agreements with certain US and
UK institutional and accredited investors to raise approximately
£17.29 million ($24.03 million) in gross proceeds through a private
placement of 15,713,309 new ordinary shares of £0.0025 at a price
of £1.10 ($1.53) per share. A further subscription for 654,023
ordinary shares was also made by Merck Sharpe & Dohme Corp.
before admission to AIM on 23 March 2021 bringing the total
subscription to 16,367,332 ordinary shares and gross proceeds of
the placement to approximately £18.01 million ($25.03 million)
gross or £16.87 million ($23.45 million) net of fees. In addition
to the placement Duncan Peyton (Chief Executive Officer) and Alex
Stevenson (Chief ScientificOfficer) intend to subscribe for, in
aggregate, £1.44 million ($2.0 million) of new ordinary shares at
the issue price of £1.10 following the release of these financial
results.
Overdraft Facility
In March 2021 4D Pharma Leon S.L.U. agreed a
€1.0 million (£0.86 million) overdraft facility supported by the
Spanish government as part of its COVID-19 relief package. The
overdraft is unsecured, incurs annual interest at a rate of 2.35%
and is repayable in full at the end of three years, further adding
to the Group’s available funding.
8. Report and accounts
A copy of the Annual Report and Accounts will be
sent to all shareholders with notice of the Annual General Meeting,
and will be made available on the Company’s website,
www.4dpharmaplc.com, by 14 April 2021.
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