TIDMVSN
RNS Number : 6401R
Verseon Corporation
25 September 2017
For immediate release September 25, 2017
Verseon Corporation
("Verseon" or the "Company")
Interim Results
Fremont, Calif.-Verseon (AIM:VSN), a technology-based
pharmaceutical company employing a computer-driven platform to
develop a diverse drug pipeline, today announces its Interim
Results for the six months ended June 30, 2017. The report and
accounts are available for download from the Company's website
(www.verseon.com).
Adityo Prakash, CEO of Verseon Corporation, commented: "Our
pipeline continues to pick up momentum. We are finalizing phase I
preparations for our first anticoagulant, have presented efficacy
results in our diabetic macular edema program, and initiated a new
program in which we are developing oral therapeutics for hereditary
angioedema, a rare, life-threatening disease."
"We believe that our drug candidates provide the best evidence
of the power of our innovative, computer-driven drug discovery
platform. With our new research and administrative facility in
place, we are well-positioned to further grow shareholder value by
generating a steady stream of novel high-quality drug candidates
for a variety of diseases."
Professor John Deanfield, Chair of Verseon's Cardiovascular
Clinical Advisory Board, commented on the Company's anticoagulation
program: "Verseon's platelet-sparing anticoagulants look very
promising. These precision drugs prevent clot formation without
disrupting platelet function, which substantially reduces bleeding
risk. This provides an exciting 'precision medicine' opportunity to
develop a new long-term combination therapy approach with
antiplatelet drugs."
Highlights
Finance: Building a solid foundation for Verseon's platform
-- Verseon continues to prudently manage its resources as the
Company invests in infrastructure, including new facilities,
laboratory equipment, and a high-performance computing cluster.
-- As of June 30, 2017, total assets on the balance sheet stood
at $60.2 million, including cash, cash equivalents, and short-term
investments of $30.8 million, compared to $69.6 million and $46.9
million, respectively, at December 31, 2016.
-- Operating expenses totaled $9.5 million for the six months
ended June 30, 2017, compared to $7.9 million for the six months
ended June 30, 2016.
-- The resultant net loss was $8.8 million or $0.06 per basic
share for the six months ended June 30, 2017, compared to a net
loss of $9.3 million or $0.06 per basic share for the six months
ended June 30, 2016.
Anticoagulation: Heading to the clinic
-- Confirmed unique hemostasis-preserving profile
-- Established CVD Clinical Advisory Board
-- Scheduled phase I start for VE-1902 (Q1 2018)
-- Progressing second development candidate toward clinical trials in 2018
Completion of CMC scale-up and regulatory toxicology studies for
VE-1902 is expected by the end of 2017. A second, chemically
distinct development candidate with promising preclinical profile,
including good in vitro and preliminary in vivo toxicology, is
being prepared for regulatory toxicology studies.
Hereditary angioedema: Developing oral therapy for a rare,
life-threatening disease
-- Established in vivo efficacy with oral dosing
Several compounds are being optimized for oral bioavailability
to identify the candidates best suited for oral treatment.
Diabetic macular edema: Efficacy results established
-- Presented in vivo efficacy with systemic dosing
-- Demonstrated good pharmacokinetics after eye-drop dosing
Multiple lead candidates spanning chemotypes suitable for
development as either eye-drop or oral treatments are being
optimized for efficacy and safety.
Oncology: Developing novel anticancer agents
-- Tested on drug-resistant cancer cell lines
-- Improved potency and pharmacokinetics
Several candidates are being assessed for their potency against
tumor cell lines that are resistant to various existing anticancer
therapies.
Computational platform: Generating novel candidates
-- Delivered results across multiple programs
Positive preclinical results across the pipeline are proving the
power of Verseon's computer-driven drug discovery platform. We
continue to develop a range of chemically diverse drug candidates
for our programs.
Facilities development: A framework for a growing pipeline
-- Closed clean-energy financing
-- Moving into new research and administrative facility
A Property Assessed Clean Energy (PACE) program provides Verseon
with access to convenient long-term financing for energy-related
improvements. The transition of all departments into the new
facility is underway.
About Verseon
Verseon Corporation (www.verseon.com, AIM: VSN) is a
technology-based pharmaceutical company that employs its
proprietary, computational drug discovery platform to develop novel
therapeutics that are unlikely to be found using conventional
methods. The Company is applying its platform to a growing drug
pipeline and currently has four active drug programs in the areas
of anticoagulation, diabetic macular edema, hereditary angioedema,
and oncology.
For further information, please contact:
Verseon Corporation www.verseon.com
+1 (510) 225
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Cautionary Note on Forward-Looking Statements
This press release contains forward-looking statements, which
are generally statements that are not historical facts.
Forward-looking statements can be identified by the words
"expects," "anticipates," "believes," "intends, " "estimates,"
"plans," "will," "outlook," and similar expressions.
Forward-looking statements are based on management's current plans,
estimates, assumptions, and projections, and speak only as of the
date they are made. We undertake no obligation to update any
forward-looking statement in light of new information or future
events, except as otherwise required by law. Forward-looking
statements involve inherent risks and uncertainties, most of which
are difficult to predict and are generally beyond our control.
Actual results or outcomes may differ materially from those implied
by the forward-looking statements as a result of the impact of a
number of factors.
Chairman's statement
For many years, there has been a documented decline in the
number of truly new drugs approved by the FDA. Of the fifteen novel
molecular entities approved in 2016 (down from 53 in 1996), only
five represent new chemical matter. Now more than ever, a new
approach to drug discovery is needed that can deliver the
much-needed innovation in designing chemical scaffolds.
Verseon recognized this need years ago and has established a
unique platform capable of generating an ongoing stream of novel
drug candidates optimized for each specific target protein. In an
industry that is notorious for time-consuming trial-and-error
testing, Verseon leverages computer technology where it is most
useful: to generate new chemical starting points for drug
development and to identify and optimize drug candidates. Combining
advanced computational modeling with comprehensive in-house
chemistry and biology labs, the Company has established an
efficient drug design and development workflow.
Importantly, the future of Verseon's pipeline doesn't rely on
just one single drug candidate per program. In contrast to
traditional drug discovery, Verseon's unique platform allows the
Company to develop a range of chemically distinct compounds. This
process enables the Company to redistribute resources to the most
promising candidates in each program, thereby improving the
probability of success as well as reducing cost and cycle time.
During the first half of this year, Verseon has made excellent
progress in all of its drug programs. The anticoagulation program
is leading the way with two candidates heading toward clinical
trials. In addition, Verseon has pushed into the field of rare
diseases with its new hereditary angioedema program, based on the
Company's novel class of plasma kallikrein inhibitors.
Completing Verseon's new research and administrative facility
has been a priority for the management team. The buildout has been
pushed forward with keen attention to quality of work and cost. As
the whole team moves in over the next few months, the Board
anticipates a further gain in productivity.
Verseon believes that its continued efforts to improve the
design and development process will help the Company achieve its
goal of becoming a leading supplier of novel medicines. The Board
remains confident in the Company's ability to capture the
increasing value of its drug pipeline.
Thomas A. Hecht, PhD
Chairman of the Board
Chief Executive's statement
As anticipated at the end of 2016, our drug development pipeline
continues to pick up momentum. We are finalizing phase I
preparations for our first anticoagulant, VE-1902. We identified
Australia as the ideal location to perform early-stage clinical
trials, selected experienced contract research organizations, and
expect regulatory toxicology testing to be completed by the end of
this year. In cooperation with our Cardiovascular Clinical Advisory
Board, we are now developing clinical trial strategies that will
demonstrate the unique capabilities of our precision
anticoagulants.
At the same time, we continue to optimize a number of lead
anticoagulation candidates with distinct chemotypes to manage the
risk of the clinical process. In fact, we nominated a second
development candidate earlier this year, which is only a few months
behind VE-1902 in preclinical development.
Another highlight during this period was the announcement of
promising in vivo efficacy results in our diabetic macular edema
program. Our plasma kallikrein inhibitors are being developed for
eye-drop or oral dosing, which distinguishes them from current
treatments that rely on injection into the eye.
Plasma kallikrein inhibitors have also demonstrated potential as
treatments for hereditary angioedema, a rare, life-threatening
genetic disease. To address this additional market, we have
dedicated resources to develop an orally bioavailable plasma
kallikrein inhibitor for this indication, which could complement or
even replace the current injectable therapies.
We believe that our drug candidates provide the best evidence of
the power of our innovative, computer-driven drug discovery
platform. A unique platform like ours requires the right
infrastructure that can host high-performance computing, chemistry,
biology, and administrative functions under one roof.
Over the last two years, we have designed a multifunctional
facility to best serve our needs. I am excited that as this report
is published, we are in the process of moving into the new
facility.
With our expanded infrastructure in place, we are
well-positioned to further grow shareholder value by providing a
steady stream of novel high-quality drug candidates for a variety
of diseases.
Adityo Prakash
Chief Executive Officer
Anticoagulation: Heading to the clinic
We have developed a novel class of anticoagulants that do not
disrupt platelet function while effectively targeting coagulation
in preclinical tests. This unique profile has the potential to
change the standard of care for the millions of patients in need of
long-term combined anticoagulant-antiplatelet therapy.
Precision anticoagulants needed
Cardiovascular disease (CVD) affects more than 90 million people
in the United States([1]) . This includes patients diagnosed with
acute coronary syndrome (ACS), coronary artery disease (CAD), and
peripheral artery disease (PAD), who typically require long-term
treatment with antiplatelet agents (aspirin, Plavix(R), or
Brilinta(R)) to prevent further complications. Moreover, many of
these patients are at a higher risk of developing abnormal heart
rhythms, for instance non-valvular atrial fibrillation (NVAF),
which require treatment with an anticoagulant. Conversely, a
significant fraction of patients with atrial fibrillation also have
CAD. In both cases, patients benefit from combination therapy with
an anticoagulant in addition to one or two antiplatelet agents.
For these patient populations, management of bleeding risk is a
major concern that is reflected in current treatment guidelines.
The conventional anticoagulants (e.g., warfarin and NOACs) are
known to significantly increase the risk of bleeding events, which
is further elevated in patients already receiving antiplatelet
therapy.
Recent clinical trials have shown that a combination therapy of
aspirin with sub-therapeutic doses of Xarelto(R) effectively
decreases the incidence of heart attack and stroke in patients with
ACS. However, they have also confirmed an increased risk of major
bleeding events. While life-long therapy combining an oral
anticoagulant with one or two antiplatelet drugs is desired,
current treatment guidelines limit such therapy to a maximum of six
months to a year due to safety concerns.
Verseon anticoagulants may fill the gap
Our preclinical studies have shown that the Verseon
anticoagulants selectively target the coagulation cascade without
affecting platelet function. This is reflected in a substantially
reduced bleeding risk of the Verseon drug candidates compared to
the NOACs. Owing to their novel pharmacological profile, the
Verseon anticoagulants may become the first to be suitable for
long-term combination anticoagulant-antiplatelet therapy with a
significantly reduced risk of major adverse cardiovascular events
and bleeding.
Preparing for the clinic
We are currently preparing the first development candidate,
VE-1902, for clinical trials. In addition to good efficacy and low
bleeding risk in preclinical models, the candidate shows very low
renal excretion. This further improves its therapeutic potential in
comparison to existing NOACs, which rely on renal clearance and
require dose adjustments in patients with kidney disease.
Additionally, VE-1902 has been well tolerated even at high doses in
preclinical in vivo toxicology studies.
GLP regulatory toxicology studies for VE-1902 are scheduled to
be completed by the end of the year while formulation and drug
product development are ongoing. Presently, we are synthesizing the
GMP drug substance and preparing the final GMP drug product for
clinical trials to commence in Q1 2018.
Second development candidate
While our first development candidate is heading to the clinic,
we continue to optimize a number of other lead candidates with
distinct chemotypes. Moving additional candidates into human trials
will de-risk the clinical process and increase the odds that our
anticoagulation program produces a marketable drug.
In early 2017, we nominated the second development candidate,
VE-2851. Like VE--1902, this candidate exhibits a promising
pharmacokinetic profile, good oral bioavailability, clean in vitro
tox, and similarly low bleeding liability. An initial assessment of
in vivo toxicology also looks promising. Notably, this candidate is
significantly more potent than VE--1902, which may allow for lower
dosing.
VE-2851 is expected to smoothly advance into the clinic by
leveraging already-established relationships with contract research
organizations. Additionally, VE-2851 is expected to follow similar
clinical development strategies as VE-1902 and is also projected to
enter clinical trials in 2018.
Clinical trial location chosen
Advancing a pipeline with multiple development candidates
requires us to run more than one early-stage clinical trial per
program. We have identified Australia as the best-suited location
to conduct cost-effective and efficient phase I trials for our
anticoagulants.
Australia has an excellent reputation for clinical trials with a
good clinical infrastructure. Furthermore, results of clinical
trials conducted in Australia are readily accepted by the FDA and
EMA. The country also offers attractive R&D credits and tax
incentives for international pharmaceutical companies that help
mitigate cost. Together, these factors make Australia an appealing
clinical trial location, and have led to more and more Australian
early-stage clinical trials are being sponsored by US-based
pharmaceutical companies.
Cardiovascular Clinical Advisory Board
To best position the Verseon anticoagulants in clinical trials,
we have recruited a panel of eminent cardiologists with extensive
anticoagulant clinical trial experience. Together with our in-house
team, the Cardiovascular Clinical Advisory Board is developing
strategies for phase I and phase II trials-.
-- Professor John Deanfield - Chair
British Heart Foundation Vandervell Professor of Cardiology and
Director of the National Centre for Cardiovascular Disease
Prevention and Outcomes (University College Hospital, London)
Professor Deanfield is a pioneer in cardiology and one of the
leading investigators in cardiovascular disease. He is an author on
over 500 papers and serves on numerous advisory and journal
editorial boards.
-- Professor Keith A. A. Fox
British Heart Foundation and Duke of Edinburgh Professor of
Cardiology (University of Edinburgh) and one of four 'Legends in
Cardiology' (American College of Cardiology and the European
Society of Cardiology)
Professor Fox is an award-winning cardiologist and founding
fellow of the European Society of Cardiology. He is an expert in
acute coronary artery disease and has been the lead investigator on
multiple novel anticoagulant trials.
-- Professor C. Michael Gibson
Professor of Medicine (Harvard Medical School), Interventional
Cardiologist and Cardiovascular Researcher (Beth Israel Deaconess
Medical Center)
Professor Gibson is a distinguished clinical researcher and
interventional cardiologist. He has pioneered novel measures of
coronary blood flow that are widely used today and has been the
lead investigator on several large antiplatelet and anticoagulant
trials.
-- Professor Gregory YH Lip
Consultant Cardiologist and Professor of Cardiovascular Medicine
(University of Birmingham), member of the European Heart Rhythm
Association and of the ESC Thrombosis and Cardiovascular
Pharmacology Committees
Professor Lip is one of the leading experts in the understanding
and treatment of atrial fibrillation and was the sole cardiologist
on the Thomson Reuters Science Watch list of "The World's Most
Influential Scientific Minds 2014."
Hereditary angioedema: Developing oral drugs for a rare,
life-threatening disease
Hereditary angioedema (HAE) is a rare genetic disease in which a
mutation of the C1 inhibitor gene leads to overactivation of
several serine proteases, including plasma kallikrein. The disease
is associated with recurring episodes of severe swelling, which can
affect a patient's face, extremities, intestinal tract, and
airways. Upper airway edema is considered especially dangerous and
can even be life-threatening.
HAE has an estimated prevalence of 1 in every 50,000 persons and
a growing global market that is expected to increase to $3.8
billion in 2025 from $1.7 billion in 2016.([2]) Additionally, the
orphan disease status of HAE allows for more rapid preclinical and
clinical development due to reduced regulatory requirements and a
well-established regulatory path.
Providing an alternative to injections
All currently available HAE treatments are injectables, either
intravenous or subcutaneous. They include the C1 esterase
inhibitors Cinryze(R), Berinert(R), and Ruconest(R), the bradykinin
B2 receptor antagonist Firazyr(R), and the plasma kallikrein
inhibitor Kalbitor(R).
The use of Kalbitor(R), as well as the positive phase III
results for Lanadelumab(R), Shire's subcutaneous monoclonal
antibody plasma kallikrein inhibitor, provide strong evidence that
plasma kallikrein is an important target central to the HAE disease
pathway. Our platform has enabled us to develop several
small-molecule plasma kallikrein inhibitors with good oral
pharmacokinetics exposure, which is critical for convenient,
once-a-day oral dosing.
Efficacy shown
In a well-established disease model for HAE, the
carrageenan-induced paw edema (CPE) model, our compounds have shown
excellent reduction of edema when administered orally. The Verseon
plasma kallikrein inhibitors reduce swelling over several hours,
similar to a positive control (indomethacin, a nonsteroidal
anti-inflammatory).
We have recently accelerated the scale-up for a number of
candidates in the HAE program. This will provide enough material to
continue optimization and efficient testing of these compounds.
Diabetic macular edema: Efficacy results established
We are developing plasma kallikrein inhibitors for the treatment
of diabetic macular edema (DME), a major cause of blindness
affecting 21 million people worldwide([3]) . By focusing on drugs
for topical eye-drop or oral administration, we aim to provide
much-needed alternatives to the current standard of recurring
intravitreal injections (anti-VEGF agents or corticosteroids) and
laser treatments.
More convenient administration desired
The current first-line therapies for DME are anti-VEGF agents,
intravitreal injections that are typically administered once every
four to eight weeks. Studies have shown widely varying vision
improvements following anti-VEGF therapy with about 50% of patients
reporting at most moderate vision improvements([4]) . At the same
time, intravitreal injections are associated with side effects such
as inflammation, infections, and cataracts. Despite the established
efficacy of anti-VEGF agents, there is a clear need for DME drugs
with a more convenient mode of administration that can serve as
monotherapy or in combination with current treatments.
Optimizing candidates for eye-drop or oral dosing
Using Verseon's computer-driven drug discovery platform, we have
designed a number of potent, selective plasma kallikrein inhibitors
from distinct chemical families and optimized multiple lead
candidates for activity, permeability, and solubility.
Pharmacokinetic studies indicate that our class of plasma
kallikrein inhibitors spans compounds suitable for eye-drop or oral
delivery. When administered as single eye drops in preclinical
experiments, several of our compounds show favorable exposure in
the relevant tissues of the eye (vitreous, retina, choroid). Other
compounds show good oral pharmacokinetics in preclinical
studies.
In vivo efficacy established
During the first half of 2017, we have designed in-house an
advanced preclinical in vivo model that well-represents the
progression of DME. This allows us to assess the efficacy of our
drug candidates in a highly controlled manner. At the 2017 BIO
International Conference, we presented initial results from this in
vivo efficacy model demonstrating significantly reduced retinal
leakage following systemic dosing. These results strongly suggest
that the Verseon inhibitors can successfully slow down the
progression of DME.
Optimizing multiple lead candidates
As with the other programs, we continue to optimize and test a
range of chemically diverse compounds. This will provide us with
multiple lead candidates to choose from when moving into the
clinic. Topical formulation development for our lead candidates is
ongoing as well as extensive testing in efficacy and safety
models.
Oncology: Developing novel anticancer agents
We have developed a range of novel compounds with improved
potency against a variety of cancer cell lines, including liver,
breast, ovarian, and lung. Several candidates show good stability
in liver microsomes and intact liver cells (hepatocytes),
suggesting that they will be sufficiently stable in vivo.
Consistent with these findings, some recent compounds have
demonstrated significantly improved in vivo pharmacokinetics.
Studying drug resistance
In today's oncology market, drug resistance is a major
challenge. Efflux pumps are transport proteins that move organic
substances, including neurotransmitters, toxic substances, but also
drugs, out of cells. This is a common way for cancer cells to
develop multidrug resistance, which can drastically limit the
effectiveness of therapeutics.
To address this issue, our drug candidates are undergoing
extensive testing to determine whether they are affected by
different efflux pumps. In functional assays on cancer cell lines
that overexpress these major pumps, Verseon's drug candidates have
shown comparable potency independent of the activity of the pumps.
This indicates that our drug candidates are not affected by the
overexpression of these efflux pumps in cancer cells.
Promising initial findings
In preliminary testing against cancer cell lines resistant to
common chemotherapy agents, the Verseon drug candidates retain
their efficacy.
Building on these promising results, we have recently initiated
a scale-up for the most potent compounds, which will enable us to
perform further testing in drug-resistant cell lines as well as in
vivo dosing tolerability studies.
Facilities development: A framework for growth
Our new research and administrative facility, located at 47071
Bayside Parkway, Fremont, CA, has undergone an extensive buildout
to provide the optimal environment for our interdisciplinary teams.
It consolidates computing, chemistry and biology labs, and
administrative functions in a single location and will allow us to
efficiently handle our growing pipeline of drug programs. The
transition of all departments into the new facility is currently
underway and is expected to be completed by the end of the
year.
Ideally supporting the Verseon workflow
With its brand-new exterior and well-thought-out interior with
offices, shared meeting spaces, break areas, and laboratories, the
approx. 87,500 square-foot building will enable us to streamline
our processes and foster collaboration.
The in-house chemistry labs feature workspace for exploratory
synthesis, chemical purification, process chemistry and scale-up,
as well as a nuclear magnetic resonance suite. Our extensive
biology labs are equipped with an analytical lab, microscopy, cell
culture, and bacterial culture suites, and a complex bioassays lab
with state-of-the-art procedures suites. In addition, the building
hosts our high-performance computing cluster and computational
molecular modeling team.
Financing for energy efficiency
At the end of September, we entered into a Property Assessed
Clean Energy (PACE) program for the new facility, which gives us
access to a $8.65 million loan for energy efficiency and renewable
energy projects. PACE is a state-legislated framework that provides
long-term financing repaid through property assessments. Among
other things, we will use the PACE program to fund the installation
of a clean, natural-gas-driven co-generation system, which is
expected to lower energy costs and Verseon's carbon footprint,
while reducing our reliance on the electrical grid.
Finance review
During the six months ended June 30, 2017, Verseon has continued
to fund its drug programs in anticoagulation, diabetic macular
edema, and oncology. In addition, a hereditary angioedema program
based on orally bioavailable plasma kallikrein inhibitors was
initiated.
In parallel, the Company has made substantial investments in an
infrastructure buildout that includes new facilities, laboratory
equipment, and a high-performance computing cluster. As expected,
the infrastructure buildout has been mostly completed. The Verseon
team is currently moving into the new facilities, and expect the
transition to be completed by the end of the year.
-- Total assets on the balance sheet stood at $60.2 million,
compared to $69.6 million as of December 31, 2016.
-- Cash, cash equivalents, and short-term investments stood at
$30.8 million, compared to $46.9 million as of December 31,
2016.
-- Property and equipment totaled $28.6 million, compared to
$22.3 million as of December 31, 2016.
-- Research and development expenses were $6.6 million for the
six months ended June 30, 2017, compared to $5.1 million for the
six months ended June 30, 2016, which is primarily attributed to a
further acceleration of the Company's drug programs.
-- General and administrative expenses were $3.0 million for the
six months ended June 30, 2017, compared to $2.8 million for the
six months June 30, 2016.
-- Non-cash expenses included stock-based compensation expense
of $0.1 million for the six months ended June 30, 2017, compared to
$0.4 million for the six months ended June 30, 2016, and also a
currency exchange loss of $0.4 million for the six months ended
June 30, 2017, compared to a loss of $1.6 million for the six
months ended June 30, 2016.
-- Net loss was $8.8 million or $0.06 per basic share for the
six months ended June 30, 2017, compared to a net loss of $9.3
million or $0.06 per basic share for the six months ended June 30,
2016.
Research and development facility ownership subsidiary
In August 2015, we purchased a property in Fremont, California
under our wholly owned subsidiary, VRH1 LLC. The property includes
a building that has been undergoing a buildout to tailor it to our
specific laboratory needs. The facility houses chemistry and
biology laboratories, computational infrastructure, and corporate
offices.
Capital structure
At June 30, 2017, Verseon's issued share capital consisted of
151,409,974 shares of common stock and the Company held 42,917
shares in treasury, as compared to 151,414,659 shares of common
stock outstanding with no shares in treasury at December 31,
2016.
Independent auditor's report
To the Directors of Verseon Corporation
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended June 30, 2017 which comprises the Consolidated
balance sheets, the Consolidated statements of operations and
comprehensive loss, the Consolidated statements of cash flows, the
Consolidated statements of stockholders' equity, and the related
notes A to K. We have read the other information contained in the
half-yearly financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
This report is made solely to the company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Auditing Practices
Board. Our work has been undertaken so that we might state to the
company those matters we are required to state to it in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company, for our review work, for this
report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the AIM Rules of the London Stock Exchange.
As disclosed in note A, the annual financial statements of the
company are prepared in accordance with the accounting principles
generally accepted in the United States of America. The condensed
set of consolidated financial statements included in this
half-yearly financial report has been prepared in accordance with
accounting principles generally accepted in the United States of
America.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended June
30, 2017 is not prepared, in all material respects, in accordance
with accounting principles generally accepted in the United States
of America and the AIM Rules of the London Stock Exchange.
Deloitte LLP
Statutory Auditor
Reading, United Kingdom
September 25, 2017
Condensed consolidated balance sheets
As of June 30, 2017 and December 31, 2016
June 30,
(US $'000, except share amounts December
and par values) 2017 31, 2016
--------------------------------------------- -------- ---------
Assets
--------------------------------------------- -------- ---------
Current assets
Cash and cash equivalents 16,393 29,225
Short-term investments 14,412 17,643
Prepaid expenses and other current
assets 848 370
--------------------------------------------- -------- ---------
Total current assets 31,653 47,238
Property and equipment, net 28,590 22,326
Total assets 60,243 69,564
Liabilities and stockholders' equity
--------------------------------------------- -------- ---------
Current liabilities
Accounts payable 2,760 2,067
Accrued liabilities 1,360 2,550
Total current liabilities 4,120 4,617
--------------------------------------------- -------- ---------
Total liabilities 4,120 4,617
Commitments and contingencies
--------------------------------------------- -------- ---------
Stockholders' equity
--------------------------------------------- -------- ---------
Common stock-$0.001 par value, 300,000,000
shares authorized as of June 30,
2017 and December 31, 2016, respectively,
151,409,974 and 151,414,659 shares
issued and outstanding (exclusive
of Treasury Stock of 42,917 and
0) as of June 30, 2017, and December
31, 2016, respectively. 151 151
Additional paid-in capital 136,795 136,646
Treasury stock APIC (11) -
Loan receivable from stockholders (14,961) (14,830)
Accumulated deficit (69,567) (60,728)
Accumulated other comprehensive
loss (4) (5)
============================================= ======== =========
Total stockholders' equity 52,403 61,234
--------------------------------------------- -------- ---------
Non-controlling interests in subsidiaries 3,720 3,713
--------------------------------------------- -------- ---------
Total equity 56,123 64,947
--------------------------------------------- -------- ---------
Total liabilities and stockholders'
equity 60,243 69,564
--------------------------------------------- -------- ---------
See accompanying notes to the condensed consolidated financial
statements.
These condensed consolidated financial statements were approved
by the Board of Directors on September 25, 2017 and signed on its
behalf by:
Adityo Prakash
Chief Executive Officer
Condensed consolidated statement of operations and comprehensive
loss
For the six months ended June 30, 2017 and 2016
June 30, June 30,
(US $'000, except share and per 2017 2016
share amounts)
=========================================== ============= =============
Operating expenses
Research and development expenses 6,553 5,146
General and administrative expenses 2,952 2,797
=========================================== ============= =============
Total operating expenses 9,505 7,943
=========================================== ============= =============
Operating loss (9,505) (7,943)
Interest expense - (3)
Interest income 257 237
Currency exchange gain/(loss) 408 (1,590)
=========================================== ============= =============
Loss before income taxes (8,840) (9,299)
Income tax provision - -
=========================================== ============= =============
Net loss (8,840) (9,299)
Net loss attributable to non-controlling
interests 1 1
=========================================== ============= =============
Net loss attributable to Verseon
Corporation (8,839) (9,298)
=========================================== ============= =============
Net loss (8,840) (9,299)
Unrealized gains on available-for-sale
securities - 42
=========================================== ============= =============
Total comprehensive loss (8,840) (9,257)
Comprehensive loss attributable
to non-controlling interests 1 1
=========================================== ============= =============
Comprehensive loss attributable
to Verseon Corporation (8,839) (9,256)
=========================================== ============= =============
Net loss attributable to Verseon
Corporation common stockholders
per share-basic and diluted (0.06) (0.06)
Weighted-average shares of stock
outstanding used in computing net
loss per share-basic and diluted 151,429,539 151,279,966
See accompanying notes to the condensed
consolidated financial statements.
Condensed consolidated statements of cash flows
For the six months ended June 30, 2017 and 2016
June 30, June 30,
(US $'000) 2017 2016
========== ==========
Cash flows from operating activities
Net loss (8,840) (9,299)
Adjustments to reconcile net loss
to net cash used in operating activities
============================================= ========== ==========
Depreciation 228 111
Currency exchange (gain)/loss from
re-measurement (408) 1,590
Stock-based compensation expense 149 363
Interest earned from loan receivable
from stockholders (182) (146)
============================================= ========== ==========
Changes in assets and liabilities
============================================= ========== ==========
Increase/(Decrease) in prepaid expenses
and other current assets (478) (137)
Increase/(Decrease) in accounts
payable (72) (76)
Increase/(Decrease) in accrued liabilities 2 (230)
============================================= ========== ==========
Net cash used in operating activities (9,601) (7,824)
============================================= ========== ==========
Cash flows from investing activities
============================================= ========== ==========
Purchases of property and equipment (6,919) (2,045)
Purchases of available-for-sale
securities investments (14,608) (7,609)
Maturities of available-for-sale
securities investments 17,840 15,719
Net cash (used in)/provided by investing
activities (3,687) 6,065
============================================= ========== ==========
Cash flows from financing activities
--------------------------------------------- ---------- ----------
Proceeds from exercise of stock
options and warrants - 31
Proceeds from issuance of equity 8 -
in Nirog
Proceeds from repayment of promissory 40 -
note
Repayment of debt - (219)
--------------------------------------------- ---------- ----------
Net cash provided by/(used in) financing
activities 48 (188)
============================================= ========== ==========
Net decrease in cash and cash equivalents (13,240) (1,947)
============================================= ========== ==========
Effect of currency exchange rate
changes 408 (1,590)
============================================= ========== ==========
Cash and cash equivalents at the
beginning of the period 29,225 41,764
============================================= ========== ==========
Cash and cash equivalents at the
end of the period 16,393 38,227
============================================= ========== ==========
Supplemental disclosure of non-cash
investing and financing activities
====================================== ======= =====
Purchases of property and equipment
under accounts payable and accrued
liabilities 2,463 111
-------------------------------------- ------- -----
Interest payments made were $0 and $83 thousand during the six
months ended June 30, 2017 and 2016, respectively.
No income taxes paid during the six months ended June 30, 2017
and 2016.
See accompanying notes to the condensed consolidated financial
statements.
Condensed consolidated statements of stockholders' equity
For the six months ended June 30, 2017 and the year ended
December 31, 2016
Common Loan Stock- Total
Stock Additional Treasury receivable Other holders' Non- stock-holders'
at par paid-in Stock from Accumu-lated compre-hensive equity controlling equity
(US $'000) value capital APIC stock-holders deficit gain (loss) (deficit) interest (deficit)
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Balance at
December 31,
2015 151 135,808 - (14,541) (41,246) (36) 80,136 3,718 83,854
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Exercise of
stock options
and
warrants-Common
Stock * 31 - - - - 31 - 31
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Issuance of
shares from
Restricted Stock
Units - - - - - - - - -
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Loans to
stockholders - - (141) - - (141) - (141)
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Stock-based
compensation - 397 - - - - 397 - 397
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Net loss - - - - (9,299) - (9,299) - (9,299)
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Net loss
attributable to
non-controlling
interests - - - - 1 - 1 (1) -
Other
comprehensive
gain - - - - - 42 42 - 42
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Balance at June
30, 2016 151 136,236 - (14,682) (50,544) 6 71,167 3,717 74,884
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Exercise of
stock options
and
warrants-Common
Stock - - - - - - - - -
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Issuance of
shares from
Restricted Stock
Units - - - - - - - - -
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Loans to
stockholders - - - (148) - - (148) - (148)
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Stock-based
compensation - 410 - - - - 410 - 410
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Net loss - - - - (10,188) - (10,188) - (10,188)
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Net loss
attributable to
non-controlling
interests - - - - 4 - 4 (4) -
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Other
comprehensive
gain - - - - - (11) (11) - (11)
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Balance at
December 31,
2016 151 136,646 - (14,830) (60,728) (5) 61,234 3,713 64,947
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Exercise of
stock options
and
warrants-Common
Stock - - - - - - - - -
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Issuance of
shares from
Restricted Stock
Units - - - - - - - - -
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Loans to
stockholders - - (11) (131) - - (142) - (142)
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Stock-based
compensation - 149 - - - - 149 - 149
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Investment in
Nirog - - - - - - - 8 8
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Net loss - - - - (8,840) - (8,840) - (8,840)
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Net loss
attributable to
non-controlling
interests - - - - 1 - 1 (1) -
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Other
comprehensive
gain - - - - - 1 1 - 1
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
Balance at June
30, 2017 151 136,795 (11) (14,961) (69,567) (4) 52,403 3,720 56,123
---------------- ------ ---------- -------- ------------- ------------ -------------- --------- ----------- --------------
* Amount less than $1,000 and insignificant after rounding.
See accompanying notes to the condensed consolidated financial
statements.
Condensed consolidated statements of stockholders' equity
For the six months ended June 30, 2017 and the year ended
December 31, 2016 (continued)
Total
Common shares
(Shares) Stock outstanding
----------------------------------------------- ------------ -------------
Balance at December 31, 2015 150,878,815 150,878,815
Exercise of stock options and warrants-Common
Stock 476,166 476,166
Issuance of shares from Restricted
Stock Units 31,910 31,910
Balance at June 30, 2016 151,386,891 151,386,891
Exercise of stock options and warrants-Common
Stock - -
Issuance of shares from Restricted
Stock Units 27,768 27,768
Balance at December 31, 2016 151,414,659 151,414,659
Exercise of stock options and warrants-Common
Stock - -
Issuance of shares from Restricted
Stock Units 38,232 38,232
Treasury Stock (42,917) (42,917)
Balance at June 30, 2017 151,409,974 151,409,974
----------------------------------------------- ------------ -------------
See accompanying notes to the condensed consolidated financial
statements.
Notes to the condensed consolidated financial statements
A. Basis of presentation and principles of consolidation
The condensed consolidated financial statements of the Company
are prepared in accordance with accounting principles generally
accepted in the United States of America ("US GAAP") applicable to
interim financial statements. Accordingly, they do not include all
of the information and footnotes required by US GAAP for complete
financial statements. In the opinion of the management of the
Company, all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation of financial
position, operating results, and cash flows for the interim period
have been included in these condensed consolidated financial
statements.
These condensed consolidated financial statements should be read
in conjunction with the Company's consolidated financial statements
for the year ended December 31, 2016.
The financial information is presented in United States Dollars
("US$"). All intercompany amounts have been eliminated in
consolidation.
These condensed consolidated financial statements include the
financial position and performance of Nirog Therapeutics LLC
("Nirog"), a Delaware limited liability company, and VRH1 LLC
("VRH1"), a wholly owned California limited liability company. VRH1
was established in August 2015 to acquire a property in Fremont,
California to house the Company's drug discovery and development
operations as well as the corporate headquarters. Nirog was
established in September 2009 as a vehicle to fund the research and
development of the Company's anticoagulation program. The Company
owned 78.44% of the outstanding equity of Nirog as of June 30, 2017
as compared to 76.8% as of December 31, 2016.
The Company has formed Verseon India Private Limited ("VIPL")
together with a Mauritius based private equity investor. VIPL was
incorporated in Andhra Pradesh, India in March 2006 to manage and
maintain the Company's supercomputing cluster. The Company has
since closed this operation in 2009 and is in the process of
dissolving the legal entity.
The accounting policies applied are consistent with those that
were applied to the consolidated financial statements for the year
ended December 31, 2016.
B. Recent accounting pronouncements
In May 2014, the Financial Accounting Standards Board ("FASB")
issued Accounting Standards Update ("ASU") No. 2014-09 "Revenue
from Contracts with Customers (Topic 606)". The standard's core
principle is that a reporting entity will recognize revenue when it
transfers promised goods or services to customers in an amount that
reflects the consideration to which the entity expects to be
entitled in exchange for those goods or services. In August 2015,
the FASB decided to postpone the effective date of the new standard
by one year. The standard will be effective for fiscal years
(including interim reporting periods within those fiscal years)
beginning after December 15, 2017. Early adoption is permitted for
fiscal years (including interim reporting periods within those
fiscal years) beginning after December 15, 2016. Entities will have
the option of using either a full retrospective or a modified
retrospective approach to adopt this new guidance. Since the
Company has yet to report revenue, the Company does not expect that
the adoption of this standard will have an impact on its
consolidated interim report.
In January 2016, the FASB issued ASU No. 2016-01, "Recognition
and Measurement of Financial Assets and Financial Liabilities",
which eliminates the requirement for public companies to disclose
the method(s) and significant assumptions used to estimate the fair
value that is required to be disclosed for financial instruments
measured at amortized cost on the balance sheet. Additionally, the
standard requires public entities to use the exit price notion when
measuring the fair value of financial instruments for disclosure
purposes. Furthermore, the standard requires presentation of
financial assets and liabilities by measurement category and form
of financial asset on the balance sheet or accompanying notes to
the financial statements. The standard will be effective for fiscal
years beginning after December 15, 2017, including interim periods
within those fiscal years. The Company is currently evaluating the
impact of adopting this guidance on its consolidated interim
report.
In February 2016, the FASB issued ASU No. 2016-02, "Leases
(Topic 842)", which establishes the principles to report
transparent and economically neutral information about the assets
and liabilities that arise from leases. It requires lessees to
recognize the lease assets and lease liabilities that arise from
leases on the balance sheet and to disclose qualitative and
quantitative information about lease transactions, such as
information about variable lease payments and options to renew and
terminate leases. The new standard will be effective for fiscal
years beginning after December 15, 2018. The Company is currently
evaluating the impact of adopting of this guidance on its
consolidated interim report.
In March 2016, the FASB issued ASU No. 2016-09, "Compensation-
Stock Compensation (Topic 178): Improvements to Employee
Share-Based Payment Account", which offers simplifications of
several aspects of accounting for share-based payment transactions,
including the income tax consequences, classification of awards as
either equity or liabilities, and classification on the statement
of cash flows. The standard is effective for fiscal years beginning
after December 15, 2016. The Company is currently evaluating the
impact of adopting of this guidance on its consolidated interim
report.
In June 2016, the FASB issued ASU No. 2016-13, "Financial
Instruments- Credit Losses (Topic 326): Measurement of Credit
Losses on Financial Instruments", which aims to provide financial
statement users with more decision-useful information about the
expected credit losses on financial instruments and other
commitments to extend credit held by a reporting entity at each
reporting date. It replaces the incurred loss impairment
methodology in current GAAP with a methodology that reflects
expected credit losses and requires consideration of a broader
range of reasonable and supportable information to inform credit
loss estimates. The standard is effective for fiscal years
beginning after December 15, 2019. Early adoption is permitted. The
Company is currently evaluating the impact of adopting this
guidance on its consolidated interim report.
In May 2017, the FASB issued ASU No. 2017-09 (ASC Topic 718),
"Stock Compensation: Scope of Modification Accounting". The
amendments in this ASU provide guidance about which changes to the
terms or conditions of a share-based payment award require an
entity to apply modification accounting. The Company is required to
adopt the guidance in the first quarter of fiscal year 2019. Early
adoption is permitted. The Company is in the process of assessing
the impact of this ASU on its consolidated interim report.
During the six months ended June 30, 2017, there were many
accounting standard updates issued by FASB. However, only the
updates that are relevant to the Company have been included
here.
C. Net loss per share
In accordance with the provisions of Accounting Standards
Codification ("ASC") Topic 260, "Earnings per Share", basic net
loss per share of common stock is computed by dividing net loss
attributable to common stockholders by the weighted-average number
of shares of common stock outstanding during the period, without
consideration of common stock equivalents.
Diluted net loss per share is computed by dividing net loss
attributable to common stockholders by the sum of the
weighted-average number shares of common stock outstanding and
dilutive common stock equivalent shares outstanding for the period.
Potentially dilutive common stock equivalent shares, which include
incremental shares of common stock issuable upon (i) the exercise
of outstanding stock options and warrants and (ii) vesting of
restricted stock units (RSUs), are only included in the calculation
of diluted net loss per share when their effect is dilutive.
For the six months ended June 30, 2017 and 2016, the following
potentially dilutive securities were excluded from the calculation
of diluted net loss per share due to their anti-dilutive
effect:
Six months ended
June 30,
================================== ====================
2017 2016
================================== ========= =========
Options to purchase Common Stock 1,557,925 1,733,825
Warrants to purchase Common
Stock 2,351,965 2,351,965
Restricted Stock Units 76,359 60,625
================================== ========= =========
Total 3,986,249 4,146,415
================================== ========= =========
D. Stock-based compensation
During the six months ended June 30, 2017, the Company granted
stock options and warrants to employees and consultants to purchase
80,000 shares of common stock, as compared to 269,000 shares of
common stock during the same period in 2016. The weighted-average
fair value of each option and warrant issued during the six months
ended June 30, 2017 and 2016 was estimated at the date of grant
using the Black-Scholes valuation model with the following
assumptions:
Six months ended
June 30,
------------------------
2017 2016
----------- -----------
Expected volatility 50% 50%
Expected dividend yields 0% 0%
Expected risk-free interest
rate 2.0%-2.1% 1.4%-1.7%
Expected life of options and
warrants 5-6 years 5-6 years
------------------------------- ----------- -----------
Total stock-based compensation expense recognized associated
with stock options, warrants, and restricted stock units during the
six months ended June 30, 2017 and 2016, respectively, was as
follows:
Six months ended
June 30,
====================
(US $'000) 2017 2016
============================= ========= =========
Research and development 154 162
General and administrative (5) 201
============================= ========= =========
Total 149 363
============================= ========= =========
E. Cash, cash equivalents and investments
The amortized cost and fair value of cash equivalents and
investments at June 30, 2017 and December 31, 2016 were as
follows:
June 30, 2017
==============================================
Amortized Gross unrealized
(US $'000) cost losses Fair value
=========================== ========= ======================= ==========
Money market fund 4,120 - 4,120
Certificate of deposits 7,729 - 7,729
Municipal securities 3,985 (2) 3,985
Government sponsored
agencies 7,430 (2) 7,430
Commercial paper - - -
Corporate securities - - -
=========================== ========= ======================= ==========
Total available-for-sale
securities 23,264 (4) 23,264
=========================== ========= ======================= ==========
Classified as:
Cash equivalents * 8,852
Short-term investments 14,412
Total available-for-sale
securities 23,264
=========================== ========= ======================= ==========
December 31, 2016
==============================================
Amortized Gross unrealized
(US $'000) cost losses Fair value
=========================== ========= ======================= ==========
Money market fund 12,797 - 12,797
Certificate of deposits 6,069 - 6,069
Municipal securities 4,211 (2) 4,209
Government sponsored
agencies 6,720 (3) 6,717
Commercial paper 4,398 - 4,398
Corporate securities 1,000 - 1,000
=========================== ========= ======================= ==========
Total available-for-sale
securities 35,195 (5) 35,190
=========================== ========= ======================= ==========
Classified as:
Cash equivalents * 17,547
Short-term investments 17,643
Total available-for-sale
securities 35,190
=========================== ========= ======================= ==========
*Cash and cash equivalents at June 30, 2017 of $16,393 thousand
comprises cash of $7,541 thousand and cash equivalents of $8,852
thousand, as compared to cash and cash equivalents of $29,225
thousand comprising cash of $11,678 thousand and cash equivalents
of $17,547 thousand at December 31, 2016.
The Company invested the funds raised from the IPO in May 2015
into instruments with the goals of preservation of principal and
sufficient liquidity to meet its operating and investment cash
requirements. All available-for-sale securities held as of June 30,
2017 had contractual maturities of less than two years with high
quality investment grade ratings. Realized gains on
available-for-sale securities for the six months ended June 30,
2017 were $74 thousand, as compared to $70 thousand during the
second half year of 2016.
As of June 30, 2017, there was no unrealized loss on
available-for-sale investments and the Company has not recorded any
impairment charges on marketable securities related to other-than
temporary declines in market value.
In accordance with the guidance of Accounting Standards
Codification ("ASC") Top 820, "Fair Value Measurement", fair value
is estimated by applying the following hierarchy, which prioritizes
the inputs used to measure fair value into three levels and bases
the categorization within the hierarchy upon the lowest level of
input that is available and significant to the fair value
measurement:
Level 1-Quoted prices in active markets for identical assets or
liabilities.
Level 2-Observable inputs other than quoted prices in active
markets for identical assets and liabilities, quoted prices for
identical or similar assets or liabilities in inactive markets, or
other inputs that are observable or can be corroborated by
observable market data for substantially the full term of the
assets or liabilities.
Level 3-Inputs that are generally unobservable and typically
reflect management's estimate of assumptions that market
participants would use in pricing the asset or liability.
The Company's financial assets and liabilities subject to fair
value measurements on a recurring basis and the level of inputs
used in such measurements are as follows as of June 30, 2017 and
December 31, 2016:
(US $'000) June 30, 2017
====================================
Description Level Level Level Total
1 2 3
============================ ======= ======== ======= ========
Money market fund 4,120 - - 4,120
Certificate of deposits - 7,729 - 7,729
Municipal bonds - 3,985 - 3,985
Government sponsored
agencies - 7,430 - 7,430
Commercial paper - - - -
Corporate debt securities - - - -
============================ ======= ======== ======= ========
Total 4,120 19,144 - 23,264
============================ ======= ======== ======= ========
(US $'000) December 31, 2016
=====================================
Description Level Level Level Total
1 2 3
============================ ======== ======== ======= ========
Money market fund 12,797 - - 12,797
Certificate of deposits - 6,069 - 6,069
Municipal bonds - 4,209 - 4,209
Government sponsored
agencies - 6,717 - 6,717
Commercial paper - 4,398 - 4,398
Corporate debt securities - 1,000 - 1,000
============================ ======== ======== ======= ========
Total 12,797 22,393 - 35,190
============================ ======== ======== ======= ========
F. Segment reporting
ASC Topic 280 "Segment Reporting" establishes standards for the
way that public business enterprises report information about
business segments and related disclosures about products and
services, geographical areas and major customers.
The Chief Executive Officer ("CEO") of the Company has been
identified as the Chief Operating Decision Maker as defined by ASC
Topic 280. The CEO of the Company allocates resources based upon
information related to its one operating segment, pharmaceutical
research. Accordingly, the Company has concluded it has one
reportable segment.
G. Income tax
As the Company continues to incur pre-tax losses through
operations, it has determined that it is more likely than not that
the benefit of deferred tax assets will not be realized and
therefore, the Company continues to maintain a full valuation
allowance offsetting any change in deferred taxes.
H. Related-party transactions
Warrants issued to Mr. Bhatia previously to acquire a total of
42,104 shares of common stock were outstanding at June 30, 2017 and
June 30, 2016 respectively.
Loan receivable from stockholders refers to employees and
consultants who purchased the Company's stock through the issuance
of promissory notes by the Company. As of June 30, 2017, total loan
receivable from stockholders was $15.0 million as compared to $14.8
million as of December 31, 2016.
Warrants issued to Mr. Cade and Chaka to acquire a total of
537,388 shares of common stock were outstanding at June 30, 2017
and June 30, 2016 respectively. The Company also engaged Chaka to
provide consulting services that totaled to $0.1 million in each of
the six-month periods ended June 30, 2017 and 2016.
I. Commitments and contingencies
Rental expense for operating leases amounted to $0.4 million for
the six months ended June 30, 2017 and 2016, respectively. Other
than the operating leases disclosed in the annual report for the
year ended December 31, 2016, there were no other commitments and
contingencies for the six months ended June 30, 2017.
J. Stockholders' equity
The total number of shares of Common Stock that the Company is
authorized to issue is 300,000,000 shares at a par value of $0.001
per share, and the total number of shares of Preferred Stock that
is authorized to issue is 30,000,000 shares at a par value of
$0.001 per share.
The Verseon Corporation 2015 Equity Incentive Plan ("2015 Plan")
provides for the grant of stock options, stock appreciation rights,
restricted stock, restricted stock units, performance units,
performance shares, cash-based awards, and other stock-based awards
to non-employee directors, officers, employees, advisors,
consultants, and independent contractors. An aggregate of
15,000,000 shares of common stock is available for delivery
pursuant to awards under the 2015 Plan. The 2015 Plan contains a
provision that provides annual increases in the number of common
stock available for delivery pursuant to awards on each January
1(st) beginning January 1, 2016, and ending on (and including)
January 1, 2025. Such annual increase equals to 2% of the total
shares of common stock outstanding on December 31(st) of the
preceding calendar year; provided, that the Board has the authority
to decide, prior to the first day of any calendar year, that there
will be no increase or a lesser increase for such calendar year. In
September 2015, the plan was amended to limit the annual increase
of number shares of incentive stock options ("ISO") available for
grant to a maximum of 3,000,000 shares. Accordingly, the total
number of shares of common stock available for grant under the 2015
Plan increased on January 1, 2016 by 3,017,576 shares, including
3,000,000 shares available for ISO grants as in accordance with the
September 2015 plan amendment. The total number of shares of common
stock available for grant under the 2015 Plan increased on January
1, 2017 by 3,028,293 shares, including 3,000,000 shares available
for ISO grants as in accordance with the September 2015 plan
amendment. As of June 30, 2017, a total of 19,691,715 shares of
common stock were available for grant under the 2015 Plan compared
to 16,420,666 shares available for grant as of December 31,
2016.
During the first six month ended on June 30 2017 and 2016,
38,232 shares and 31,910 shares of common stock were issued from
the vesting of restricted stock units (RSUs); 0 shares and 456,116
shares of common stock were issued from exercises of certain
warrants in connection of long-term convertible notes; and 0 shares
and 20,050 shares were issued from exercises of previously granted
options, respectively.
During the first six months ended on June 30 2017 and 2016, the
Company repurchased 42,917 and 0 of common shares respectively.
During the first six months ended on June 30 2017, the Company
granted certain employees and consultants options to purchase an
aggregate of 80,000 shares of common stock and no RSUs. During the
same period in 2016, the Company granted employees and consultants
options to purchase an aggregate of 269,000 shares of common stock
and 13,888 RSUs.
As of June 30, 2017, the Company had 151,409,974 shares of
common stock outstanding (excluding Treasury Stock of 42,917) and
no shares of preferred stock outstanding compared to 151,414,659
shares of common stock outstanding (no Treasury Stock) and no
shares of preferred stock outstanding as of December 31, 2016.
K. Subsequent event
In September 2017, VRH1 secured $8.65 million to finance
energy-related upgrades to its property via the Property Assessed
Clean Energy (PACE) program. PACE is a state-legislated framework
providing long-term financing for energy efficiency, renewable
energy, and water conservation projects that is repaid through
property assessments. PACE is non-recourse financing that is also
non-accelerating and transferable upon property sale. The financing
carries a fixed 6.50% interest for 25 years and the term of the
property assessment is 25 years. These funds will be used for
building and installation of a natural gas plant and solar power
panels along with other energy efficiency upgrades, all of which
will allow the Company to significantly reduce its ongoing
power-related operational costs.
- Ends -
[1] www.heart.org, Sep. 2017
[2] Transparency Market Research, August 2017
[3] Diabetes Care, 2012
[4] M. A. Singer et al., F1000Res, 2016; 5
This information is provided by RNS
The company news service from the London Stock Exchange
END
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Verseon (LSE:VSN)
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