EX-99.1 2 tm2223584d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

ADDEX THERAPEUTICS LTD

 

INDEX TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Unaudited Interim Condensed Consolidated Financial Statements  
Unaudited Interim Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021 2
Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss for the three-month and the six-month periods ended June 30, 2022 and 2021 3
Unaudited Interim Condensed Consolidated Statements of Changes in Equity for the six-month periods ended June 30, 2022 and 2021 4
Unaudited Interim Condensed Consolidated Statements of Changes in Equity for the three-month periods ended June 30, 2022 and 2021 5
Unaudited Interim Condensed Consolidated Statements of Cash Flows for the six-month periods ended June 30, 2022 and 2021 7
Unaudited Notes to the Interim Condensed Consolidated Financial Statements for the three-month and six-month periods ended June 30, 2022 8

 

 

 

 

Addex Therapeutics │ Interim Condensed Consolidated Financial Statements

 

Unaudited Interim Condensed Consolidated Balance Sheets

 

as of June 30, 2022, and December 31, 2021

 

    Notes    

June 30,

2022

     December 31,
2021		  
                   
              Amounts in Swiss francs  
ASSETS                        
                         
Current assets                        
Cash and cash equivalents     6       8,812,858       20,484,836  
Other financial assets     7/15     3,561       17,145  
Trade and other receivables     7       331,770       164,785  
Contract asset     7       78,253       159,636  
Prepayments     7       1,719,694       1,115,374  
Total current assets             10,946,136       21,941,776  
                         
Non-current assets                        
Right-of-use assets     8       323,407       469,989  
Property, plant and equipment     9       54,431       72,111  
Non-current financial assets     10       58,075       57,908  
Total non-current assets             435,913       600,008  
                         
Total assets             11,382,049       22,541,784  
                         
LIABILITIES AND EQUITY                        
                         
Current liabilities                        
Current lease liabilities             242,782       287,698  
Payables and accruals     11       4,053,370       3,847,145  
Total current liabilities             4,296,152       4,134,843  
                         
Non-current liabilities                        
Non-current lease liabilities             94,169       194,316  
Retirement benefits obligations     14       129,276       1,281,525  
Total non-current liabilities             223,445       1,475,841  
                         
Equity                        
Share capital     12       65,272,952       49,272,952  
Share premium     12       283,716,463       283,981,361  
Treasury shares reserve     12       (27,669,822 )     (11,703,279 )
Other reserves             27,645,648       24,437,868  
Accumulated deficit             (342,102,789 )     (329,057,802 )
Total equity             6,862,452       16,931,100  
                         
Total liabilities and equity             11,382,049       22,541,784  

 

The accompanying notes form an integral part of these consolidated financial statements.

 

2 

 

 

Addex Therapeutics │ Interim Condensed Consolidated Financial Statements

 

Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss

 

for the three-month and six-month periods ended June 30, 2022 and 2021

 

      

For the three months ended
June 30,

  

For the six months ended
June 30,  

 
  

Notes 

  

2022 

  

2021 

  

2022 

  

2021 

 
                     
   Amounts in Swiss francs 
Revenue from contract with customer   15    183,354    992,595    420,591    1,836,818 
Other income   16    3,089    79,285    9,800    157,483 
                          
Operating costs                         
Research and development        (5,747,026)   (3,731,839)   (9,512,473)   (6,479,882)
General and administration        (1,531,632)   (1,846,678)   (3,772,718)   (3,169,084)
Total operating costs   17    (7,278,658)   (5,578,517)   (13,285,191)   (9,648,966)
                          
Operating loss        (7,092,215)   (4,506,637)   (12,854,800)   (7,654,665)
                          
Finance income         205    (160,573)   300    368,582 
Finance expense         (129,242)   (22,939)   (190,487)   (43,679)
Finance result    19    (129,037)   (183,512)   (190,187)   324,903 
                          
Net loss before tax         (7,221,252)   (4,690,149)   (13,044,987)   (7,329,762)
Income tax expense        -    -    -    - 
Net loss for the period         (7,221,252)   (4,690,149)   (13,044,987)   (7,329,762)
                          
Basic and diluted loss per share for loss attributable to the ordinary equity holders of the Company    20    (0.19)   (0.14)   (0.34)   (0.22)
                          
Other comprehensive income                         
Items that will never be reclassified to profit and loss:                         
Remeasurements of retirement benefits obligation        478,949    126,061    1,144,768    251,462 
Items that may be classified subsequently to profit and loss:                         
Exchange difference on translation of foreign operations        208    1,232    235    1,696 
Other comprehensive income for the period, net of tax        479,157    127,293    1,145,003    253,158 
                          
Total comprehensive loss for the period        (6,742,095)   (4,562,856)   (11,899,984)   (7,076,604)

 

The accompanying notes form an integral part of these consolidated financial statements.

 

3 

 

 

Addex Therapeutics │ Interim Condensed Consolidated Financial Statements

 

Unaudited Interim Condensed Consolidated Statements of Changes in Equity

 

for the six-month periods ended June 30, 2022 and 2021

 

   Amounts in Swiss francs 
  

Notes

   Share Capital   Share Premium   Treasury Shares Reserve   Foreign Currency Translation Reserve   Other Reserves   Accumulated Deficit   Total 

Balance as of January 1, 2021

        32,848,635    286,888,354    (6,078,935)   (657,230)   15,314,867    (313,705,888)   14,609,803 
Net loss for the period        -    -    -    -    -    (7,329,762)   (7,329,762)
Other comprehensive income for the period        -    -    -    1,696    251,462    -    253,158 

Total comprehensive loss for the period

        -    -    -    1,696    251,462    (7,329,762)   (7,076,604)
Issue of shares-third parties   12    6,900,000    3,199,323    -    -    -    -    10,099,323 
Issue of treasury shares   12    9,524,317    -    (9,524,317)   -    -    -    - 
Cost of share capital issuance        -    (1,902,487)   -    -    -    -    (1,902,487)
Value of share-based services   13    -    -    -    -    522,951    -    522,951 
Movement in treasury shares:   12                                    
Settlement of supplier invoices        -    35,115    80,306    -    -    -    115,421 
Net purchases under liquidity agreement        -    (4,422)   (22,203)   -    -    -    (26,625)
Other net sales of treasury shares        -    41,004    39,940    -    -    -    80,944 

Balance as of June 30, 2021

        49,272,952    288,256,887    (15,505,209)   (655,534)   16,089,280    (321,035,650)   16,422,726 
                                         

Balance as of January 1, 2022

        49,272,952    283,981,361    (11,703,279)   (657,525)   25,095,393    (329,057,802)   16,931,100 
Net loss for the period        -    -    -    -    -    (13,044,987)   (13,044,987)
Other comprehensive income for the period        -    -    -    235    1,144,768    -    1,145,003 

Total comprehensive loss for the period

        -    -    -    235    1,144,768    (13,044,987)   (11,899,984)
Issue of treasury shares   12    16,000,000    -    (16,000,000)   -    -    -    - 
Cost of treasury shares issuance        -    (215,633)   -    -    -    -    (215,633)
Related costs of sales shelf-registration        -    (2,223)   -    -    -    -    (2,223)
Cost of pre-funded warrants sold        -    -    -    -    (36,534)   -    (36,534)
Value of share-based services   13    -    -    -    -    2,099,311    -    2,099,311 
Movement in treasury shares:   12                                    
Net purchases under liquidity agreement        -    (47,042)   33,457    -    -    -    (13,585)

Balance as of June 30, 2022

        65,272,952    283,716,463    (27,669,822)   (657,290)   28,302,938    (342,102,789)   6,862,452 

 

The accompanying notes form an integral part of these consolidated financial statements.

 

4 

 

 

Addex Therapeutics │ Interim Condensed Consolidated Financial Statements

 

Unaudited Interim Condensed Consolidated Statements of Changes in Equity

 

for the three-month period ended June 30, 2022 (1/2)

 

   Amounts in Swiss francs 
   Notes   Share Capital   Share Premium   Treasury Shares Reserve   Foreign Currency Translation Reserve   Other Reserves   Accumulated Deficit   Total 

Balance as of January 1, 2021

        32,848,635    286,888,354    (6,078,935)   (657,230)   15,314,867    (313,705,888)   14,609,803 
Net loss for the period        -    -    -    -    -    (2,639,613)   (2,639,613)
Other comprehensive income for the period        -    -    -    464    125,401    -    125,865 

Total comprehensive loss for the period

        -    -    -    464    125,401    (2,639,613)   (2,513,748)
Issue of shares – third parties   12    6,900,000    3,199,323    -    -    -    -    10,099,323 
Cost of share capital issuance        -    (1,767,053)   -    -    -    -    (1,767,053)
Value of share-based services   13    -    -    -    -    186,102    -    186,102 
Movement in treasury shares:   12                                    
Settlement of supplier invoices        -    21,284    37,382    -    -    -    58,666 
Net purchases under liquidity agreement        -    8,061    (63,028)   -    -    -    (54,967)
Other net sales of treasury shares        -    41,004    39,940    -    -    -    80,944 

Balance as of March 31, 2021

        39,748,635    288,390,973    (6,064,641)   (656,766)   15,626,370    (316,345,501)   20,699,070 
Net loss for the period        -    -    -    -    -    (4,690,149)   (4,690,149)
Other comprehensive income for the period        -    -    -    1,232    126,061    -    127,293 

Total comprehensive loss for the period

        -    -    -    1,232    126,061    (4,690,149)   (4,562,856)
Issue of treasury  shares   12    9,524,317    -    (9,524,317)   -    -    -    - 
Cost of share capital issuance        -    (135,434)   -    -    -    -    (135,434)
Value of share-based services   13    -    -    -    -    336,849    -    336,849 
Movement in treasury shares:   12                                    
Settlement of supplier invoices        -    13,831    42,924    -    -    -    56,755 
Net sales under liquidity agreement        -    (12,483)   40,825    -    -    -    28,342 

Balance as of June 30, 2021

        49,272,952    288,256,887    (15,505,209)   (655,534)   16,089,280    (321,035,650)   16,422,726 

 

The accompanying notes form an integral part of these consolidated financial statements.

 

5 

 

 

Addex Therapeutics │ Interim Condensed Consolidated Financial Statements

 

Unaudited Interim Condensed Consolidated Statements of Changes in Equity

 

for the three-month period ended June 30, 2022 (2/2)

 

     Amounts in Swiss francs 
     Notes   Share
Capital		   Share
Premium		   Treasury
Shares
Reserve		   Foreign
Currency
Translation
Reserve		   Other
Reserves		   Accumulated
Deficit		   Total 
Balance as of January 1, 2022         49,272,952    283,981,361    (11,703,279)   (657,525)   25,095,393    (329,057,802)   16,931,100 
Net loss for the period         -    -    -    -    -    (5,823,735)   (5,823,735)
Other comprehensive income for the period         -    -    -    27    665,819    -    665,846 
Total comprehensive loss for the period         -    -    -    27    665,819    (5,823,735)   (5,157,889)
Issue of treasury shares    12    16,000,000    -    (16,000,000)   -    -    -    - 
Cost of treasury shares issuance         -    (210,633)   -    -    -    -    (210,633)
Related costs of sales shelf registration         -    (2,223)   -    -    -    -    (2,223)
Cost of pre-funded warrants sold         -    -    -    -    (36,534)   -    (36,534)
Value of share-based services    13    -    -    -    -    1,440,052    -    1,440,052 
Movement in treasury shares:    12                                    
Net purchases under liquidity agreement         -    (26,252)   17,692    -    -    -    (8,560)
Balance as of March 31, 2022         65,272,952    283,742,253    (27,685,587)   (657,498)   27,164,730    (334,881,537)   12,955,313 
Net loss for the period         -    -    -    -    -    (7,221,252)   (7,221,252)
Other comprehensive income for the period         -    -    -    208    478,949    -    479,157 
Total comprehensive loss for the period         -    -    -    208    478,949    (7,221,252)   (6,742,095)
Cost of treasury shares issuance         -    (5,000)   -    -    -    -    (5,000)
Value of share-based services    13    -    -    -    -    659,259    -    659,259 
Movement in treasury shares:    12                                    
Net purchases under liquidity agreement         -    (20,790)   15,765    -    -    -    (5,025)
Balance as of June 30, 2022         65,272,952    283,716,463    (27,669,822)   (657,290)   28,302,938    (342,102,789)   6,862,452 

 

 

The accompanying notes form an integral part of these consolidated financial statements.

 

6

 

Addex Therapeutics │ Interim Condensed Consolidated Financial Statements

 

Unaudited Interim Condensed Consolidated Statements of Cash Flows

 

for the six-month periods ended June 30, 2022 and 2021

 

      For the six months ended
June 30,		 
   Notes  2022   2021 
            
  

Amounts in Swiss francs

 
Net loss for the period      (13,044,987)   (7,329,762)
Adjustments for:             
Depreciation  8/9   170,178    176,909 
Value of share-based services  13   2,099,311    522,951 
Post-employment benefits      (7,481)   (177,901)
Finance cost/(income) net      116,981    (328,977)
Decrease in other financial assets  7   13,584    26,625 
Increase in trade and other receivables  7   (166,985)   (58,072)
Decrease / (increase) in contract asset  7   81,383    (1,101,429)
Increase in prepayments  7   (604,319)   (1,127,268)
Increase in payables and accruals  11   667,430    880,344 
Decrease in contract liability  15   -    (733,668)
Decrease in deferred income  16   -    (86,481)
Services paid in shares  12   -    115,421 
Net cash used in operating activities      (10,674,905)   (9,221,308)
              
Cash flows from investing activities             
Purchase of property, plant and equipment  9   -    (5,393)
Net cash used in investing activities      -    (5,393)
              
Cash flows from financing activities             
Proceeds from capital increase      -    10,161,746 
Costs paid on issue of shares      -    (1,682,517)
Cost paid on issue of treasury shares  12   (215,634)   - 
(Purchase)/sale of treasury shares      (13,585)   54,319 
Costs paid on sale of pre-funded warrants  12   (306,127)   - 
Costs paid on sales of treasury shares – shelf registration  12   (193,834)   - 
Principal element of lease payment      (150,979)   (157,033)
Interest received  19   299    3,329 
Interest paid  19   (34,746)   (43,679)
Net cash from/(used in) financing activities      (914,606)   8,336,165 
              
Decrease in cash and cash equivalents      (11,589,511)   (890,536)
              
Cash and cash equivalents at the beginning of the period  6   20,484,836    18,695,040 
Exchange difference on cash and cash equivalents      (82,467)   303,710 
              
Cash and cash equivalents at the end of the period  6   8,812,858    18,108,214 

 

The accompanying notes form an integral part of these consolidated financial statements.

 

7

 

Addex Therapeutics│Interim Condensed Consolidated Financial Statements│Notes

 

Unaudited Notes to the Interim Condensed Consolidated Financial Statements

 

for the three-month and six-month periods ended June 30, 2022

 

(Amounts in Swiss francs)

 

1. General information

 

Addex Therapeutics Ltd (the “Company”), formerly Addex Pharmaceuticals Ltd, and its subsidiaries (together, the “Group”) are a clinical stage pharmaceutical group applying its leading allosteric modulator drug discovery platform to discovery and development of small molecule pharmaceutical products, with an initial focus on central nervous system disorders.

 

The Company is a Swiss stockholding corporation domiciled c/o Addex Pharma SA, Chemin des Aulx 12, CH1228 Plan-les-Ouates, Geneva, Switzerland and the parent company of Addex Pharma SA, Addex Pharmaceuticals France SAS and Addex Pharmaceuticals Inc. registered in Delaware with its principal business location in San Francisco, California, United States. Its registered shares are traded at the SIX, Swiss Exchange, under the ticker symbol ADXN. On January 29, 2020, the Group listed on the Nasdaq Stock Market, American Depositary Shares (ADSs) under the symbol “ADXN”, without a new issuance of securities. ADSs represents shares that continue to be admitted to trading on SIX Swiss Exchange.

 

These condensed consolidated financial statements have been approved for issuance by the Board of Directors on 17 August, 2022.

 

2. Basis of preparation

 

These interim condensed consolidated financial statements for the three-month and six-month periods ended June 30, 2022, have been prepared under the historic cost convention and in accordance with IAS 34 “Interim Financial Reporting” and are presented in a format consistent with the consolidated financial statements under IAS 1 “Presentation of Financial Statements”. However, they do not include all of the notes that would be required in a complete set of financial statements. Thus, this interim financial report should be read in conjunction with the consolidated financial statements for the year ended December 31, 2021.

 

Interim financial results are not necessarily indicative of results anticipated for the full year. The preparation of these unaudited condensed consolidated interim financial statements made in accordance with IAS 34 requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management’s best knowledge of current events and actions, actual results ultimately may differ from those estimates. The areas involving a higher degree of judgment which are significant to the interim condensed consolidated financial statements are disclosed in note 4 to the consolidated financial statements for the year ended December 31, 2021.

 

A number of new or amended standards and interpretations became applicable for financial periods beginning on or after January 1, 2022. The Group noted that the latter did not have a material impact on the Group’s financial position or disclosures made in the interim condensed consolidated financial statements.

 

Due to rounding, numbers presented throughout these Interim condensed consolidated financial statements may not add up precisely to the totals provided. All ratios and variances are calculated using the underlying amount rather than the presented rounded amount.

 

8

 

3. Critical accounting estimates and judgments

 

The Group makes estimates and assumptions concerning the future. These estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities or may have had a significant impact on the reported results are disclosed below:

 

Going concern

 

The Group’s accounts are prepared on a going concern basis. To date, the Group has financed its cash requirements primarily from share issuances and licensing certain of its research and development stage products. The Group is a development-stage enterprise and is exposed to all the risks inherent in establishing a business. The Group expects that its existing cash and cash equivalents, at the issuance date of these unaudited condensed consolidated interim financial statements, will be sufficient to fund its operations and meet all of its obligations as they fall due, through the end of the first half of 2023. These factors individually and collectively indicate that a material uncertainty exists that may cast substantial doubt about the Group's ability to continue as a going concern for one year from the date of issuance of these unaudited interim condensed consolidated financial statements. The future viability of the Group is dependent on its ability to raise additional capital through public or private financings or collaboration agreements to finance its future operations, that may be delayed due to COVID-19 pandemic and the Russia’s invasion of Ukraine. The sale of additional equity may dilute existing shareholders. The inability to obtain funding, as and when needed, would have a negative impact on the Group’s financial condition and ability to pursue its business strategies. If the Group is unable to obtain the required funding to run its operations and to develop and commercialize its product candidates, the Group could be forced to delay, reduce or stop some or all of its research and development programs to ensure it remains solvent. Management continues to explore options to obtain additional funding, including through collaborations with third parties related to the future potential development and/or commercialization of its product candidates. However, there is no assurance that the Group will be successful in raising funds, closing collaboration agreements, obtaining sufficient funding on terms acceptable to the Group, or if at all, which could have a material adverse effect on the Group’s business, results of operations and financial condition.

 

COVID-19

 

In early 2020 a coronavirus disease (COVID-19) pandemic developed globally resulting in a significant number of infections and negative effects on economic activity. The Group is actively monitoring the situation and is taking any necessary measures to respond to the situation in cooperation with the various stakeholders.

 

On June 17, 2022 the Group terminated its dipraglurant US registration program including pivotal Phase 2B/3 and open label clinical trials of dipraglurant in levodopa-induced dyskinesia associated with Parkinson’s disease (PD-LID) due to a slow recruitment of patients, attributed to the consequences of COVID-19 related patient concerns about participation in clinical studies, as well as staffing shortages and turnover within study sites.

 

Depending on the duration of the COVID-19 crisis and continued negative impact on global economic activity, the Group may have to take additional measures that will have a negative impact on the Group’s business continuity and may experience certain liquidity restraints as well as incur impairments on its assets. The exact impact on the Group’s activities in 2022 and thereafter cannot be reasonably predicted.

 

Russia’s invasion of Ukraine

 

On February 24, 2022, Russia invaded Ukraine creating a global conflict. The resulting conflict and retaliatory measures by the global community have created global security concerns, including the possibility of expanded regional or global conflict, which have had, and are likely to continue to have, short-term and more likely longer-term adverse impacts on Ukraine and Europe and around the globe. Potential ramifications include disruption of the supply chain including research and development activities being conducted by the Group and its strategic partners. The Group and partners rely on global networks of contract research organizations to engage clinical study sites and enroll patients, certain of which are in Russia and Ukraine. Delays in research and development activities of the Group and its partners could increase associated costs and, depending upon the duration of any delays, require the Group and its partners to find alternative suppliers at additional expense. In addition, the conflict in Eastern Europe has had significant ramifications on global financial markets, which may adversely impact the ability of the Group to raise capital on favorable terms or at all.

 

Revenue recognition

 

Revenue is primarily from fees related to licenses, milestones and research services. Given the complexity of the relevant agreements, judgements are required to identify distinct performance obligations, allocate the transaction price to these performance obligations and determine when the performance obligations are met. In particular, the Group’s judgement over the estimated stand-alone selling price which is used to allocate the transaction price to the performance obligations is disclosed in note 15.

 

Grants

 

Grants are recorded at their fair value when there is reasonable assurance that they will be received and recognized as income when the Group has satisfied the underlying grant conditions. In certain circumstances, grant income may be recognized before explicit grantor acknowledgement that the conditions have been met.

 

Accrued research and development costs

 

The Group records accrued expenses for estimated costs of research and development activities conducted by third party service providers. The Group records accrued expenses for estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced, and these costs are included in accrued expenses on the balance sheets and within research and development expenses in the statements of comprehensive loss. These costs are a significant component of research and development expenses. Accrued expenses for these costs are recorded based on the estimated amount of work completed in accordance with agreements established with these third parties. To date, the Group has not experienced significant changes in the estimates of accrued research and development expenses after a reporting period. However, due to the nature of estimates, the Group may be required to make changes to the estimates in the future as it becomes aware of additional information about the status or conduct of its research activities.

 

9

 

Research and development costs

 

The Group recognizes expenditure incurred in carrying out its research and development activities, including development supplies, until it becomes probable that future economic benefits will flow to the Group, which results in recognizing such costs as intangible assets, involving a certain degree of judgement. Currently, such development supplies are associated with pre-clinical and clinical trials of specific products that do not have any demonstrated technical feasibility.

 

Share-based compensation

 

The Group recognizes an expense for share-based compensation based on the valuation of equity incentive units using the Black-Scholes valuation model. A number of assumptions related to the volatility of the underlying shares and to the risk-free rate are made in this model. Should the assumptions and estimates underlying the fair value of these instruments vary significantly from management’s estimates, then the share-based compensation expense would be materially different from the amounts recognized.

 

Pension obligations

 

The present value of the pension obligations is calculated by an independent actuary and depends on a number of assumptions that are determined on an actuarial basis such as discount rates, future salary and pension increases, and mortality rates. Any changes in these assumptions will impact the carrying amount of pension obligations. The Group determines the appropriate discount rate at the end of each period. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. In determining the appropriate discount rate, the Group considers the interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension liability. Other key assumptions for pension obligations are based in part on current market conditions.

 

4. Interim measurement note

 

Seasonality of the business: The business is not subject to any seasonality, but expenses and corresponding revenue are largely determined by the phase of the respective projects, particularly with regard to external research and development expenditures.

 

Costs: Costs that incur unevenly during the financial year are anticipated or deferred in the interim report only if it would also be appropriate to anticipate or defer such costs at the end of the financial year.

 

5. Segment reporting

 

Management has identified one single operating segment, related to the discovery, development and commercialization of small-molecule pharmaceutical products.

 

Information about products, services and major customers

 

External income of the Group for the three-month and six-month periods ended June 30, 2022 and 2021 is derived from the business of discovery, development and commercialization of pharmaceutical products. Income was earned from rendering of research services to a pharmaceutical company and grants earned.

 

10

 

 

Information about geographical areas

 

External income is exclusively recorded in the Swiss operating company.

 

Analysis of revenue from contract with customer and other income by nature is detailed as follows:

 

  

For the three months

ended June 30,

  

For the six months

ended June 30,

 
   2022   2021   2022   2021 
Collaborative research funding   183,354    992,595    420,591    1,836,818 
Grants earned   -    73,735    -    146,852 
Other service income   3,089    5,550    9,800    10,631 
Total   186,443    1,071,880    430,391    1,994,301 

 

Analysis of revenue from contract with customer and other income by major counterparties is detailed as follows:

 

  

For the three months

ended June 30,

  

For the six months

ended June 30,

 
   2022   2021   2022   2021 
Indivior PLC   183,354    992,595    420,591    1,836,818 
Eurostars /Innosuisse   -    73,735    -    146,852 
Other counterparties   3,089    5,550    9,800    10,631 
Total   186,443    1,071,880    430,391    1,994,301 

 

For more detail, refer to note 15, “Revenue from contract with customer” and note 16 “Other income”.

 

The geographical allocation of long-lived assets is detailed as follows:

 

   June 30, 2022   December 31, 2021 
Switzerland   431,836    596,098 
United States of America   3,717    3,536 
France   360    374 
Total   435,913    600,008 

 

The geographical analysis of operating costs is as follows:

 

  

For the three months

ended June 30,

  

For the six months

ended June 30,

 
   2022   2021   2022   2021 
Switzerland   7,267,558    5,567,368    13,264,551    9,628,157 
United States of America   10,740    8,646    18,448    16,627 
France   360    2,503    2,192    4,182 
Total operating costs (note 17)   7,278,658    5,578,517    13,285,191    9,648,966 

 

The capital expenditure during the six-month period ended June 30, 2022 is nil (CHF 5,393 for the six-month period ended June 30, 2021).

 

6. Cash and cash equivalents

 

   June 30, 2022   December 31, 2021 
Cash at bank and on hand   8,812,858    20,484,836 
Total cash and cash equivalents   8,812,858    20,484,836 

 

Split by currency:

 

   June 30, 2022   December 31, 2021 
CHF   86.65%   44.33%
USD   10.46%   54.47%
EUR   2.33%   0.58%
GBP   0.56%   0.62%
Total    100.00%   100.00%

 

11

 

 

The Group pays interests on CHF cash and cash equivalents and earns interests on USD cash and cash equivalents. The Group invests its cash balances into a variety of current and deposit accounts mainly with Swiss banks.

 

All cash and cash equivalents were held either at banks or on hand as of June 30, 2022 and December 31, 2021.

 

7. Other current assets

 

   June 30, 2022   December 31, 2021 
Other financial assets   3,561    17,145 
Trade and other receivables   331,770    164,785 
Contract asset (Indivior PLC)   78,253    159,636 
Prepayments   1,719,694    1,115,374 
Total other current assets   2,133,278    1,456,940 

 

The Group applies the IFRS 9 simplified approach to measuring expected credit losses (“ECL”), which uses a lifetime expected loss allowance for all contract assets, trade receivables and other receivables. As of June 30, 2022, the combined amount of the contract asset, trade receivables and other receivables amounted to CHF 410,023 (CHF 324,421 as of December 31, 2021) including CHF 180,747 for the research agreement with Indivior (CHF 159,636 as of December 31, 2021), CHF 131,848 for the grant from Eurostars/Innosuisse (CHF 131,848 as of December 31, 2021) and CHF 53,881 for five non-governmental debtors (four non-governmental debtors for CHF 3,978 as of December 31, 2021). The Group has considered that the contract asset, trade receivables and other receivables have a low risk of default based on historic loss rates and forward-looking information on macroeconomic factors affecting the ability of the third parties to settle invoices. As a result, expected loss allowance has been deemed as nil as of June 30, 2022 and December 31, 2021. The prepayments increased by CHF 0.6 million as of June 30, 2022 compared to December 31, 2021 primarily due to Directors and Officers (D&O) Insurance premium for CHF 0.8 million and retirement benefits for CHF 0.3 million paid annually at the beginning of the year, partially offset by a decrease of CHF 0.5 million in amounts prepaid to Contract Research Organization (CROSs).

 

8. Right-of-use assets

 

Year ended December 31, 2021 

Properties

  

Equipment

  

Total

 
Opening net book amount   543,890    21,454    565,344 
Additions   2,000    -    2,000 
Depreciation charge   (294,389)   (26,026)   (320,415)
Effect of lease modifications   208,902    17,676    226,578 
Disposals   (4,216)   -    (4,216)
Exchange differences   698    -    698 
Closing net book amount   456,885    13,104    469,989 

 

As of December 31, 2021  Properties   Equipment   Total 
Cost   1,298,569    88,844    1,387,413 
Accumulated depreciation   (841,684)   (75,740)   (917,424)
Net book value   456,885    13,104    469,989 

 

Period ended June 30, 2022  Properties   Equipment   Total 
Opening net book amount   456,885    13,104    469,989 
Depreciation charge   (139,348)   (13,150)   (152,498)
Effect of lease modifications   -    5,916    5,916 
Closing net book amount   317,537    5,870    323,407 

 

As of June 30, 2022  Properties   Equipment   Total 
Cost   1,298,569    13,542    1,312,111 
Accumulated depreciation   (981,032)   (7,672)   (988,704)
Net book value   317,537    5,870    323,407 

 

12

 

 

9. Property, plant and equipment

 

Year ended December 31, 2021 

 

Equipment

   Furniture &
fixtures		  

Chemical

library

  

 

Total

 
Opening net book amount   67,760    -    -    67,760 
Additions   31,549    -    -    31,549 
Depreciation charge   (27,198)        -        -    (27,198)
Closing net book amount   72,111    -    -    72,111 

 

As of December 31, 2021 

 

Equipment

   Furniture &
fixtures		  

Chemical

library

  

 

Total

 
Cost   1,713,828    7,564    1,207,165    2,928,557 
Accumulated depreciation   (1,641,717)   (7,564)   (1,207,165)   (2,856,446)
Net book value   72,111    -    -    72,111 

 

Period ended June 30, 2022 

 

Equipment

   Furniture &
fixtures		  

Chemical

library

  

 

Total

 
Opening net book amount   72,111         -           -    72,111 
Depreciation charge   (17,680)   -    -    (17,680)
Closing net book amount   54,431    -    -    54,431 

 

As of June 30, 2022 

 

Equipment

   Furniture &
fixtures		  

Chemical

library

  

 

Total

 
Cost   1,713,828    7,564    1,207,165    2,928,557 
Accumulated depreciation   (1,659,397)   (7,564)   (1,207,165)   (2,874,126)
Net book value   54,431    -    -    54,431 

 

10. Non-current financial assets

 

   June 30, 2022   December 31, 2021 
Security rental deposits   58,075    57,908 
Total non-current financial assets   58,075    57,908 

 

11. Payables and accruals

 

   June 30, 2022   December 31, 2021 
Trade payables   1,819,031    1,787,287 
Social security and other taxes   149,742    203,288 
Accrued expenses   2,084,597    1,856,570 
Total payables and accruals   4,053,370    3,847,145 

 

All payables mature within 3 months. Accrued expenses and trade payables primarily relate to R&D services from contract research organizations, consultants and professional fees. The accrued expenses increased by CHF 0.2 million as of June 30, 2022 compared to December 31, 2021, primarily due to increased research and development activities. The carrying amounts of payables do not materially differ from their fair values, due to their short-term nature.

 

12. Share capital

 

   Number of shares 
  

Common

shares

  

Treasury

shares

  

 

Total

 
Balance as of January 1, 2021   32,848,635    (5,729,861)   27,118,774 
Issue of shares – capital increase   16,424,317    (9,524,317)   6,900,000 
Settlement of supplier invoices   -    80,306    80,306 
Net purchase of treasury shares under liquidity agreement   -    (19,448)   (19,448)
Other net sale of treasury shares   -    39,940    39,940 
Balance as of June 30, 2021   49,272,952    (15,153,380)   34,119,572 

 

13

 

 

 

   Number of shares 
   Common shares   Treasury shares   Total 
Balance as of January 1, 2022   49,272,952    (11,374,803)   37,898,149 
Issue of shares – capital increase   16,000,000    (16,000,000)   - 
Net purchase of treasury shares under liquidity agreement   -    (21,949)   (21,949)
Balance as of June 30, 2022   65,272,952    (27,396,752)   37,876,200 

 

The Company maintains a liquidity agreement with Kepler Capital Markets SA (“Kepler”). Under the agreement, the Group has provided Kepler with cash
and shares to enable them to buy and sell the Company’s shares. As of June 30, 2022, 113,319 (December 31, 2021: 91,370) treasury shares are recorded under this agreement in the treasury share reserve and CHF 3,561 (December 31, 2021: CHF 17,145) is recorded in other financial assets.

 

As of June 30, 2022, the total outstanding share capital is CHF 37,876,200 consisting of 37,876,200 shares excluding 27,396,752 treasury shares. As of December 31, 2021, the total outstanding share capital was CHF 37,898,149 consisting of 37,898,149 shares excluding 11,374,803 treasury shares. All shares have a nominal value of CHF 1.00.

 

On February 2, 2022, the Company issued 16,000,000 new shares from the authorized capital to its 100% owned subsidiary, Addex Pharma SA, at CHF 1.00. These shares are held as treasury shares, hence the operation does not impact the outstanding share capital. Directly related share issuance costs of CHF 0.2 million were recorded as a deduction in equity.

 

On December 16, 2021, the Group entered into a securities purchase agreement with Armistice Capital LLC and sold 3,752,202 treasury shares in the form of 625,367 american depositary share (ADS) listed on the nasdaq stock market at a price of USD 1.08 (CHF 1.00) per share, equivalent to USD 6.50 (CHF 6.00) per ADS. In addition, 5,478,570 pre-funded warrants in the form of 913,095 ADS were sold at a price of USD 1.08 (CHF 0.99) per share, equivalent to USD 6.49 (CHF 5.99) per ADS with an exercise price of USD 0.01 per ADS. The total gross proceeds of this offering amounted to USD 10 million (CHF 9.2 million) and directly related share issuance costs of CHF 1.4 million were recorded as a deduction in equity for the year ended December 31, 2021 of which CHF 0.5 million has been paid during the first quarter of 2022. The Group additionally issued to Armistice Capital LLC, 9,230,772 warrants to purchase 1,538,462 ADS with an exercise price of USD 1.08 (CHF 1.00) per share, equivalent to USD 6.5 (CHF 6.00) per ADS. The fair value of each of the warrants issued is CHF 0.40 per share, CHF 2.4 per ADS, and has been calculated using the Black-Scholes valuation model and recorded in equity as a cost of the offering for the year ended December 31, 2021, with a volatility of 55.57% and an annual risk-free rate of -0.64%. The total value of the warrants issued amounted to CHF 3.7 million.

 

On April 23, 2021, the Company issued 9,524,317 new shares from the authorized capital to its 100% owned subsidiary, Addex Pharma SA, at CHF 1.00. These shares are held as treasury shares, hence the operation does not impact the outstanding share capital.

 

On January 8, 2021, the Company issued 6,900,000 registered shares, with a nominal value of CHF 1.00 each, at an issue price of CHF 1.46. Out of the total new shares, 6,750,000 are in the form of ADS. The gross proceeds amounted to CHF 10.1 million (USD 11.5 million) and directly related share issuance costs of CHF 1.8 million were recorded as a deduction in equity as of June 30, 2021.

 

On June 21, 2022 the Group entered into a new sale agency agreement with Kepler Chevreux whose substantive terms are aligned with the agreement entered into on August 24, 2020 that expired on December 31, 2021. No treasury shares were sold during the six-month period ended June 30, 2022 under the sale agency agreement, whilst 39,940 treasury shares were sold, for a gross amount of CHF 80,944 during the six -month period ended June 30, 2021.

 

In addition, the Group did not use its treasury shares to pay consultants during the six-month period ended June 30, 2022, whilst during the six-month period ended June 30, 2021, the Group used 80,306 treasury shares to purchase services from consultants including 41,937 treasury shares for Roger Mills, the Group’s Chief Medical Officer. The total value of consulting services settled in shares was CHF 116,817.

 

13. Share-based compensation

 

The total share-based compensation expense recognized in the statement of comprehensive loss for equity incentive units granted to directors, executives, employees and consultants for the three-month and six-month periods ended June 30, 2022 amounted to CHF 659,259 and CHF 2,099,311, respectively (CHF 336,849 and CHF 522,951 for the three-month and six-month periods ended June 30, 2021).

 

14

 

 

As of June 30, 2022, 12,518,255 options were outstanding (8,615,885 options as of December 31, 2021). During the six-month period ended June 30, 2022, the Group granted 3,902,370 options with vesting over 4 years and a 10-year exercise period. Of these new options, 3,846,657 were granted at an exercise price of CHF 1.00 on April 12, 2022, 49,713 were granted at an exercise price of CHF 1.04 on April 12, 2022 and 6,000 were granted at an exercise price of CHF 1.00 on May 2, 2022.

 

On January 4, 2022, the exercise price of 8,294,045 equity incentive units was reduced to CHF 1.00 and the share-based compensation related to the fair value adjustment for the reduction in the exercise price was recognized over the remaining vesting period of the respective equity incentive units or immediately for fully vested units and amounted to CHF 221,271 and CHF 1,450,274 for the three-month and six-month periods ended June 30, 2022, respectively.

 

As of June 30, 2022 and December 31, 2021, a total of 198,750 equity sharing certificates (ESCs) were outstanding.

 

14. Retirement benefits obligations

 

The amounts recognized in the statement of comprehensive loss are as follows:

 

   For the three months
ended June 30,		   For the six months
ended June 30,		 
   2022   2021   2022   2021 
Current service cost   (85,432)   (74,885)   (170,864)   (163,439)
Past service cost   36,459    -    36,459    219,104 
Interest cost   (9,705)   (6,036)   (19,410)   (12,121)
Interest income   6,996    3,857    13,992    7,714 
Company pension amount (note 18)   (51,682)   (77,064)   (139,823)   51,258 

 

The conversion rates have changed in April 2022 and January 2021 which has led to a positive past service cost for the three-month period ended June 30, 2022 and for the six-month period ended June 30, 2021.

 

The amounts recognized in the balance sheet are determined as follows:

 

   June 30, 2022   December 31, 2021 
Defined benefit obligation   (7,605,263)   (9,276,675)
Fair value of plan assets   7,475,987    7,995,150 
Funded status   (129,276)   (1,281,525)

 

The defined benefit obligation and the fair value of plan assets decreased by CHF 1.7 million and CHF 0.5 million, respectively, as of June 30, 2022 compared to December 31, 2021 due to the discount rate and the interest rate on savings accounts being increased to 2.00% as of June 30, 2022 (0.35% as of December 31, 2021).

 

15. Revenue from contract with customer

 

License & research agreement with Indivior PLC

 

On January 2, 2018, the Group entered into an agreement with Indivior for the discovery, development and commercialization of novel GABAB PAM compounds for the treatment of addiction and other CNS diseases. This agreement included the selected clinical candidate, ADX71441. In addition, Indivior agreed to fund a research program at the Group to discover novel GABAB PAM compounds.

 

The contract contains two distinct material promises and performance obligations: (1) the selected compound ADX71441 which falls within the definition of a licensed compound, whose rights of use and benefits thereon was transferred in January 2018 and, (2) the research services to be conducted by the Group and funded by Indivior to discover novel GABAB PAM compounds for clinical development that may be discovered over the research term of the agreement and selected by Indivior.

 

Indivior has sole responsibility, including funding liability, for development of selected compounds under the agreement through preclinical and clinical trials, as well as registration procedures and commercialization, if any, worldwide. Indivior has the right to design development programs for selected compounds under the agreement. Through the Group’s participation in a joint development committee, the Group reviews, in an advisory capacity, any development programs designed by Indivior. However, Indivior has authority over all aspects of the development of such selected compounds.

 

15

 

 

Under terms of the agreement, the Group granted Indivior an exclusive license to use relevant patents and know-how in relation to the development and commercialization of product candidates selected by Indivior. Subject to agreed conditions, the Group and Indivior jointly own all intellectual property rights that are jointly developed and the Group or Indivior individually own all intellectual property rights that the Group or Indivior develop individually. The Group has retained the right to select compounds from the research program for further development in areas outside the interest of Indivior including Charcot-Marie-Tooth type 1A neuropathy, or CMT1A, Chronic Cough and pain. Under certain conditions, but subject to certain consequences, Indivior may terminate the agreement.

 

In January 2018, the Group received, under the terms of the agreement, a non-refundable upfront fee of USD 5.0 million for the right to use the clinical candidate, ADX71441, including all materials and know-how related to this clinical candidate. In addition, the Group is eligible for payments on successful achievement of pre-specified clinical, regulatory and commercial milestones totaling USD 330 million and royalties on net sales of mid-single digits to low double-digits.

 

On February 14, 2019, Indivior terminated the development of their selected compound, ADX71441. Separately, Indivior funds research at the Group, based on a research plan to be mutually agreed between the parties, to discover novel GABAB PAM compounds. These future novel GABAB PAM compounds, if selected by Indivior, become licensed compounds. The Group agreed with Indivior to an initial research term of two years, that can be extended by twelve-month increments and a minimum annual funding of USD 2 million for the Group’s R&D costs incurred. R&D costs are calculated based on the costs incurred in accordance with the contract. Following Indivior’s selection of one newly identified compound, the Group has the right to also select one additional newly identified compound. The Group is responsible for the funding of all development and commercialization costs of its selected compounds and Indivior has no rights to the Group’s selected compounds. The initial two-year research term was expected to run from May 2018 to April 2020. In 2019, Indivior agreed an additional research funding of USD 1.6 million, for the research period. On October 30, 2020, the research term was extended until June 30, 2021 and Indivior agreed an additional research funding of USD 2.8 million. Effective May 1, 2021, the research term was extended until July 31, 2022 and Indivior agreed an additional research funding of CHF 3.7 million, of which CHF 2.4 million has been paid to the Group as of June 30, 2022, a remaining amount of CHF 0.3 million is expected to be received directly by the Group and CHF 1.0 million paid directly by Indivior to third party suppliers that are supporting the funded research program.

 

For the three-month and six-month periods ended June 30, 2022, the Group recognized CHF 0.2 million and CHF 0.4 million as revenue (For the three-month and the six-month periods ended June 30, 2021, CHF 1.0 million and CHF 1.8 million, respectively) and recorded a combined amount of CHF 0.2 million in contract asset and trade receivable as of June 30, 2022 (December 31, 2021: CHF 0.2 million).

 

Janssen Pharmaceuticals Inc. (formerly Ortho-McNeil-Janssen Pharmaceuticals Inc).

 

On December 31, 2004, the Group entered into a research collaboration and license agreement with Janssen Pharmaceuticals Inc. (JPI). In accordance with this agreement, JPI has acquired an exclusive worldwide license to develop mGlu2 PAM compounds for the treatment of human health. The Group is eligible to receive up to EUR 109 million in success-based development and regulatory milestone, and low double-digit royalties on net sales. The Group considers these various milestones to be variable consideration as they are contingent upon achieving uncertain, future development stages and net sales. For this reason, the Group considers the achievement of the various milestones as binary events that will be recognized as revenue upon occurrence.

 

No amounts have been recognized under this agreement in the three-month and six-month periods ended June 30, 2022 and 2021.

 

16. Other income

 

Under a grant agreement with Eurostars/Innosuisse the Group is required to complete specific research activities within a defined period of time. The Group’s funding is fixed and received based on the satisfactory completion of the agreed research activities and incurring the related costs.

 

The Group was awarded a grant by Eurostars/Innosuisse in 2019 for CHF 512,032 of which CHF 380,184 were paid as of June 30, 2022. As of June 30, 2022 and December 31, 2021, the amount recognized by the Group as other receivables remains stable at CHF 131,848 and is expected to be received in the fourth quarter of 2022 in accordance with the grant conditions.

 

The Group additionally recognized other income from IT consultancy agreements.

 

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For the three-month and six-month periods ended June 30, 2022, the Group recognized CHF 3,089 and CHF 9,800, respectively as other income (CHF 79,285 and CHF 157,483 for the three-month and six-month periods ended June 30, 2021). The decrease is primarily due to the Group not recognizing any income from Eurostars/Innosuisse during the three-month and six-month periods ended June 30, 2022, in accordance with the grant conditions.

 

17. Operating costs

 

   For the three months
ended June 30,		   For the six months
ended June 30,		 
   2022   2021   2022   2021 
Staff costs (note 18)   1,352,084    1,273,385    3,545,057    2,163,344 
Depreciation (notes 8/9)   83,346    88,264    170,178    176,909 
External research and development costs   4,677,306    2,781,951    7,184,492    4,741,337 
Laboratory consumables   100,849    55,561    182,211    138,906 
Patent maintenance and registration costs   96,617    66,270    171,849    144,961 
Professional fees   323,390    642,403    781,544    928,746 
Short-term leases   14,596    8,046    27,861    16,437 
D&O Insurance   411,861    396,838    795,688    795,858 
Other operating costs   218,609    265,799    426,311    542,468 
Total operating costs   7,278,658    5,578,517    13,285,191    9,648,966 

 

The evolution of the total operating costs is mainly driven by external research and development expenses, staff costs, D&O insurance, professional fees and other operating costs.

 

During the six-month period ended June 30, 2022, total operating costs increased by CHF 3.6 million compared to the same period ended June 30, 2021, primarily due to increased external research and development costs of CHF 2.4 million of which CHF 2.0 million relate to dipraglurant clinical development activities. During the same period, staff costs increased by CHF 1.4 million of which CHF 1.2 million relate to higher share-based compensation costs (note 18).

 

During the three-month period ended June 30, 2022, total operating costs increased by CHF 1.7 million compared to the same period ended June 30, 2021, primarily due to increased external research and development costs of CHF 1.9 million including CHF 1.6 million for dipraglurant clinical development activities. During the same period, professional fees decreased by CHF 0.3 million primarily due to certain one off expenses, in the second quarter of 2021, related to the setting-up of our US shelf registration and “at-the-market” (ATM) ADS equity sale program.

 

18. Staff costs

 

   For the three months
ended June 30,		   For the six months
ended June 30,		 
   2022   2021   2022   2021 
Wages and salaries   649,639    816,750    1,472,876    1,592,602 
Social charges and insurances   100,542    118,595    219,688    217,606 
Value of share-based services   550,221    260,976    1,712,670    404,394 
Retirement benefit (note 14)   51,682    77,064    139,823    (51,258)
Total staff costs   1,352,084    1,273,385    3,545,057    2,163,344 

 

During the six-month period ended June 30, 2022, total staff costs increased by CHF 1.4 million compared to the same period ended June 30, 2021, primarily due to higher share-based compensation cost for CHF 1.2 million, related to the reduction of the exercise price of the equity incentive units granted to employees to CHF 1.00 on January 4, 2022.

 

19. Finance result, net

 

   For the three months
ended June 30,		   For the six months
ended June 30,		 
   2022   2021   2022   2021 
Interest income   204    1,717    299    3,329 
Interest cost   (7,574)   (17,274)   (24,369)   (31,404)
Interest expense on leases   (4,758)   (5,665)   (10,377)   (12,275)
Foreign exchange (losses)/gains, net   (116,909)   (162,290)   (155,740)   365,253 
Finance result, net   (129,037)   (183,512)   (190,187)   324,903 

 

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20. Loss per share

 

Basic and diluted loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of shares in issue during the period excluding shares purchased by the Group and held as treasury shares.

 

   For the three months
ended June 30,		   For the six months
ended June 30,		 
   2022   2021   2022   2021 
Loss attributable to equity holders of the Company   (7,221,252)   (4,690,149)   (13,044,987)   (7,329,762)
Weighted average number of shares in issue   37,467,005    34,060,051    37,891,408    33,789,956 
Basic and diluted loss per share   (0.19)   (0.14)   (0.34)   (0.22)

 

The Company has three categories of dilutive potential shares as of June 30, 2022 and 2021: equity sharing certificates (“ESCs”), share options and warrants. For the three-month and six-month periods ended June 30, 2022 and 2021, equity sharing certificates, share options and warrants have been ignored in the calculation of the loss per share, as they would be antidilutive.

 

21. Related party transactions

 

Related parties include members of the Board of Directors and the Executive Management of the Group. The following transactions were carried out with related parties:

 

Key management compensation

 

   For the three months
ended June 30,		   For the six months
ended June 30,		 
   2022   2021   2022   2021 
Salaries, other short-term employee benefits and post-employment benefits   482,228    516,146    922,664    793,077 
Consulting fees   77,883    63,077    123,707    121,854 
Share-based compensation   556,724    266,916    1,822,104    421,221 
Total   1,116,835    846,139    2,868,475    1,336,152 

 

Salaries, other short-term employee benefits and post-employment benefits relate to members of the Board of Directors and Executive Management who are employed by the Group. Consulting fees relate mainly to Roger Mills, a member of the Executive Management who delivers his services to the Group under a consulting contract. The Group has a net payable to the Board of Directors and Executive Management of CHF 130,187 as of June 30, 2022 (December 31, 2021: CHF 172,443).

 

22. Events after the balance sheet date

 

On July 19, 2022, the nominal value of the issued, conditional and authorized share capital has been reduced from CHF 1.00 to CHF 0.01 with effect on SIX Swiss Exchange and Nasdaq Stock Market on July 26, 2022. The total number of issued, outstanding, conditional and authorized shares remains the same one.

 

On July 14, 2022 and on July 21, 2022 Armistice Capital LLC exercised pre-funded warrants for 5,478,570 shares in the form of 913,095 ADSs and paid the exercise price of USD 0.01 per ADS, amounting to a total of USD 9131.

 

On July 21, 2022 and July 22, 2022 the Group sold, under the sale agency agreement with Kepler Cheuvreux, a total number of 1,355,248 treasury shares at an average price of CHF 0.34 per share, with gross proceeds of CHF 0.5 million.

 

On July 22, 2022 the Group entered into a securities purchase agreement with Armistice Capital LLC and sold 4,500,000 treasury shares in the form of 750,000 ADSs at a price of CHF 0.27 per share (USD 1.70 per ADS). As a result, the total number of outstanding shares increased to 49,235,768. In addition, 10,500,000 pre-funded warrants, in the form of 1,750,000 ADSs, were sold at a price of USD 1.69 per ADS (CHF 0.27 per share) with an exercise price of USD 0.01 per ADS. The total gross proceeds from the offering amounted to USD 4.2 million (CHF 4.1 million). The Group granted Armistice Capital LLC, 15,000,000 warrants, in the form of 2,500,000 ADSs, with an exercise price of USD 1.90 per ADS (CHF 0.30 per share) and an exercise period of 5 years.

 

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On August 2, 2022, the exercise price of 12,434,713 equity incentive units was reduced to CHF 0.19 and the share-based compensation related to the fair value adjustment for the reduction in the exercise price of CHF 0.95 million will be recognized over the remaining vesting period of the respective equity incentive units or immediately for fully vested units. As a result, CHF 0.6 million will be recognized in the second half of 2022 and CHF 0.35 million over the period 2023 to 2026 as share-based compensation expense.

 

The research agreement with Indivior has been extended until March 31, 2023, with an effective date of August 1, 2022. Under the amendment to the research agreement, Indivior committed additional research funding of CHF 0.85 million.

 

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