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CONSOLIDATED INTERIM Financial statements for the THREE and SIX MONTHS ended
Condensed consolidated interim statement of comprehensive income
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||
| Note | $'000 | $'000 | $'000 | $'000 | ||||||||||||||
| Operating expenses | ||||||||||||||||||
| Research and development | (1,954 | ) | (39 | ) | (2,646 | ) | (50 | ) | ||||||||||
| General and administration | (719 | ) | (3 | ) | (1,167 | ) | (11 | ) | ||||||||||
| Loss from operations | (2,673 | ) | (42 | ) | (3,813 | ) | (61 | ) | ||||||||||
| Finance expense | (6 | ) | - | (6 | ) | - | ||||||||||||
| Foreign currency translation differences | 554 | - | 544 | - | ||||||||||||||
| Loss for the period | (2,125 | ) | (42 | ) | (3,275 | ) | (61 | ) | ||||||||||
| Other comprehensive income/(expense) | ||||||||||||||||||
| Items that may be reclassified to profit or loss | ||||||||||||||||||
| Currency translation adjustment | (486 | ) | 6 | (688 | ) | - | ||||||||||||
| Total comprehensive loss for the period | (2,611 | ) | (36 | ) | (3,963 | ) | (61 | ) | ||||||||||
| Attributable to owners: | ||||||||||||||||||
| Loss for the period | (2,125 | ) | (42 | ) | (3,275 | ) | (61 | ) | ||||||||||
| Comprehensive loss for the period | (486 | ) | 6 | (688 | ) | - | ||||||||||||
| Loss per share | ||||||||||||||||||
| Basic and diluted loss per share (in USD) | 11 | (0.053 | ) | (0.002 | ) | (0.093 | ) | (0.002 | ) |
Condensed consolidated interim statement of financial position
| At June 30, | At December 31, | |||||||||
| 2021 | 2020 | |||||||||
| Note | $'000 | $'000 | ||||||||
| ASSETS | ||||||||||
| Current assets | ||||||||||
| Cash | 292,625 | 5,895 | ||||||||
| Other current assets | 5 | 164 | 17 | |||||||
| Total current assets | 292,789 | 5,912 | ||||||||
| Non-current assets | ||||||||||
| Property, plant and equipment | 30 | - | ||||||||
| Total non-current assets | 30 | - | ||||||||
| Total assets | 292,819 | 5,912 | ||||||||
| LIABILITIES AND EQUITY | ||||||||||
| Current liabilities | ||||||||||
| Trade payables | 6 | 1,002 | 1 | |||||||
| Other current liabilities | 7 | 3,590 | 245 | |||||||
| Total current liabilities | 4,592 | 246 | ||||||||
| Total liabilities | 4,592 | 246 | ||||||||
| Equity attributable to owners | ||||||||||
| Share capital | 8 | 1,301 | 871 | |||||||
| Share premium | 8 | 291,512 | 5,430 | |||||||
| Other reserves | 12 | - | ||||||||
| Foreign currency translation reserve | (488 | ) | 200 | |||||||
| Accumulated deficit | (4,110 | ) | (835 | ) | ||||||
| Total equity | 288,227 | 5,666 | ||||||||
| Total liabilities and equity | 292,819 | 5,912 |
Condensed consolidated interim statement of changes in equity
| Attributable to owners | ||||||||||||||||||||||||
| Share capital | Share premium | Other reserves | Foreign currency translation reserve | Accumulated deficit | Total | |||||||||||||||||||
| $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | |||||||||||||||||||
| Note 8 | ||||||||||||||||||||||||
| At January 1, 2021 | 871 | 5,430 | - | 200 | (835 | ) | 5,666 | |||||||||||||||||
| Loss for the period | - | - | - | - | (3,275 | ) | (3,275 | ) | ||||||||||||||||
| Translation adjustment | - | - | - | (688 | ) | - | (688 | ) | ||||||||||||||||
| Total comprehensive loss for the period | - | - | - | (688 | ) | (3,275 | ) | (3,963 | ) | |||||||||||||||
| Share-based compensation expense | - | - | 12 | - | - | 12 | ||||||||||||||||||
| Corporate reorganization | (112 | ) | 112 | - | - | - | - | |||||||||||||||||
| Issue of share capital | 542 | 285,970 | - | - | - | 286,512 | ||||||||||||||||||
| Total transactions with owners | 430 | 286,082 | 12 | - | - | 286,524 | ||||||||||||||||||
| At June 30, 2021 | 1,301 | 291,512 | 12 | (488 | ) | (4,110 | ) | 288,227 | ||||||||||||||||
| At January 1, 2020 | 801 | - | - | (12 | ) | (389 | ) | 400 | ||||||||||||||||
| Loss for the period | - | - | - | - | (61 | ) | (61 | ) | ||||||||||||||||
| Translation adjustment | - | - | - | - | - | - | ||||||||||||||||||
| Total comprehensive loss for the period | - | - | - | - | (61 | ) | (61 | ) | ||||||||||||||||
| At June 30, 2020 | 801 | - | - | (12 | ) | (450 | ) | 339 |
Condensed consolidated interim statement of cash flows
| Six months ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| $'000 | $'000 | |||||||
| Cash flows from operating activities | ||||||||
| Loss for the period | (3,275 | ) | (61 | ) | ||||
| Depreciation | 4 | - | ||||||
| Share-based compensation expense | 12 | - | ||||||
| Finance expense | 6 | - | ||||||
| Movement in working capital | 1,491 | (43 | ) | |||||
| Cash flows used in operating activities | (1,762 | ) | (104 | ) | ||||
| Interest paid | (6 | ) | - | |||||
| Net cash used in operating activities | (1,768 | ) | (104 | ) | ||||
| Cash flows used in investing activities | ||||||||
| Purchase of property, plant and equipment | (35 | ) | - | |||||
| Cash flows from financing activities | ||||||||
| Proceeds from capital contributions | 309,200 | - | ||||||
| Transaction costs from capital contributions | (19,980 | ) | - | |||||
| Net cash flows from financing activities | 289,220 | - | ||||||
| Net increase/(decrease) in cash | 287,417 | (104 | ) | |||||
| Cash at the beginning of the period | 5,895 | 498 | ||||||
| Impact of foreign exchange on cash | (687 | ) | (10 | ) | ||||
| Cash at the end of the period | 292,625 | 384 |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
GH Research PLC (the "Company")
was incorporated on March 29, 2021. The registered office of the Company is located at 28 Baggot Street Lower, Dublin 2, Ireland.
The Company and its subsidiary, GH Research
Ireland Limited, (together the "Group" or "GH Research") are a clinical-stage biopharmaceutical company dedicated
to transforming the treatment of psychiatric and neurological disorders. Its initial focus is on developing the novel and proprietary
5-MeO-DMT therapies for the treatment of patients with Treatment Resistant Depression, or TRD. Its portfolio currently includes GH001,
a proprietary inhalable 5-MeO-DMT product candidate, and GH002, a proprietary injectable 5-MeO-DMT product candidate.
On April 8, 2021, GH Research Ireland
Limited issued 25,379,047 Series B preferred shares (which were redesignated into 10,151,618 ordinary shares of GH Research PLC prior
to the closing of the initial public offering). The net proceeds of this issuance were $118.8 million, after deducting directly attributable
transaction costs of $6.4 million.
On June 29, 2021, the Company completed
an initial public offering ("IPO") on the Nasdaq Global Market ("Nasdaq") in which it issued and sold an aggregate
of 11,499,999 ordinary shares at $16.00 per share, which included 1,499,999 ordinary shares issued and sold pursuant to the underwriters'
exercise in full of their option to purchase additional ordinary shares. The net proceeds of the offering were $167.7 million, after deducting
underwriting discounts and estimated directly attributable transaction costs of $16.3 million.
These unaudited condensed consolidated
interim financial statements were presented to the board of directors and approved by them on September 23, 2021.
Basis of preparation
with International Financial Reporting Standards
The unaudited condensed consolidated
interim financial statements for the three and six months ended June 30, 2021 have been prepared in accordance with IAS 34 "Interim
Financial Reporting". The unaudited condensed consolidated interim financial statements do not include all of the information required
for full annual financial statements and should be read in conjunction with the financial statements of GH Research Ireland Limited for
the year ended December 31, 2020 which were prepared in accordance with International Financial Reporting Standards ("IFRS").
These unaudited condensed consolidated interim financial statements are presented in U.S. dollar ("USD" or "$"),
which is the Company's functional currency and the Group's reporting currency.
The incorporation of GH Research PLC
is accounted for as a capital reorganization and the comparatives are presented on that basis.
The financial information presented in
this interim report does not represent full statutory accounts as defined by the Companies Act 2014. The statutory accounts of GH Research
Ireland Limited for the year ended December 31, 2020, will be filed with the Companies Registration Office by September 30, 2021. GH Research
Ireland Limited was exempt from a statutory audit for the year ended December 31, 2020.
There are no new IFRS standards, amendments
to standards or interpretations that are mandatory for the financial year beginning on January 1, 2021, that are relevant to the Group
and that have had any impact in the interim period. New standards, amendments to standards and interpretations that are not yet effective,
which have been deemed by the Company as currently not relevant, are not listed here.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)
GH Research is a clinical-stage biopharmaceutical
company developing innovative therapeutics. The Group is exposed to all risks inherent in establishing and developing its business, including
the substantial uncertainty that current projects will succeed. Research and development expenses have been incurred from the start of
the Group's activities, generating negative cash flows from operating activities since formation.
Since its incorporation, the Group has
funded its growth through capital increases. The Group has never taken bank loans nor otherwise incurred debt on its balance sheet. As
a result, the Group is not exposed to liquidity risk through requests for early repayment of loans.
As of June 30, 2021, the Group's
cash amounted to $292.6 million (December 31, 2020: $5.9 million).
The board of directors believes that
the Group has sufficient financial resources available to cover its planned cash outflows for at least the next twelve months from the
date of issuance of these unaudited condensed consolidated interim financial statements. The Group, therefore, continues to adopt the
going concern basis in preparing its unaudited condensed consolidated interim financial statements.
The preparation of the unaudited condensed
consolidated interim financial statements requires management to make judgements, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing these unaudited condensed
consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies
and the key sources of estimation uncertainty included those that applied to the financial statements of GH Research Ireland Limited for
the year ended December 31, 2020.
The accounting policies, presentation
and methods of computation followed in the unaudited condensed consolidated interim financial statements are consistent with those applied
in the Group's most recent annual financial statements and have been applied consistently to all periods presented in the unaudited
condensed consolidated interim financial statements.
The unaudited condensed consolidated
interim financial statements incorporate the financial statements of the Company and its subsidiary, GH Research Ireland Limited. Subsidiaries
are all entities over which the Company has control. Control is achieved when the Company has power over an entity, is exposed to or has
rights to variable returns from its involvement with the entity and has the ability to affect returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are deconsolidated from the date
that control ceases. All intercompany transactions have been eliminated.
plant and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the respective
assets, which are as follows:
| Estimated Useful Life | |
| IT equipment | 3 years |
| Medical equipment | 2 years |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)
Share-based compensation
The fair value of options granted under
the share option plan is recognized as an employee share-based compensation expense with a corresponding increase in equity. The total
expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.
Incremental transaction costs are capitalized
as incurred and are shown in equity as a deduction, net of tax, from the proceeds received from financing rounds and the initial public
offering. If the equity instruments are not subsequently issued, the transaction costs would be expensed.
Cash represents cash held on bank current
accounts and is carried at amortized cost. The Company's cash balance is maintained with well established, highly rated financial
institutions. As of June 30, 2021, the cash balance is held at one bank that has S&P's credit rating of BBB+. The majority of
the cash balance is held in U.S. dollars with limited exposure to currency risk.
Fair value estimation
At June 30, 2021, the carrying amount
is considered to be identical to the fair value for the following financial assets and liabilities:
Other current assets
Trade payables and other current liabilities
Management considers the Group to have
only a single segment: Research and Development ("R&D"). This is consistent with the way that information is reported