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PROQR THERAPEUTICS N.V.
Unaudited Condensed Interim Financial Statements
| PAGE | ||||
| Unaudited Condensed Statement of Financial Position as of March 31, 2015 and December 31, 2014 | F-2 | |||
| Unaudited Condensed Statement of Comprehensive Loss for the Three Month Period ended March 31, 2015 and 2014 | F-3 | |||
| Unaudited Condensed Statement of Changes in Equity for the Three Month Period ended March 31, 2015 and 2014 | F-4 | |||
| Unaudited Condensed Statement of Cash Flows for the Three Month Period ended March 31, 2015 and 2014 | F-5 | |||
| Notes to Unaudited Condensed Interim Financial Statements | F-6 |
PROQR THERAPEUTICS N.V.
Unaudited Condensed Statement of Financial Position
| March 31, 2015 | December 31, 2014 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | 113,815 | 112,736 | ||||||
| Prepayments and other receivables | 1,551 | 735 | ||||||
| Social securities and other taxes | 323 | 426 | ||||||
| Total current assets | 115,689 | 113,897 | ||||||
| Property, plant and equipment | 1,747 | 1,187 | ||||||
| Intangible assets | 152 | 163 | ||||||
| Total assets | 117,588 | 115,247 | ||||||
| Liabilities and shareholders equity | ||||||||
| Current liabilities | ||||||||
| Finance lease liabilities | 30 | 34 | ||||||
| Trade payables | 2,412 | 1,247 | ||||||
| Social securities and other taxes | 274 | 341 | ||||||
| Pension premiums | 130 | 127 | ||||||
| Other current liabilities | 1,918 | 1,265 | ||||||
| Total current liabilities | 4,764 | 3,014 | ||||||
| Finance lease liabilities | 7 | 15 | ||||||
| Borrowings | 2,885 | 2,814 | ||||||
| Total liabilities | 7,656 | 5,843 | ||||||
| Shareholders equity | ||||||||
| Shareholders equity | 109,932 | 109,404 | ||||||
| Total liabilities and shareholders equity | 117,588 | 115,247 |
The notes are an integral part of these condensed interim financial statements.
PROQR THERAPEUTICS N.V.
Unaudited Condensed Statement of Profit or Loss and OCI
( in thousands, except share and per share data)
| THREE MONTH PERIOD ENDED MARCH 31, | ||||||||
| 2015 | 2014 | |||||||
| Other income | 338 | 4 | ||||||
| Research and development costs | (5,480 | ) | (1,265 | ) | ||||
| General and administrative costs | (1,603 | ) | (595 | ) | ||||
| Total operating costs | (7,083 | ) | (1,860 | ) | ||||
| Operating result | (6,745 | ) | (1,856 | ) | ||||
| Finance income and expense | 6,980 | (63 | ) | |||||
| Result before corporate income taxes | 235 | (1,919 | ) | |||||
| Income taxes | ||||||||
| Net profit (loss) attributable to equity holders of the Company | 235 | (1,919 | ) | |||||
| Other comprehensive income | ||||||||
| Total comprehensive profit (loss) (attributable to equity holders of the Company) | 235 | (1,919 | ) | |||||
| Share information | ||||||||
| Weighted average number of shares outstanding 1 - basic | 23,338,663 | 6,467,419 | ||||||
| Weighted average number of shares outstanding 1 - diluted | 24,378,072 | 6,467,419 | ||||||
| Earnings per share attributable to the equity holders of the Company (expressed in Euro per share) | 0.01 | (0.30 | ) | |||||
| Basic profit (loss) per share | 0.01 | (0.30 | ) 1 | |||||
| Diluted profit (loss) per share | 0.01 | (0.30 | ) 1 |
The notes are an integral part of these condensed interim financial statements.
PROQR THERAPEUTICS N.V.
Unaudited Condensed Statement of Changes in Equity
( in thousands, except share data)
| Number of shares | Total Share Capital | Share Premium | Equity Settled Employee Benefit Reserve | Accumulated Deficit | Total Equity | |||||||||||||||||||||||
| Ordinary | Preferred | |||||||||||||||||||||||||||
| Balance at January 1, 2014 | 6,108,152 | 59 | 3,482 | 41 | (3,671 | ) | (89 | ) | ||||||||||||||||||||
| Net loss | (1,919 | ) | (1,919 | ) | ||||||||||||||||||||||||
| Recognition of share-based payments | 104 | 104 | ||||||||||||||||||||||||||
| Shares issued in the period | ||||||||||||||||||||||||||||
| Treasury shares issued | ||||||||||||||||||||||||||||
| Balance at March 31, 2014 | 6,108,152 | 59 | 3,482 | 145 | (5,590 | ) | (1,904 | ) | ||||||||||||||||||||
| Balance at January 1, 2015 | 23,338,154 | 934 | 123,581 | 687 | (15,798 | ) | 109,404 | |||||||||||||||||||||
| Net profit (loss) | 235 | 235 | ||||||||||||||||||||||||||
| Recognition of share-based payments | 288 | 288 | ||||||||||||||||||||||||||
| Shares options exercised | 5,090 | 0 | 5 | 5 | ||||||||||||||||||||||||
| Balance at March 31, 2015 | 23,343,244 | 934 | 123,586 | 975 | (15,563 | ) | 109,932 |
The notes are an integral part of these condensed interim financial statements
PROQR THERAPEUTICS N.V.
Unaudited Condensed Statement of Cash Flows
| THREE MONTH PERIOD ENDED MARCH 31, | ||||||||
| 2015 | 2014 | |||||||
| Cash flows from operating activities | ||||||||
| Net profit (loss) | 235 | (1,919 | ) | |||||
| Adjustments for: | ||||||||
| Depreciation | 95 | 17 | ||||||
| Share-based compensation | 288 | 104 | ||||||
| Financial income and expenses | (6,980 | ) | 63 | |||||
| Changes in working capital | 1,015 | (199 | ) | |||||
| Cash used in operations | (5,347 | ) | (1,934 | ) | ||||
| Corporate income tax paid | ||||||||
| Interest received/(paid) | 72 | (2 | ) | |||||
| Net cash used in operating activities | (5,275 | ) | (1,936 | ) | ||||
| Cash flow from investing activities | ||||||||
| Purchases of property, plant and equipment | (488 | ) | (156 | ) | ||||
| Purchases of intangible assets | ||||||||
| Net cash used in investing activities | (488 | ) | (156 | ) | ||||
| Cash flow from financing activities | ||||||||
| Proceeds from exercise of share options | 5 | |||||||
| Proceeds from borrowings | ||||||||
| Redemption of financial lease | (12 | ) | (15 | ) | ||||
| Net cash used in financing activities | (7 | ) | (15 | ) | ||||
| Net increase in cash and cash equivalents | (5,770 | ) | (2,107 | ) | ||||
| Currency effect cash and cash equivalents | 6,849 | |||||||
| Cash and cash equivalents, at beginning of the period | 112,736 | 4,129 | ||||||
| Cash and cash equivalents at the end of the period | 113,815 | 2,022 |
The notes are an integral part of these condensed interim financial statements.
PROQR THERAPEUTICS N.V.
Notes to Unaudited Condensed Interim Financial Statements
1. General information
ProQR Therapeutics N.V., or
ProQR or the Company , is a development stage company that primarily focuses on the development and commercialization of novel therapeutic medicines.
Since September 18, 2014, the Company s ordinary shares are listed on the NASDAQ Global Market under ticker symbol PRQR.
The Company was incorporated in the Netherlands, on February 21, 2012 and has been reorganized from a private company with limited liability to a public
company with limited liability on September 23, 2014. The Company has its statutory seat in Leiden, the Netherlands. The address of its headquarters and registered office is Darwinweg 24, 2333 CR Leiden, the Netherlands.
As used in these condensed interim financial statements, unless the context indicates otherwise, all references to ProQR or the
Company refer to ProQR Therapeutics N.V.
2. Significant Accounting Policies
These unaudited condensed financial statements have been prepared in accordance with International Financial Reporting Standards ( IFRS ), as issued
by the International Accounting Standards Board ( IASB ). Certain information and disclosures normally included in financial statements prepared in accordance with IFRS have been condensed or omitted. Accordingly, these condensed financial
statements should be read in conjunction with the Company s annual financial statements for the year ended December 31, 2014. In the opinion of management, all adjustments, consisting of normal recurring nature, considered necessary for a
fair presentation have been included in the condensed financial statements.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company s accounting policies. The areas involving a higher degree of judgment or complexity or areas where
assumptions and estimates are significant to these unaudited condensed interim financials are disclosed in Note 4.
The Company s financial
results have varied substantially, and are expected to continue to vary, from period to period. The Company believes that its ordinary activities are not linked to any particular seasonal factors.
The Company operates in one reportable segment, which comprises the discovery and development of innovative, RNA based therapeutics.
3. Adoption of new and revised International Financial Reporting Standards
The accounting policies adopted in the preparation of the condensed interim financial statements are consistent with those applied in the preparation of the
Company s annual financial statements for the year ended December 31, 2014. New Standards and Interpretations, which became effective as of January 1, 2015, did not have a material impact on our condensed interim financial statements.
4. Critical Accounting Estimates and Judgments
the application of the Company s accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the
estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
(a) Share-based payments
Share options granted to employees and consultants are measured at the fair value of the equity instruments granted. Fair value is determined through the use
of the Black-Scholes option-pricing model, which is considered the most appropriate model for this purpose by management.
Initially, the Company s
ordinary shares were not publicly traded and consequently the Company needed to estimate the fair value of its share and the expected volatility of that value. Please refer to Note 8 to the condensed interim financial statements for the assumptions
used in those estimates. The value of the underlying shares was determined on the basis of the prior sale of company stock method. As such, the Company has benchmarked the value per share to external transactions of Company shares and external
For options granted on September 17, 2014, the Company used the opening price of the Company s stock on
September 18, 2014, the first day of trading of the Company s stock on the Nasdag Global Market, which amounted to US$13.00 ( 10.03) as the value of its ordinary shares.
For all options granted subsequent to the initial public offering, the Company uses the closing price of the ordinary shares on the previous business day as
the exercise price of the options granted.
The result of the share option valuations and the related compensation expense is dependent on the model and
input parameters used. Even though Management considers the fair values reasonable and defensible based on the methodologies applied and the information available, others might derive a different fair value for the Company s share options.
(b) Corporate income taxes
The Company recognizes deferred tax assets arising from unused tax losses or tax credits only to the extent that the Company has sufficient taxable temporary
differences or there is convincing evidence that sufficient taxable profit will be available against which the unused tax losses or unused tax credits can be utilized. Management s judgment is that such convincing evidence is currently not
sufficiently available and a deferred tax asset is therefore only recognized to the extent that the Company has sufficient taxable temporary differences.
(c) Research and development expenditures
Research expenditures are currently not capitalized but are reflected in the income statement because the criteria for capitalization are not met. At each
balance sheet date, the Company estimates the level of service performed by the vendors and the associated costs incurred for the services performed.
Although we do not expect the estimates to be materially different from amounts actually incurred, the understanding of the status and timing of services
performed relative to the actual status and timing of services performed may vary and could result in reporting amounts that vary in any particular period.
5. Cash and Cash Equivalents
As of March 31, 2015,
the Company s cash and equivalents were 113,815,000 as compared to 112,736,000 at December 31, 2014. The increase was primarily driven by changes in the USD/EUR exchange rate and the resulting remeasurement, offset by
operating expenses in the quarter. A significant portion of the cash balance is denominated in US dollars. The cash balances are held at banks with investment grade credit ratings. The cash at banks is at full disposal of the Company. Bank deposits
are convertible into cash upon request of the Company.
6. Current liabilities
As of March 31, 2015 and December 31, 2014, the other current liabilities consisted principally of accruals for services provided by vendors not yet
billed and other miscellaneous liabilities. The accrued liabilities as at March 31, 2015 increased compared to December 31, 2014 as a result of the increased level of research and development activities and as a result of increased
staffing related accruals.
| March 31, 2015 | December 31, 2014 | |||||||
| ( in thousands) | ||||||||
| Innovation credit | 2,588 | 2,588 | ||||||
| Accrued interest on innovation credit | 297 | 226 | ||||||
| 2,885 | 2,814 |
Innovation credit ( Innovatiekrediet )
On June 1, 2012, ProQR was awarded an Innovation credit by the Dutch government, through its agency RVO (previously: AgentschapNL ) of the
Ministry of Economic Affairs, for the Company s cystic fibrosis program. The credit was increased in the course of 2013 and 2014. The credit covers 35% of the costs incurred in respect of the program up to an initial maximum of
5.0 million through November 30, 2015.
The credit is interest-bearing at a rate of 10% per annum. The credit, including
accrued interest, is repayable in three instalments on January 31, 2017, January 31, 2018 and January 31, 2019, depending on the technical success of the program.
The assets which are co-financed with the granted innovation credit are subject to a right of pledge for the benefit of RVO.
8. Shareholders equity
The authorized share
capital of the Company amounting to 934,000 consists of 23,343,244 ordinary shares with a nominal value of 0.04 per share. All issued shares have been fully paid in cash.
On September 15, 2014, the general meeting of shareholders of the Company resolved to approve and effect a capital reorganization, including a share
split and bonus share issuance. The combined effect of the share split and bonus share issuance was a 101.804232-for-1 share split of the outstanding ordinary and preferred shares held by the Company s
shareholders. This share split became effective on September 15, 2014.
All share, per-share and related information presented in the comparative
figures of these condensed interim financial statements and accompanying footnotes have been retroactively adjusted, where applicable, to reflect the impact of the share split.
On September 18, 2014, the Company was listed at the NASDAQ Global Market under ticker symbol PRQR. In connection with this listing, the Company issued a
total of 8,625,000 ordinary shares against the initial public offering price of $ 13.00, resulting in gross proceeds of $ 112,125,000 ( 87,202,000). The number of shares issued includes the exercise of the overallotment option granted to
the underwriters. The net proceeds raised in the offering amounted to 80,376,000, net of 8,589,000 of underwriting discounts and offering expenses, of which 6,826,000 was processed through share premium and 1,763,000 was
included in the statement of comprehensive loss as general and administrative costs.