Exhibit 99.2
TABLE OF CONTENTS
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Notes to the unaudited condensed interim consolidated financial information | | 10 |
| 10 | |
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1
INTERIM FINANCIAL REPORT
FIRST HALF 2023
1.BUSINESS UPDATE
A. CLINICAL UPDATE
DREAM US: IDE PIVOTAL STUDY
Nyxoah initiated its pivotal DREAM IDE trial in the United States in December 2020 to support an application seeking FDA marketing authorization and, ultimately, reimbursement in the U.S. for bilateral hypoglossal nerve stimulation for the treatment of moderate-to-severe obstructive sleep apnea (“OSA”). The DREAM trial is a multicenter, prospective, open-label trial in which patients who undergo implantation of the Genio® system will be followed for five years post-implantation to assess the safety and efficacy of the Genio® system in patients with moderate-to-severe OSA.
The trial was initially expected to enroll 134 patients who will undergo the implantation procedure with 12-month effectiveness and safety primary endpoints across 18 centers in the United States and six international sites. In April 2022, the FDA approved the Company’s request to reduce the trial’s sample size to 115 patients from 134 after reviewing data from the BETTER SLEEP trial (see below).
The primary safety endpoint is incidence of device-related severe adverse events ("SAEs") at 12-months post implantation. The co-primary effectiveness endpoints are the percentage of responders with at least a 50% reduction on the apnea-hypopnea index ("AHI") with hypopneas associated with a 4% oxyhemoglobin desaturation and a remaining AHI with hypopneas associated with a 4% oxyhemoglobin desaturation less than 20, and a 25% reduction on the oxygen desaturation index ("ODI") between baseline and 12-month visits. Patients with moderate to severe OSA (AHI score between 15 and 65) and aged between 22 and 75 years are eligible for enrolment if they failed, did not tolerate or refused positive airway pressure ("PAP") treatment. Patients with a body mass index above 32 kg/m2, a complete concentric collapse ("CCC") observed during a drug induced sleep endoscopy and combined central and mixed AHI above 25% at baseline polysomnography are to be excluded.
Enrollment in the DREAM trial is now complete, and 115 patients have undergone a Genio® implantation procedure. The company presented 12-month efficacy data on the first 34 DREAM patients and safety data, as of March 14, 2023, on all DREAM patients demonstrating a 65% AHI responder rate, a 76% ODI responder rate and safety in-line with expectations. These data are preliminary and not conclusive of final DREAM success. For the trial to be successful, of the 115 patients, at least 63% of patients need to be AHI and ODI responders at the 12-month follow-up. The Company anticipates having 12-month clinical data in the first half of 2024 and has submitted the first and second modules in the modular PMA.
BETTER SLEEP: ACHIEVED PRIMARY ENDPOINT IN BOTH CCC AND NON-CCC PATIENT COHORTS
In March 2022, the Company attended the World Sleep Congress in Rome, Italy, and presented data generated from its BETTER SLEEP trial, a multicenter, prospective, open-label, two-group clinical trial, designed to assess the long-term safety and performance of the Genio® system for the treatment of adult OSA patients with and without CCC of the soft palate over a period of 36 months post-implantation. The BETTER SLEEP trial included a subgroup of CCC patients, which is a patient population that is contraindicated for unilateral hypoglossal nerve stimulation.
In the BETTER SLEEP trial, 42 patients were implanted with the Genio® system, 18 of whom presented with CCC (or 42.9% of the total implanted population) at eight research centers in Australia. The primary safety endpoint was the incidence of device-related SAEs six months post-implantation. The primary performance endpoint was achieving at least a 4-point reduction in the apnea-hypopnea index (4% oxygen desaturation, or AHI4) from baseline at six months for the entire patient cohort. Patients with moderate to severe AHI scores (15 < AHI < 65) and aged between 21 and 75 years were eligible for enrollment if they failed, refused or did not tolerate PAP treatment. Patients with a body mass index above 32 kg/m2 were excluded.
Three patients in the non-CCC arm and three patients in the CCC arm did not complete their six-month polysomnography, and as a result, the analysis was calculated based on 36 patients (21 non-CCC and 15 CCC). Of these 36 patients, there were 23 responders (64%), including nine of the 15 CCC patients (60%) and 14 of the 21 non-CCC patients (67%), at six months. The overall reduction was
2
statistically significant with an 11-point reduction (p<0.001), with statistically significant reductions of 10 points (p=0.001) in the CCC cohort and 11 points (p<0.001) in the non-CCC cohort. In addition, mean AHI4 reduction exceeded 70% among responders in both CCC and non-CCC cohorts. These results are subject to final review and validation.
With respect to the primary safety endpoint, preliminary unadjudicated safety data showed four SAEs in three patients during the six-month post-implantation period. Of those, two SAEs in one patient were reported as device related, one SAE in one patient was reported as procedure and device related, and one SAE in one patient was reported as unrelated to procedure or device. Final review and adjudication of SAEs and adverse events ("AEs") have not yet been completed by an independent clinical events committee and as a result the characterization of SAEs or AEs could be subject to change.
While additional data, including responder rates, remains subject to ongoing review and continues to be analyzed, the Company observed in the per protocol group a 70% responder rate in the non-CCC patient subgroup based on the Sher criteria. The per protocol group consisted of 35 patients and excluded five patients from the mITT analysis population: two of these patients were lost to follow-up, one patient did not comply with the study protocol, and two patients were removed from the study by the investigator, one for hostility towards staff and one having returned to continuous positive airway pressure, therapy.
The Company expects to announce additional data with respect to the trial as further analyses are conducted and seeks to publish the full data set from the trial in a peer-reviewed publication. There will be no additional enrollment in the BETTER SLEEP trial. However, the Company will continue to monitor patients in the evaluable patient population and plan to continue evaluating over the course of three years following implantation.
The data generated from this study were used to expand the Company’s CE mark for the Genio® system to treat patients demonstrating CCC at the soft palate level, and the first commercial Genio® implants occurred in CCC patients in Germany during the first quarter of 2022.
ACCCESS U.S. IDE STUDY SEEKING APPROVAL TO TREAT CCC PATIENTS
In the United States, supported by the BETTER SLEEP study data, the FDA in September 2021 granted Breakthrough Device Designation for the Genio® system in order to shorten the approval path to treat CCC patients. Following a series of sprint discussions with the FDA regarding the design of a trial called ACCCESS to assess the safety and efficacy of the Genio® system on CCC patients, the FDA approved the Company’s IDE application in July 2022.
In this study, Nyxoah will implant up to 106 patients across up to 40 implant sites with co-primary efficacy endpoints of AHI responder rate, per the Sher criteria, and ODI responder rate, both assessed at 12 months post-implant. The clinical sites are being activated, and the first patients had undergone a Genio(R) implantation procedure.
B.EUROPEAN COMMERCIALIZATION
During the first six months of 2023, Nyxoah recognized total revenue of €1.5 million, primarily in Germany. After securing DRG reimbursement in Germany during the first quarter of 2021, Nyxoah built and expanded its German commercial organization to a total of 14 full time employees.
Nyxoah’s commercial strategy is focused on creating a Center of Excellence ecosystem, with a high level of clinical expertise between implanting ENT surgeons and sleep physicians who are able to provide more treatment options to their large patient pools. As of June 30, 2023, the Company has activated 42 Tier 1 sites across Germany, up from 12 as of December 31, 2021.
The Company has also focused on entering new European markets. The Company has secured DRG reimbursement in Switzerland, state reimbursement in Austria, and is awaiting reimbursement decisions in several other countries. Nyxoah has also generated revenue in Switzerland and Austria, and the Company expects to expand into other European countries.
2.FINANCIAL HIGHLIGHTS
Revenue was €1.5 million for the six months ending June 30, 2023, compared to €1.6 million for the six months ending June 30, 2022 with strong acceleration in Q2 2023.
3
Cost of goods sold was €0.6 million for the six months ending June 30, 2023, compared to €0.6 million cost for the six months ending June 30, 2022.
Selling, general and administrative expenses increased by €3.0 million or 34 % from €8.7 million for the six months ended June 30, 2022 to €11.7 million for the six months ended June 30, 2023, mainly due to an increase of costs to support the commercialization of Genio® system in Europe, scale up of the Company and also due to a start of new ERP system implementation.
Before capitalization of €5.0 million for the six months ended June 30, 2023 and €7.8 million for the six months ended June 30, 2022, research and development expenses increased by €3.0 million or 20 %, from €14.8 million for the six months ended June 30, 2022, to €17.8 million for the six months ended June 30, 2023, due to the combined effect of higher clinical, R&D activities and manufacturing expenses and also due to a start of new ERP system implementation. This increase is mainly in staff, consulting costs and in manufacturing and outsourced development to support those activities, these increases were offset by a decrease of €1.7 million in clinical study activities due to completion of Dream Study.
Nyxoah realised a net financial loss of €0.3 million for the six months ending June 30, 2023 primarily driven by the exchange rate depreciation of dollar versus euro. This compares to a net positive financial result of €3.3 million for the six months ended June 30, 2022, during which dollar appreciated versus euro.
Nyxoah realized a net loss of €24.7 million for the six months ended June 30, 2023, compared to a net loss of €11.7 million for the six months ended June 30, 2022
Cash and cash equivalents
On June 30, 2023, cash and cash equivalents and financial assets totalled €84.5 million, compared to €94.9 million on December 31, 2022. The decrease in cash and cash equivalents resulted mainly from net cash used in operating activities of €22.5 million and net cash from investing activities of €3.9 million and offset by net cash flows from financial activities of €17.8 million due to capital increase. See note 13.
3.2023 OUTLOOK
The Company expects to continue ramping up sales in Germany as well as in other European countries where we are already present.
In the US, the Company will focus on patient follow-up in the DREAM IDE trial resulting in reaching primary endpoints, continue to enrol the ACCCESS IDE study for CCC patients and begin preparations to enter the US market with regulatory, manufacturing and market access readiness.
4.RISK FACTORS
We refer to the description of risk factors in the Company’s 2022 annual report, pp. 60-83. In summary, the principal risks and uncertainties faced by us relate to our financial situation and need for additional capital, clinical development of our product candidates, commercialization and reimbursement of our product candidates, our dependence on third parties and on key personnel, the markets and countries in which we operate, the manufacturing of our product candidates, legal and regulatory compliance matters, our intellectual property, our organization and operations.
4
5.FORWARD-LOOKING STATEMENTS
This interim management report contains forward-looking statements. All statements other than present and historical facts and conditions contained in this report, including statements regarding our future results of operations and financial position, business strategy, plans and our objectives for future operations, are forward-looking statements. When used in this report, the words “anticipate,” “believe,” “can,” “could,” “estimate,” “expect,” “intend,” “is designed to,” “may,” “might,” “plan,” “potential,” “predict,” “objective,” “should,” or the negative of these and similar expressions identify forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties, and readers are cautioned that any such forward-looking statements are not guarantees of future performance. Nyxoah’s actual results may differ materially from those predicted by the forward-looking statements as a result of various important factors, including Nyxoah’s expectations regarding the inherent uncertainties associated with competitive developments, clinical trial and product development activities and regulatory approval requirements; Nyxoah’s reliance on collaborations with third parties; estimating the commercial potential of Nyxoah’s product candidates; Nyxoah’s ability to obtain and maintain protection of intellectual property for its technologies; Nyxoah’s limited operating history; and Nyxoah’s ability to obtain additional funding for operations and to complete the development and commercialization of its product candidates. A further list and description of these risks, uncertainties and other risks can be found in Nyxoah’s 2022 annual report. Given these uncertainties, the reader is advised not to place any undue reliance on such forward-looking statements. These forward-looking statements speak only as of the date of publication of this document. Nyxoah expressly disclaims any obligation to update any such forward-looking statements in this document, to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements, unless specifically required by applicable law or regulation.
5
NYXOAH SA
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION AS AT AND
FOR THE SIX MONTHS ENDED JUNE 30, 2023 –
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(unaudited)
(in thousands)
| | | | | | | | |
| | | | As at | ||||
| | | | June 30 | | December 31 | ||
|
| Notes |
| 2023 |
| 2022 | ||
ASSETS | | | | | | | | |
Non-current assets |
|
|
| |
|
| |
|
Property, plant and equipment |
| 7 |
| | 2,813 |
| | 2,460 |
Intangible assets |
| 8 |
| | 44,488 |
| | 39,972 |
Right of use assets |
| 9 |
| | 3,571 |
| | 3,159 |
Deferred tax asset |
| 19 |
| | 48 |
| | 47 |
Other long-term receivables |
|
|
| | 165 |
| | 173 |
|
|
|
| € | 51,085 |
| € | 45,811 |
Current assets |
|
|
| | |
| | |
Inventory |
| 10 |
| | 1,146 |
| | 882 |
Trade receivables |
| 11 |
| | 1,820 |
| | 1,463 |
Other receivables |
| 11 |
| | 2,262 |
| | 1,775 |
Other current assets |
| 12 |
| | 1,576 |
| | 1,284 |
Financial assets |
| 14 |
| | 67,919 |
| | 76,968 |
Cash and cash equivalents |
| 13 |
| | 16,604 |
| | 17,888 |
|
|
|
| € | 91,327 |
| € | 100,260 |
Total assets |
|
|
| € | 142,412 |
| € | 146,071 |
|
|
|
| |
|
| | |
EQUITY AND LIABILITIES |
|
|
| |
|
| | |
Capital and reserves |
|
|
| |
|
| | |
Capital |
| 15 |
| | 4,924 |
| | 4,440 |
Share premium |
| 15 |
| | 246,070 |
| | 228,275 |
Share based payment reserve |
| 16 |
| | 7,005 |
| | 5,645 |
Other comprehensive income |
| 15 |
| | 98 |
| | 176 |
Retained loss |
|
|
| | (142,522) |
| | (118,212) |
Total equity attributable to shareholders |
|
|
| € | 115,575 |
| € | 120,324 |
|
|
|
| |
|
| | |
LIABILITIES |
|
|
| |
|
| | |
Non-current liabilities |
|
|
| |
|
| | |
Financial debt |
| 17 |
| | 8,433 |
| | 8,189 |
Lease liability |
| 9 |
| | 2,991 |
| | 2,586 |
Pension liability |
|
|
| | 50 |
| | — |
Provisions |
|
|
| | 127 |
| | 59 |
Deferred tax liability |
|
|
| | — |
| | — |
|
|
|
| € | 11,601 |
| € | 10,834 |
Current liabilities |
|
|
| |
|
| | |
Financial debt |
| 17 |
| | 559 |
| | 388 |
Lease liability |
| 9 |
| | 751 |
| | 719 |
Trade payables |
| 18 |
| | 4,690 |
| | 4,985 |
Current tax liability |
| 19 |
| | 4,475 |
| | 3,654 |
Other payables |
| 20 |
| | 4,761 |
| | 5,167 |
|
|
|
| € | 15,236 |
| € | 14,913 |
Total liabilities |
|
|
| € | 26,837 |
| € | 25,747 |
Total equity and liabilities |
|
|
| € | 142,412 |
| € | 146,071 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
6
NYXOAH SA
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION AS AT AND
FOR THE SIX MONTHS ENDED JUNE 30, 2023 -
INTERIM CONSOLIDATED STATEMENTS OF LOSS AND OTHER COMPREHENSIVE LOSS
(unaudited)
(in thousands)
| | | | | | | | | | | | | | |
| | |
| For the three months |
| For the six months ended | ||||||||
| | | | ended June 30 | | June 30 | ||||||||
|
| Notes | | 2023 |
| 2022 |
| 2023 |
| 2022 | ||||
Revenue | | 22 | | | 1,107 | | | 936 | | | 1,548 | | | 1,595 |
Cost of goods sold |
| 22 | | | (419) | |
| (334) |
| | (594) | |
| (623) |
Gross profit |
|
| | € | 688 | | € | 602 | | € | 954 | | € | 972 |
Research and Development Expense |
| 22 | |
| (6,605) | |
| (3,470) | |
| (12,762) | |
| (7,065) |
Selling, General and Administrative Expense |
| 22 | |
| (6,185) | |
| (4,536) | |
| (11,736) | |
| (8,729) |
Other income/(expense) |
|
| |
| 219 | |
| 14 | |
| 265 | |
| 150 |
Operating loss for the period |
|
| | € | (11,883) | | € | (7,390) | | € | (23,279) | | € | (14,672) |
Financial income |
| 24 | |
| 789 | |
| 4,669 | |
| 1,414 | |
| 6,246 |
Financial expense |
| 25 | |
| (775) | |
| (2,162) | |
| (1,732) | |
| (2,950) |
Loss for the period before taxes |
|
| | € | (11,869) | | € | (4,883) | | € | (23,597) | | € | (11,376) |
Income taxes |
| 19 | |
| (928) | |
| (107) | |
| (1,110) | |
| (315) |
Loss for the period |
|
| | € | (12,797) | | € | (4,990) | | € | (24,707) | | € | (11,691) |
|
|
| |
| | |
| | |
| | |
| |
Loss attributable to equity holders |
|
| | € | (12,797) | | € | (4,990) | | € | (24,707) | | € | (11,691) |
Other comprehensive loss |
|
| |
| | |
| | |
| | |
| |
Items that may be subsequently reclassified to profit or loss (net of tax) |
|
| |
| | |
| | |
| | |
| |
Currency translation differences |
|
| |
| (50) | |
| (12) | |
| (78) | |
| (114) |
Total comprehensive loss for the year, net of tax |
|
| | € | (12,847) | | € | (5,002) | | € | (24,785) | | € | (11,805) |
Loss attributable to equity holders |
|
| | € | (12,847) | | € | (5,002) | | € | (24,785) | | € | (11,805) |
|
|
| |
| | |
| | |
| | |
| |
Basic Loss Per Share (in EUR) |
| 26 | | € | (0.447) | | € | (0.193) | | € | (0.907) | | € | (0.453) |
Diluted Loss Per Share (in EUR) |
| 26 | | € | (0.447) | | € | (0.193) | | € | (0.907) | | € | (0.453) |
The accompanying notes are an integral part of these condensed consolidated interim financial statements
7
NYXOAH SA
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION AS AT AND
FOR THE SIX MONTHS ENDED, JUNE 30 2023 -
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(unaudited)
(in thousands)
| | | | | | | | | | | | | | | | | | |
| | Attributable to owners of the parent | ||||||||||||||||
| | | | | | | | Share | | | | | | | | | | |
| | | | | | | | based | | Other | | | | | | | ||
| | Common | | Share | | payment | | comprehensive | | Retained | | | | |||||
|
| shares |
| premium |
| reserve |
| income |
| loss |
| Total | ||||||
Balance at January 1, 2023 |
| € | 4,440 |
| € | 228,275 |
| € | 5,645 |
| € | 176 |
| € | (118,212) |
| € | 120,324 |
Loss for the period | |
| — | |
| — | |
| — | |
| — | |
| (24,707) | |
| (24,707) |
Other comprehensive loss for the period | |
| — | |
| — | |
| — | |
| (78) | |
| — | |
| (78) |
Total comprehensive loss for the period | |
| — | |
| — | |
| — | | € | (78) | | € | (24,707) | | € | (24,785) |
Equity-settled share-based payments | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Granted during the period | |
| — | |
| — | |
| 1,757 | |
| — | |
| — | |
| 1,757 |
Forfeited during the period | |
| — | |
| — | |
| (397) | |
| — | |
| 397 | |
| — |
Transaction cost | | | — | | | (337) | | | — | | | — | | | — | | | (337) |
Issuance of shares for cash | |
| 484 | |
| 18,132 | |
| — | |
| — | |
| — | |
| 18,616 |
Total transactions with owners of the company recognized directly in equity | |
| 484 | |
| 17,795 | |
| 1,360 | |
| — | |
| 397 | |
| 20,036 |
Balance at June 30, 2023 | | € | 4,924 | | € | 246,070 | | € | 7,005 | | € | 98 | | € | (142,522) | | € | 115,575 |
| | | | | | | | | | | | | | | | | | |
| | Attributable to owners of the parent | ||||||||||||||||
| | | | | | | | Share | | | | | | | | | | |
| | | | | | | | based | | Other | | | | | | | ||
| | Common | | Share | | payment | | comprehensive | | Retained | | | | |||||
|
| shares |
| premium |
| reserve |
| income |
| loss |
| Total | ||||||
Balance at January 1, 2022 | | € | 4,427 | | € | 228,033 | | € | 3,127 | | € | 202 | | € | (87,167) | | € | 148,622 |
Loss for the period | |
| — | |
| — | |
| — | |
| — | |
| (11,691) | |
| (11,691) |
Other comprehensive income for the period | |
| — | |
| — | |
| — | |
| (114) | |
| — | |
| (114) |
Total comprehensive loss for the period | |
| — | |
| — | |
| — | | € | (114) | | € | (11,691) | | € | (11,805) |
Equity-settled share-based payments | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Granted during the period | | | — | | | — | | | 1,292 | | | — | | | — | | | 1,292 |
Exercised during the period | |
| 4 | |
| 125 | |
| (8) | |
| — | |
| 8 | |
| 129 |
Issuance of shares for cash | | | 7 | | | — | | | — | | | — | | | — | | | 7 |
Total transactions with owners of the company recognized directly in equity | |
| 11 | |
| 125 | |
| 1,284 | |
| — | |
| 8 | |
| 1,428 |
Balance at June 30, 2022 | | € | 4,438 | | € | 228,158 | | € | 4,411 | | € | 88 | | € | (98,850) | | € | 138,245 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
8
NYXOAH SA
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION AS AT AND
FOR THE SIX MONTHS ENDED JUNE 30, 2023 –
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
| | | | | | | | |
| | |
| For the six months ended | ||||
| | | | June 30 | ||||
|
| Notes |
| 2023 |
| 2022 | ||
CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | | | |
Loss before tax for the year |
|
| | € | (23,597) | | € | (11,376) |
Adjustments for |
|
| |
| | |
| |
Finance income |
|
| |
| (1,414) | |
| (6,246) |
Finance expenses |
|
| |
| 1,732 | |
| 2,950 |
Depreciation and impairment of property, plant and equipment and right-of-use assets |
| 7, 9 | |
| 640 | |
| 536 |
Amortization of intangible assets |
| 8 | |
| 477 | |
| 402 |
Share-based payment transaction expense |
| 16 | |
| 1,757 | |
| 1,292 |
Increase/(Decrease) in provisions |
|
| |
| 119 | |
| 32 |
Other non-cash items |
|
| |
| (16) | |
| 37 |
Cash generated before changes in working capital |
|
| | € | (20,302) | | € | (12,373) |
Changes in working capital |
|
| |
| | |
| |
Decrease/(Increase) in inventory |
| 10 | |
| (264) | |
| (160) |
(Increase)/Decrease in trade and other receivables |
| 11 | |
| (671) | |
| 1,011 |
Increase/(Decrease) in trade and other payables |
| 18, 20 | |
| (967) | |
| 2,053 |
Cash generated from changes in operations |
|
| | € | (22,204) | | € | (9,469) |
Income tax paid |
|
| |
| (274) | |
| (254) |
Net cash from / (used in) operating activities |
|
| | € | (22,478) | | € | (9,723) |
CASH FLOWS FROM INVESTING ACTIVITIES |
|
| |
| | |
| |
Purchases of property, plant and equipment |
| 7 | |
| (676) | |
| (302) |
Capitalization of intangible assets |
| 8 | |
| (4,993) | |
| (7,650) |
Purchase of financial assets - current | | 14 | | | (43,400) | | | (44,032) |
Proceeds from sale of financial assets - current | | 14 | | | 52,383 | | | — |
Interest income on financial assets |
| | |
| 572 | |
| — |
Net cash from / (used in) investing activities |
|
| | € | 3,886 | | € | (51,984) |
CASH FLOWS FROM FINANCING ACTIVITIES |
|
| |
| | |
| |
Payment of principal portion of lease liabilities |
| 9 | |
| (395) | |
| (317) |
Repayment of other loan |
|
| |
| (42) | |
| (42) |
Interests paid |
|
| |
| (14) | |
| (134) |
Repayment of recoverable cash advance |
| 15 | |
| — | |
| — |
Proceeds from issuance of shares, net of transaction costs |
| 15 | |
| 18,279 | |
| 136 |
Other financial costs |
|
| |
| (32) | |
| (8) |
Net cash from / (used in) financing activities |
|
| | € | 17,796 | | € | (365) |
Movement in cash and cash equivalents |
|
| | € | (796) | | € | (62,072) |
Effect of exchange rates on cash and cash equivalents |
| | |
| (488) | |
| 2,165 |
Cash and cash equivalents at January 1 |
| 13 | | € | 17,888 | | € | 135,509 |
Cash and cash equivalents at June 30 |
| 13 | | € | 16,604 | | € | 75,602 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
9
NYXOAH SA
NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL INFORMATION
1.General information
Nyxoah SA (the “Company”) is a public listed company with limited liability (naamloze vennootschap/société anonyme) incorporated and operating under the laws of Belgium and is domiciled in Belgium. The Company is registered with the legal entities register (Brabant Walloon) under enterprise number 0817.149.675. The Company’s registered office is in Rue Edouard Belin 12, 1435 Mont-Saint-Guibert, Belgium.
The Company is a medical technology company focused on the development and commercialization of innovative solutions to treat Obstructive Sleep Apnea, or OSA. Our lead solution is the Genio® system, a CE-Marked, patient-centric, minimally invasive, next generation hypoglossal neurostimulations therapy for OSA. OSA is the world’s most common sleep disordered breathing condition and is associated with increased mortality risk and comorbidities including cardiovascular diseases, depression and stroke.
The Genio® system is the first neurostimulation system for the treatment of OSA to include a battery-free and leadless neurostimulator capable of delivering bilateral hypoglossal nerve stimulation to keep the upper airway open. The product is intended to be used as a second-line therapy to treat moderate to severe OSA patients who have either not tolerated, failed or refused conventional therapy, including Continuous Positive Airway Pressure, or CPAP, which, despite its proven efficacy, is associated with many limitations, meaning compliance is a serious challenge. In addition, other second-line treatments are more suitable to treat mild to moderate OSA (such as oral devices) or highly invasive. Compared to other hypoglossal nerve stimulation technologies for the treatment of OSA, the Genio® system is a disruptive, differentiating technology that targets a clear unmet medical need thanks to its minimally invasive and quick implantation technique, its external battery and its ability to stimulate the two branches of the hypoglossal nerve.
Obstructive sleep apnea is the world’s most common sleep disordered breathing condition. OSA occurs when the throat and tongue muscles and soft tissues relax and collapse. It makes a person stop breathing during sleep, while the airway repeatedly becomes partially (hypopnea) or completely (apnea) blocked, limiting the amount of air that reaches the lungs. During an episode of apnea or hypopnea, the patient’s oxygen level drops, which leads to sleep interruptions.
Nyxoah SA has established three wholly owned subsidiaries: Nyxoah Ltd, a subsidiary of the Company since October 21, 2009 (located in Israel and incorporated on January 10, 2008 under the name M.L.G. Madaf G. Ltd), Nyxoah Pty Ltd since February 1, 2017 (located in Australia) and Nyxoah Inc. since May 14, 2020 (located in the USA).
The interim condensed consolidated financial statements of Nyxoah SA and its subsidiaries (collectively, the Group) as of June 30, 2023 and for the three and six months ended June 30, 2023, have been authorized for issue on August 8, 2023 by the Board of Directors of the Company.
2.Significant accounting policies
Basis of Preparation of the interim condensed consolidated financial statements
The Company’s interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34 – Interim Financial Reporting (“IFRS”), as issued by the International Accounting Standards Board (IASB). They do not include all the information required for complete annual financial statements and should be read in conjunction with the Company’s last annual consolidated financial statements as at and for the year ended December 31, 2022.
Except for the application of standards, interpretations and amendments being mandatory as of January 1, 2023, the accounting policies used for the preparation of the interim condensed consolidated financial statements are consistent with those used for the preparation of the Company’s annual consolidated financial statements as of and for the year ended December 31, 2022.
The consolidated financial statements are presented in thousands of Euros (€) and all values are rounded to the nearest thousands, except when otherwise indicated (e.g. € million).
10
The preparation of the interim condensed consolidated financial statements 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 judgement or complexity, are areas where assumptions and estimates are significant to the consolidated financial statements. The critical accounting estimates used in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Company’s annual consolidated financial statements as of and for the year ended December 31, 2022.
Going concern principle
The Unaudited Interim Condensed Consolidated Financial Statements have been prepared on a going concern basis. As at June 30, 2023, the Company had cash and cash equivalents of €16.6 million and financial assets of €67.9 million. Based on cash flow forecasts for the remaining period of 2023 and 2024, which include significant expenses and cash outflows in relation to – among others – the ongoing clinical trials, the continuation of research and development project, and the scaling up of the Company’s manufacturing facilities. The Company believes that this cash position will be sufficient to meet the Company’s capital requirements and fund its operations for at least 12 months as from the date these financials are authorized for issuance.
New and amended standards and interpretations applicable
Effective for the annual periods beginning on January 1, 2023
The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
Several amendments and interpretations apply for the first time in 2023, but do not have an impact on the interim condensed consolidated financial statements of the Company:
₋ | IFRS 17 Insurance Contracts (applicable for annual periods beginning on or after January 1, 2023) |
₋ | Amendments to IFRS 17 Insurance contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative Information (applicable for annual periods beginning on or after January 1, 2023) |
₋ | Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting Policies (applicable for annual periods beginning on or after January 1, 2023) |
₋ | Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates (applicable for annual periods beginning on or after January 1, 2023) |
₋ | Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (applicable for annual periods beginning on or after January 1, 2023) |
₋ | Amendments to IAS 12 Income taxes: International Tax Reform – Pillar Two Model Rules (effective immediately – disclosures are required for annual periods beginning on or after 1 January 2023) |
3.Critical accounting estimates and assumptions
The preparation of interim financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that may significantly affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of the reporting period.
Refer to the disclosure note 5 from the Group’s 2022 year-end consolidated financial statements for further details about the main critical accounting estimates and assumptions.
11
4.Segment reporting
Based on the organizational structure, as well as the nature of financial information available and reviewed by the Company’s chief operating decision makers to assess performance and make decisions about resource allocations, the Company has concluded that its total operations represent one reportable segment. The chief operating decision maker is the CEO.
5.Fair Value
The carrying amount of cash and cash equivalents, trade receivables, other receivables, other current assets and financial assets approximate their value due to their short-term character.
The carrying value of current liabilities approximates their fair value due to the short-term character of these instruments. The fair value of non-current liabilities (financial debt and other non-current liabilities), excluding the derivative financial liabilities, is evaluated based on their interest rates and maturity date. These instruments have fixed interest rates and their fair value measurements are subject to changes in interest rates. The fair value measurement is classified as level 3.
The derivative financial liabilities and assets which consist of foreign currency options and foreign currency forwards are measured at fair value through profit and loss. Fair value is determined by the financial institution and is based on foreign currency forwards rates and the maturity of the instrument.
| | | | | | | | |
| | Carrying value | | Fair value | ||||
| | As at | | As at | | As at | | As at |
| | June 30, | | December 31, | | June 30, | | December 31, |
(in EUR 000) |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
Financial Assets |
|
|
|
|
|
|
|
|
Other long-term receivables (level 3) |
| 165 |
| 173 |
| 165 |
| 173 |
Trade and other receivables (level 3) |
| 4,082 |
| 3,237 |
| 4,082 |
| 3,237 |
Foreign currency forwards (level 2) |
| — |
| 1 |
| — |
| 1 |
Other current assets (level 3) |
| 1,576 |
| 1,284 |
| 1,576 |
| 1,284 |
Cash and cash equivalents (level 1) |
| 16,604 |
| 17,888 |
| 16,604 |
| 17,888 |
Financial assets (level 1) |
| 67,919 |
| 76,968 |
| 67,919 |
| 76,968 |
| | | | | | | | |
| | Carrying value | | Fair value | ||||
| | As at | | As at | | As at | | As at |
| | June 30, | | December 31, | | June 30, | | December 31, |
(in EUR 000) |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
Financial liabilities |
|
|
|
|
|
|
|
|
Financial debt (level 3) |
| 105 |
| 146 |
| 99 |
| 138 |
Foreign currency option (level 2) |
| 427 |
| 10 |
| 427 |
| 10 |
Recoverable cash advances (level 3) |
| 8,887 |
| 8,431 |
| 8,887 |
| 8,431 |
Trade and other payables (level 1 and 3) |
| 9,024 |
| 10,142 |
| 9,024 |
| 10,142 |
6.Subsidiaries
For all periods that are mentioned in this report, the Company owns 100% of the shares of Nyxoah LTD, an Israeli company located in Tel-Aviv that was incorporated in 2009 and has a share capital of NIS 1.00.
The Company also owns 100% of the shares of Nyxoah PTY LTD, an Australian Company located in Collingwood that was incorporated in 2017 and has a share capital of AUD 100.
In May 2020, the Company incorporated Nyxoah Inc, an US-based company located in Delaware with a share capital of USD 1.00. The Company owns 100% of the shares of Nyxoah Inc.
12
7.Property, Plant and Equipment
The total acquisitions for the six months ended June 30, 2023 amount to €0.7 million (2022: €302,000) and were mainly related to laboratory equipment, furniture and office equipment. Assets under construction were transferred to leasehold improvements for an amount of €0.6 million and to laboratory equipment for an amount of €139,000.
The depreciation charge amounts to €271,000 in 2023 and to €198,000 in 2022 for the six months ended June 30.
8.Intangible assets
| | | | | | |
| | Development | | Patents and | | |
(in EUR 000) |
| cost |
| licenses |
| Total |
Cost |
|
|
|
|
|
|
Opening value at January 1, 2022 |
| 25,610 |
| 591 |
| 26,201 |
Additions |
| 7,650 |
| — |
| 7,650 |
Cost at June 30, 2022 |
| 33,260 |
| 591 |
| 33,851 |
Opening value at January 1, 2023 |
| 41,073 |
| 591 |
| 41,664 |
Additions |
| 4,993 |
| — |
| 4,993 |
Cost at June 30, 2023 |
| 46,066 |
| 591 |
| 46,657 |
Amortization |
|
|
|
|
|
|
Opening amortization at January 1, 2022 |
| (837) |
| (42) |
| (879) |
Amortization |
| (381) |
| (21) |
| (402) |
Amortization at June 30, 2022 |
| (1,218) |
| (63) |
| (1,281) |
Opening amortization at January 1, 2023 |
| (1,608) |
| (84) |
| (1,692) |
Amortization |
| (456) |
| (21) |
| (477) |
Amortization at June 30, 2023 |
| (2,064) |
| (105) |
| (2,169) |
Net book value at June 30, 2022 |
| 32,042 |
| 528 |
| 32,570 |
Net book value at June 30, 2023 |
| 44,002 |
| 486 |
| 44,488 |
There is only one development project: The Genio® system. The Company started amortizing the first-generation Genio® system in 2021. The amortization amounted to €477,000 for the six months ended June 30, 2023 (2022: €402,000) and is included in research and development expense.
The Company continues to incur in 2023 development expenses with regard to the improved second-generation Genio® system and clinical trials to obtain additional regulatory approvals in certain countries or to be able to sell the Genio® System in certain countries. The total capitalized development expenses amounted to €5.0 million and €7.7 million for the six months ended June 30, 2023, and 2022, respectively.
9.Right of use assets and lease liabilities
For the six months ended June 30, 2023, the Company entered into new lease agreements for €208,000 (2022: €0.6 million). On top of that an existing lease contract has been extended for 15 years, resulting in an increase of the RoU asset and lease liability with €0.7 million. The repayments of lease liabilities amounted to €395,000 (2022: €317,000). The depreciations on the right of use assets amounted to €369,000 and €338,000 for the six months ended June 30, 2023, and 2022, respectively.
10.Inventory
| | | | |
| | As at | ||
| | June 30, | | December 31, |
(in EUR 000) |
| 2023 |
| 2022 |
Raw materials | | 341 | | 498 |
Work in progress |
| 607 |
| 100 |
Finished goods |
| 198 |
| 284 |
Total Inventory |
| 1,146 |
| 882 |
13
The increase in inventory is due to increasing activities to prepare for the commercialization and further scale-up of the company in 2023. For the period ended June 30, 2023 and the year ended December 31, 2022 the Company did not recognize any expenses for inventory write-offs since the inventory level is expected to be sold in the foreseeable future.
11.Trade and Other receivables
| | | | |
| | As at | ||
| | June 30, | | December 31, |
(in EUR 000) |
| 2023 |
| 2022 |
Trade receivables |
| 1,820 |
| 1,463 |
R&D incentive receivable (Australia) |
| 620 |
| 346 |
VAT receivable |
| 728 |
| 847 |
Current tax receivable |
| 248 |
| 159 |
Foreign currency swaps |
| — |
| 1 |
Other |
| 666 |
| 422 |
Total trade and other receivables |
| 4,082 |
| 3,238 |
The increase of €0.8 million in trade and other receivables is mainly due to an increase in trade receivables and an increase in R&D incentive receivables. We refer to note 22 for more details.
The Company may include unbilled receivables in its accounts receivable balance. Generally, these receivables represent earned revenue from products delivered to customers, which will be billed in the next billing cycle. All amounts are considered collectible and billable. As at December 31, 2022 and June 30, 2023, there were no unbilled receivables included in the trade receivables.
R&D incentive receivables relates to incentives received in Australia as support to the clinical trials and the development of the Genio® system.
The current tax receivable relates to excess payment of corporate income tax in Israel and in Belgium.
Other mainly relates advance payments and withholding tax to be received related to Belgian R&D employees.
12.Other current assets
The increase of €292,000 in other current assets as at June 30, 2023 is mainly due to a general increase in prepaid expenses and to a payment of €250,000 towards the Educational Grant with SMR Holding UG (Dr. Sommers). We refer to note 27 for more details.
13.Cash and cash equivalents
| | | | |
| | As at | ||
| | June 30, | | December 31, |
(in EUR 000) |
| 2023 |
| 2022 |
Short term deposit |
| 4,010 |
| 36 |
Current accounts |
| 12,594 |
| 17,852 |
Total cash and cash equivalents |
| 16,604 |
| 17,888 |
Cash and cash equivalents remain relatively stable totalling €16.6 million as at June 30, 2023, compared to €17.9 million as at December 31, 2022 with an increase of short term deposits (less than 3 months) by €4.0 million partially offset by a decrease of current account by €5.3 million.
14.Financial assets
Current financial assets relate to term accounts with an initial maturity longer than 3 months but less than 12 months measured at amortized costs.
14
In 2023, the Company entered into USD term deposits and US Treasury bills for a total amount $US 40.8 million (€37.4 million) and €6.0 million. During the period ended as at June 30, 2023, $US 25.0 million (€23.4 million) and €29.0 million reached maturity and is subsequently held as cash.
As per June 30, 2023, the current financial assets consists of $US 45.8 million (€41.9 million), which could generate a foreign currency exchange gain or loss in the financial results in accordance with the fluctuations of the USD/EUR exchange rate as the Company’s functional currency is EUR, and €26.0 million.
The total amount of term deposits as per June 30, 2023, amounts to €67.9 million.
15.Capital, Share Premium, Reserves
15.1. Capital and share premium
The number of shares and the par value in the paragraph below take into account resolutions adopted by the shareholders’ meeting of February 21, 2020. All existing preferred shares were converted into common shares, and then a share split of 500:1 was approved by the shareholders’ meeting. The tables and comments below reflect the number of shares after the share split of 500:1 as of January 1, 2020.
As part of the IPO on September 21, 2020, the Company incurred direct-attributable transaction costs of €6.5 million which have been deducted from the share premium.
As part of the IPO on July 7, 2021, the Company incurred direct-attributable transaction costs of €7.6 million which have been deducted from the share premium.
As of June 30, 2023, the share capital of the Company amounts to €4.9 million represented by 28,661,985 shares, and the share premium amounts to €260.6 million (before deduction of the transaction costs).
Evolution of the share capital and share premium over the six months ended June 30, 2023 and 2022:
| | | | | | | | | | |
|
| Common |
| Total of |
| Par value |
| Share |
| Share |
(Number of shares except otherwise stated) | | shares | | shares | | (EUR) | | capital | | premium |
January 1, 2022 |
| 25,772,359 |
| 25,772,359 |
| 0.17 |
| 4,427 |
| 242,198 |
February 10, 2022 - Exercise warrants |
| 25,000 |
| 25,000 |
| 0.17 |
| 4 |
| 125 |
June 8, 2022 - Capital increase in cash |
| 38,920 |
| 38,920 |
| 0.17 |
| 7 |
| — |
June 30, 2022 |
| 25,836,279 |
| 25,836,279 |
| 0.17 |
| 4,438 |
| 242,323 |
September 30, 2022 - Exercise warrants |
| 10,000 |
| 10,000 |
| 0.17 |
| 2 |
| 117 |
December 31, 2022 |
| 25,846,279 |
| 25,846,279 |
| 0.17 |
| 4,440 |
| 242,440 |
March 29, 2023 - Capital increase in cash |
| 393,162 |
| 393,162 |
| 0.17 |
| 68 |
| 2,481 |
March 30, 2023 - Capital increase in cash |
| 2,047,544 |
| 2,047,544 |
| 0.17 |
| 351 |
| 12,999 |
April 13, 2023 - Capital increase in cash |
| 375,000 |
| 375,000 |
| 0.17 |
| 65 |
| 2,651 |
June 30, 2023 | | 28,661,985 | | 28,661,985 | | 0.17 | | 4,924 | | 260,571 |
On March 29, 2023, the Company issued 393,162 new shares for an aggregate capital increase of €2.5 million (including share premium). The Company raised $2.8 million in gross proceeds pursuant to the Company’s $50 million at-the-market (“ATM”) program established on December 22, 2022 at an issue price equal to the market price on the Nasdaq Global Market at the time of the sale. The shares were purchased by historical Nyxoah shareholder Cochlear Limited, and the proceeds will be used for general corporate purposes.
On March 30, 2023, the Company raised €13.35 million private placement financing from the sale of 2,047,544 new ordinary shares at a price per share of €6.52 (approximately U.S. $7.10 at current exchange rates), the closing price on Euronext Brussels on March 23, 2023. Gross proceeds total €13.35 million (approximately U.S. $15 million at current exchange rates) and will be used for general corporate purposes.
On April 13, 2023, the Company issued 375,000 new shares for an aggregate capital increase of €2.7 million (including share premium). The Company raised $3.0 million in gross proceeds pursuant to the Company’s $50 million at-the-market ("ATM") program established
15
on December 22, 2022 at an issue price equal to the market price on the Nasdaq Global Market at the time of the sale. The proceeds will be used for general corporate purposes.
As part of above capital increases, the Company incurred direct-attributable transaction costs of €337,000 which have been deducted from the share premium. The proceeds from the capital increase net of transaction costs amounted to €18.3 million.
15.2.Reserves
The reserves include the share-based payment reserve (see note 16), other comprehensive income and the retained loss. Retained loss is comprised of primarily accumulated losses, other comprehensive income is comprised of currency translation reserves and remeasurements of post-employment benefit obligations.
The movement in other comprehensive income for the six months ended June 30, 2023 and 2022 is detailed in the table below:
| | | | | | |
| | | | Post- | | |
| | Currency | | employment | | |
| | translation | | benefit | | |
(in EUR 000) |
| reserve |
| obligations |
| Total |
Opening value at January 1, 2022 |
| 270 |
| (68) |
| 202 |
Currency translation differences |
| (114) |
| — |
| (114) |
Total other comprehensive income at June 30, 2022 |
| 156 |
| (68) |
| 88 |
Opening value at January 1, 2023 |
| 174 |
| 2 |
| 176 |
Currency translation differences |
| (78) |
| — |
| (78) |
Total other comprehensive income at June 30, 2023 |
| 96 |
| 2 |
| 98 |
16.Share-Based compensation
Equity-settled share-based payment transactions
As of June 30, 2023, the Company has five outstanding equity-settled share-based incentive plans, including (i) the 2016 warrants plan (the 2016 Plan), (ii) the 2018 warrants plan (the 2018 Plan), (iii) the 2020 warrants plan (the 2020 Plan), (iv) the 2021 warrants plan (the 2021 plan) and (v) the 2022 warrants plan (the 2022 plan). The Company had an extraordinary shareholders’ meeting on February 21, 2020 where it was decided to achieve a share split in a ratio of 500:1. Per warrant issued before February 21, 2020, 500 common shares will be issuable. For presentation purposes the tables and comments below reflect the number of shares the warrants give right to across all plans.
In accordance with the terms of the various plans, all warrants that had not yet vested before, vested on September 7, 2020, i.e. ten business days prior to the closing of the IPO on September 21, 2020.
| | | | |
Number of shares (after share split) warrants give right to across all plans |
| 2023 |
| 2022 |
Outstanding at January 1 |
| 1,416,490 |
| 993,490 |
Granted |
| 475,862 |
| 461,500 |
Forfeited/Cancelled |
| (139,250) |
| (14,125) |
Exercised |
| — |
| (25,000) |
Outstanding as at June 30 |
| 1,753,102 |
| 1,415,865 |
Exercisable as at June 30 |
| 996,086 |
| 779,966 |
16
The followings warrants from the 2021 warrant plan have been granted in 2023:
-March 24, 2023: 200,862 warrants;
-April 12, 2023: 100,000 warrants;
-June 14, 2023: 161,398 warrants.
On June 14, 2023, 13,602 warrants were granted from the 2022 warrant plan.
The following tables provide the input to the Black-Scholes model for warrants granted in 2018, 2020, 2021, 2022 and 2023 related to the 2016 warrant plan, the 2018 warrant plan, the 2020 warrant plan, the 2021 warrant plan and the 2022 warrant plan. The tables and notes uses as a basis, the number of shares the warrants give right to across all plans.
| | | | | | | | | | | |
| | | | | | | | | | Plan 2021 | |
|
| Plan 2016 |
| Plan 2018 |
| Plan 2018 |
| Plan 2020 |
| (grant Sept 17 |
|
| | (grant 2018) | | (grant 2018) | | (grant 2020) | | (grant 2020) | | 2021) |
|
Return Dividend |
| 0 | % | 0 | % | 0 | % | 0 | % | 0 | % |
Expected volatility |
| 66.92 | % | 56.32 | % | 56.32 | % | 56.32 | % | 51.30 | % |
Risk-free interest rate |
| 0.35 | % | (0.20) | % | (0.20) | % | (0.20) | % | (0.36) | % |
Expected life |
| 3 |
| 3 |
| 3 |
| 3 |
| 3 | |
Exercise price |
| 5.17 |
| 6.52 |
| 11.94 |
| 11.94 |
| 25.31 | |
Stock price |
| 1.09 |
| 10.24 |
| 10.20 |
| 10.20 |
| 25.75 | |
Fair value |
| 0.10 |
| 5.30 |
| 3.31 |
| 3.31 |
| 9.22 | |
| | | | | | | | | | | |
|
| Plan 2021 |
| Plan 2021 |
| Plan 2021 |
| Plan 2021 |
| Plan 2021 |
|
| | (grant Oct 27 | | (grant Feb 21 | | (grant Feb 21 | | (grant Feb 21 | | (grant May 14 | |
|
| 2021) |
| 2022) |
| 2022) |
| 2022) |
| 2022) |
|
Return Dividend |
| 0 | % | 0 | % | 0 | % | 0 | % | 0 | % |
Expected volatility |
| 51.50 | % | 49.80 | % | 49.80 | % | 49.80 | % | 49.80 | % |
Risk-free interest rate |
| (0.18) | % | 0.37 | % | 0.37 | % | 0.50 | % | 1.06 | % |
Expected life |
| 3 |
| 3 |
| 3 |
| 4 |
| 3 |
|
Exercise price |
| 25.31 |
| 17.76 |
| 25.31 |
| 17.76 |
| 13.82 |
|
Stock price |
| 20.50 |
| 17.50 |
| 17.50 |
| 17.50 |
| 13.82 |
|
Fair value |
| 5.94 |
| 6.05 |
| 4.15 |
| 6.90 |
| 4.94 |
|
| | | | | | | | | | | |
|
| Plan 2021 |
| Plan 2021 |
| Plan 2021 |
| Plan 2021 |
| Plan 2021 |
|
| | (grant June 8 | | (grant Aug 8 | | (grant Aug 8 | | (grant March 24 | | (grant April 12 |
|
| | 2022) | | 2022) | | 2022) | | 2023) | | 2023) |
|
Return Dividend |
| 0 | % | 0 | % | 0 | % | 0 | % | 0 | % |
Expected volatility |
| 52.60 | % | 53.71 | % | 53.97 | % | 52.00 | % | 52.00 | % |
Risk-free interest rate |
| 1.60 | % | 1.39 | % | 1.45 | % | 3.20 | % | 3.24 | % |
Expected life |
| 3 |
| 3 |
| 4 |
| 3 |
| 3 | |
Exercise price |
| 12.95 |
| 9.66 |
| 9.66 |
| 5.42 |
| 6.36 | |
Stock price |
| 13.34 |
| 9.75 |
| 9.75 |
| 6.70 |
| 7.08 | |
Fair value |
| 5.21 |
| 3.79 |
| 4.32 |
| 3.09 |
| 3.04 | |
17
| | | | | |
| | Plan 2021 | | Plan 2022 | |
| | (grant June 14 | | (grant June 14 | |
|
| 2023) |
| 2023) |
|
Return Dividend | | 0 | % | 0 | % |
Expected volatility | | 51.28 | % | 51.28 | % |
Risk-free interest rate |
| 3.36 | % | 3.36 | % |
Expected life |
| 3 |
| 3 | |
Exercise price |
| 7.19 |
| 7.19 | |
Stock price |
| 7.10 |
| 7.10 | |
Fair value |
| 2.75 |
| 2.75 | |
On March 24, 2023, the Company reduced the exercise price of 75% of the warrants previously granted to warrant holders under the 2021 Warrants Plan to 5.42 EUR to reflect the decrease in the company’s share price. For the remaining 25% of the warrants previously granted under the 2021 Warrants Plan, the exercise price will remain unchanged. All other terms and conditions of the re-priced warrants remain unchanged to the original option agreement. The Company determined the fair value of the options at the date of the modification (March 24, 2023). The incremental fair value of the re-priced warrants will be recognised as an expense over the period from the modification date to the end of the vesting period. For the warrants already vested at the date of modification, the incremental fair value is fully recognised as an expense at date of modification.
The fair value of the modified warrants was determined using the same models and principles as described above, with the following model inputs:
| | | | | | | | | |
|
| Plan 2021 |
| Plan 2021 |
| Plan 2021 |
| Plan 2021 |
|
| | (grant Sept 17 | | (grant Oct 27 | | (grant Feb 21 | | (grant Feb 21 |
|
| | 2021) | | 2021) | | 2022) | | 2022) |
|
Return Dividend |
| 0 | % | 0 | % | 0 | % | 0 | % |
Expected volatility |
| 52.00 | % | 52.00 | % | 52.00 | % | 52.00 | % |
Risk-free interest rate |
| 3.25 | % | 3.25 | % | 3.17 | % | 3.36 | % |
Expected life |
| 2 |
| 2 |
| 2 |
| 2 | |
Exercise price |
| 5.42 |
| 5.42 |
| 5.42 |
| 5.42 | |
Stock price |
| 6.68 |
| 6.68 |
| 6.68 |
| 6.68 | |
Fair value |
| 2.48 |
| 2.52 |
| 2.67 |
| 2.49 | |
Incremental Fair value |
| 2.38 |
| 2.40 |
| 2.23 |
| 2.38 | |
| | | | | | | | | |
|
| Plan 2021 |
| Plan 2021 |
| Plan 2021 |
| Plan 2021 |
|
| | (grant Feb 21 | | (grant May 14 | | (grant Aug 8 | | (grant Aug 8 |
|
| | 2022) | | 2022) | | 2022) | | 2022) |
|
Return Dividend |
| 0 | % | 0 | % | 0 | % | 0 | % |
Expected volatility |
| 52.00 | % | 52.00 | % | 52.00 | % | 52.00 | % |
Risk-free interest rate |
| 3.03 | % | 3.13 | % | 3.13 | % | 2.98 | % |
Expected life |
| 3 |
| 2 |
| 3 |
| 4 | |
Exercise price |
| 5.42 |
| 5.42 |
| 5.42 |
| 5.42 | |
Stock price |
| 6.68 |
| 6.68 |
| 6.68 |
| 6.68 | |
Fair value |
| 3.05 |
| 2.75 |
| 2.87 |
| 3.21 | |
Incremental Fair value |
| 2.23 |
| 1.92 |
| 1.28 |
| 1.19 | |
The Company has recognized €1.8 million share-based payment expense for the six months ended June 30, 2023 (2022: €1.3 million) of which €0.6 million is related to the incremental fair value of the re-priced warrants.
18
17.Financial Debt
Financial debt consists of recoverable cash advances and other loans. Related amounts can be summarized as follows:
| | | | |
| | As at | ||
|
| June 30, |
| December 31, |
(in EUR 000) | | 2023 | | 2022 |
Recoverable cash advances - Non-current | | 8,412 | | 8,126 |
Recoverable cash advances - Current |
| 475 |
| 305 |
Total Recoverable cash advances |
| 8,887 |
| 8,431 |
Other loan - Non-current | | 21 |
| 63 |
Other loan - Current |
| 84 |
| 83 |
Total Other loan |
| 105 |
| 146 |
Non-current |
| 8,433 |
| 8,189 |
Current |
| 559 |
| 388 |
Total Financial Debt |
| 8,992 |
| 8,577 |
Financial debt related to recoverable cash advances
Recoverable cash advances received
As at June 30, 2023, the details of recoverable cash advances received can be summarized as follows:
| | | | | | |
|
| Contractual |
| Advances |
| Amounts |
(in EUR 000) | | advances | | received | | reimbursed |
Sleep apnea device (6472) |
| 1,600 |
| 1,600 |
| 480 |
First articles (6839) |
| 2,160 |
| 2,160 |
| 494 |
Clinical trial (6840) |
| 2,400 |
| 2,400 |
| 210 |
Activation chip improvements (7388) |
| 1,467 |
| 1,467 |
| 44 |
Total |
| 7,627 |
| 7,627 |
| 1,228 |
During the six months ended June 30, 2023 and the six months ended June 30, 2022 , the Company made no reimbursements and did not receive any new amounts.
Based on expected timing of sales and after discounting, the financial debt related to the recoverable cash advances is as follows:
| | | | |
| | As at | ||
|
| June 30, |
| December 31, |
(in EUR 000) | | 2023 | | 2022 |
Contract 6472 |
| 1,665 |
| 1,571 |
Contract 6839 |
| 2,338 |
| 2,214 |
Contract 6840 |
| 2,939 |
| 2,790 |
Contract 7388 |
| 1,945 |
| 1,856 |
Total recoverable cash advances |
| 8,887 |
| 8,431 |
Non-current |
| 8,412 |
| 8,126 |
Current |
| 475 |
| 305 |
Total recoverable cash advances |
| 8,887 |
| 8,431 |
19
The amounts recorded under “Current” caption correspond to the sales-independent amounts (fixed repayment) and sales-dependent reimbursements (variable repayment) estimated to be repaid to the Walloon Region in the next 12-month period. The estimated sales-independent (fixed repayment) as well as sales-dependent reimbursements (variable repayment) beyond 12 months are recorded under “Non-current” liabilities.
Changes in the recoverable cash advances can be summarized as follows:
| | | | |
(in EUR 000) |
| 2023 |
| 2022 |
As at January 1 |
| 8,431 |
| 8,127 |
Advances reimbursed (excluding interests) |
| — |
| — |
Initial measurement and re-measurement |
| (39) |
| (28) |
Discounting impact |
| 495 |
| 463 |
As at June 30 |
| 8,887 |
| 8,562 |
18.Trade payables
| | | | |
| | As at | ||
|
| June 30, |
| December 31, |
(in EUR 000) | | 2023 | | 2022 |
Payables |
| 2,659 |
| 1,873 |
Invoices to be received |
| 2,031 |
| 3,112 |
Total Trade payables |
| 4,690 |
| 4,985 |
The decrease in total trade payables of €295,000 as at June 30, 2023 is due to a decrease in invoices to be received of €1.1 million which is compensated by the increase in trade payables of €0.8 million.
19.Income taxes and deferred taxes
| | | | | | | | |
| | For the three months ended | | For the six months ended | ||||
|
| June 30 |
| June 30 | ||||
(in EUR 000) |
| 2023 |
| 2022 | | 2023 |
| 2022 |
Current tax income/(expense) |
| (927) | | (944) | | (1,115) |
| (1,636) |
Deferred tax income/(expense) |
| (1) | | 837 | | 5 |
| 1,321 |
Total Income Tax Income/(Expense) |
| (928) | | (107) | | (1,110) |
| (315) |
The current tax expense mainly relates to (i) income tax paid or payable by certain of the Company’s subsidiaries for an amount of €0.8 million (2022: €1.6 million), and (ii) an additional accrual of the liability for uncertain tax positions for an amount of €276,000 (2022: €69,000). The uncertain tax position was recorded following certain public rulings and guidance issued by tax authorities in one of the jurisdictions that the Company operates in. The current tax liability of €4.5 million includes a liability for uncertain tax positions for an amount of €2.2 million and income tax liability for an amount of €2.3 million.
As of January 1, 2022, new tax regulations are in place in the US. In order to fully comply with internal revenue requirements, R&D expenses can no longer be deducted when incurred but instead they will be capitalized only for tax purposes and they will be amortized over a 5 year period.The current tax liability amount to €2.2 million for the subsidiary in the United States. As the subsidiary is not expecting to generate significant profits in the near future, no deferred tax assets on temporary differences have been recognized at this stage.
20
20.Other payables
| | | | |
| | As at | ||
| | June 30, | | December 31, |
(in EUR 000) |
| 2023 |
| 2022 |
Holiday pay accrual | | 643 | | 612 |
Salary |
| 1,555 |
| 2,186 |
Accrued expenses |
| 1,953 |
| 2,228 |
Foreign currency option - current |
| 427 |
| 10 |
Other |
| 183 |
| 131 |
Total other payables |
| 4,761 |
| 5,167 |
The decrease of €406.000 in other payables as at June 30, 2023, compared to December 31, 2022, is the result of a decrease of €0.6 million in salary payables partly offset by an increase of €417,000 in the fair value of the foreign currency option, a decrease of €275,000 in accrued expenses related to a decrease in clinical activities and an increase in holiday pay accrual of €31,000.
21.Derivatives
The Company is exposed to currency risk primarily due to the expected future USD, AUD and NIS expenses that will be incurred as part of the ongoing and planned marketing, clinical trials and other related expenses. A financial risk management policy has been approved to i) generate yields on liquidity and ii) reduce the exposure to currency fluctuations with a timeline up to 24 months and by means of foreign currency swaps.
The Company has entered into several foreign currency swaps and foreign currency forwards for which the notional amounts are detailed in the table below:
| | | | |
| | As at | ||
|
| June 30, |
| December 31, |
(in EUR 000) | | 2023 | | 2022 |
Foreign currency swaps EUR - NIS (in EUR) |
| 4,099 |
| 542 |
Foreign currency swaps EUR - NIS (in NIS) |
| 16,000 |
| 2,000 |
Foreign currency forwards EUR - NIS (in EUR) |
| 873 |
| — |
Foreign currency forwards EUR - NIS (in NIS) | | 3,500 | | — |
Foreign currency swaps EUR - AUD (in EUR) | | 92 | | 379 |
Foreign currency swaps EUR - AUD (in AUD) | | 150 | | 600 |
Foreign currency swaps USD - EUR (in USD) | | 24,322 | | — |
Foreign currency swaps USD - EUR (in EUR) |
| 22,000 |
| — |
The following table shows the carrying amount of derivative financial instruments measured at fair value in the statement of the financial position including their levels in the fair value hierarchy:
| | | | | | | | |
| | As at June 30, 2023 | ||||||
(in EUR 000) |
| Level I |
| Level II |
| Level III |
| Total |
Financial liabilities |
|
|
|
|
|
|
|
|
Foreign currency swaps |
| — |
| 418 |
| — |
| 418 |
Foreign currency forwards |
| — |
| 9 |
| — |
| 9 |
The fair value is determined by the financial institution and is based on foreign currency swaps rates, foreign currency forward rates and the maturity of the instrument. All foreign currency swaps and forwards are classified as current as their maturity date is within the next twelve months.
21
The change in the balance of the financial assets is detailed as follows:
| | | | |
(in EUR 000) |
| 2023 |
| 2022 |
Financial asset | | | | |
| | | | |
Opening value at January 1 |
| 1 |
| — |
Fair value adjustments |
| (1) |
| 22 |
Closing value at June 30 |
| — |
| 22 |
The change in the balance of the financial liabilities is detailed as follows:
| | | | |
(in EUR 000) |
| 2023 |
| 2022 |
Financial liability | | | | |
| | | | |
Opening value at January 1 |
| 10 |
| 654 |
Fair value adjustments |
| 417 |
| 1,949 |
Exchange rate difference |
| — |
| 28 |
Closing value at June 30 |
| 427 |
| 2,631 |
22.Results of operation
Revenue and cost of goods sold
In the six months ended June 30, 2023, the Company generated revenue for the amount of €1.5 million (2022: €1.6 million). In the three months ended June 30, 2023, the Company generated revenue for the amount of €1.1 million (2022: €0.9 million).
Revenue is recognized at a point in time upon satisfaction of the performance obligation, being the moment control over the Genio® system is transferred to the customer, which is in general at delivery at customer site or a predefined location in the country of the customer. For certain customers, control may be transferred upon shipment to the customer in case the incoterms are Ex-Works. The revenue from the Genio® system consists of a kit of products delivered at the same point in time, and as such revenue does not need to be allocated over the different products. The revenue is then recognized at an amount that reflects the consideration to which the Company expects to be entitled in exchange of the Genio® system. In determining the transaction price for the sale of the Genio® system, the Company considers the effects of variable consideration.
For the six month period ended June 30, 2023 the sales (based on country of customer) were generated in Germany (€1.4 million), Switzerland (€117,000) and Austria (€81,000) (2022: Germany: €1.6 million and Finland: €40,000). For the six month period ended June 30, 2023, the Company has no customers with individual sales larger than 10% of the total revenue (2022: two customers).
For the three month period ended June 30, 2023 the sales (based on country of customer) were generated in Germany (€1.0 million), Switzerland (€23,000) and Austria (€41,000) (2022: Germany: €0.9 million).
Cost of goods sold for the three and six months ended June 30, 2023 and 2022:
| | | | | | | | |
| | For the three months ended | | For the six months ended | ||||
| | June 30 | | June 30 | ||||
(in EUR 000) |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
Purchases of goods and services |
| 316 | | 539 | | 858 |
| 783 |
Inventory movement |
| 103 | | (205) | | (264) |
| (160) |
Total cost of goods sold |
| 419 | | 334 | | 594 |
| 623 |
22
Operating expenses
The tables below detail the operating expenses for the six months ended June 30, 2023 and 2022:
| | | | | | |
| | | | | | Operating |
| | | | | | expense for the |
(in EUR 000) |
| Total cost |
| Capitalized |
| period |
Research and development |
| 17,763 |
| (5,001) |
| 12,762 |
Selling, general and administrative expenses |
| 11,736 |
| — |
| 11,736 |
Other income and expenses |
| (273) |
| 8 |
| (265) |
For the six months ended June 30, 2023 |
| 29,226 |
| (4,993) |
| 24,233 |
| | | | | | |
|
| |
| |
| Operating |
| | | | | | expense for the |
(in EUR 000) | | Total cost | | Capitalized | | period |
Research and development |
| 14,817 |
| (7,752) |
| 7,065 |
Selling, general and administrative expenses |
| 8,729 |
| — |
| 8,729 |
Other income and expenses |
| (252) |
| 102 |
| (150) |
For the six months ended June 30, 2022 |
| 23,294 |
| (7,650) |
| 15,644 |
The tables below detail the operating expenses for the three months ended June 30, 2023 and 2022:
| | | | | | |
|
| |
| |
| Operating |
| | | | | | expense for the |
(in EUR 000) | | Total cost | | Capitalized | | period |
Research and development |
| 8,892 |
| (2,287) |
| 6,605 |
Selling, general and administrative expenses |
| 6,185 |
| — |
| 6,185 |
Other income and expenses |
| (227) |
| 8 |
| (219) |
For the three months ended June 30, 2023 |
| 14,850 |
| (2,279) |
| 12,571 |
| | | | | | |
|
| |
| |
| Operating |
| | | | | | expense for the |
(in EUR 000) | | Total cost | | Capitalized | | period |
Research and development |
| 7,776 |
| (4,306) |
| 3,470 |
Selling, general and administrative expenses |
| 4,536 |
| — |
| 4,536 |
Other income and expenses |
| (83) |
| 69 |
| (14) |
For the three months ended June 30, 2022 |
| 12,229 |
| (4,237) |
| 7,992 |
Research and Development expenses
| | | | | | | | |
| | For the three months ended | | For the six months ended | ||||
| | June 30 | | June 30 | ||||
(in EUR 000) |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
Staff costs |
| 3,386 | | 2,595 | | 7,381 |
| 5,090 |
Consulting and contractors' fees |
| 890 | | 612 | | 1,694 |
| 1,304 |
Q&A regulatory |
| 109 | | 52 | | 145 |
| 125 |
IP costs |
| 112 | | 120 | | 241 |
| 222 |
Depreciation and amortization expense |
| 318 | | 245 | | 631 |
| 496 |
Travel |
| 292 | | 206 | | 572 |
| 328 |
Manufacturing and outsourced development |
| 1,942 | | 892 | | 3,127 |
| 2,341 |
Clinical studies |
| 1,190 | | 2,642 | | 2,567 |
| 4,252 |
Other expenses |
| 292 | | 410 | | 723 |
| 657 |
IT | | 361 | | 2 | | 682 | | 2 |
Capitalized costs |
| (2,287) | | (4,306) | | (5,001) |
| (7,752) |
Total research and development expenses |
| 6,605 | | 3,470 | | 12,762 |
| 7,065 |
23
Before capitalization of €5.0 million for the six months ended June 30, 2023 and €7.8 million for the six months ended June 30, 2022, research and development expenses increased by €3.0 million or 20 %, from €14.8 million for the six months ended June 30, 2022, to €17.8 million for the six months ended June 30, 2023, due to the combined effect of higher clinical, R&D activities and manufacturing expenses and also due to a start of new ERP system implementation. This increase is mainly in staff, consulting costs and in manufacturing and outsourced development to support those activities, this increase was offset by a decrease of €1.7 million in clinical study activities due to Dream Study.
Before capitalization of €2.3 million for the three months ended June 30, 2023 and €4.3 million for the three months ended June 30, 2022, research and development expenses increased by €1.1 million or 14 %, from €7.8 million for the three months ended June 30, 2022, to €8.9 million for the three months ended June 30, 2023, due to the combined effect of higher clinical, R&D activities and manufacturing expenses and also due to a start of new ERP system implementation. This increase is mainly in staff and consulting costs to support those activities and manufacturing and outsourced development.
Selling, General and Administrative expenses
| | | | | | | | |
| | For the three months ended | | For the six months ended | ||||
| | June 30 | | June 30 | ||||
(in EUR 000) |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
Staff costs |
| 2,390 | | 1,647 | | 4,802 |
| 3,329 |
Consulting and contractors' fees |
| 2,279 | | 1,104 | | 3,857 |
| 2,104 |
Legal fees |
| 257 | | 181 | | 485 |
| 415 |
Rent |
| 107 | | 127 | | 195 |
| 202 |
Depreciation and amortization expense |
| 242 | | 229 | | 484 |
| 440 |
IT |
| 240 | | 153 | | 488 |
| 253 |
Travel |
| 187 | | 267 | | 430 |
| 547 |
Insurance fees |
| 289 | | 427 | | 576 |
| 835 |
Other |
| 194 | | 401 | | 419 |
| 604 |
Total selling, general and administrative expenses |
| 6,185 | | 4,536 | | 11,736 |
| 8,729 |
Selling, general and administrative expenses increased by €3.0 million or 34 % from €8.7 million for the six months ended June 30, 2022 to €11.7 million for the six months ended June 30, 2023, mainly due to an increase of costs to support the commercialization of Genio(R) system in Europe, scale up of the Company and also due to a start of new ERP system implementation.
Selling, general and administrative expenses increased by €1.6 million or 36 % from €4.5 million for the three months ended June 30, 2022 to €6.2 million for the three months ended June 30, 2023, mainly due to an increase of costs to support the commercialization of Genio(R) system in Europe, scale up of the Company and also due to a start of new ERP system implementation.
24
Other operating income / ( expenses)
| | | | | | | | |
| | For the three months ended | | For the six months ended | ||||
| | June 30 | | June 30 | ||||
(in EUR 000) |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
Recoverable cash advances |
| | | | |
|
|
|
Initial measurement and re-measurement |
| 6 | | 11 | | 39 |
| 28 |
R&D incentives (Australia) |
| 268 | | 41 | | 289 |
| 137 |
Capitalization of R&D incentive |
| (8) | | (69) | | (8) |
| (102) |
Other income/(expenses) |
| (47) | | 31 | | (55) |
| 87 |
Total Other Operating Income/(Expenses) |
| 219 | | 14 | | 265 |
| 150 |
The Company had other operating income of €265,000 for the six months ended June 30, 2023 compared to other operating expenses of €150,000 for the six months ended June 30, 2022.
The Company had other operating income of €219,000 for the three months ended June 30, 2023 compared to other operating expenses of €14,000 for the three months ended June 30, 2022.
The other operating income contains the R&D Incentive (Australia) that relates to an incentive to be received on development expenses incurred by the subsidiary in Australia. The R&D incentive for the period of six months ended June 30, 2023 includes a correction for 2022.
23.Employee benefits
| | | | | | | | |
| | For the three months ended | | For the six months ended | ||||
| | June 30 | | June 30 | ||||
(in EUR 000) |
| 2023 | | 2022 |
| 2023 |
| 2022 |
Salaries |
| 4,202 | | 3,187 | | 8,712 |
| 6,089 |
Social charges |
| 327 | | 267 | | 654 |
| 500 |
Fringe benefits |
| 6 | | 62 | | 16 |
| 78 |
Defined contribution plan |
| 75 | | 66 | | 152 |
| 136 |
Holiday pay |
| 74 | | (20) | | 224 |
| 38 |
Share-based payment |
| 748 | | 628 | | 1,757 |
| 1,292 |
Other |
| 344 | | 52 | | 668 |
| 286 |
Total employee benefits |
| 5,776 | | 4,242 | | 12,183 |
| 8,419 |
| | | | | | | | |
| | For the three months ended | | For the six months ended | ||||
| | June 30 | | June 30 | ||||
(in EUR 000) |
| 2023 | | 2022 |
| 2023 |
| 2022 |
Selling, general and administrative expenses |
| 2,390 | | 1,647 | | 4,802 |
| 3,329 |
Research & Development expenses |
| 3,386 | | 2,595 | | 7,381 |
| 5,090 |
Total employee benefits |
| 5,776 | | 4,242 | | 12,183 |
| 8,419 |
24.Financial income
| | | | | | | | |
| | For the three months ended | | For the six months ended | ||||
| | June 30 | | June 30 | ||||
(in EUR 000) |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
Interests |
| 570 | | 113 | | 984 |
| 113 |
Exchange differences |
| 222 | | 4,561 | | 430 |
| 6,090 |
Other |
| (3) | | (5) | | — |
| 43 |
Total financial income |
| 789 | | 4,669 | | 1,414 |
| 6,246 |
For the six month period ended June 30, 2023, the total interest income amounted to €1.0 million (three month period ended June 30, 2023: €0.6 million). This interest income relates to the term accounts.
25
For the six month period ended June 30, 2022, exchange gains amount €6.1 million (three month period ended June 30, 2022: €4.6 million), mainly due to the revaluation of both the Company’s USD cash balance and USD financial assets (note 14). This was related to a decrease in the rate of EUR/USD compared to December 31, 2021. For the six month period ended June 30, 2023, exchange gains amount to €430,000 (three month period ended June 30, 2023: €222,000). We refer to note 25 for more details on the revaluation of both the Company’s USD cash balance and USD financial assets as per June 30, 2023.
25.Financial expense
| | | | | | | | |
| | For the three months ended | | For the six months ended | ||||
| | June 30 | | June 30 | ||||
(in EUR 000) |
| 2023 |
| 2022 | | 2023 |
| 2022 |
Fair value adjustment |
| 320 | | 1,631 | | 416 |
| 1,949 |
Recoverable cash advances, Accretion of interest |
| 248 | | 232 | | 495 |
| 463 |
Interest and bank charges |
| 17 | | 16 | | 45 |
| 103 |
Interest on lease liabilities |
| 30 | | 25 | | 60 |
| 47 |
Exchange differences |
| 161 | | 305 | | 715 |
| 388 |
Other |
| (1) | | (47) | | 1 |
| — |
Total Financial expense |
| 775 | | 2,162 | | 1,732 |
| 2,950 |
The fair value adjustment relates to the fair value adjustment on financial instruments. More information can be found in note 21.
The discounting impact of the recoverable cash advances is further detailed in note 17 above.
For the six month period ended June 30, 2023, exchange losses amount to €0.7 million (three month period ended June 30, 2023: €161,000), mainly due to the revaluation of both the Company’s USD cash balance and USD financial assets (note 14). For the year ended December 31, 2022, the closing rate of EUR/USD amounted to 1.07265, while as at June 30, 2023, the rate of EUR/USD increased to 1.09164, resulting in unrealized exchange losses on the USD balances.
The Company holds its USD cash balances and term deposits as they expect to incur cash-outflows in the US relating to both clinical costs (DREAM and ACCESS) and to the commercial launch of the Genio® system.
26.Loss Per Share (EPS)
The Basic Earnings Per Share and the Diluted Earnings Per Share are calculated by dividing earnings for the year by the weighted average number of shares outstanding during the year. As the Company is incurring net losses, outstanding warrants have no dilutive effect. As such, there is no difference between the Basic and Diluted EPS.
EPS for June 2023 has been presented in the income statement taking into account resolutions adopted by the shareholders’ meeting of February 21, 2020. All existing preferred shares were converted into common shares, and then a share split of 500:1 was approved by the shareholders’ meeting.
| | | | | | | | |
|
| For the three months ended | | For the six months ended | ||||
| | June 30 | | June 30 | ||||
| | 2023 |
| 2022 |
| 2023 |
| 2022 |
As at June 30, after conversion and share split |
| | | | |
|
|
|
Outstanding common shares at period-end |
| 28,661,985 | | 25,836,279 | | 28,661,985 |
| 25,836,279 |
Weighted average number of common shares outstanding |
| 28,608,413 | | 25,806,768 | | 27,250,102 |
| 25,796,560 |
Number of shares resulting of the exercise of outstanding warrants |
| 2,439,500 | | 1,953,125 | | 2,439,500 |
| 1,953,125 |
26
Basic and Diluted EPS for the three and six month period ended June 30, 2023 and 2022 based on weighted average number of shares outstanding after conversion and share split are as follows:
| | | | | | | | |
| | For the three months ended | | For the six months ended | ||||
| | June 30 | | June 30 | ||||
|
| 2023 |
| 2022 |
| 2023 |
| 2022 |
Loss of year attributable to equity holders (in EUR) |
| (12,797,000) | | (4,990,000) | | (24,707,000) |
| (11,691,000) |
Weighted average number of common shares outstanding (in units) |
| 28,608,413 | | 25,806,768 | | 27,250,102 |
| 25,796,560 |
Basic earnings per share in EUR (EUR/unit) |
| (0.447) | | (0.193) | | (0.907) |
| (0.453) |
Diluted earnings per share in EUR (EUR/unit) |
| (0.447) | | (0.193) | | (0.907) |
| (0.453) |
27.Other commitments
The Company has granted in 2022 an amount of €0.5 million towards the Educational Grant with SMR Holding UG (Dr. Sommers) for the period starting on January 1, 2023 until December 31, 2024. The first installment of €250,000 is paid by the Company in January 2023, the second installment of €250,000 is due in January 2024.
28.Related Party Transactions
Transactions between the Company and its subsidiaries have been eliminated in consolidation and are not disclosed in the notes. Related party transactions are disclosed below.
Remuneration of Key Management
The remuneration of the senior management consists of the remuneration of the CEO of the Company for the three and six months ended June 30:
| | | | | | | | |
| | For the three months ended | | For the six months ended | ||||
| | June 30 | | June 30 | ||||
(in EUR 000) |
| 2023 |
| 2022 | | 2023 |
| 2022 |
Short-term remuneration & compensation |
| 209 | | 126 | | 396 |
| 271 |
Share based payment |
| 35 | | 20 | | 101 |
| 55 |
Total |
| 244 | | 146 | | 497 |
| 326 |
Transactions with Non-Executive Directors and Shareholders:
| | | | | | | | | | | | |
| | For the six months ended June 30, | | For the six months ended June 30, | ||||||||
| | 2023 | | 2022 | ||||||||
| | R&D | | Consulting | | Board | | R&D | | Consulting | | Board |
(in EUR 000) |
| Collaboration |
| services |
| Remuneration |
| Collaboration |
| services |
| Remuneration |
Cochlear |
| 182 |
| — |
| — |
| 1,336 |
| — |
| — |
MINV SA |
| — |
| — |
| — |
| — |
| 60 |
| — |
Ray Cohen |
| — |
| — |
| — |
| — |
| — |
| 4 |
Donald Deyo |
| — |
| — |
| — |
| — |
| — |
| 14 |
Robert Taub |
| — |
| — |
| 66 |
| — |
| — |
| 42 |
Kevin Rakin |
| — |
| — |
| 32 |
| — |
| — |
| 25 |
Pierre Gianello |
| — |
| — |
| 32 |
| — |
| — |
| 35 |
Jan Janssen |
| — |
| — |
| — |
| — |
| — |
| 19 |
Jurgen Hambrecht |
| — |
| — |
| 29 |
| — |
| — |
| 24 |
Rita Mills |
| — |
| — |
| 34 |
| — |
| — |
| 23 |
Giny Kirby | | — | | — | | 34 | | — | | — | | 3 |
Wildman Ventures LLC | | — | | — | | 40 | | — | | — | | — |
Total |
| 182 |
| — |
| 267 |
| 1,336 |
| 60 |
| 189 |
Amounts outstanding at period-end |
| — |
| — |
| 111 |
| 559 |
| 60 |
| 78 |
27
| | | | | | | | | | | | |
|
| For the three months ended June 30, 2023 |
| For the three months ended June 30, 2022 | ||||||||
(in EUR 000) | | R&D |
| Consulting |
| Board |
| R&D |
| Consulting |
| Board |
|
| Collaboration |
| services |
| Remuneration |
| Collaboration |
| services |
| Remuneration |
Cochlear |
| 41 |
| — |
| — |
| 543 |
| — |
| — |
Ray Cohen |
| — |
| — |
| — |
| — |
| — |
| 4 |
Donald Deyo |
| — |
| — |
| — |
| — |
| — |
| 6 |
Robert Taub |
| — |
| — |
| 30 |
| — |
| — |
| 16 |
Kevin Rakin |
| — |
| — |
| 16 |
| — |
| — |
| 10 |
Pierre Gianello |
| — |
| — |
| 14 |
| — |
| — |
| 21 |
Jan Janssen |
| — |
| — |
| — |
| — |
| — |
| (13) |
Jurgen Hambrecht |
| − |
| — |
| 14 |
| — |
| — |
| 9 |
Rita Mills |
| — |
| — |
| 19 |
| — |
| — |
| 9 |
Giny Kirby | | — | | — | | 20 | | — | | — | | 3 |
Wildman Ventures LLC | | — | | — | | 23 | | — | | — | | — |
Total |
| 41 |
| — |
| 136 |
| 543 |
| — |
| 65 |
Amounts outstanding at period-end |
| — |
| — |
| 111 |
| 559 |
| 60 |
| 78 |
The Company and Cochlear Limited, or Cochlear, have entered into a collaboration agreement, dated November 2018, under which they agreed to collaborate to further develop and progress commercialization of implantable treatments for sleep disordered breathing conditions. A new Statement of Work was entered into on June 8, 2020. Under this agreement, Cochlear is working with the Company in developing and enhancing the next generation implantable stimulator. This collaboration agreement led to a financial impact of €182,000 and €1.3 million for the six months ended June 30, 2023 and 2022 respectively. In April 2023, the project came to its end after development milestones were reached.
29.Events after the Balance-Sheet Date
The Company has acquired all shares of Nyxoah GmbH, a German company, on July 26, 2023. Nyxoah was incorporated on May 11, 2023. Except for the minimum capital of €25,000, Nyxoah GmbH has no assets or liabilities and no business had been conducted by it.
Upon closing of the acquisition, the Company has paid a consideration of €29,000 in cash.
28
RESPONSIBILITY STATEMENT
We certify that, to the best of our knowledge,
a) | the condensed consolidated interim financial statement, prepared in accordance with the applicable standards for financial statements, give a true and fair view of the assets, liabilities, financial position and results of the Company and the undertakings included in the consolidation taken as a whole; and |
b) | this interim management report provides a true and fair overview of the development, results and the position of the Company and the undertakings included in the consolidation taken as a whole, as well as a description of the principal risks and uncertainties that they face. |
Mont-Saint-Guibert, August 8, 2023.
On behalf of the board of directors
| | |
Robert Taub, Chairman |
| Olivier Taelman, CEO |
29