Exhibit 99.1
Condensed Consolidated Interim Financial Statements of
(Unaudited)
BELLUS HEALTH INC.
Periods ended March 31, 2021 and 2020
(In thousands of United States dollars)
Bellus health INC.
Condensed Consolidated Interim Financial Statements
(Unaudited)
Periods ended March 31, 2021 and 2020
(In thousands of United States dollars)
Condensed Consolidated Interim Financial Statements | |
Condensed Consolidated Interim Statements of Financial Position | 1 |
Condensed Consolidated Interim Statements of Loss and Other Comprehensive Loss | 2 |
Condensed Consolidated Interim Statements of Changes in Shareholders' Equity | 3 |
Condensed Consolidated Interim Statements of Cash Flows | 4 |
Notes to Condensed Consolidated Interim Financial Statements | 5 |
bellus health INC.
Condensed Consolidated Interim Statements of Financial Position
(Unaudited)
March 31, 2021 and December 31, 2020
(In thousands of United States dollars)
March 31, | December 31, | |||||||
2021 | 2020 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents (note 4) | $ | 32,457 | $ | 48,889 | ||||
Short-term investments (note 4) | 49,476 | 49,371 | ||||||
Trade and other receivables | 485 | 325 | ||||||
Research tax credit receivable | 873 | 724 | ||||||
Prepaid expenses and other assets | 4,180 | 3,005 | ||||||
Total current assets | 87,471 | 102,314 | ||||||
Non-current assets: | ||||||||
Right-of-use asset (note 5) | 456 | 501 | ||||||
Other assets | 194 | 198 | ||||||
In-process research and development asset (note 6) | 50,100 | 50,100 | ||||||
Total non-current assets | 50,750 | 50,799 | ||||||
Total Assets | $ | 138,221 | $ | 153,113 | ||||
Liabilities and Shareholders' Equity | ||||||||
Current liabilities: | ||||||||
Trade and other payables | $ | 4,652 | $ | 5,495 | ||||
Lease liability (note 5) | 179 | 156 | ||||||
Total current liabilities | 4,831 | 5,651 | ||||||
Non-current liabilities: | ||||||||
Lease liability (note 5) | 305 | 347 | ||||||
Total non-current liabilities | 305 | 347 | ||||||
Total Liabilities | 5,136 | 5,998 | ||||||
Shareholders' equity: | ||||||||
Share capital (note 7 (a)) | 575,286 | 575,286 | ||||||
Other equity (notes 7 (b) (i) and (ii)) | 33,081 | 31,360 | ||||||
Deficit | (484,580 | ) | (468,829 | ) | ||||
Accumulated other comprehensive income (note 2 (c)) | 9,298 | 9,298 | ||||||
Total Shareholders' Equity | 133,085 | 147,115 | ||||||
Commitments and contingencies (note 10) | ||||||||
Total Liabilities and Shareholders' Equity | $ | 138,221 | $ | 153,113 |
See accompanying notes to unaudited condensed consolidated interim financial statements.
1
bellus health INC.
Condensed Consolidated Interim Statements of Loss and Other Comprehensive Loss
(Unaudited)
Periods ended March 31, 2021 and 2020
(in thousands of United States dollars, except per share data)
Three-month periods ended | ||||||||
March 31, | ||||||||
2021 | 2020 | |||||||
Revenues | $ | 4 | $ | 4 | ||||
Expenses: | ||||||||
Research and development | 12,586 | 6,576 | ||||||
Research tax credits | (138 | ) | (66 | ) | ||||
12,448 | 6,510 | |||||||
General and administrative | 3,470 | 2,762 | ||||||
Total operating expenses | 15,918 | 9,272 | ||||||
Loss from operating activities | (15,914 | ) | (9,268 | ) | ||||
Finance income | 189 | 383 | ||||||
Finance costs | (26 | ) | (1,247 | ) | ||||
Net finance income (costs) (note 8) | 163 | (864 | ) | |||||
Net loss and other comprehensive loss for the period | $ | (15,751 | ) | $ | (10,132 | ) | ||
Net loss per share (note 9) | ||||||||
Basic and diluted | $ | (0.20 | ) | $ | (0.18 | ) |
See accompanying notes to unaudited condensed consolidated interim financial statements.
2
bellus health INC.
Condensed Consolidated Interim Statements of Changes in Shareholders' Equity
(Unaudited)
Periods ended March 31, 2021 and 2020
(in thousands of United States dollars)
Accumulated | ||||||||||||||||||||
other | ||||||||||||||||||||
Share | Other | comprehensive | ||||||||||||||||||
capital | equity | Deficit | income | Total | ||||||||||||||||
(note 7 (a)) | ||||||||||||||||||||
Balance, December 31, 2020 | $ | 575,286 | $ | 31,360 | $ | (468,829 | ) | $ | 9,298 | $ | 147,115 | |||||||||
Total comprehensive loss for the period: | ||||||||||||||||||||
Net loss and comprehensive loss | - | - | (15,751 | ) | - | (15,751 | ) | |||||||||||||
Total comprehensive loss for the period | - | - | (15,751 | ) | - | (15,751 | ) | |||||||||||||
Transactions with shareholders, recorded directly in shareholders' equity: | ||||||||||||||||||||
Stock-based compensation (note 7 (b) (i)) | - | 1,721 | - | - | 1,721 | |||||||||||||||
Balance, March 31, 2021 | $ | 575,286 | $ | 33,081 | $ | (484,580 | ) | $ | 9,298 | $ | 133,085 |
Accumulated | ||||||||||||||||||||
other | ||||||||||||||||||||
Share | Other | comprehensive | ||||||||||||||||||
capital | equity | Deficit | income | Total | ||||||||||||||||
(note 7 (a)) | ||||||||||||||||||||
Balance, December 31, 2019 | $ | 486,401 | $ | 26,858 | $ | (433,818 | ) | $ | 9,298 | $ | 88,739 | |||||||||
Total comprehensive loss for the period: | ||||||||||||||||||||
Net loss and comprehensive loss | - | - | (10,132 | ) | - | (10,132 | ) | |||||||||||||
Total comprehensive loss for the period | - | - | (10,132 | ) | - | (10,132 | ) | |||||||||||||
Transactions with shareholders, recorded directly in shareholders' equity: | ||||||||||||||||||||
Issued in consideration for acquisition of remaining BLU-5937 Assets (note 6) | 47,749 | - | (301 | ) | - | 47,448 | ||||||||||||||
Stock-based compensation (note 7 (b) (i)) | - | 618 | - | - | 618 | |||||||||||||||
Balance, March 31, 2020 | $ | 534,150 | $ | 27,476 | $ | (444,251 | ) | $ | 9,298 | $ | 126,673 |
See accompanying notes to unaudited condensed consolidated interim financial statements.
3
bellus health INC.
Condensed Consolidated Interim Statements of Cash Flows
(Unaudited)
Periods ended March 31, 2021 and 2020
(in thousands of United States dollars)
Three-month periods ended | ||||||||
March 31, | ||||||||
2021 | 2020 | |||||||
Cash flows from operating activities: | ||||||||
Net loss for the period | $ | (15,751 | ) | $ | (10,132 | ) | ||
Adjustments for: | ||||||||
Depreciation (note 5) | 45 | 45 | ||||||
Stock-based compensation | 1,721 | 618 | ||||||
Net finance (income) costs | (163 | ) | 864 | |||||
Other items | (21 | ) | 87 | |||||
Changes in operating assets and liabilities | ||||||||
Trade and other receivables | (156 | ) | (83 | ) | ||||
Research tax credits receivable | (138 | ) | 229 | |||||
Prepaid expenses and other assets | (799 | ) | 614 | |||||
Trade and other payables | (806 | ) | (2,513 | ) | ||||
(16,068 | ) | (10,271 | ) | |||||
Cash flows from financing activities: | ||||||||
Deferred financing costs | (420 | ) | (108 | ) | ||||
Share issue costs related to issuance of common shares to finance acquisition of in-process research and development asset (note 6) | - | (76 | ) | |||||
Lease liability - principal repayments | (34 | ) | (31 | ) | ||||
Interest paid | (18 | ) | (5 | ) | ||||
(472 | ) | (220 | ) | |||||
Cash flows from investing activities: | ||||||||
Sales of short-term investments | - | 10,000 | ||||||
Purchases of short-term investments | - | - | ||||||
Acquisition of in-process research and development asset, including transaction costs (note 6) | - | (368 | ) | |||||
Interest received | 22 | 156 | ||||||
22 | 9,788 | |||||||
Net decrease in cash and cash equivalents | (16,518 | ) | (703 | ) | ||||
Cash and cash equivalents, beginning of period | 48,889 | 18,688 | ||||||
Effect of foreign exchange on cash and cash equivalents | 86 | (542 | ) | |||||
Cash and cash equivalents, end of period | $ | 32,457 | $ | 17,443 | ||||
Supplemental cashflow disclosure: | ||||||||
Non-cash transactions: | ||||||||
Issuance of common shares in consideration for acquisition of remaining BLU-5937 Assets (note 6) | $ | - | $ | 47,749 | ||||
Share issue costs and transaction costs - IPR&D asset acquisition, in Trade and other payables | - | 392 | ||||||
Deferred financing costs, in Trade and other payables | - | 28 | ||||||
Value of DSUs in Prepaid expenses (note 7 (b) (iii)) | 24 | 25 |
See accompanying notes to unaudited condensed consolidated interim financial statements.
4
bellus health INC.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited)
Periods ended March 31, 2021 and 2020
(in thousands of United States dollars, except per share data, unless otherwise noted)
1. | Reporting entity: |
BELLUS Health Inc. ('BELLUS Health' or the 'Company') is a clinical-stage biopharmaceutical company developing novel therapeutics for the treatment of chronic cough and other hypersensitization-related disorders. The Company's product candidate, BLU-5937, is being developed for the treatment of refractory chronic cough and chronic pruritus associated with atopic dermatitis. The Company is domiciled in Canada. The address of the Company's registered office is 275 Armand-Frappier Blvd., Laval, Quebec, H7V 4A7. BELLUS Health's common shares trade on the Nasdaq Capital Market ('Nasdaq') and on the Toronto Stock Exchange ('TSX'), both under the symbol BLU.
These condensed consolidated interim financial statements include the accounts of BELLUS Health Inc. and its subsidiaries.
The annual consolidated financial statements of the Company as at and for the year ended December 31, 2020 are available on our web site at www.bellushealth.com, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.
2. | Basis of preparation: |
(a) | Statement of compliance: |
These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard ('IAS') 34, Interim Financial Reporting of International Financial Reporting Standards ('IFRS'). The condensed consolidated interim financial statements do not include all the information required for full annual consolidated financial statements and should be read in conjunction with the annual consolidated financial statements as at and for the year ended December 31, 2020.
These condensed consolidated interim financial statements for the three-month period ended March 31, 2021 were approved by the Board of Directors on May 10, 2021.
(b) | Use of estimates and judgements: |
The preparation of the condensed consolidated interim financial statements in accordance with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The reported amounts and note disclosures reflect management's best estimate of the most probable set of economic conditions and planned course of actions. Actual results may differ from these estimates.
5
bellus health INC.
Notes to Condensed Consolidated Interim Financial Statements (Continued)
(Unaudited)
Periods ended March 31, 2021 and 2020
(in thousands of United States dollars, except per share data, unless otherwise noted)
2. | Basis of preparation (continued): |
(b) | Use of estimates and judgements (continued): |
In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Company's accounting policies and key sources of estimation uncertainty were the same as those applied to the consolidated financial statements for the year ended December 31, 2020.
(c) | Functional and presentation currency: |
Items included in the condensed consolidated interim financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (the functional currency). These condensed consolidated interim financial statements are presented in United State dollars ('USD'), which is the Company's functional and presentation currency for all periods presented.
(d) | COVID-19 pandemic: |
The COVID-19 pandemic continues to cause significant financial market and social dislocation. The situation is dynamic with various cities and countries around the world responding in different ways to address the outbreak. Since the Company is considered an 'essential service', its operations in Quebec have not been subject to mandated business closures and, accordingly, disruptions to its business as a result of COVID-19 have been limited thus far. However, the COVID-19 pandemic continues to rapidly evolve and the extent to which it may impact our business will depend on future developments that are highly uncertain. The Company cannot presently predict the scope and severity of any potential business shutdowns or disruptions related to COVID-19 nor the impact of the vaccines that are now accessible or will be made accessible in Canada, the United States and in other countries, but if the Company or any of the third parties with whom it engages, were to experience shutdowns or other business disruptions, its ability to conduct its business in the manner and on the timelines presently planned could be materially and negatively impacted. The Company will continue to monitor developments of the pandemic and continuously assess its potential further impact on its operations to prevent any disruptions to the conduct of its business and clinical trials. In the event of a prolonged continuation of the pandemic, it is not clear what the potential impact may be on the Company's business, financial position and financial performance.
6
bellus health INC.
Notes to Condensed Consolidated Interim Financial Statements (Continued)
(Unaudited)
Periods ended March 31, 2021 and 2020
(in thousands of United States dollars, except per share data, unless otherwise noted)
3. | Significant accounting policies and basis of measurement: |
The accounting policies and basis of measurement applied in these condensed consolidated interim financial statements are the same as those applied by BELLUS Health in its consolidated financial statements for the year ended December 31, 2020.
4. | Cash, cash equivalents and short-term investments: |
Cash, cash equivalents and short-term investments consist of cash balances with banks and short-term investments:
March 31, | December 31, | |||||||
2021 | 2020 | |||||||
Cash balances with banks | $ | 3,334 | $ | 5,734 | ||||
Short-term investments with initial maturities of less than three months or that can be withdrawn on demand: | ||||||||
Savings accounts and term deposits, yielding interest at 0.10% to 0.35% as at March 31, 2021 (December 31, 2020 - 0.20% to 0.45%) | 29,123 | 43,155 | ||||||
Cash and cash equivalents | 32,457 | 48,889 | ||||||
Short-term investments with initial maturities greater than three months and less than one year: | ||||||||
Term deposits issued in USD, yielding interest as at 0.23% to 0.55% as at March 31, 2021 (December 31, 2020 - 0.23% to 0.55%) | 20,042 | 20,021 | ||||||
Term deposit issued in CAD (CAD $5,544), yielding interest at 0.85% to 1.27% as at March 31, 2021 (December 31, 2020 - (CAD $5,529), 0.85% to 1.27%) | 4,413 | 4,341 | ||||||
Bearer deposit notes issued in USD, yielding interest at 0.16% to 0.22% as at March 31, 2021 (December 31, 2020 - 0.16% to 0.22%) | 25,021 | 25,009 | ||||||
Short-term investments | 49,476 | 49,371 | ||||||
Cash, cash equivalents and short-term investments | $ | 81,933 | $ | 98,260 |
7
bellus health INC.
Notes to Condensed Consolidated Interim Financial Statements (Continued)
(Unaudited)
Periods ended March 31, 2021 and 2020
(in thousands of United States dollars, except per share data, unless otherwise noted)
5. | Right-of-use asset and lease liability: |
BELLUS Health's leases are mainly real estate leases for office space.
The Company leases office space in Laval, Quebec, Canada. Its main property lease at that location expires on September 30, 2023.
Right-of-use asset:
Carrying | ||||
value | ||||
Cost: | ||||
Balance as at December 31, 2020 and 2019 | $ | 802 | ||
Accumulated amortization: | ||||
Balance as at December 31, 2020 | $ | (301 | ) | |
Depreciation | (45 | ) | ||
Balance as at March 31, 2021 | $ | (346 | ) | |
Net carrying value: | ||||
Balance as at December 31, 2020 | $ | 501 | ||
Balance as at March 31, 2021 | 456 |
Lease liability:
Carrying | ||||
value | ||||
Balance as at December 31, 2020 | $ | 503 | ||
Interest expense | 8 | |||
Principal repayment | (34 | ) | ||
Foreign exchange loss | 7 | |||
Balance as at March 31, 2020 | $ | 484 | ||
Current portion of lease liability | 179 | |||
Non-current portion of lease liability | $ | 305 |
8
bellus health INC.
Notes to Condensed Consolidated Interim Financial Statements (Continued)
(Unaudited)
Periods ended March 31, 2021 and 2020
(in thousands of United States dollars, except per share data, unless otherwise noted)
5. | Right-of-use asset and lease liability (continued): |
Lease liability (continued):
The remaining life of the Company's property leases as of March 31, 2020 is 2.5 years.
Lease payments were discounted using an incremental borrowing rate of 5%.
Minimum annual payments under the non-cancelable leases, undiscounted, are as follows:
Years ending December 31, | ||||
2021 (remainder of the year) | $ | 153 | ||
2022 | 209 | |||
2023 and after | 165 | |||
$ | 527 |
6. | In-process research and development asset: |
As at March 31, 2021, the aggregate carrying value of the in process research and development ('IPR&D') asset related to BLU-5937 amounted to $50,100 ($50,100 as at December 31, 2020). The IPR&D asset related to BLU-5937 is accounted for as an indefinite-lived intangible asset until the project, currently in its clinical phase, is completed or abandoned, at which point it will be amortized or impaired, respectively.
BELLUS Health acquired the IPR&D asset related to BLU-5937 in February 2017 through the obtention from the NEOMED Institute ('NEOMED') of an exclusive worldwide license to develop and commercialize BLU-5937, a potent, highly selective, orally bioavailable small molecule antagonist of the P2X3 receptor, a clinically validated target for chronic cough.
On March 25, 2020, the Company closed an asset purchase and sale agreement to acquire all of the remaining BLU-5937 and related P2X3 antagonists intellectual property assets (the 'BLU-5937 Assets') from adMare BioInnovations' NEOMED Institute ('adMare'), which is accounted for as an acquisition of assets. The February 2017 license agreement was terminated as part of this transaction.
In consideration of the foregoing, the Company issued to adMare and AstraZeneca AB ('AstraZeneca') an aggregate of 4,770,000 BELLUS Health common shares from treasury, having an aggregate fair value of $47,749 at the date of the closing of the transaction, calculated using the average of the BELLUS Health's March 25, 2020 opening and closing share price, plus a cash consideration paid to adMare of $352 (CAD $500). AstraZeneca assigned the BLU-5937 Assets to adMare in 2012.
9
bellus health INC.
Notes to Condensed Consolidated Interim Financial Statements (Continued)
(Unaudited)
Periods ended March 31, 2021 and 2020
(in thousands of United States dollars, except per share data, unless otherwise noted)
6. | In-process research and development asset (continued): |
The total consideration paid for the IPR&D asset related to the remaining BLU-5937 Assets was $48,284, consisting of the shares issued and cash paid referred to above, as well as transaction costs in relation to the acquisition of $183. Transactions costs in relation to the share issuance amounted to $301 and have been charged to the deficit. This acquisition was accounted for as a non-employee share-based payment transaction and measured using the consideration transferred by the Company. As a result of the transaction, the IPR&D asset's carrying value was increased for the additional portion acquired by the Company.
7. | Shareholders' equity: |
(a) | Share capital: |
Changes in issued and outstanding common shares for the three-month periods ended March 31, 2021 and 2020 were as follows:
Number | Dollars | ||||||||
Balance, March 31, 2021 and December 31, 2020 | 78,337,361 | $ | 575,286 |
Number | Dollars | |||||||
Balance, December 31, 2019 | 55,378,660 | $ | 486,401 | |||||
Issued in consideration for acquisition of remaining BLU-5937 Assets (note 7 (a) (i)) | 4,770,000 | 47,749 | ||||||
Balance, March 31, 2020 | 60,148,660 | $ | 534,150 |
(i) | On March 25, 2020, the Company issued 4,770,000 common shares from treasury in consideration for the acquisition of the remaining BLU-5937 Assets (refer to note 6). |
10
bellus health INC.
Notes to Condensed Consolidated Interim Financial Statements (Continued)
(Unaudited)
Periods ended March 31, 2021 and 2020
(in thousands of United States dollars, except per share data, unless otherwise noted)
7. | Shareholders' equity (continued): |
(a) | Share capital (continued): |
'At-the-market' sales agreement
On December 23, 2020, the Company entered into an 'at-the-market' ('ATM') sales agreement (the 'Sales Agreement') with Jefferies LLC ('Jefferies') pursuant to which the Company may from time to time sell through at-the-market distributions with Jefferies acting as sales agent (the 'Agent') its common shares for aggregate gross proceeds of up to $50,000, including sales made directly on the Nasdaq or on any other existing trading market for the common shares in the United States. No common shares will be offered or sold in Canada. The common shares would be issued at market prices prevailing at the time of the sale and, as a result, prices may vary between purchasers and during the period of distribution. The ATM has a 2-year term and requires the Company to pay to the Agent a commission of up to 3.0% of the gross proceeds of any common shares sold. Subject to the terms and conditions of the Sales Agreement, the Agent will use its commercially reasonable efforts to sell the common shares from time to time, based upon the Company's instructions. The Company has no obligation to sell any of the common shares and may at any time suspend sales under the Sales Agreement. The Company and the Agent may terminate the Sales Agreement in accordance with its terms. Under the terms of the Sales Agreement, the Company has provided the Agent with customary indemnification rights.
During the three-month period ended March 31, 2021, no common shares were sold under the ATM program. As at March 31, 2021 and December 31, 2020, total costs incurred to register the Sales Agreement, amounting to $380, are recorded as deferred financing costs and classified as prepaids and other assets in the consolidated statement of financial position. Under an ATM program, proportional costs for commission, legal and costs related to common shares sold are reclassified from deferred financing costs to deficit upon share issuance.
11
bellus health INC.
Notes to Condensed Consolidated Interim Financial Statements (Continued)
(Unaudited)
Periods ended March 31, 2021 and 2020
(in thousands of United States dollars, except per share data, unless otherwise noted)
7. | Shareholders' equity (continued): |
(b) | Share-based payment arrangements: |
(i) | Stock option plan: |
Changes in outstanding stock options issued under the stock option plan for the three-month periods ended March 31, 2021 and 2020 were as follows:
Number | Weighted average exercise price (1) | ||||||||
Balance, December 31, 2020 | 6,288,166 | $ | 3.83 | ||||||
Granted (2),(3) | 1,458,000 | $ | 4.34 | ||||||
Forfeited | (39,000 | ) | $ | 3.28 | |||||
Balance, March 31, 2021 | 7,707,166 | $ | 3.93 |
Number | Weighted average exercise price (1) | |||||||
Balance, March 31, 2020 and December 31, 2019 | 4,726,943 | $ | 2.05 |
(1) | USD equivalent of stock options granted in CAD is presented at the closing rate of the corresponding period. |
(2) | 1,408,000 stock options were granted on February 25, 2021, having an exercise price of $4.36; 1,171,000 stock options granted to key management personnel and 237,000 granted to other employees. |
(3) | 50,000 stock options were granted to key management personnel on March 30, 2021, having an exercise price of $3.83. |
12
bellus health INC.
Notes to Condensed Consolidated Interim Financial Statements (Continued)
(Unaudited)
Periods ended March 31, 2021 and 2020
(in thousands of United States dollars, except per share data, unless otherwise noted)
7. | Shareholders' equity (continued): |
(b) | Share-based payment arrangements (continued): |
(i) | Stock option plan (continued): |
The following table summarizes information about stock options outstanding and exercisable as at March 31, 2021:
Options outstanding | Options exercisable | ||||||||||||
Weighted | |||||||||||||
average years | |||||||||||||
Exercise price/share | Number | To expiration | Number | ||||||||||
Stock options granted in USD | |||||||||||||
$3.83 | 50,000 | 10.0 | - | ||||||||||
$4.36 | 1,408,000 | 9.9 | - | ||||||||||
Stock options granted in CAD (1) | |||||||||||||
$0.86 (CAD $1.08) | 719,445 | 6.1 | 432,223 | ||||||||||
$1.00 (CAD $1.26) | 1,127,779 | 6.9 | 670,001 | ||||||||||
$1.20 (CAD $1.51) | 41,667 | 6.6 | 25,000 | ||||||||||
$1.43 (CAD $1.80) | 1,077,777 | 1.4 | 1,077,777 | ||||||||||
$1.63 (CAD $2.05) | 41,667 | 7.3 | 16,667 | ||||||||||
$2.50 (CAD $3.14) | 185,000 | 9.6 | - | ||||||||||
$2.85 (CAD $3.58) | 70,000 | 9.4 | - | ||||||||||
$3.01 (CAD $3.78) | 5,667 | 1.4 | 5,667 | ||||||||||
$3.21 (CAD $4.03) | 28,611 | 4.9 | 28,611 | ||||||||||
$3.28 (CAD $4.12) | 421,000 | 9.7 | - | ||||||||||
$3.47 (CAD $4.36) | 974,998 | 7.9 | 386,666 | ||||||||||
$6.68 (CAD $8.39) | 512,222 | 8.6 | 102,444 | ||||||||||
$9.08 (CAD $11.41) | 8,333 | 8.4 | 4,166 | ||||||||||
$11.07 (CAD $13.91) | 970,000 | 9.0 | - | ||||||||||
$11.72 (CAD $14.72) | 65,000 | 9.1 | - | ||||||||||
7,707,166 | 7.4 | 2,749,222 |
(1) | USD equivalent of stock options granted in CAD is presented at the closing rate. |
Stock-based compensation
For the three-month period ended March 31, 2021, the Company recorded a stock-based compensation expense related to the stock option plan (excluding compensation under the DSU plans) in the amount of $1,721 in the condensed consolidated interim statement of loss and other comprehensive income; from this amount, $574 is presented in Research and development expenses and $1,147 is presented in General and administrative expenses ($618 for the corresponding period of the previous year, $335 and $283 respectively presented in Research and development and General and administrative expenses).
13
bellus health INC.
Notes to Condensed Consolidated Interim Financial Statements (Continued)
(Unaudited)
Periods ended March 31, 2021 and 2020
(in thousands of United States dollars, except per share data, unless otherwise noted)
7. | Shareholders' equity (continued): |
(b) | Share-based payment arrangements (continued): |
(ii) | Stock option plan (continued): |
Stock-based compensation (continued)
The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes pricing model. Expected volatility is estimated by considering historic average share price volatility for a period commensurate with the expected life. The weighted average assumptions for stock options granted during the three-month periods ended March 31, 2021 and 2020 were as follows:
2021 (1) | 2020 | |||||||
Weighted average fair value of stock options at grant date | $ | 3.36 | N/A | |||||
Weighted average share price | $ | 4.34 | N/A | |||||
Weighted average exercise price | $ | 4.34 | N/A | |||||
Risk-free interest rate | 0.94 | % | N/A | |||||
Expected volatility | 112 | % | N/A | |||||
Expected life in years | 7 | N/A | ||||||
Expected dividend yield | Nil | N/A |
(1) Stock options were granted on February 25, 2021 and March 30, 2021.
Dividend yield was excluded from the calculation since it is the present policy of the Company to retain all earnings to finance operations and future growth.
(ii) | Broker warrants: |
In connection with the Company's equity offering in December 2018 (the '2018 Offering'), the Company issued 402,851 broker warrants exercisable for common shares. Each broker warrant entitled the holders to buy one common share at a price of $2.69 (CAD $3.42) per share for a period of 18 months from the closing of the 2018 Offering.
Changes in outstanding broker warrants for the three-month periods ended March 31, 2021 and 2020 were as follows:
Number | Dollars | ||||||||
Balance, March 31, 2021 and December 31, 2020 | - | $ | - |
Number | Dollars | |||||||
Balance, March 31, 2020 and December 31, 2019 | 171,590 | $ | 131 |
14
bellus health INC.
Notes to Condensed Consolidated Interim Financial Statements (Continued)
(Unaudited)
Periods ended March 31, 2021 and 2020
(in thousands of United States dollars, except per share data, unless otherwise noted)
7. | Shareholders' equity (continued): |
(b) | Share-based payment arrangements (continued): |
(iii) | Deferred share unit ('DSU') plan: |
Changes in the number of units outstanding for the three-month periods ended March 31, 2021 and 2020 were as follows:
Number of units | 2021 | 2020 | ||||||
Balance, beginning of period | 253,028 | 234,633 | ||||||
Units granted | - | - | ||||||
Balance, end of period | 253,028 | 234,633 | ||||||
Balance of DSU liability, included in Trade and other payables (1) | $ | 967 | $ | 2,334 |
(1) Balance of DSU liability as at December 31, 2020 amounted to $761.
The stock-based compensation expense related to DSU plan recorded in the condensed consolidated interim statement of loss and other comprehensive income for the three-month period ended March 31, 2021 amounted to $242; from this amount, $1 is presented in Research and development expenses and $241 is presented in General and administrative expenses ($764 for the corresponding period of the previous year, $1 presented in Research and development expense and $763 presented in General and administrative expenses, respectively).
8. | Net finance income (costs): |
Finance income and Finance costs for three-month periods ended March 31, 2021 and 2020 were attributed as follows:
Three-month periods ended March 31, | ||||||||
2021 | 2020 | |||||||
Interest income | $ | 71 | $ | 383 | ||||
Foreign exchange gain | 118 | - | ||||||
Finance income | 189 | 383 | ||||||
Interest expense on lease liability (note 5) | (8 | ) | (4 | ) | ||||
Interest and bank charges | (18 | ) | (5 | ) | ||||
Foreign exchange loss | - | (1,238 | ) | |||||
Finance costs | (26 | ) | (1,247 | ) | ||||
Net finance income (costs) | $ | 163 | $ | (864 | ) |
15
bellus health INC.
Notes to Condensed Consolidated Interim Financial Statements (Continued)
(Unaudited)
Periods ended March 31, 2021 and 2020
(in thousands of United States dollars, except per share data, unless otherwise noted)
9. | Loss per share: |
Three-month periods ended | ||||||||
March 31, | ||||||||
2021 | 2020 | |||||||
Basic weighted average number of common shares outstanding | 78,337,361 | 55,693,165 | ||||||
Basic and diluted loss per share | $ | (0.20 | ) | $ | (0.18 | ) |
Excluded from the calculation of the diluted loss per share for the three-month periods ended March31, 2021 and 2020 is the impact of all stock options granted under the stock option plan, as they would be anti-dilutive.
Stock options granted under the stock option plan could potentially be dilutive in the future.
10. | Commitments and contingencies: |
(a) | Contracts in the normal course of business: |
The Company enters into contracts in the normal course of business, including for research and development activities, consulting and other services.
As at March 31, 2021, the Company has commitments for expenditures related to contracts for research and development activities of approximately $31,441 (approximately $36,659 as at December 31, 2020), of which $29,349 is expected to be payable in 2021, $1,795 in 2022 and $297 in 2023.
(b) | Contingencies: |
On March 16, 2021, a Company stockholder, Carl D. Cachia, individually and on behalf of all persons who purchased or otherwise acquired Company securities between September 5, 2019 and July 5, 2020, filed a complaint against the Company and certain of its executive officers. The complaint alleges claims under provisions of the Securities Exchange Act of 1934. The complaint seeks compensatory damages and reasonable costs and expenses, including counsel fees and expert fees.
No provision has been made in the financial statements for the resolution of the above matter. Resolution of this matter could have an effect on the Company's financial statements in the year that a determination is made, however, in management's opinion, given the early stage of this litigation, the final resolution of this matter is not projected to have a material adverse effect on the Company's financial position.
16
bellus health INC.
Notes to Condensed Consolidated Interim Financial Statements (Continued)
(Unaudited)
Periods ended March 31, 2021 and 2020
(in thousands of United States dollars, except per share data, unless otherwise noted)
11. | Related party transactions: |
(a) | There is no single ultimate controlling party. |
(b) | Dr. Francesco Bellini, Chairman of the Board of Directors, provides ongoing advisory services to the Company under the terms of a consulting and services agreement between the Company and Picchio International, wholly-owned by Dr. Francesco Bellini and his spouse. The agreement has a one-year term and shall renew for successive one-year terms. The Company recorded fees and expenses of $75 and $72 (CAD $95) under the consulting and services agreement for the three-month periods ended March 31, 2021 and 2020, respectively. |
(c) | Key management personnel: |
The Chief Executive Officer, Chief Financial Officer, Chief Medical Officer, Vice Presidents and Directors of BELLUS Health are considered key management personnel of the Company.
The aggregate compensation for the three-month periods ended March 31, 2021 and 2020 to key management personnel of the Company is set out below:
Three-month periods ended | ||||||||
March 31, | ||||||||
2021 | 2020 | |||||||
Short-term benefits | $ | 736 | $ | 566 | ||||
DSU plan expense | 242 | 764 | ||||||
Stock option plan expense | 1,308 | 540 | ||||||
$ | 2,286 | $ | 1,870 |
12. | Financial instruments: |
Carrying values and fair values:
Fair value estimates are made as of a specific point in time, using available information about the financial instrument. These estimates are subjective in nature and may not be determined with precision. A three-tier fair value hierarchy prioritizes the inputs used in measuring fair value.
There was no financial asset or liability fair valued on a recurring basis as at March 31, 2021 and December 31, 2020.
For its financial assets and liabilities measured at amortized cost as at March 31, 2021, the Company has determined that the carrying value of its short-term financial assets and liabilities approximates their fair value because of the relatively short periods to maturity of these instruments.
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BELLUS Health Inc. published this content on 10 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 May 2021 12:25:07 UTC.