Attached files
| file | filename |
|---|---|
| 8-K/A - 8-K/A - PRECIGEN, INC. | xon-20151028x8ka.htm |
| EX-23.1 - EX-23.1 - PRECIGEN, INC. | xon-20151028x8kaxexx231.htm |
| EX-99.3 - EX-99.3 - PRECIGEN, INC. | xon-20151028x8kaxexx993.htm |
| EX-99.2 - EX-99.2 - PRECIGEN, INC. | xon-20151028x8kaxexx992.htm |
Exhibit 99.1
Consolidated Financial Statements Oxitec Limited |
For the year ended 31 December 2014
Oxitec Limited
Company Information | ||
Directors | Dr L S Alphey (Resigned September 4th 2015) B G Morton (Resigned September 4th 2015) L T Clay (Resigned September 4th 2015) E D K Mott (Resigned September 4th 2015) H St P Parry Dr C G J Richards (Resigned September 4th 2015) W G McAfee (Resigned September 4th 2015) Dr C Towler (Resigned September 4th 2015) Christian Ulrich (Appointed September 4th 2015) Rick Sterling (Appointed September 4th 2015) | |
Company secretary | W J R Fleming (Resigned September 4th 2015) | |
Registered number | 04512301 | |
Registered office | Second Floor, Park Gate 25 Western Avenue Milton Park Abingdon OXFORD OX14 4SH | |
Independent auditors | PricewaterhouseCoopers LLP One Reading Central 23 Forbury Road READING RG1 3JH | |
Bankers | Santander Corporate & Commercial Banking Santander UK plc 1st Floor, 121 St Aldates OXFORD OX1 1HB HSBC Bank Plc 16 Cornmarket Street OXFORD OX1 3HY | |
Solicitors | Wilmer Hale Second Floor, Park Gate 25 Western Avenue Milton Park OXFORD OX14 4SH | |
Oxitec Limited
Contents
Page(s) | |
Independent Auditors’ Report | 4 |
Consolidated Profit and Loss Account | 5 |
Consolidated Statement of Total Recognised Gains and Losses | 6 |
Consolidated Balance Sheet | 7 |
Consolidated Cash Flow Statement | 8 |
Reconciliation of Net Cash Flow to Movement in Net Debt | 8 |
Notes to the Consolidated Financial Statements | 9–21 |
Oxitec Limited
Independent Auditors’ Report
To the Board of Directors of Oxitec Limited
We have audited the accompanying consolidated financial statements of Oxitec Limited and its subsidiaries, which comprise the consolidated balance sheet as of 31 December 2014, and the related consolidated profit and loss account, statement of total recognised gains and losses, cash flow statement, reconciliation of net cash flow to movement in net debt, and notes to the financial statements for the year then ended.
Management's Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Financial Reporting Standard for Smaller Entities (Effective April 2008) and the Companies Act 2006 applicable to small groups (together “United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities”); this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements referred to above:
• | give a true and fair view of the state of the Company’s affairs as at 31 December 2014 and of its loss and cash flows for the year then ended; and |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities. |
Emphasis of matter
We draw attention to Note 22, which reconciles the results for the period from United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities (FRSSE) to accounting principles generally accepted in the United States of America (US GAAP). Significant differences exist between United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities and US GAAP. Our opinion is not modified with respect to this matter.
Other matter
We draw attention to the fact that these financial statements have not been prepared under section 394 of the Companies Act 2006 and are not the company’s statutory financial statements.
/s/ PricewaterhouseCoopers LLP
Reading, United Kingdom
9 September 2015
Page 4
Oxitec Limited
Consolidated Profit and Loss Account
For the year ended 31 December 2014
2014 | |||
Note | £ | ||
Turnover | - | ||
Administrative expenses | (4,810,460) | ||
Other operating income | 2 | 525,683 | |
Operating loss | 3 | (4,284,777) | |
Interest receivable and similar income | 5 | 13,004 | |
Interest payable and similar charges | 6 | (99,378) | |
Loss on ordinary activities before taxation | (4,371,151) | ||
Tax credit on loss on ordinary activities | 7 | 379,587 | |
Loss for the financial year | 13 | (3,991,564) | |
All results relate to continuing operations.
There are no material differences between the loss on ordinary activities before taxation and the loss for the financial year stated above and their historical cost equivalents.
The notes on pages 9 to 21 form part of these financial statements.
Page 5
Oxitec Limited
Consolidated Statement of Total Recognised Gains and Losses
For the year ended 31 December 2014
2014 | ||
£ | ||
Loss for the financial year | (3,991,564) | |
Exchange losses on foreign currency translation | (79,667) | |
Total recognised losses relating to the year | (4,071,231) | |
The notes on pages 9 to 21 form part of these financial statements.
Page 6
Oxitec Limited
Consolidated Balance Sheet
As at 31 December 2014
2014 | |||||
Note | £ | £ | |||
Fixed assets | |||||
Tangible assets | 8 | 692,793 | |||
Investments | 9 | 13,347 | |||
706,140 | |||||
Current assets | |||||
Debtors | 10 | 527,100 | |||
Investments | 9 | 754,142 | |||
Cash at bank and in hand | 2,676,497 | ||||
3,957,739 | |||||
Creditors: amounts falling due within one year | 11 | (4,747,715) | |||
Net current liabilities | (789,976) | ||||
Total assets less current liabilities | (83,836) | ||||
Net liabilities | (83,836 | ) | |||
Capital and reserves | |||||
Called up share capital | 12 | 6,661 | |||
Share premium account | 13 | 20,790,841 | |||
Profit and loss account | 13 | (20,881,338) | |||
Total shareholders' deficit | 14 | (83,836) | |||
The notes on pages 9 to 21 form part of these financial statements.
Page 7
Oxitec Limited
Consolidated Cash Flow Statement
For the year ended 31 December 2014
2014 | |||
Note | £ | ||
Net cash outflow from operating activities | 16 | (4,050,558) | |
Returns on investment and servicing of finance | |||
Interest received | 9,342 | ||
Net cash inflow from returns on investments and servicing of finance | 9,342 | ||
Tax received | 379,587 | ||
Capital expenditure and financial investment | |||
Purchases of tangible fixed assets | (552,072) | ||
Increase in investment in Genefirst Limited | (5,091) | ||
Net cash outflow for capital expenditure and financial investment | (557,163) | ||
Net cash outflow before use of liquid resources and financing | (4,218,792) | ||
Management of liquid resources | |||
Purchases of short term deposits | (754,142) | ||
Net cash outflow from management of liquid resources | (754,142) | ||
Financing | |||
Issue of ordinary share capital | 6,040,816 | ||
Increase in borrowings | 177,976 | ||
Net cash inflow from financing | 6,218,792 | ||
Increase in cash and cash equivalents | 1,245,858 | ||
Reconciliation of net cash flow to movement in net debt | |||
Increase in cash and cash equivalents | 1,245,858 | ||
Movement in liquid resources | 754,142 | ||
Movement in borrowings | (177,976) | ||
Other non-cash changes | (99,378) | ||
Change in net debt | 1,722,646 | ||
Net debt at the beginning of the year | (2,131,964) | ||
Net debt at the end of the year | 17 | (409,318) | |
The notes on pages 9 to 21 form part of these financial statements.
Page 8
Oxitec Limited
Notes to the Consolidated Financial Statements
For the year ended 31 December 2014
1. Accounting policies
Principal activities
The principal activity of Oxitec Limited (the “Company”) and subsidiaries (“the Group”, “Oxitec”or “we”) during the year was research and development in biotechnology. Oxitec is a pioneer in controlling insects that spread disease and damage crops. Through world class science we have developed an innovative new solution to controlling harmful insect pests.
Basis of preparation of financial statements
These financial statements have been prepared solely for the purpose of meeting the requirements of U.S. Securities and Exchange Commission (“SEC”) Rule 3-05 of Regulation S-X following the acquisition of Oxitec by Intrexon Corporation (“Intrexon”) on 27 August 2015. These financial statements are not the statutory financial statements of the Company or Group. Accordingly, these financial statements do not present information on Oxitec Limited as a separate legal entity. These non-statutory financial statements have been prepared in accordance with the Financial Reporting Standard for Smaller Entities (Effective April 2008) and the Companies Act 2006 applicable to small groups (United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities) which have been applied consistently (except as otherwise stated).
The financial statements are prepared under the historical cost convention. No comparative information has been presented in these financial statements as no comparatives are required under SEC Rule 3-05 of Regulation S-X. However, this is a departure from generally accepted accounting practice in the United Kingdom as comparative figures are required.
US GAAP
Significant differences exist between United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities and US Generally Accepted Accounting Principles (US GAAP). The US GAAP results for the period and the effect on Group total shareholders' funds are set out in Note 22.
Consolidation
The consolidated financial statements include the results of the company and its subsidiary undertakings made up to the end of the financial year. Intra-group transactions are excluded on consolidation and sales and profit figures relate to external transactions only.
Going concern
The financial statements have been prepared on a going concern basis which assumes that the Company will continue in operational existence for the foreseeable future. Since the year end, the Company has raised £4,553,800 of additional working capital through an issue of shares to existing and new investors. Following the acquisition of the Company by Intrexon, the directors have also received a letter of support from Intrexon to provide the Company with sufficient resources to meet its liabilities as they fall due for at least twelve months from the date of approval of these financial statements. Accordingly, the directors consider that the going concern assumption is appropriate.
Research and development
Research and development expenditure is written off in the year in which it is incurred. Research and development tax credits are recognised on a receipt basis.
Page 9
Oxitec Limited
Notes to the Consolidated Financial Statements
For the year ended 31 December 2014
1. Accounting policies (continued)
Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected useful lives on the following bases:
Plant & machinery | - | 5 years |
Office equipment | - | 3 years |
Assets in the course of construction are included in tangible fixed assets as construction in progress on the basis of expenditure incurred at the balance sheet date and are not depreciated until brought into use.
Investments
Investments held as fixed assets are shown at cost less provision for impairment.
Operating leases
Rentals under operating leases are charged to the profit and loss account on a straight line basis over the lease term.
Foreign currencies
Profit and loss account of the overseas subsidiary undertakings are translated at average exchange rates for the year. Monetary assets and liabilities denominated in foreign currencies are translated into sterling at rates of exchange ruling at the balance sheet date. Differences arising from the re-translation of the opening net investment in the overseas subsidiary undertakings to year end rates are taken to reserves.
Transactions in foreign currencies are translated into sterling at the rate ruling on the date of the transaction.
Exchange gains and losses are recognised in the profit and loss account.
Government and other grants
Government and other grants of a revenue nature are credited to the Profit and loss account in the same period as the related expenditure is incurred. Where there is significant uncertainty over the timing or amount of grant income, this is only recognised on a receipts basis.
Pensions
The Group operates a defined contribution pension scheme and the pension charge represents the amounts payable by the Group to the fund in respect of the year. The assets of the scheme are held separately from those of the Group.
The Group Auto-enrolment staging date is October 2015 and actions are underway to complete implementation in Quarter 3 2015.
Page 10
Oxitec Limited
Notes to the Consolidated Financial Statements
For the year ended 31 December 2014
1. Accounting policies (continued)
Deferred taxation
Full provision is made for deferred tax assets and liabilities arising from all timing differences between the recognition of gains and losses in the financial statements and recognition in the tax computation. A net deferred tax asset is recognised only if it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Deferred tax assets and liabilities are calculated at the tax rates expected to be effective at the time the timing differences are expected to reverse. Deferred tax assets and liabilities are not discounted.
Financial instruments
Convertible loan notes are held as liabilities on the face of the balance sheet, split between current and non-current, dependant on the maturity date of the loan notes. The liability is recognised at the principal amount plus any accrued interest or compounded interest accruable on the loan notes.
2. Other operating income
2014 | |||
£ | |||
Grant income | 516,336 | ||
Other miscellaneous | 9,347 | ||
525,683 | |||
3. Operating loss
The operating loss is stated after charging: | |||
2014 | |||
£ | |||
Staff costs | 2,368,242 | ||
Depreciation of tangible fixed assets: - Owned by the Group | 104,795 | ||
Loss on disposal of fixed assets | 9,637 | ||
Auditors’ remuneration | 18,000 | ||
Research and development expenditure | 264,415 | ||
Operating lease expenditure - Land and buildings - Office equipment | 236,651 8,052 | ||
4. Directors' remuneration
2014 | |||
£ | |||
Aggregate remuneration | 321,228 | ||
No pension contributions were made in respect of directors during the year.
Page 11
Oxitec Limited
Notes to the Consolidated Financial Statements
For the year ended 31 December 2014
5. Interest receivable and similar income | ||
2014 | ||
£ | ||
Foreign exchange gains | 3,662 | |
Other interest receivable | 9,342 | |
13,004 | ||
6. Interest payable and similar charges | ||
2014 | ||
£ | ||
Interest payable on convertible loans | 99,378 | |
99,378 | ||
7. Tax on loss on ordinary activities | ||
2014 | ||
£ | ||
Research and development tax credit | 379,587 | |
379,587 | ||
Unrelieved tax losses of approximately £15,000,000 remain available for offset against future taxable trading profits, prior to any research and development tax relief claims for the current year. The Group has not recognised any deferred tax asset in respect of these losses due to there being significant uncertainty regarding the recovery of these losses against taxable trading profits in the forseeable future.
Page 12
Oxitec Limited
Notes to the Consolidated Financial Statements
For the year ended 31 December 2014
8. Tangible assets
Plant & Machinery | Office Equipment | Construction in progress | Total | |
£ | £ | £ | £ | |
Cost | ||||
At 1 January 2014 | 572,616 | 147,434 | - | 720,050 |
Additions | 128,333 | 54,265 | 369,474 | 552,072 |
Disposals | (242,752) | (65,303) | - | (308,055) |
At 31 December 2014 | 458,197 | 136,396 | 369,474 | 964,067 |
Accumulated depreciation | ||||
At 1 January 2014 | 368,356 | 96,541 | - | 464,897 |
Charge for the year | 79,653 | 25,142 | - | 104,795 |
Disposals | (242,752) | (55,666) | - | (298,418) |
At 31 December 2014 | 205,257 | 66,017 | - | 271,274 |
Net book value | ||||
At 31 December 2014 | 252,940 | 70,379 | 369,474 | 692,793 |
At 31 December 2013 | 204,260 | 50,893 | - | 255,153 |
Page 13
Oxitec Limited
Notes to the Consolidated Financial Statements
For the year ended 31 December 2014
9. Investments
Subsidiary undertakings
The Company holds 100% of the ordinary shares of the following subsidiary undertakings:
Name | Country of Incorporation |
Oxitec Singapore pte | Singapore |
Oxitec Sdn Bhd | Malaysia |
Oxitec Inc | USA |
Oxitec do Brasil Tecnologia de Insetos Ltda | Brazil |
The principal activity of Oxitec do Brasil Tecnologia de Insetos Ltda is research and development. All other subsidiaires have no significant activity.
The aggregate of the share capital and reserves as at 31 December 2014 and of the profit or loss for the year ended on that date for the subsidiary undertakings were as follows:
Aggregate of | ||
share capital and | ||
Name | reserves | Profit/(loss) |
£ | £ | |
Oxitec Singapore pte | (52,007) | (4,673) |
Oxitec Sdn Bhd | (314,487) | (5,605) |
Oxitec Inc | - | - |
Oxitec Do Brasil Participacoes LTDA | (821,961) | (707,913) |
Investment in Genefirst Limited
The Company also has an investment in Genefirst Limited (“Genefirst”), a company incorporated in the UK which is recognised at cost of £13,347. At 31 December 2014 this investment represented 19% of the ordinary share capital of Genefirst. On 7 January 2015 Genefirst raised additional equity capital, reducing the Company’s interest to 12% of the issued shares of Genefirst. Genefirst had share capital and reserves of £100,848 at 31 December 2014 and made a loss of £67,000 for the year ended 31 December 2014.
Current asset investments | 2014 | |
£ | ||
Time deposit investment | 754,142 | |
The current asset investment balance relates to a short-term time deposit amount due within one year. | ||
Page 14
Oxitec Limited
Notes to the consolidated financial statements
For the year ended 31 December 2014
10. Debtors | |||
2014 | |||
£ | |||
Due within one year | |||
Prepayments and accrued income | 247,750 | ||
Other debtors | 279,350 | ||
527,100 | |||
11. | Creditors: Amounts falling due within one year |
2014 | |||
£ | |||
Convertible loans | 3,839,957 | ||
Trade creditors | 183,131 | ||
Taxation and social security | 60,623 | ||
Other creditors | 664,004 | ||
4,747,715 | |||
The convertible loan balance includes £3,078,156, principal plus accrued interest, provided by East Hill Venture Fund LP (“East Hill”). Further details of this balance are given in note 19. The remaining £761,801 of convertible loan relates to a loan from the Wellcome Trust which is convertible at the holders option into ordinary shares at a discount of 20% to the most recent funding round. During the year, interest charges of £99,378 were accrued and added to the amount of the outstanding loans. Interest accrues at a fixed interest rate of 4% above six month U.S. dollar LIBOR as at 27 June 2013 and 2% above three month sterling LIBOR as at 3 February 2010 on the East Hill and Welcome Trust loans respectively. Prior to 29 June 2013, interest accrued at a fixed rate of 2% above three month sterling LIBOR as at 27 June 2008 on £1,500,000 of the East Hill loan, and 3% above three month sterling LIBOR as at 2 June 2009 on £750,000 of the East Hill loan.
Page 15
Oxitec Limited
Notes to the consolidated financial statements
For the year ended 31 December 2014
12. Called up share capital
2014 | ||
£ | ||
Allotted, called up and fully paid | ||
666,094 Ordinary shares of £0.01 each | 6,661 | |
During the course of the year, the Company issued of 131,872 Ordinary shares of £0.01 each, in order to provide additional working capital. The difference between the total consideration of £6,040,816 and the total nominal value of £1,319, being £6,039,497, has been credited to the share premium account.
13. Reserves
Share premium account | Profit and loss account | ||
£ | £ | ||
At 1 January 2014 | 14,751,344 | (16,810,107) | |
Loss for the financial year | - | (3,991,564) | |
Exchange losses on foreign currency translation | - | (79,667) | |
Premium on shares issued during the year | 6,039,497 | - | |
At 31 December 2014 | 20,790,841 | (20,881,338) | |
14. Reconciliation of movements in shareholders’ deficit
2014 | |||
£ | |||
Loss for the financial year | (3,991,564) | ||
Exchange losses on foreign currency translation | (79,667) | ||
Increase in share capital | 1,319 | ||
Increase in share premium | 6,039,497 | ||
Net decrease in shareholders’ deficit | 1,969,585 | ||
Opening shareholders’ deficit | (2,053,421) | ||
Closing shareholders’ deficit | (83,836 | ) | |
15. Share options
The Company has granted a number of share options over ordinary shares to both employees and directors of the Company. Under the scheme, there are unexercised options over 64,135 shares at an exercise price of £5; 6,715 shares at an exercise price of £17.50; 1,000 shares at an exercise price of £18.48; and 9,000 shares at an exercise price of £47.00. Under the scheme, the options vest over a three to five year period at an equal annual percentage on the anniversary of the grant date and are exercisable within 5 years of being granted.
Page 16
Oxitec Limited
Notes to the consolidated financial statements
For the year ended 31 December 2014
15. Share options (continued)
The following share options are held by the directors of the Company:
• | Dr L S Alphey has interests in share options over 1,636 Ordinary shares of £0.01 each at an exercise price of £5.00 per share and further options over 6,715 Ordinary shares of £0.01 each at an exercise price of £17.50 per share |
• | E D K Mott has interests in share options over 1,000 Ordinary shares of £0.01 each at an exercise price of £18.48 per share |
• | H St P Parry has interests in share options over 15,024 Ordinary shares of £0.01 each at an exercise price of £5.00 per share and further options over 9,000 Ordinary shares of £0.01 each at an exercise price of £47.00 per share sce |
• | Dr CGJ Richards has interests in share options over 3,000 Ordinary shares of £0.01 each at an exercise price of £5.00 per share. |
16. Reconciliation of operating loss to net cash outflow from operating activities
2014 | |||
£ | |||
Operating loss | (4,284,777) | ||
Increase in debtors | (261,738) | ||
Increase in creditors | 381,525 | ||
Depreciation expense | 104,795 | ||
Loss on disposal of fixed assets | 9,637 | ||
Net cash outflow from operating activities | (4,050,558 | ) | |
17. Analysis of changes in net debt
At 1 January 2014 | Cash flows | Other changes | At 31 December 2014 | |
£ | £ | £ | £ | |
Cash and cash equivalents | 1,430,639 | 1,245,858 | - | 2,676,497 |
Convertible loans | (3,562,603) | (177,976) | (99,378) | (3,839,957) |
Current asset investments | - | 754,142 | - | 754,142 |
Total | (2,131,964) | 1,822,024 | (99,378) | (409,318) |
Page 17
Oxitec Limited
Notes to the consolidated financial statements
For the year ended 31 December 2014
18. Financial commitments
At 31 December 2014 the Group has lease agreements in respect of properties and office equipment, for which the payments extend over a number of years.
Annual minimum lease commitments under non-cancellable operating leases expiring:
Land and buildings | Other | ||
£ | £ | ||
Within one year | - | - | |
Within two to five years | 173,000 | 8,052 | |
After five years | 63,651 | - | |
236,651 | 8,052 | ||
19. Related party transactions
During the year ended 31 December 2008, the Company was provided with a £1,500,000 unsecured convertible loan facility by East Hill, a business which is controlled by L T Clay, a director of Oxitec. During 2009, the Company was provided with and drew down a further £750,000 loan facility from East Hill secured by way of a debenture over the Company's assets. The loan facilities are convertible into ordinary shares at the lesser of £40 per share and the most recent funding round. During the year the loan facilities were amended and the maturity date extended to 27 June 2015. At 31 December 2014, all £2,250,000 of the loan facilities had been drawn down by the Company. During the year, interest charges of £99,378 were accrued and added to the amount of the outstanding loans. Total accrued interest amounts to £828,156 at 31 December 2014.
Fees totalling £91,788 have been paid to Oxford Capital Partners, a business which is under the control of E D K Mott, a director of Oxitec. Invoices totalling £15,000 for Non Executive Director services provided throughout 2014 for Oxford Capital Partners LLP (Edward Mott), and invoices totalling £24,000 for provision of services by a company, Talestris Ltd (Christopher Richards) were paid during 2014. Fees totalling £92,500 were accrued to L T Clay, a director of Oxitec. These fees remain unpaid.
20. Post balance sheet events
During 2015, up until the date of approval of these financial statements, the Company issued 91,072 ordinary shares with a nominal value of 1p each in return for a total consideration of £4,553,800.
During July 2015 the Company’s loan facilities with East Hill were amended and the maturity date extended to 27 June 2017.
On 4 September 2015 all of the issued and to be issued share capital of the Company was acquired by Intrexon for total purchase consideration of $160 million which was settled in cash and Intrexon common stock shares.
On 4 September 2015 all of the directors of the Company with the sole exception of Hadyn Parry resigned.
On 4 September 2015 the Company secretary resigned.
Page 18
Oxitec Limited
Notes to the consolidated financial statements
For the year ended 31 December 2014
20. Post balance sheet events (continued)
On 4 September 2015 Christian Ulrich and Rick Sterling were appointed directors of the Company
On 4 September 2015 all convertible loans were duly converted to a total of 99,769 ordinary shares and subsequently sold on the same date to Intrexon.
On 4 September 2015 all share options in issue, totalling options over 86,670 ordinary shares in Oxitec Ltd were exercised and the shares so issed sold on the same date to Intrexon.
On 4 September 2015 all exercisable warrant instruments in issue, totalling warrants to purchase 62,165 ordinary shares in Oxitec Ltd were exercised and the shares so issued sold on the same date to Intrexon.
21. Ultimate parent company
The directors regard Intrexon Corporation, a company incorporated in the US, as the ultimate parent company and ultimate controlling party. Copies of the consolidated financial statements of Intrexon can be obtained from The Company Secretary, 20374 Seneca Meadows Parkway, Germantown, Maryland, 20876, United States of America.
Intrexon Corporation is the largest and smallest group of undertakings for which group financial statements are drawn up of which the Company is a member subsequent to its acquisition by Intrexon on 4th September 2015. The immediate parent company of Oxitec is Intrexon UK Insect Holdings Limited.
Page 19
Oxitec Limited
Notes to the financial statements
For the year ended 31 December 2014
22. Reconciliation from UK FRSSE to accounting principles generally accepted in the United States of America (“US GAAP”)
The accompanying consolidated financial statements of Oxitec have been prepared in accordance with the UK FRSSE as described in Note 1. The UK FRSSE differs in certain respects from the requirements of US GAAP. The effects of the application of US GAAP to Oxitec results, as determined under the UK FRSSE, are set out below.
Year ended 31 December 2014 Profit & loss account | At 31 December 2014 Total shareholders’ deficit | ||
£ | £ | ||
UK FRSSE results | |||
Loss for the financial year | (3,991,564) | - | |
Total shareholders’ deficit | - | (83,836) | |
US GAAP adjustments: | |||
a) Share based compensation expense | (217,835) | - | |
b) Convertible loans | (197,116) | (782,294) | |
Total US GAAP adjustments | (414,951) | (782,294) | |
Results under US GAAP | (4,406,515) | (866,130) | |
a) | Share based compensation expense |
Under the UK FRSSE, there is no requirement to recognise equity settled share based compensation expense. Under US GAAP, equity classified awards are recognised as compensation expense and are measured at the grant date fair value of the award over the vesting period. The Company has estimated the grant date fair value using the Black-Scholes-Merton option-pricing model.
b) | Convertible loans |
Under the UK FRSSE, financial instruments are classified as a financial liability, a financial asset or an equity instrument in accordance with the substance of the contractual arrangement. Under the UK FRSSE the convertible loans are recognised as a liability at cost. Under US GAAP, the Company has elected to report its convertible loans under the Fair Value Option Subsections of FASB ASC Subtopic 825‑10, Financial Instruments—Overall, with changes in fair value reported in earnings. The profit and loss account adjustment of £197,116 and total shareholders’ deficit adjustment of £782,294 reflect the incremental impact of applying a fair basis of measurement to the amounts recorded under the UK FRSSE since the date that the instruments were issued.
Page 20
Oxitec Limited
Notes to the financial statements
For the year ended 31 December 2014
22. Reconciliation from UK FRSSE to accounting principles generally accepted in the United States of America (“US GAAP”) (continued)
Cash flow statement for the year ended 31 December 2014
The consolidated cash flow statement of Oxitec has been prepared in accordance with UK GAAP. There are certain differences with regard to classification of items within the cash flow statement under US GAAP. Under UK GAAP cash flows are prepared separately for operating activities, returns on investments and servicing of finance, taxation, capital expenditure and financial investment, acquisitions and disposals, and financing. Under UK GAAP, cash is defined as cash in hand and deposits repayable on demand, less overdrafts repayable on demand. Under US GAAP, cash and cash equivalents are defined as cash and investments with original maturities of three months or less. The following table presents cash flows as classifoed under US GAAP.
2014 | ||
£ | ||
Cash flows from operating activities | ||
Net loss | (4,406,515) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation of tangible fixed assets | 104,795 | |
Loss on disposal of tangible fixed assets | 9,637 | |
Share based compensation expense | 217,835 | |
Unrealised losses on convertible loans measured at fair value | 296,494 | |
Other non-cash items | (3,662) | |
Changes in operating assets and liabilities: | ||
Debtors | (261,738) | |
Creditors | 381,525 | |
Net cash used in operating activities | (3,661,629) | |
Cash flows from investing activities | ||
Purchases of short term deposits | (754,142) | |
Purchases of tangible fixed assets | (552,072) | |
Increase in investment in Genefirst Limited | (5,091) | |
Net cash used in investing activities | (1,311,305) | |
Cash flows from financing activities | ||
Proceeds from issuance of shares in a private placement | 6,040,816 | |
Advances from convertible loan facility | 177,976 | |
Net cash provided by financing activities | 6,218,792 | |
Net increase in cash and cash equivalents | 1,245,858 | |
Cash and cash equivalents | ||
Beginning of year | 1,430,639 | |
End of year | 2,676,497 | |
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