EX-99.3 4 lmnl-ex993_9.htm EX-99.3 lmnl-ex993_9.htm

Exhibit 99.3

 

 

 

 

 

Condensed interim consolidated financial statements of Liminal BioSciences Inc.

 

 

For the quarter ended March 31, 2020

 

 

1


LIMINAL BIOSCIENCES INC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(In thousands of Canadian dollars, except per share amounts) (Unaudited)

 

 

 

 

March 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

36,555

 

 

$

61,285

 

Accounts receivable (note 4)

 

 

3,572

 

 

 

4,086

 

Income tax receivable

 

 

9,414

 

 

 

9,214

 

Inventories (note 5)

 

 

6,532

 

 

 

7,532

 

Prepaids

 

 

9,872

 

 

 

12,733

 

Total current assets

 

 

65,945

 

 

 

94,850

 

 

 

 

 

 

 

 

 

 

Other long-term assets

 

 

1,191

 

 

 

1,170

 

Capital assets

 

 

21,294

 

 

 

21,471

 

Right-of-use assets (note 6)

 

 

31,720

 

 

 

33,254

 

Intangible assets

 

 

13,820

 

 

 

13,846

 

Deferred tax assets

 

 

507

 

 

 

507

 

Total assets

 

$

134,477

 

 

$

165,098

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities (note 7)

 

$

17,978

 

 

$

22,808

 

Current portion of lease liabilities (note 8)

 

 

6,834

 

 

 

8,290

 

Current portion of long-term debt

 

 

-

 

 

 

165

 

Total current liabilities

 

 

24,812

 

 

 

31,263

 

 

 

 

 

 

 

 

 

 

Long-term portion of lease liabilities (note 8)

 

 

29,769

 

 

 

29,947

 

Other long-term liabilities (note 9)

 

 

244

 

 

 

285

 

Long-term debt

 

 

8,726

 

 

 

8,669

 

Total liabilities

 

$

63,551

 

 

$

70,164

 

 

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

 

 

Share capital (note 10a)

 

$

943,955

 

 

$

932,951

 

Contributed surplus (note 10b)

 

 

36,105

 

 

 

43,532

 

Warrants (note 10c)

 

 

95,856

 

 

 

95,856

 

Accumulated other comprehensive loss

 

 

(3,019

)

 

 

(3,099

)

Deficit

 

 

(994,403

)

 

 

(967,051

)

Equity attributable to owners of the parent

 

 

78,494

 

 

 

102,189

 

Non-controlling interests

 

 

(7,568

)

 

 

(7,255

)

Total equity

 

 

70,926

 

 

 

94,934

 

Total liabilities and equity

 

$

134,477

 

 

$

165,098

 

Going concern (note 1)

The accompanying notes are an integral part of the condensed interim consolidated financial statements

 

 

2


LIMINAL BIOSCIENCES INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of Canadian dollars, except per share amounts) (Unaudited)

 

 

 

 

 

 

 

 

 

 

Quarters ended March 31

 

2020

 

 

2019

 

 

Revenues (note 11)

 

$

1,103

 

 

$

2,264

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

Cost of sales and other production expenses (note 5)

 

 

684

 

 

 

1,130

 

 

Research and development expenses

 

 

16,985

 

 

 

17,471

 

 

Administration, selling and marketing expenses

 

 

10,672

 

 

 

7,095

 

 

Gain on foreign exchange

 

 

(1,132

)

 

 

(1,776

)

 

Finance costs

 

 

1,630

 

 

 

7,149

 

 

Loss (gain) on extinguishments of liabilities (note 10a)

 

 

(79

)

 

 

80

 

 

Change in fair value of financial instruments measured at fair

   value through profit or loss

 

 

-

 

 

 

229

 

 

Net loss from continuing operations, net of taxes of $nil

 

$

(27,657

)

 

$

(29,114

)

 

Net income from discontinued operations, net of taxes of $nil (note 3)

 

 

-

 

 

 

280

 

 

Net loss

 

$

(27,657

)

 

$

(28,834

)

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to:

 

 

 

 

 

 

 

 

 

Non-controlling interests - continuing operations

 

 

(313

)

 

 

(698

)

 

Owners of the parent

 

 

 

 

 

 

 

 

 

-Continuing operations

 

 

(27,344

)

 

 

(28,416

)

 

-Discontinued operations

 

 

-

 

 

 

280

 

 

 

 

$

(27,344

)

 

$

(28,136

)

 

Net loss

 

$

(27,657

)

 

$

(28,834

)

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per share attributable to the owners of

   the parent basic and diluted:

 

 

 

 

 

 

 

 

 

From continuing operations

 

 

(1.17

)

 

 

(33.59

)

 

From discontinued operations

 

 

-

 

 

 

0.33

 

 

 

 

$

(1.17

)

 

$

(33.26

)

 

Weighted average number of outstanding shares

   (in thousands)

 

 

23,386

 

 

 

846

 

 

The accompanying notes are an integral part of the condensed interim consolidated financial statements

 

 

3


LIMINAL BIOSCIENCES INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands of Canadian dollars) (Unaudited)

 

Quarters ended March 31

 

2020

 

 

2019

 

 

Net Loss

 

$

(27,657

)

 

$

(28,834

)

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

Items that may be subsequently reclassified to profit

   and loss:

 

 

 

 

 

 

 

 

 

Exchange differences on translation of foreign operations

   from continuing operations

 

 

80

 

 

 

5

 

 

Exchange differences on translation of foreign operations

   from discontinued operations (note 3)

 

 

-

 

 

 

72

 

 

Other comprehensive income

 

 

80

 

 

 

77

 

 

Comprehensive loss

 

$

(27,577

)

 

$

(28,757

)

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income (loss) attributable to:

 

 

 

 

 

 

 

 

 

Non-controlling interests - continuing operations

 

 

(313

)

 

 

(698

)

 

Owners of the parent

 

 

 

 

 

 

 

 

 

- Continuing operations

 

 

(27,264

)

 

 

(28,411

)

 

- Discontinued operations

 

 

-

 

 

 

352

 

 

 

 

 

(27,264

)

 

 

(28,059

)

 

Comprehensive loss

 

$

(27,577

)

 

$

(28,757

)

 

The accompanying notes are an integral part of the condensed interim consolidated financial statements

 

 

4


LIMINAL BIOSCIENCES INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In thousands of Canadian dollars) (Unaudited)

 

 

 

 

 

 

 

Equity attributable to owners of the parent

 

 

 

 

 

 

 

 

 

 

 

Share

capital

 

 

Contributed

surplus

 

 

Warrants

 

 

Foreign

currency

translation

reserve

 

 

Deficit

 

 

Total

 

 

Non-

controlling

interests

 

 

Total

Equity

 

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

Balance at January 1, 2019

 

 

583,117

 

 

 

21,923

 

 

 

95,296

 

 

 

(1,252

)

 

 

(755,688

)

 

 

(56,604

)

 

 

(6,542

)

 

 

(63,146

)

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(28,136

)

 

 

(28,136

)

 

 

(698

)

 

 

(28,834

)

Foreign currency translation reserve

 

 

-

 

 

 

-

 

 

 

-

 

 

 

77

 

 

 

-

 

 

 

77

 

 

 

-

 

 

 

77

 

Issuance of shares (note 10a)

 

 

6,485

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

6,485

 

 

 

-

 

 

 

6,485

 

Share-based payments expense (note 10b)

 

 

-

 

 

 

1,532

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,532

 

 

 

-

 

 

 

1,532

 

Share issuance cost

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(175

)

 

 

(175

)

 

 

-

 

 

 

(175

)

Effect funding arrangements on

   non-controlling interests

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(100

)

 

 

(100

)

 

 

100

 

 

 

-

 

Balance at March 31, 2019

 

 

589,602

 

 

 

23,455

 

 

 

95,296

 

 

 

(1,175

)

 

 

(784,099

)

 

 

(76,921

)

 

 

(7,140

)

 

 

(84,061

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2020

 

 

932,951

 

 

 

43,532

 

 

 

95,856

 

 

 

(3,099

)

 

 

(967,051

)

 

 

102,189

 

 

 

(7,255

)

 

 

94,934

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(27,344

)

 

 

(27,344

)

 

 

(313

)

 

 

(27,657

)

Foreign currency translation reserve

 

 

-

 

 

 

-

 

 

 

-

 

 

 

80

 

 

 

-

 

 

 

80

 

 

 

-

 

 

 

80

 

Issuance of shares (note 10a)

 

 

1,240

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,240

 

 

 

-

 

 

 

1,240

 

Share-based payments expense (note 10b)

 

 

-

 

 

 

2,377

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,377

 

 

 

-

 

 

 

2,377

 

Share-based compensation

   paid in cash (note 10b)

 

 

-

 

 

 

(40

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(40

)

 

 

-

 

 

 

(40

)

Shares issued pursuant to a

   restricted share unit plan (note 10b)

 

 

9,764

 

 

 

(9,764

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Share issuance cost

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(8

)

 

 

(8

)

 

 

-

 

 

 

(8

)

Balance at March 31, 2020

 

 

943,955

 

 

 

36,105

 

 

 

95,856

 

 

 

(3,019

)

 

 

(994,403

)

 

 

78,494

 

 

 

(7,568

)

 

 

70,926

 

The accompanying notes are an integral part of the condensed interim consolidated financial statements.

 

5


LIMINAL BIOSCIENCES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of Canadian dollars) (Unaudited)

 

 

Quarters ended March 31

 

2020

 

 

2019

 

Cash flows used in operating activities

 

 

 

 

 

 

 

 

Net loss from continuing operations for the period

 

$

(27,657

)

 

$

(29,114

)

Net income from discontinued operations for the period

 

 

-

 

 

 

280

 

Adjustments to reconcile net loss to cash flows used in

   operating activities:

 

 

 

 

 

 

 

 

Finance costs and foreign exchange

 

 

517

 

 

 

5,796

 

Carrying value of capital and intangible assets disposed

 

 

20

 

 

 

132

 

Change in fair value of financial instruments measured at

   fair value through profit or loss

 

 

-

 

 

 

229

 

Loss (gain) on extinguishments of liabilities

 

 

(79

)

 

 

80

 

Share-based payments expense (note 10b)

 

 

2,337

 

 

 

1,532

 

Depreciation of capital assets

 

 

671

 

 

 

925

 

Depreciation of right-of-use assets (note 6)

 

 

720

 

 

 

1,211

 

Amortization of intangible assets

 

 

238

 

 

 

299

 

 

 

 

(23,233

)

 

 

(18,630

)

Change in non-cash working capital items

 

 

(124

)

 

 

1,103

 

 

 

$

(23,357

)

 

$

(17,527

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

Proceeds from share issuances (note 10a)

 

 

-

 

 

 

4,351

 

Proceeds from debt and warrant issuances

 

 

-

 

 

 

19,859

 

Repayment of principal on long-term debt

 

 

(165

)

 

 

(165

)

Repayment of interest on long-term debt

 

 

(251

)

 

 

(2,182

)

Payments of principal on lease liabilities (note 8)

 

 

(2,072

)

 

 

(947

)

Payment of interest on lease liabilities (note 8)

 

 

(1,549

)

 

 

(316

)

Debt, share and warrants issuance costs

 

 

(8

)

 

 

(126

)

 

 

$

(4,045

)

 

$

20,474

 

Cash flows from (used in) investing activities

 

 

 

 

 

 

 

 

Additions to capital assets

 

 

(331

)

 

 

(820

)

Additions to intangible assets

 

 

(195

)

 

 

(421

)

Proceeds from sale of discontinued operations business, net of cash

   divested

 

 

1,175

 

 

 

-

 

Transaction costs paid relating to the sale of discontinued operations

   business

 

 

(787

)

 

 

-

 

Interest received

 

 

216

 

 

 

14

 

 

 

$

78

 

 

$

(1,227

)

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents during the period

 

 

(27,324

)

 

 

1,720

 

Net effect of currency exchange rate on cash and cash equivalents

 

 

2,594

 

 

 

(53

)

Cash and cash equivalents, beginning of period

 

 

61,285

 

 

 

7,389

 

Cash and cash equivalents, end of period

 

$

36,555

 

 

$

9,056

 

Comprising of:

 

 

 

 

 

 

 

 

Cash

 

 

15,242

 

 

 

9,056

 

Cash equivalents

 

 

21,313

 

 

 

-

 

 

 

$

36,555

 

 

$

9,056

 

Cash flows from discontinued operations are presented in note 3

The accompanying notes are an integral part of the condensed interim consolidated financial statements.

 

 

6


LIMINAL BIOSCIENCES INC.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of Canadian dollars) (Unaudited)

 

1.

Nature of operations and going concern

Liminal BioSciences Inc. (“Liminal” or the “Company”) is incorporated under the Canada Business Corporations Act and is a publicly traded clinical stage biotechnology company (Nasdaq & TSX symbol: LMNL) focused on discovering, developing and commercializing novel treatments for patients suffering from diseases related to fibrosis, including respiratory, liver and kidney diseases that have high unmet medical need. Liminal has a deep understanding of certain biological targets and pathways that have been implicated in the fibrotic process, including fatty acid receptors such as G-protein-coupled receptor 40, or GPR40, and G-protein-coupled receptor 84, or GPR84, and peroxisome proliferator-activated receptors, or PPARs.

Liminal’s lead small molecule segment product candidate, fezagepras (PBI-4050), is currently being developed for multiple fibrotic diseases. The plasma‑derived therapeutics segment leverages Liminal’s experience in bioseparation technologies used to isolate and purify biopharmaceuticals from human plasma. With respect to this second platform, the Company is focused on the development of its plasma-derived product candidate Ryplazim® (plasminogen) (“Ryplazim®”), a highly purified glu-plasminogen derived from human plasma that acts as a plasminogen replacement therapy for patients deficient in plasminogen protein.

On November 25, 2019 the Company sold the majority of its bioseparations business to a third party. These activities are presented as discontinued operations in the consolidated financial statements. Details on this transaction and the results from discontinued operations are disclosed in note 3.

The Company’s head office is located at 440, Boul. Armand-Frappier, suite 300, Laval, Québec, Canada, H7V 4B4. Liminal has business operations in Canada, the United Kingdom and the United States.

Structured Alpha LP (“SALP”) is Liminal’s majority and controlling shareholder and is considered Liminal’s parent entity for accounting purposes. Thomvest Asset Management Ltd. is the general partner of SALP and the ultimate controlling parent, for accounting purposes, of Liminal is The 2003 TIL Settlement.

The unaudited condensed interim consolidated financial statements for the quarter ended March 31, 2020 have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (‘IASB”) on a going concern basis, which presumes the Company will continue its operations for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the ordinary course of business.

During the quarter ended March 31, 2020, the Company incurred a net loss of $27.7 million ($28.8 million for the quarter ended March 31, 2019) and had negative operating cash flows of $23.4 million ($17.5 million for the quarter ended March 31, 2019). In addition, at March 31, 2020, the Company had a working capital of $41.1 million ($63.6 million at December 31, 2019) and an accumulated deficit of $994.4 million ($967.1 million at December 31, 2019). Given Liminal's main activities continue to be in the R&D stage, management has concluded it will need additional sources of financing to ensure it has sufficient funds to continue its operations for a period extending beyond the next twelve months.

Until the Company completes a significant financing, it continues operating at a low spending level, pacing investments on new research programs, and reducing infrastructure cost where possible. The need to complete multiple financing transactions is likely to continue until the Company can generate sufficient product revenues to finance its cash requirements. Meanwhile, management expects to finance future cash needs primarily through a combination of public or private equity offerings, debt financings, strategic collaborations, business and asset divestitures, and grant funding. Despite the Company’s efforts to obtain the necessary funding and improve profitability of its operations, there can be no assurance of its success in doing so, especially with respect to its access to further funding on acceptable terms, if at all, particularly if the COVID-19 pandemic continues to disrupt global financial markets.

These circumstances indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. If the Company is unable to secure additional capital, it may

7


LIMINAL BIOSCIENCES INC.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of Canadian dollars) (Unaudited)

 

be required to curtail its research and development initiatives and take additional measures to reduce costs in order to conserve its cash in amounts sufficient to sustain operations and meet its obligations. These measures could cause significant delays in the Company’s preclinical, clinical and regulatory efforts, which are critical to the realization of its business plan. These unaudited condensed interim consolidated financial statements do not

include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.

 

 

2.

Significant accounting policies

a)

Accounting framework

These unaudited condensed interim consolidated financial statements (“interim financial statements”) for the quarter ended March 31, 2020 have been prepared in accordance with IAS 34, Interim financial reporting. Accordingly, certain information and footnote disclosure normally included in annual financial statements prepared in accordance with IFRS, as issued by the IASB, have been omitted or condensed. These interim financial statements should therefore be read in conjunction with the audited annual consolidated financial statements for the year ended December 31, 2019, which have been prepared in accordance with IFRS and which can be found at www.sedar.com and at www.sec.gov/edgar.

These interim financial statements were approved for issue on May 12, 2020 by the Company’s Audit, Risk and Finance committee as delegated by the Board of Directors.

b)

Adoption of new accounting standards

The accounting policies used in these interim financial statements are consistent with those applied by the Company in its December 31, 2019 audited annual consolidated financial statements and no new accounting standards were adopted during the quarter.

c)

New standards and interpretations not yet adopted

There are currently no new standards or interpretations not yet in effect that the Company reasonably expects would have an impact on its interim financial statements.

d)

Significant accounting judgements and critical accounting estimates

The preparation of the interim consolidated financial statements requires the use of judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures. The uncertainty that is often inherent in estimates and assumptions could result in material adjustments to assets or liabilities affected in future periods. Other than as described below, the significant accounting judgments and critical accounting estimates applied by the Company, disclosed in the consolidated financial statements for the year ended December 31, 2019, remain unchanged

COVID-19 – The impact the COVID-19 pandemic on our interim financial statements for the quarter ended March 31, 2020 has been limited. However, the COVID-19 pandemic has impacted our clinical and preclinical programs, resulting in the adjustment of certain development timelines and activities. While the long-term impact of the global COVID-19 pandemic cannot be fully determined or quantified at this time, we anticipate it will likely impact our future operations and results. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information is obtained and are recognized in the consolidated financial statements as soon as they become known.

8


LIMINAL BIOSCIENCES INC.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of Canadian dollars) (Unaudited)

 

Share-based compensation To determine the fair value of stock options on a given date, the Company must determine the assumptions that will be used as inputs to the Black-Scholes option pricing model, including the assumption regarding the future volatility of the common shares of Liminal for the expected life of the stock options. The Company uses the historical volatility as a starting basis for the estimate and also considers whether there are factors that would indicate that the past volatility is not indicative of the future volatility. In making this assessment, management considers changes in Liminal’s activities and other factors such as a significant share consolidation. As the volatility is an assumption that has a significant impact on the calculated value of a stock option, the impact of this estimate can significantly impact the share-based payment expense over the vesting period of an award.

On March 23, 2020, the board of directors of the Company approved a plan to seek shareholder approval to modify the exercise price of certain stock options as disclosed in note 10b. In order to determine when the expense related to this modification is recognized in the consolidated statement of operations, management evaluated the timing of notification to option holders, the timing and method of determining the exercise price and the service period. Management further considered whether the holders of the stock options had sufficient understanding of the terms and conditions of the potentially revised awards, the degree of certainty of the approval for the repricing and whether the service period for earning the rights to the awards had commenced. Management concluded that the definition of the grant date was not met but that the service period had commenced and therefore a preliminary calculation of the incremental fair value of the repricing of the awards was performed using assumptions as of March 31, 2020. This included an assumption that the exercise price would be revised to $15.21, which management assumed would be the higher of (i) $15.21 or (ii) the five day weighted average share price of Liminal common shares on the repricing date. A share-based expense was recognized during the first quarter of 2020 in accordance with the vesting status of the underlying stock options. A final calculation will be required when the conditions for the grant date are met.

Had management determined that the grant date had been met, a single and final calculation would have been done on the announcement date and the incremental fair value would have been similar to the estimate made on March 31, 2020. The difference between the incremental fair value calculated as of March 31, 2020 and the final calculation that will be utilized when the grant date conditions are met may be significant as the calculation will be affected by the revised exercise price and the market price at which the shares will be trading at the grant date. Consequently, the expense recognized over the vesting period may be significantly different depending on what is deemed to be the grant date.

 

 

3.

Discontinued operations

On November 25, 2019, the Company sold two subsidiaries in its bioseparations segment, representing the majority of its bioseparations operations and all of the bioseparations revenues. The results and cash flows of the business sold have been presented as discontinued operations with the revenues and costs relating to ceased activities being reclassified and presented retrospectively in the consolidated statements of operations, statements of comprehensive loss and notes to the financial statements as discontinued operations

9


LIMINAL BIOSCIENCES INC.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of Canadian dollars) (Unaudited)

 

Results and cash flows from discontinued operations

 

The results from discontinued operations for the period ended March 31, 2019 are as follows:

 

 

 

March 31,

 

Quarter ended

 

2019

 

Revenues

 

$

5,969

 

 

 

 

 

 

Expenses

 

 

 

 

Cost of sales and other production expenses

 

 

3,222

 

Research and development expenses

 

 

1,721

 

Administration, selling and marketing expenses

 

 

549

 

Gain on foreign exchange

 

 

(7

)

Finance costs

 

 

204

 

Net income from discontinued operations net of tax of $nil

 

$

       280

 

 

The cash flows from discontinued operations for the quarters ended March 31, 2020 and 2019 are presented in the following table:

 

 

March 31,

 

 

March 31,

 

Quarters ended

2020

 

 

2019

 

Cash flows used in operating activities

$

-

 

 

$

(407

)

Cash flows used in financing activities

 

-

 

 

 

(230

)

Cash flows used in investing activities

 

388

 

 

 

(415

)

Net change in cash during the quarter

$

388

 

 

$

(1,052

)

Net effect of currency exchange rate on cash

 

-

 

 

 

(1

)

Net increase (decrease) in cash generated by discontinued operations

$

388

 

 

$

(1,053

)

 

 

4.

Accounts receivable

 

 

 

March 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Trade receivables

 

$

1,014

 

 

$

44

 

Tax credits and government grants receivable

 

 

1,637

 

 

 

1,546

 

Sales taxes receivable

 

 

642

 

 

 

863

 

Other receivables

 

 

279

 

 

 

1,633

 

 

 

$

3,572

 

 

$

4,086

 

 

 

5.

Inventories

 

 

 

 

 

 

 

 

March 31,

 

 

December 31,

 

 

 

 

 

 

 

 

2020

 

 

2019

 

Raw materials

 

 

 

 

 

 

$

6,331

 

 

$

7,175

 

Finished goods

 

 

 

 

 

 

 

201

 

 

 

357

 

 

 

 

 

 

 

 

$

6,532

 

 

$

7,532

 

 

10


LIMINAL BIOSCIENCES INC.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of Canadian dollars) (Unaudited)

 

Inventories sold in the amount of $414 and $1,029 were recognized as cost of sales and other production expenses from continuing operations, and $nil and $2,326 from discontinued operations during the quarters ended March 31, 2020 and 2019 respectively. Inventory write‑downs of $163 and $nil from continuing operations and $nil and $414 from discontinued operations, also included in cost of sales and other production expenses, were recorded during the quarters ended March 31, 2020 and 2019 respectively.

 

 

6.

Right-of-use assets

 

 

 

 

 

 

 

Production

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

and laboratory

 

 

 

 

 

 

 

 

 

 

 

Buildings

 

 

equipment

 

 

Other

 

 

Total

 

Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2020

 

$

36,234

 

 

$

1,630

 

 

$

143

 

 

$

38,007

 

Lease modifications and other remeasurements

 

 

14

 

 

 

-

 

 

 

-

 

 

 

14

 

Effect of foreign exchange differences

 

 

151

 

 

 

-

 

 

 

-

 

 

 

151

 

Balance at March 31, 2020

 

$

36,399

 

 

$

1,630

 

 

$

143

 

 

$

38,172

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2020

 

$

3,988

 

 

$

718

 

 

$

47

 

 

$

4,753

 

Depreciation expense

 

 

555

 

 

 

148

 

 

 

17

 

 

 

720

 

Lease modifications and other remeasurements

 

 

974

 

 

 

-

 

 

 

-

 

 

 

974

 

Effect of foreign exchange differences

 

 

5

 

 

 

-

 

 

 

-

 

 

 

5

 

Balance at March 31, 2020

 

$

5,522

 

 

$

866

 

 

$

64

 

 

$

6,452

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carrying amounts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At March 31, 2020

 

$

30,877

 

 

$

764

 

 

$

79

 

 

$

31,720

 

At December 31, 2019

 

 

32,246

 

 

 

912

 

 

 

96

 

 

 

33,254

 

 

 

7.

Accounts payable and accrued liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

2020

 

 

December 31,

2019

 

Trade payables

 

 

 

 

 

 

$

9,579

 

 

$

10,496

 

Wages and benefits payable

 

 

 

 

 

 

 

2,876

 

 

 

5,593

 

Current portion of royalty payment obligations

   (note 9)

 

 

 

 

 

 

 

3,352

 

 

 

3,043

 

Current portion of license acquisition payment

   obligation

 

 

 

 

 

 

 

-

 

 

 

1,302

 

Current portion of other employee benefit liabilities

   (note 9)

 

 

 

 

 

 

 

2,171

 

 

 

2,374

 

 

 

 

 

 

 

 

$

17,978

 

 

$

22,808

 

 

 


11


LIMINAL BIOSCIENCES INC.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of Canadian dollars) (Unaudited)

 

8.

Lease liabilities

 

The transactions affecting the lease liabilities during the quarter ended March 31, 2020 were as follows:

 

Balance at January 1, 2020

 

$

38,237

 

Interest expense

 

 

1,549

 

Payments

 

 

(3,621

)

Lease modification and other remeasurements

 

 

(1,095

)

Effect of foreign exchange differences

 

 

1,533

 

Balance at March 31, 2020

 

$

36,603

 

Less current portion of lease liabilities

 

 

6,834

 

Long-term portion of lease liabilities

 

$

29,769

 

 

Interest expense on lease liabilities for the quarter ended March 31, 2020 was $1,549 ($1,788 for the quarter ended March 31, 2019) and is included as part of finance costs in the consolidated statement of operations.

 

 

9.

Other long-term liabilities

 

 

 

March 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Royalty payment obligations

 

$

3,465

 

 

$

3,148

 

Other employee benefit liabilities

 

 

2,302

 

 

 

2,554

 

 

 

$

5,767

 

 

$

5,702

 

Less:

 

 

 

 

 

 

 

 

Current portion of royalty payment obligations (note 7)

 

 

(3,352

)

 

 

(3,043

)

Current portion of other employee benefit liabilities (note 7)

 

 

(2,171

)

 

 

(2,374

)

 

 

$

244

 

 

$

285

 

 

 

10.

Share capital and other equity instruments

a)

Share capital

 

Changes in the issued and outstanding common shares of the Company during the quarters ended March 31, 2020 and 2019 were as follows:

 

 

March 31, 2020

 

March 31, 2019

 

 

Number

 

 

Amount

 

Number

 

 

Amount

 

Balance - beginning of period

 

23,313,164

 

 

$

932,951

 

 

720,306

 

 

$

583,117

 

Issued to acquire assets

 

96,833

 

 

 

1,240

 

 

4,420

 

 

 

1,326

 

Shares issued pursuant to a restricted share units

   plan (note 10b)

 

10,355

 

 

 

9,764

 

 

-

 

 

 

-

 

Shares issued for cash

 

-

 

 

 

-

 

 

12,865

 

 

 

4,214

 

Shares released from escrow

 

-

 

 

 

-

 

 

-

 

 

 

400

 

Shares issued in payment to suppliers

 

-

 

 

 

-

 

 

1,472

 

 

 

545

 

Balance - end of period

 

23,420,352

 

 

$

943,955

 

 

739,063

 

 

$

589,602

 

 

12


LIMINAL BIOSCIENCES INC.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of Canadian dollars) (Unaudited)

 

2020

On January 29, 2020, the Company issued 96,833 common shares as a consideration for the final payment for the licence acquired on January 29, 2018. This transaction was accounted for as an extinguishment of the license acquisition payment obligation and the difference between the carrying value of the liability of $1,319 and the amount recorded for the shares issued of $1,240, which were valued at the market price of the shares on their date of issuance, was recorded as a gain on extinguishment of liabilities of $79 during the quarter ended March  31, 2020.

2019

In November 2018, the Company entered into an ”At-the-Market” (“ATM”) Equity Distribution Agreement (“EDA”) under which the Company is able, at its discretion and from time to time, subject to conditions in the EDA, to offer common shares through ATM issuances on the TSX or any other marketplace for aggregate proceeds not exceeding $31 million. This agreement provides that common shares are to be sold at market prices prevailing at the time of sale. The Company issued a total of 12,865 common shares at an average price of $327.55 per share under the ATM in January and February 2019, for aggregate gross proceeds of $4,214, less transaction costs of $248 recorded in deficit, for total net proceeds of $3,966. The use of the ATM facility was suspended concurrently with our Nasdaq registration.

On January 29, 2019, the Company issued 4,420 common shares in settlement of second payment due for the licence acquired on January 29, 2018 and recorded $1,326 in share capital based on the market value of the shares on that date.

On February 25 and 27, 2019, the Company issued a total of 1,472 common shares in payment for amounts due to certain suppliers. This transaction was accounted for as an extinguishment of liabilities and the difference between the carrying value of the accounts payable of $465 and the amount recorded for the shares issued of $545, which were valued at the market price of the shares on their date of issuance, was recorded as a loss on extinguishment of liabilities of $80.

As part of the settlement agreement concluded in April 2019 with the former CEO of the Company, common shares held in escrow as security for a share purchase loan of $400 to the former CEO were released and the loan extinguished in exchange for the receipt of a payment of $137, representing the fair value of the shares at the time of the settlement.

b)Contributed surplus (Share-based payments)

Stock options

Changes in the number of stock options outstanding during the quarters ended March 31, 2020 and 2019 were as follows:

 

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

average

 

 

 

 

 

 

average

 

Quarters ended March 31

 

 

Number

 

 

exercise price

 

 

Number

 

 

exercise price

 

Balance - beginning of period

 

 

 

2,209,864

 

 

$

38.72

 

 

 

21,625

 

 

$

1,464.49

 

Granted

 

 

 

-

 

 

 

-

 

 

 

1,622

 

 

 

300.00

 

Forfeited

 

 

 

(9,827

)

 

 

27.51

 

 

 

(887

)

 

 

1,344.05

 

Expired

 

 

 

(20

)

 

 

1,910.00

 

 

 

-

 

 

 

-

 

Balance - end of period

 

 

 

2,200,017

 

 

$

38.75

 

 

 

22,360

 

 

$

1,384.80

 

 

13


LIMINAL BIOSCIENCES INC.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of Canadian dollars) (Unaudited)

 

2020

In March 2020, Liminal’s board of directors approved a plan to reduce the exercise price of the stock options issued in June 2019, held by active employees and directors at the time of the repricing. As of March 31, 2020, this represent 1,975,289 of the outstanding stock options with exercise prices of $27.00 and $36.00. If the plan is approved, the exercise price would be changed to the higher of (i) $15.21 and (ii) the five-day weighted average share price of Liminal common shares on the repricing date that would not occur before the filing of the first quarter results. The repricing is subject to the approval of the shareholders at the Company’s annual shareholders meeting to take place June 8, 2020.

Although the stock options have not been repriced as of March 31, 2020, management concluded that the service period for employees and directors to earn the modified awards had commenced from the date the Company informed the holders of these stock options of the repricing proposal and the expense resulting from the repricing plan should be recognized starting from that date. Using an estimated revised exercise price of $15.21, the Company calculated the incremental fair value of the repricing as at March 31, 2020 at an amount of $2,228. Of this amount, $430, related to the vested stock options, was recognized immediately as an expense and the remaining $1,798, related to the unvested stock options, will be amortized over the remaining vesting period of those awards. If shareholders’ approval for the repricing is received, the Company will proceed to modify the exercise price of the stock options to the price determined on the repricing date and a final calculation of the fair value of the modification will be performed.

2019

In January 2019, 1,622 stock options were granted at an exercise price of $300.00 and vesting on December 31, 2019.

The Company uses the Black-Scholes option pricing model to calculate the fair value of stock options. The weighted average inputs into the model and the resulting grant date fair values during the quarters ended March 31, 2020 and 2019 were as follows:

 

 

 

 

 

 

 

 

March 31,

 

 

March 31,

 

 

 

 

 

 

 

 

2020

 

 

2019

 

Expected dividend rate

 

 

 

 

 

 

 

-

 

 

 

-

 

Expected volatility of share price

 

 

 

 

 

 

 

91.8

%

 

 

68.4

%

Risk-free interest rate

 

 

 

 

 

 

 

0.8

%

 

 

1.9

%

Expected life in years

 

 

 

 

 

 

 

6.5

 

 

 

6.3

 

Weighted average grant date fair value

 

 

 

 

 

 

$

6.62

 

 

$

189.70

 

 

At March 31, 2020, stock options issued and outstanding by range of exercise price, not giving effect to the possible repricing of stock options discussed above, are as follows:

 

 

 

 

 

 

Weighted

average

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

remaining

 

 

Weighted

 

 

 

 

 

 

Weighted

 

Range of

Number

 

 

contractual life

 

 

average

 

 

Number

 

 

average

 

exercise price

outstanding

 

 

(in years)

 

 

exercise price

 

 

exercisable

 

 

exercise price

 

$7.86-$11.99

 

171,250

 

 

 

9.6

 

 

$

9.58

 

 

 

-

 

 

$

-

 

$27.00

 

226,717

 

 

 

9.2

 

 

 

27.00

 

 

 

74,090

 

 

 

27.00

 

$36.00

 

1,794,224

 

 

 

9.2

 

 

 

36.00

 

 

 

375,995

 

 

 

36.00

 

$390.00-$3,190.00

 

7,826

 

 

 

5.6

 

 

 

1647.60

 

 

 

6,467

 

 

 

1,758.13

 

 

 

2,200,017

 

 

 

9.2

 

 

$

38.75

 

 

 

456,552

 

 

$

58.93

 

 

14


LIMINAL BIOSCIENCES INC.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of Canadian dollars) (Unaudited)

 

A share-based payment compensation expense of $2,363 was recorded for the stock options for the quarter ended March 31, 2020 ($487 for the quarter ended March 31, 2019).

 

Restricted share units (“RSU”)

Changes in the number of RSU outstanding during the quarters ended March 31, 2020 and 2019 were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

 

March 31,

 

 

 

 

 

 

 

 

2020

 

 

2019

 

Balance - beginning of period

 

 

 

 

 

 

 

17,565

 

 

 

18,299

 

Granted

 

 

 

 

 

 

 

-

 

 

 

12,564

 

Forfeited

 

 

 

 

 

 

 

(24

)

 

 

(133

)

Released

 

 

 

 

 

 

 

(10,355

)

 

-

 

Paid in cash

 

 

 

 

 

 

 

(2,948

)

 

 

-

 

Balance - end of period

 

 

 

 

 

 

 

4,238

 

 

 

30,730

 

 

2020

 

At March 31, 2020, nil vested RSU and 4,238 unvested RSU were outstanding.

 

2019

 

On January 31, 2019, the Company granted 12,564 RSU at a grant price of $300.00 and a one-year vesting period. At March 31, 2019, 3,424 vested RSU and 27,306 unvested RSU were outstanding.

A share-based payment compensation expense of $14 was recorded during the quarter ended March 31, 2020 ($1,045 for the quarter ended March 31, 2019).

Share-based payments expense

The total share-based payments expense, comprising the above-mentioned expenses for stock options and RSU, has been included in the consolidated statements of operations for the quarters ended March 31, 2020 and 2019 as indicated in the following table:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

 

March 31,

 

Quarters ended

 

 

 

 

 

 

2020

 

 

2019

 

Cost of sales and other production expenses

 

 

 

 

 

 

$

7

 

 

$

-

 

Research and development expenses

 

 

 

 

 

 

 

1,015

 

 

 

692

 

Administration, selling and marketing expenses

 

 

 

 

 

 

 

1,355

 

 

 

840

 

 

 

 

 

 

 

 

$

2,377

 

 

$

1,532

 

 


16


LIMINAL BIOSCIENCES INC.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of Canadian dollars) (Unaudited)

 

c)Warrants

The following table summarizes the changes in the number of warrants outstanding during the quarters ended March 31, 2020 and 2019:

 

 

 

 

 

March 31, 2020

 

 

 

 

March 31, 2019

 

 

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

average

 

 

 

 

 

 

 

 

 

 

average

 

 

 

 

Number

 

 

 

 

exercise price

 

 

 

 

Number

 

 

 

 

exercise price

 

Balance of warrants - beginning of period

 

 

 

172,735

 

 

 

 

$

84.33

 

 

 

 

 

153,611

 

 

 

 

$

1,028.35

 

Issued - loan modification

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

19,402

 

 

 

 

 

156.36

 

Balance of warrants - end of period

 

 

 

172,735

 

 

 

 

$

84.33

 

 

 

 

 

173,013

 

 

 

 

$

930.56

 

Balance of warrants exercisable - end of period

 

 

 

172,735

 

 

 

 

$

84.33

 

 

 

 

 

171,013

 

 

 

 

$

906.36

 

 

On February 22, 2019, pursuant to modifying its fourth loan agreement with SALP, the Company issued 19,402 warrants, referred to as Warrants #9, having an exercise price of $156.36. Warrants #9 do not meet the definition of an equity instrument since the underlying preferred shares qualify as a liability instrument, and therefore they must be accounted for as a financial instrument carried at fair value through profit or loss, presented on our statement of financial position as a warrant liability. During the quarter ended March 31, 2019, the Company recorded an expense of $229 due to the change in fair value of the warrant liability. These warrants were subsequently cancelled in April 2019.

As at March 31, 2020, the following warrants were outstanding:

 

 

 

 

Number

 

 

Expiry date

 

Exercise price

 

 

 

 

 

4,000

 

 

January 2023

 

 

3,000.00

 

 

 

 

 

168,735

 

 

April 2027

 

 

15.21

 

 

 

 

 

172,735

 

 

 

 

 

 

$

84.33

 

 

 

11.

Revenues from continuing operations

 

 

 

 

 

 

 

 

March 31,

 

 

March 31,

 

Quarters ended

 

 

 

 

 

 

2020

 

 

2019

 

Revenues from the sale of goods

 

 

 

 

 

 

$

901

 

 

$

2,198

 

Other revenues

 

 

 

 

 

 

 

202

 

 

 

66

 

 

 

 

 

 

 

 

$

1,103

 

 

$

2,264

 

 

 

16


LIMINAL BIOSCIENCES INC.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of Canadian dollars) (Unaudited)

 

12.

Segmented information

The Company has two operating segments at March 31, 2020 which are the small molecule therapeutics segment and the plasma-derived therapeutics segment.

a) Revenues and expenses by operating segments

Segment revenues are with external customers unless otherwise specified.

 

For the quarter ended March 31, 2020

 

Small

molecule

therapeutics

 

 

Plasma-

derived

therapeutics

 

 

Reconciliation

to statement

of operations

 

 

Total

 

Revenues

 

$

-

 

 

$

901

 

 

$

202

 

 

$

1,103

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales and other production expenses

 

 

-

 

 

 

646

 

 

 

38

 

 

 

684

 

Manufacturing and purchase cost of product

   candidates used for R&D activities

 

 

32

 

 

 

8,702

 

 

 

-

 

 

 

8,734

 

R&D - Other expenses

 

 

3,493

 

 

 

4,732

 

 

 

26

 

 

 

8,251

 

Administration, selling and marketing expenses

 

 

716

 

 

 

2,083

 

 

 

7,873

 

 

 

10,672

 

Segment loss

 

$

(4,241

)

 

$

(15,262

)

 

$

(7,735

)

 

$

(27,238

)

Gain on foreign exchange

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,132

)

Finance costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,630

 

Gain on extinguishments of liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(79

)

Net loss before income taxes from continuing

   operations

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(27,657

)

Other information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

228

 

 

$

1,233

 

 

$

168

 

 

$

1,629

 

Share-based payment expense

 

 

558

 

 

 

4

 

 

 

1,815

 

 

 

2,377

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the quarter ended March 31, 2019

 

Small

molecule

therapeutics

 

 

Plasma-

derived

therapeutics

 

 

Reconciliation

to statement

of operations

 

 

Total

 

Revenues

 

$

31

 

 

$

2,205

 

 

$

28

 

 

$

2,264

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales and other production expenses

 

 

-

 

 

 

1,130

 

 

 

-

 

 

 

1,130

 

Manufacturing and purchase cost of product

   candidates used for R&D activities

 

 

-

 

 

 

9,234

 

 

 

(17

)

 

 

9,217

 

R&D - Other expenses

 

 

2,705

 

 

 

5,482

 

 

 

67

 

 

 

8,254

 

Administration, selling and marketing expenses

 

 

651

 

 

 

1,970

 

 

 

4,474

 

 

 

7,095

 

Segment loss

 

$

(3,325

)

 

$

(15,611

)

 

$

(4,496

)

 

$

(23,432

)

Gain on foreign exchange

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,776

)

Finance costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,149

 

Loss on extinguishments of liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

80

 

Change in fair value of financial instruments

   measured at fair value through profit or loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

229

 

Net loss before income taxes from continuing

   operations

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(29,114

)

Other information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

177

 

 

$

1,799

 

 

$

144

 

 

$

2,120

 

Share-based payment expense

 

 

397

 

 

 

351

 

 

 

717

 

 

 

1,465

 

 


 

17


LIMINAL BIOSCIENCES INC.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of Canadian dollars) (Unaudited)

 

b) Revenues by location from continuing operations

Revenues are attributed to countries based on the location of customers.

 

Quarters ended

 

 

 

 

 

March 31,

2020

 

 

March 31,

2019

 

United States

 

 

 

 

 

$

731

 

 

$

1,422

 

Canada

 

 

 

 

 

 

205

 

 

 

842

 

United Kingdom

 

 

 

 

 

 

167

 

 

 

-

 

 

 

 

 

 

 

$

1,103

 

 

$

2,264

 

The Company derives significant revenues from certain customers. For the quarter ended March 31, 2020 there were no significant revenues derived from one single party. For the quarter ended March 31, 2019, there was one party in the plasma-derived therapeutics segment who accounted for 64% of total revenues for continuing operations.

 

 

13.

Related party transactions

During the quarter ended March 31, 2020, the Company paid interest on the loan with its parent, SALP, in the

amount of $251 ($2,182 for the quarter ended March 31, 2019).

The Company has a nonrevolving line of credit (“LOC”) agreement with SALP, of which $29,123 is currently available to be drawn as of March 31, 2020, bearing a stated interest of 10%, payable quarterly, and maturing on April 23, 2024 of which $nil has been drawn as at March 31, 2020. The LOC limit available to draw upon has previously been, and will continue to be, automatically reduced by the amounts of net proceeds generated upon the occurrence of all or any of the following transactions: a licensing transaction for the Company’s product candidate Ryplazim® or equity raises. The Company’s ability to draw on the LOC expires May 11, 2021.

During the quarter ended March 31, 2020, the Company recorded $26 ($nil for the quarter ended March 31, 2019) of research and development expenses, relating to a consulting service agreement signed with one of its directors in 2019 of which $nil remains payable as at March 31, 2020.

18