lens-8k_20180730.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 30, 2018

PRESBIA PLC

(Exact Name of Registrant as Specified in Charter)

 

Ireland

 

001-36824

 

98-1162329

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

17 Corrig Road, Suite 7

Sandyford, Dublin 18 Ireland

(Address of Principal Executive Offices)(Zip Code)

+353 (1) 659 9446

Registrant's Telephone Number

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.


Item 7.01.

Regulation FD Disclosure.

As an Irish public limited company, Presbia PLC (the “Company”) is required, in connection with its annual general shareholders meeting, to send or make available to its shareholders the Company’s Irish statutory accounts for the year ended December 31, 2017 and related reports (the “Irish Statutory Accounts”). A copy of the Irish Statutory Accounts is attached hereto as Exhibit 99.1. Although the Irish Statutory Accounts are based on the financial statements the Company prepared in accordance with U.S. generally accepted accounting principles and filed as a part of its Annual Report on Form 10-K, the Irish Statutory Accounts include disclosures and presentation formats required by the Republic of Ireland’s Irish Companies Act 2014.

The Irish Statutory Accounts will be sent or made available to shareholders in advance of the Company’s 2018 Annual General Meeting, as required by Irish law.

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by reference in such a filing.

Item 9.01.

Financial Statements and Exhibits.

(d)

Exhibits

 

Number

  

Exhibit

 

 

99.1

  

Irish Statutory Accounts for the fiscal year ended December 31, 2017 (furnished herewith)

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

PRESBIA PLC

 

 

 

 

 

By:

 

/s/ Richard Fogarty

 

Name:

 

Richard Fogarty

 

Title:

 

Chief Accounting Officer

 

Dated:    July 30, 2018

lens-ex991_6.htm

 

 

EXHIBIT 99.1

 

 

 

 

 

 

 

 

Presbia PLC

 

 

Report and Consolidated Financial Statements for the year ended

31 December 2017

 

 

 


PRESBIA PLC

REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

 

CONTENTS

PAGE

 

 

COMPANY INFORMATION

2

DIRECTORS’ REPORT

3 - 7

STATEMENT OF DIRECTORS' RESPONSIBILITIES

8

INDEPENDENT AUDITOR'S REPORT

9 - 13

CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

14

CONSOLIDATED BALANCE SHEET

15

COMPANY BALANCE SHEET

16

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

17

COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

18

CONSOLIDATED STATEMENT OF CASH FLOWS

19

COMPANY STATEMENT OF CASH FLOWS

20

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

21 - 40

 

 

 


1


PRESBIA PLC

COMPANY INFORMATION

 

DIRECTORS

Mark Yung

Richard Ressler

Zohar Loshitzer

Gerd Auffarth

Gerald Farrell

Robert Cresci

 

 

SECRETARY

Richard Fogarty

 

 

REGISTERED OFFICE

Suite 7, Sandyford Office Centre, 17 Corrig Road, Sandyford

Dublin 18

Ireland

 

 

REGISTERED NUMBER OF INCORPORATION

539137

 

 

SOLICITORS

Arthur Cox

10 Earlsfort Terrace

Dublin 2

Ireland

 

 

AUDITOR

Moore Stephens LLP

150 Aldersgate Street

London

EC1A 4AB

 

 

BANKERS

Allied Irish Bank

Bank Centre Ballsbridge Dublin 4

 

 

 

2

 


PRESBIA PLC

CONSOLIDATED BALANCE SHEET

AT 31 DECEMBER 2017

 

The directors present their report and audited consolidated financial statements for the year ended 31 December 2017.

The directors have elected to prepare the consolidated financial statements of Presbia PLC in accordance with Section  279 of the Companies Act 2014, which provides that a true and fair view of the state of affairs and profit or loss may be given by preparing the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), as defined in Section 279 of the Companies Act 2014, to the extent that the use of those principles in the preparation of the consolidated financial statements does not contravene any provision of the Companies Acts or any regulation made thereunder.

As required by Section 225 of the Companies Act 2014 of Ireland, the directors acknowledge that they are responsible for securing the Company's compliance with its “relevant obligations” (as defined in that legislation).  The directors further confirm that a compliance policy statement has been drawn up, and that appropriate arrangements and structures have been put in place that are, in the directors' opinion, designed to secure material compliance with the relevant obligations.  A review of those arrangements and structures has been conducted in the financial year to which this report relates.

Basis of Preparation

The accompanying financial statements reflect the operations of Presbia PLC and its subsidiaries (unless otherwise stated, the terms “we,” “us,” “our,” “Presbia” or the “Company” refers to Presbia PLC) and have been prepared in United States dollars (“USD”), the Company’s functional and presentation currency, and in accordance with US GAAP.

Principal Activities

Presbia PLC (the “Company”), an Irish public limited company, was formed on 6 February 2014 and is engaged in the development and commercialization of a variety of advanced ophthalmic products, including intracorneal lenses, together with surgical tools, devices and methods.

As at 31 December 2017, the wholly-owned subsidiaries of the Company were Presbia Investments Limited, Presbia Ireland Limited, Presbia USA Inc., Visitome Inc., PresbiBio LLC, OPL LLC, PIP Holdings C.V., PresbiOptical LLC, Presbia Cooperatief U.A and Presbia Deutchland GmbH.    

OVERVIEW

The Company is an ophthalmic device trading company, incorporated in Ireland, which funds the development and marketing of a proprietary optical lens implant for treating presbyopia, the age-related loss of the ability to focus on near objects. The microlens is a miniature lens designed to be surgically implanted in a patient's eye to improve that patient's ability to see objects at close distances. The current strategy is to continue to commercialize our microlens in certain strategic countries where we currently have marketing approval and to obtain FDA approval for our microlens in the United States.

The Company's goal is to become a leading provider of corneal inlay presbyopia-correcting treatment worldwide. Presbia PLC is a development stage ophthalmic device company with a limited operating history. To date it is not a profitable company and has incurred losses since its formation having an accumulated deficit of $88.3 million. The Company is funded by amounts raised from the parent’s initial public offering in 2015, net proceeds of $10.5 million from the parent’s rights offering, closed in March 2017, and the sale in April 2018 of preferred shares by the Company and its wholly-owned subsidiary, Presbia USA, Inc., to Richard Ressler, a member of Presbia PLC’s board of directors and its majority shareholder, for an aggregate purchase price of $5 million. Based on our current business plan, we believe that our cash and cash equivalents at December 31, 2017, including the April 2018 financing will not be sufficient to meet the anticipated cash requirements of Presbia PLC and its subsidiaries during

3


PRESBIA PLC

CONSOLIDATED BALANCE SHEET

AT 31 DECEMBER 2017

 

the next twelve months. This raises substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are described in the Accounting Policies section. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

EMPLOYEES

As at 31 December 2017, we had 24 employees, one of whom holds a doctorate in optical physics and physiological optics degree, and three of whom hold other advanced degrees. We have no collective bargaining agreements with our employees and we have not experienced any work stoppages. We believe that our relations with our employees are good.

RISKS AND UNCERTAINITIES

The medical device industry in general, and the ophthalmic medical device market in particular, are highly competitive. In order to succeed in this market as a development stage company, the Company must:

 

incur substantial expenditures to obtain regulatory approvals necessary to commence marketing our products in particular jurisdictions;

 

develop a commercialization strategy that is responsive both to the needs of laser centers and ophthalmic surgeons and to our own requirements and limitations; and

 

invest in our future by continuing to advance our technology and improve our microlens, our microlens inserter and other auxiliary products;

To address these concerns, on December 10, 2017, our board of directors approved the re-ordering of the Company’s operational priorities, focusing its resources on FDA approval of its microlens and ongoing clinical trials and commercialization efforts in Germany and South Korea.  These actions reduce the pre-FDA approval marketing, manufacturing and engineering expenses associated with the post-FDA approval U.S. commercial launch of our microlens.

Our commercialization strategy involves engaging ophthalmic clinics to ultimately sponsor our products after gaining confidence in our products and processes. We will train the staff of these centers in practice integration, support patient recruitment with direct response advertising campaigns, surgical performance, patient management and post-operative reporting, enabling the centers to perform a substantial portion of the commercialization process on their own. If we are successful in implementing this strategy, our principal expenses will be in furnishing training teams to ophthalmic clinics and then arranging for a smaller Presbia team to remain available to the center once the center is able to perform the necessary skills on its own.

The competitive nature of the market, the high degree of government regulation, the importance of technological innovation and the significance that most people place on near vision combine to elevate the risks facing any development stage company seeking to enter our market.

RESULTS FOR THE YEAR AND STATE OF AFFAIRS AS AT 31 DECEMBER 2017

The consolidated statement of operations and comprehensive loss for the year ended 31 December 2017 and the consolidated balance sheet at that date are set out on pages 13-14. Loss for the year amounted to $17.0 million (2016: $15.8 million). The company’s loss for the year amounted to $56.6 million (2016: $24.5 million).

4


PRESBIA PLC

CONSOLIDATED BALANCE SHEET

AT 31 DECEMBER 2017

 

GOING CONCERN

The net loss of $17.0 million for the year ended 31 December 2017 is the result of the operating expenses for the year. Management expects that existing cash as of 31 December 2017 of $3.2 million, plus the net proceeds from the April 2018 issue of $5,000,000 of preferred shares to our principal shareholder, will not be sufficient to fund the Company’s operations through 30 June 2019.

The Company must raise additional capital to fund its operations. The Company may raise additional capital through equity offerings, debt financings, collaborations and/or licensing arrangements. Additional funds may not be available when we need them on terms that are acceptable to us, or at all. If adequate funds are not available on acceptable terms, we may be required to delay, reduce the scope of, or curtail, our operations. To the extent that we raise additional funds by issuing equity securities, our shareholders will experience dilution, and debt financing, if available, may involve restrictive covenants.

DIRECTORS

The names of the persons who were directors at any time during the year ended 31 December 2017 and to the date of this report are set out below:

 

Name

Date of change

 

 

Mark Yung

Appointed 14 December 2017

 

 

Todd Cooper

Resigned 10 December 2017

 

 

Ralph “Randy” Thurman

Resigned 10 December 2017

 

 

Richard Ressler

 

 

 

Vladimir Feingold

Resigned 16 February 2018

 

 

Zohar Loshitzer

 

 

 

Gerd Auffarth

 

 

 

Gerald Farrell

 

 

 

Robert Cresci

 

 

5


PRESBIA PLC

CONSOLIDATED BALANCE SHEET

AT 31 DECEMBER 2017

 

DIRECTORS’ INTERESTS IN SHARES

The following directors and secretary have an interest in the shares of the Company, as set out below:

 

 

31 December 2017

 

 

31 December 2016

 

 

 

Shares

 

 

Options

 

 

Restricted Shares

 

 

Stock Awards

 

 

Shares

 

 

Options

 

 

Restricted Shares

 

 

Stock Awards

 

Todd Cooper

 

 

92,514

 

 

 

270,000

 

(1)

 

 

 

 

75,000

 

 

 

92,514

 

 

 

450,000

 

 

 

 

 

 

75,000

 

Ralph Thurman

 

 

47,757

 

 

 

250,000

 

(2)

 

20,985

 

(5)

 

 

 

 

56,664

 

 

 

250,000

 

 

 

8,247

 

 

 

 

Vladmir Feingold

 

 

1,381,270

 

 

 

100,000

 

(3)

 

12,738

 

(5)

 

60,000

 

 

 

1,381,270

 

 

 

100,000

 

 

 

 

 

 

60,000

 

Zohar Loshitzer

 

 

387,960

 

 

 

100,000

 

(3)

 

20,985

 

(5)

 

 

 

 

387,960

 

 

 

100,000

 

 

 

8,247

 

 

 

 

Jarett Fenton

 

 

 

 

 

 

 

 

 

 

 

100,000

 

 

 

 

 

 

 

 

 

 

 

 

100,000

 

Richard Ressler

 

 

10,484,048

 

 

 

10,000

 

(4)

 

20,985

 

(5)

 

 

 

 

10,848,048

 

 

 

10,000

 

 

 

8,247

 

 

 

 

Gerd Auffarth

 

 

 

 

 

 

 

 

32,004

 

(5)

 

 

 

 

 

 

 

 

 

 

19,266

 

 

 

 

Robert Cresci

 

 

96,128

 

 

 

 

 

 

30,255

 

(5)

 

 

 

 

96,128

 

 

 

 

 

 

17,517

 

 

 

 

Gerald Farrell

 

 

59,664

 

 

 

 

 

 

36,953

 

(5)

 

 

 

 

59,664

 

 

 

 

 

 

24,215

 

 

 

 

(1)

Such shares will vest in five annual installments commencing 28 January 2016. As at 28 January 2018, 270,000 ordinary shares covered by options were vested and 180,000 ordinary shares covered by options were forfeited.

(2)

As at 28 January 2017, all 250,000 ordinary shares covered by options were vested.

(3)

Such shares will vest in five annual installments commencing 28 January 2016. As at 28 January 2018, 60,000 ordinary shares covered by options were vested.

(4)

As at 28 January 2017, all 10,000 ordinary shares covered by options were vested.

(5)

Includes 12,738 restricted shares granted 14 March 2017 which fully vested as at 14 March 2018. Previously granted restricted shares vest in five equal, annual installments commencing one year after date of grant.

POLITICAL DONATIONS

No political donations that require disclosure under Irish law were made during the year (2016: nil).

ACCOUNTING RECORDS

The Company’s directors are aware of their responsibilities, under sections 281 to 285 of the Companies Act 2014 as to whether in their opinion, the accounting records of the Company are sufficient to permit the consolidated financial statements to be readily and properly audited and are discharging their responsibility by:

 

implementation of necessary policies and procedures for recording transactions,

 

employment of competent accounting personnel with appropriate expertise,

 

the provision of adequate resources to the financial function

The accounting records are maintained at 8845 Irvine Center Dr., Suite 100, Irvine, CA, 92618, United States.

AUDITOR

Moore Stephens LLP was appointed as the Company's auditor in accordance with the provision of Section 383(2) of the Companies Act 2014, they continue in office as auditor of the Company.

6


PRESBIA PLC

CONSOLIDATED BALANCE SHEET

AT 31 DECEMBER 2017

 

Statement of disclosure to auditor

Each of the directors in office at the date of approval of this annual report confirms that:

 

so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and

 

the director has taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of section 330 of the

Companies Act 2014.

 

/s/ Mark Yung

 

/s/ Gerald Farrell

Director

 

Director

20 June 2018

 

20 June 2018

 

 

 

7


PRESBIA PLC

CONSOLIDATED BALANCE SHEET

AT 31 DECEMBER 2017

 

The directors are responsible for preparing the directors’ report and the consolidated financial statements in accordance with applicable Irish law and US GAAP including the accounting standards issued by the Financial Reporting Council and published by the Institute of Chartered Accountants in Ireland.

Irish company law requires the directors to prepare financial statements for each financial year. Under that law, the directors have elected to prepare the consolidated financial statements in accordance with Companies Act 2014 and US GAAP. Under company law, the directors must not approve the consolidated financial statements unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the Company as at the financial year end date and of the profit or loss of the Company for that financial year and otherwise comply with the Companies Act 2014.

In preparing these consolidated financial statements, the directors are required to:

 

select suitable accounting policies for the consolidated financial statements and then apply them consistently;

 

make judgements and estimates that are reasonable and prudent;

 

state whether the financial statements have been prepared in accordance with applicable accounting standards, identify those standards, and note the effect and the reasons for any material departure from those standards; and

 

prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for ensuring that the Company keeps or causes to be kept adequate accounting records which correctly explain and record the transactions of the Company, enable at any time the assets, liabilities, financial position and profit and loss of the Company to be determined with reasonable accuracy, enable them to ensure that the financial statements and the directors’ report comply with the Companies Act 2014 and enable the financial statements to be audited.

The directors are responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

/s/ Mark Yung

 

/s/ Gerald Farrell

Director

 

Director

20 June 2018

 

20 June 2018

 

 

 

 


8


PRESBIA PLC

INDEPENDENT AUDITOR’S REPORT

 

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PRESBIA PLC

Financial statements subject to audit

We have audited the financial statements of Presbia PLC for the year ended 31 December 2017 which comprise:

 

the consolidated statement of operations and comprehensive loss;

 

the consolidated and company balance sheets;

 

the consolidated and company statements of changes in shareholders’ equity;

 

the consolidated and company statements of cash flow; and

 

the notes to the financial statements, which include a summary of significant accounting policies and other explanatory information.

The financial reporting framework that has been applied in the preparation of the consolidated and parent company  financial statements is the Companies Act 2014, as defined in Section 293 and 294, and US Generally Accepted Accounting Principles (“US GAAP”).

Our opinion

In our opinion, Presbia PLC’s (the “Company”) group financial statements (the “Group”)(the “financial statements”):

 

give a true and fair view, in accordance with US GAAP, to the extent that the use of those principles in the preparation of the financial statements does not contravene any provision of the Companies Act 2014 or of any regulations made thereunder, of the state of the Group’s and the Company’s affairs as at 31 December 2017 and of the Group’s loss for the year then ended; and

 

have been prepared in accordance with the requirements of the Companies Act 2014.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report below. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Ireland, including the Ethical Standard issued by the Irish Auditing and Accounting Supervisory Authority (IAASA), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty relating to going concern

We draw attention to note 3 in the financial statements, which indicates that the going concern presumption may not be appropriate because its validity depends principally on securing funding, as a minimum to cover the Company’s and Group’s ongoing operating expenses and to develop the optical lens implant, without yet being able to generate income through production, and the availability of subsequent funding sufficient to support the working capital of the Group or carry out the necessary further development required.  

As stated in note 3, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the Company’s and Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

9


PRESBIA PLC

INDEPENDENT AUDITOR’S REPORT

 

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PRESBIA PLC (continued)

An overview of the scope of our audit

The Group operates through three main trading subsidiary undertakings. The financial statements consolidate these entities together with a number of non-trading subsidiary undertakings as set out in note 16. In establishing our overall approach to the audit of the Group we determined the type of work that needed to be performed in respect of each subsidiary.  

We considered the risk of the financial statements being misstated or not prepared in accordance with the underlying legislation or standards. We then directed our work toward areas of the financial statements which we assessed as having the highest risk of containing material misstatements.

We tested and examined information using both analytical procedures and tests of detail, to the extent necessary to provide us with a reasonable basis to draw conclusions. These procedures gave us the evidence that we need for our opinion on the Group’s financial statements as a whole and, in particular, helped mitigate the risks of material misstatement mentioned above.

We also documented and reviewed the Group’s systems, primarily to confirm that they form an adequate basis for the preparation of the financial statements, but also to identify the controls operated to ensure the completeness and accuracy of the data.

Our assessment of key risks of material misstatement

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on the overall audit strategy, the allocation of resources in the audit and directing the efforts of the engagement team.

These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

10


PRESBIA PLC

INDEPENDENT AUDITOR’S REPORT

 

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PRESBIA PLC (continued)

 

Investment valuation

The value of the investment included within the Company’s balance sheet is wholly reliant on the development of the optical lens implant.

There is a risk that in its current form the valuation of the investment could be overstated dependent on the Group’s ability to secure FDA approval for its product, which it is then able to successfully commercialise.

 

 

 

Management have completed a valuation exercise for the Company’s investment and have impaired the investment by $53.8m in the current year.

We have reviewed the valuation model prepared and undertaken the following procedures:

The valuation model assumes certain rates of revenue growth, which are based upon the actual outturn of comparable companies. We considered whether these were appropriate benchmarks and if the growth rates applied seemed reasonable.

Reviewed estimated operating expenses based on what management believe will support this growth.

Obtained an expert opinion on the rationale for the discount rate and terminal multiple applied in the valuation model.

Carried out sensitivity analysis of the valuation model based on the assumptions applied.

The above procedures have been completed with no issues being identified.

 

 

Our application of materiality

We set certain thresholds for materiality. These help us to establish transactions and misstatements that are significant to the financial statements as a whole, to determine the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually on balances and on the financial statements as a whole.  

In establishing the audit strategy, it was determined that the level of uncorrected misstatements judged to be material for the financial statements as a whole would be $1.26m, being approximately 7.5% of loss before tax.

This is the threshold above which missing or incorrect information in the financial statements is considered to have an impact on the decision makers of users. The Company was also audited to a materiality of $1.26m, initially based on 2% of the gross assets but capped to Group materiality.

We agreed to report all potential adjustments in excess of $63,000 being 5% of the consolidated financial statements materiality as a whole, in addition to other identified misstatements that warranted reporting on qualitative grounds.

11


PRESBIA PLC

INDEPENDENT AUDITOR’S REPORT

 

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PRESBIA PLC (continued)

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2014

Based solely on the work undertaken in the course of the audit, we report that:

 

in our opinion, the information given in the directors’ report is consistent with the financial statements; and

 

in our opinion, the directors’ report has been prepared in accordance with the Companies Act 2014.

We have obtained all the information and explanations which we consider necessary for the purposes of our audit.

In our opinion, the accounting records of the Company were sufficient to permit the financial statements to be readily and properly audited and the Company statement of financial position is in agreement with the accounting records.

Matters on which we are required to report by exception

We have nothing to report in respect of the provisions in the Companies Act 2014 which require us to report to you if, in our opinion, the disclosures of directors’ remuneration and transactions specified by Sections 305 to 312 of the Act are not made.

Responsibilities of directors

As explained more fully in the Directors’ Responsibilities Statement, set out on page 7, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view and otherwise comply with the Companies Act 2014 and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

12


PRESBIA PLC

INDEPENDENT AUDITOR’S REPORT

 

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PRESBIA PLC (continued)

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.  Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists.  Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the IAASA’s

website at: http://www.iaasa.ie/Publications/Auditing-standards/International-Standards-on-Auditing-for-use-in-Ire/Description-of-the-auditor-s-responsibilities-for.

This description forms part of our auditor’s report.

The purpose of our audit work and to whom we owe our responsibilities

This report is made solely to the Company’s members, as a body, in accordance with section 391 of the Companies Act 2014.  Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

 

/s/ Moore Stephens, LLP

Stephen Corrall, Senior Statutory Auditor

 

For and on behalf of Moore Stephens LLP,

Statutory Audit Firm

 

150 Aldersgate Street

London

EC1A 4AB

 

20 June 2018

 

 

 

 


13


PRESBIA PLC

CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE YEAR ENDED 31 DECEMBER 2017

 

 

 

 

Period Ended

 

 

Year ended

 

 

Notes

31 December 2017

 

 

31 December 2016

 

 

 

US$ '000

 

 

US$ '000

 

Revenue

 

 

14

 

 

 

14

 

Cost of sales

 

 

97

 

 

 

279

 

Gross loss

 

 

(83

)

 

 

(265

)

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

5

 

7,073

 

 

 

5,541

 

Sales and marketing

6

 

3,278

 

 

 

3,103

 

General and administrative

7

 

6,281

 

 

 

6,750

 

Total operating expenses

 

 

16,632

 

 

 

15,394

 

Operating loss

 

 

(16,715

)

 

 

(15,659

)

Interest expense

 

 

37

 

 

 

20

 

Other expense

 

 

1

 

 

 

2

 

Loss before taxation

8

 

(16,753

)

 

 

(15,681

)

Taxation

12

 

245

 

 

 

76

 

Loss for the year and total comprehensive loss

 

 

(16,998

)

 

 

(15,757

)

 

The accompanying notes are an integral part of these financial statements.

 

 

 


14


PRESBIA PLC

CONSOLIDATED BALANCE SHEET

AT 31 DECEMBER 2017

 

 

 

Notes

2017

 

 

2016

 

 

 

US$ '000

 

 

US$ '000

 

Assets

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

 

Property and equipment, net

13

 

477

 

 

 

727

 

Intangible assets

14

 

1,479

 

 

 

1,494

 

Other assets

15

 

127

 

 

 

126

 

Total non-current assets

 

 

2,083

 

 

 

2,347

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Accounts and other receivables

18

 

116

 

 

 

395

 

Inventory

19

 

127

 

 

 

302

 

Cash

 

 

3,236

 

 

 

7,333

 

Total current assets

 

 

3,479

 

 

 

8,030

 

 

 

 

 

 

 

 

 

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts and other payables

20

 

(1,779

)

 

 

(981

)

Due to related parties

21

 

(23

)

 

 

(18

)

Note payable, current portion

22

 

(480

)

 

 

(490

)

Total current liabilities

 

 

(2,282

)

 

 

(1,489

)

 

 

 

 

 

 

 

 

 

Net current assets

 

 

1,197

 

 

 

6,541

 

 

 

 

 

 

 

 

 

 

Note Payable, net of current portion

22

 

 

 

 

(369

)

Due to related parties, net of current portion

21

 

(12

)

 

 

 

Other non-current liabilities

23

 

(137

)

 

 

(80

)

Total liabilities

 

 

(149

)

 

 

(449

)

Net assets

 

 

3,131

 

 

 

8,439

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

 

 

 

 

Share capital

25

 

71

 

 

 

67

 

Capital contribution

 

 

91,362

 

 

 

79,676

 

Retained earnings - deficit

 

 

(88,302

)

 

 

(71,304

)

Total shareholders' equity - funds

 

 

3,131

 

 

 

8,439

 

 

The accompanying notes are an integral part of these financial statements.

The financial statements were approved by the Board of Directors on 20 June 2018 and signed on its behalf by:

 

/s/ Mark Yung

 

/s/ Gerald Farrell

Director

 

Director

20 June 2018

 

20 June 2018

 

 


15


PRESBIA PLC

CONSOLIDATED BALANCE SHEET

AT 31 DECEMBER 2017

 

 

 

Notes

2017

 

 

2016

 

 

 

US$ '000

 

 

US$ '000

 

Assets

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

 

Investment in subsidiaries

16

 

60,605

 

 

 

71,554

 

Total non-current assets

 

 

60,605

 

 

 

71,554

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Intercompany receivable, net

17

 

 

 

 

29,255

 

Accounts receivable

18

 

41

 

 

 

262

 

Cash

 

 

191

 

 

 

51

 

Total Current Assets

 

 

232

 

 

 

29,568

 

 

 

 

 

 

 

 

 

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Intercompany payable, net

17

 

(4,731

)

 

 

 

Accounts payable

20

 

(200

)

 

 

(254

)

Total current liabilities

 

 

(4,931

)

 

 

(254

)

 

 

 

 

 

 

 

 

 

Net current (liabilities)/assets

 

 

(4,699

)

 

 

29,314

 

 

 

 

 

 

 

 

 

 

Due to related parties, net of current portion

21

 

12

 

 

 

 

Total liabilities

 

 

12

 

 

 

 

Net assets

 

 

55,894

 

 

 

100,868

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

 

 

 

 

Share capital

25

 

71

 

 

 

67

 

Capital contribution

 

 

144,507

 

 

 

132,821

 

Accumulated deficit

 

 

(88,684

)

 

 

(32,020

)

Total shareholders' equity - funds

 

 

55,894

 

 

 

100,868

 

 

The accompanying notes are an integral part of these financial statements.

The financial statements were approved by the Board of Directors on 20 June 2018 and signed on its behalf by:

 

/s/ Mark Yung

 

/s/ Gerald Farrell

Director

 

Director

20 June 2018

 

20 June 2018

 

 

 

 


16


PRESBIA PLC

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2017

 

 

 

 

Common Stock

 

 

Deferred Shares

 

 

Additional

Paid-In

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

Amount

 

 

 

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Total

 

 

 

Shares

 

 

US$ '000

 

 

Shares

 

 

US$ '000

 

 

US$ '000

 

 

US$ '000

 

 

US$ '000

 

Balance, December 31, 2015

 

 

13,355,477

 

 

 

13

 

 

 

39,994

 

 

 

54

 

 

 

77,505

 

 

 

(55,547

)

 

 

22,025

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,171

 

 

 

 

 

 

2,171

 

Issuance of restricted shares

 

 

65,450

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15,757

)

 

 

(15,757

)

Balance, December 31, 2016

 

 

13,420,927

 

 

 

13

 

 

 

39,994

 

 

 

54

 

 

 

79,676

 

 

 

(71,304

)

 

 

8,439

 

Proceeds from issuance of ordinary shares from rights offering, net  of costs

 

 

3,611,764

 

 

 

4

 

 

 

 

 

 

 

 

 

10,530

 

 

 

 

 

 

10,534

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,156

 

 

 

 

 

 

1,156

 

Issuance of restricted shares

 

 

89,166

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(16,998

)

 

 

(16,998

)

Balance, December 31, 2017

 

 

17,121,857

 

 

 

17

 

 

 

39,994

 

 

 

54

 

 

 

91,362

 

 

 

(88,302

)

 

 

3,131

 

 

The accompanying notes are an integral part of these financial statements.


 

17


PRESBIA PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE FISCAL YEARS ENDED 31 DECEMBER 2017

 

 

 

 

Common Stock

 

 

Deferred Shares

 

 

Additional

Paid-In

 

 

Accumulated

 

 

 

 

 

 

 

Shares

 

 

Amount

US$ '000

 

 

Shares

 

 

Amount

US$ '000

 

 

Capital

US$ '000

 

 

Deficit

US$ '000

 

 

Total

US$ '000

 

Balance, December 31, 2015

 

 

13,355,477

 

 

 

13

 

 

 

39,994

 

 

 

54

 

 

 

130,650

 

 

 

(7,528

)

 

 

123,189

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,171

 

 

 

 

 

 

2,171

 

Issuance of restricted shares

 

 

65,450

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(24,492

)

 

 

(24,492

)

Balance, December 31, 2016

 

 

13,420,927

 

 

 

13

 

 

 

39,994

 

 

 

54

 

 

 

132,821

 

 

 

(32,020

)

 

 

100,868

 

Proceeds from issuance of ordinary shares from rights offering, net of costs

 

 

3,611,764

 

 

 

4

 

 

 

 

 

 

 

 

 

10,530

 

 

 

 

 

 

10,534

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,156

 

 

 

 

 

 

1,156

 

Issuance of restricted shares

 

 

89,166

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(56,664

)

 

 

(56,664

)

Balance, December 31, 2017

 

 

17,121,857

 

 

 

17

 

 

 

39,994

 

 

 

54

 

 

 

144,507

 

 

 

(88,684

)

 

 

55,894

 

 

The accompanying notes are an integral part of these financial statements.


18


PRESBIA PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE FISCAL YEARS ENDED 31 DECEMBER 2017

 

 

 

 

2017

 

 

2016

 

 

 

US$ '000

 

 

US$ '000

 

Cash flow from operating activities:

 

 

 

 

 

 

 

 

Loss before income tax

 

 

(16,998

)

 

 

(15,757

)

Movements in working capital

 

 

(3,027

)

 

 

(2,350

)

Depreciation and Amortization

 

 

477

 

 

 

253

 

Inventory provisions

 

 

90

 

 

 

278

 

Loss on disposal of fixed assets

 

 

1

 

 

 

4

 

Stock-based compensation

 

 

1,168

 

 

 

2,171

 

Imputed interest expense

 

 

83

 

 

 

37

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(5

)

 

 

113

 

Inventory

 

 

85

 

 

 

(149

)

Prepaid expenses and other current assets

 

 

286

 

 

 

16

 

Other assets

 

 

(1

)

 

 

(98

)

Accounts payable and other current liabilities

 

 

528

 

 

 

(305

)

Income taxes payable

 

 

231

 

 

 

8

 

Deferred rent

 

 

79

 

 

 

59

 

Due to related parties

 

 

5

 

 

 

(37

)

Cash outflow from operations

 

 

(13,971

)

 

 

(13,407

)

 

 

 

 

 

 

 

 

 

Cash flow from investing activities:

 

 

 

 

 

 

 

 

Purchase of intangible assets

 

 

(125

)

 

 

(145

)

Purchase of property and equipment

 

 

(73

)

 

 

(140

)

Net cash used in investing activities

 

 

(198

)

 

 

(285

)

 

 

 

 

 

 

 

 

 

Cash flow from financing activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of ordinary shares from rights offering, net of costs

 

 

10,534

 

 

 

 

Payment of note payable to Neoptics A.G.

 

 

(510

)

 

 

(516

)

Deferred offering costs

 

 

 

 

 

(167

)

Proceeds from sale of equipment

 

 

 

 

 

1

 

Net cash generated from/(used in) financing activities

 

 

10,024

 

 

 

(682

)

 

 

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

 

(4,145

)

 

 

(14,374

)

Effect of exchange rate on cash

 

 

48

 

 

 

(42

)

Cash and cash equivalents at beginning of period

 

 

7,333

 

 

 

21,749

 

Cash and cash equivalent at end of period

 

 

3,236

 

 

 

7,333

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for income taxes

 

 

19

 

 

 

50

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Capitalized intangible asset costs included in accounts payable

 

 

15

 

 

 

4

 

Deferred offering costs included in accounts payable and other current liabilities

 

 

 

 

 

91

 

 

The accompanying notes are an integral part of these financial statements.

19


PRESBIA PLC

COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2017

 

 

 

2017

 

 

2016

 

 

 

US$ '000

 

 

US$ '000

 

Cash flow from operating activities:

 

 

 

 

 

 

 

 

Loss before income tax

 

 

(56,664

)

 

 

(24,492

)

Adjustments to reconcile net loss to cash used in

operating activities:

 

 

 

 

 

 

 

 

Impairment loss on investment in subsidiary

 

 

53,778

 

 

 

20,113

 

Stock-based compensation

 

 

1,168

 

 

 

2,171

 

 

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities: