Kidswell Bio Corporation (4584) Financial Results for 1Q FY2023

August 7, 2023

Summary of Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2024
(Non-consolidated)(Excerpt from Japanese version)[Japanese GAAP]

Company name:

Kidswell Bio Corporation

Listing: Tokyo Stock Exchange

Stock code:
Representative:

4584
Shinya Kurebayashi, President & CEO

URL: https://www.kidswellbio.com/en/

Contact:

Takahiro Kurihara, Head of CEO OfficeTel: +81-3-6222-9547

Scheduled date of filing of Annual Securities Report:
Scheduled date of payment of dividend:

August 14, 2023-

Preparation of supplementary materials for financial results:
Holding of financial result meeting:Yes
No(All amounts are rounded down to the nearest million yen)

1.

Financial Results for the Fiscal Year Ending March 31, 2024 (April 1, 2023 – June 30, 2023)(1) Results of operations (Cumulative)

Net sales(Percentages shown for net sales and incomes represent year-on-year changes)
Ordinary income
Net income
Operating income

Million yen%

Million yen%

Million yen%

Million yen

%

45

-92.5

-455

-

-470

-

-470

-

610

-

-37

-

-80

-

-80

-

Fiscal year ending March 31,
2024
Fiscal year ended March 31, 2023

Net income

Diluted net

per share

income per share
Yen

Yen

First quarter of the fiscal year
ending Mar. 31, 2023

-14.68-First quarter of the fiscal year
ended Mar. 31, 2022

-2.57

-

(Notes)Even though there is a calculation of dilutive shares available, there is no reporting on net income per share after an adjustment of
dilutive shares as the company recorded net loss.
(2) Financial position
Total assets

Shareholders’

Net assets

Million yen

equity ratio

Million yen%

As of June 30, 2023
3,044
768
18.8
As of March 31, 2023
3,894
1,233
26.6
(Reference) Shareholders’ equity
Fiscal year ending March 31, 2024: 571 million yen
Fiscal Year ended March 31, 2023: 1,037 million yen
2.

Dividends

Dividend per share
1Q-end 2Q-end 3Q-end Year-end

Total

Yen

Yen

Yen

Yen

Yen

Fiscal year ended Mar. 31, 2023

-

0.00

-

0.00

0.00

Fiscal year ending Mar. 31, 2024-

Fiscal year ending Mar. 31, 2024
0.00
0.00
(forecasts)(Note) Changes to the most recent forecasted dividend amount: None

- 1 -

0.00

Kidswell Bio Corporation (4584) Financial Results for 1Q FY2023

3.

Business Forecast for the Fiscal Year Ending March 31, 2024 (April 1, 2023 – March 31, 2024)(Percentages represent year-on-year changes)

Net sales
Million yen%

Operating income

Ordinary income

Million yen

Million yen%%

Net income

Net income
Million yen

per share
%

Yen

-

-48.973,500
26.1-1,500-1,550-1,550
Full year(Notes)Since the Company mainly manages annual performance, only full-year performance forecasts are shown.

* Annotations
1. Changes in accounting policies and accounting-based estimates, and restatements
a. Changes in accounting policies due to revisions in accounting standards, others: Noneb. Changes in accounting policies other than a) above: Nonec. Changes in accounting-based estimates: None
d. Restatements: None
2. Number of outstanding shares (common stock)a. Number of shares outstanding at the end of period (including treasury shares)
At the end of the fiscal year ending March, 2024: 32,066,013 shares
At the end of the fiscal year ended March, 2023: 32,059,713 sharesb. Number of treasury shares at the end of period
At the end of the fiscal year ending March, 2024: 93 shares
At the end of the fiscal year ended March, 2023: 93 sharesc. Average number of shares outstanding during the period
At the end of the fiscal year ending March, 2024: 32,060,935 shares
At the third quarter of the fiscal year ended March, 2023: 31,440,208 shares*This summary report on Kidswell Bio Corporation’s financial statements is not subject to audit procedures.
*Cautionary statement with respect to forward-looking statements, and other special items(Notes to information regarding future)
Forecasts regarding future performance in these materials are based on assumptions judged to be valid and the information available to
the Company at the time these materials were made. These materials on future performances are not promises by the Company. Actual
performance may differ significantly from these forecasts for several reasons.
(How to obtain supplemental financial information)
Materials for the supplemental financial information are available on the Company’s website (https://www.kidswellbio.com/en/).

- 2 -Kidswell Bio Corporation (4584) Financial Results for 1Q FY2023

Table of Contents
I. Financial Results for the current fiscal quarter………………………………………………………………………………
II. Business updates………………………………………………………………………………………………………………
III. Outlook ………………………………………………………………………………………………………………………
IV. Financial statements and notes to financial statements………………………………………………………………………
(A) Balance sheet………………………………………………………………………………………………………………
(B) Income statement……………………………………………………………………………………………………………
(C) Notes to financial statements …………………………………………………………………………………………

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4
4
4
5
5
6
7

Kidswell Bio Corporation (4584) Financial Results for 1Q FY2023

I. Financial Results for the current fiscal quarter
As for the first quarter of FY2023 financial results, the sales was 45,979 thousand yen (564,889 thousand yen decrease from the samequarter of the previous year), R&D expenses was 312,535 thousand yen (207,045 thousand yen increase from the same quarter of theprevious year), operational loss was 455,049 thousand yen (operational loss in the same quarter of the previous year was 37,991 thousandyen), ordinary loss was 470,326 thousand yen (ordinary loss in the same quarter of the previous year was 80,652 thousand yen) and net
loss for the current fiscal year was 470,629 thousand yen (net loss for the previous fiscal quarter was 80,954 thousand yen).
II. Business updates in FY2022
1. Cell Therapy (Regenerative Medicine) Business
The Company has been making great progress of the research and development activities by utilizing SHED (Stem cells from
Human Exfoliated Deciduous teeth) in both our own and collaborative research activities with academia and confirmed thepotential of SHED as a source for future drug products while completed Master Cell Bank (MCB) in compliance with GMP(Good Manufacturing Practice) in August 2022 and, consequently, established a SHED drug discovery platform, “S-Quatre”
which covers the process from sourcing of SHED to manufacturing of MCB.
Regarding the collaborative research of cerebral palsy with the Company and Nagoya University, improvement of movement
disorders for the chronic cerebral palsy model was confirmed by the SHED administration for the first time in the world andbased on this result of the clinical research initiated by Nagoya University for cerebral palsy patients will be launched by the endof 2023. As a result of these accomplishments, the probabilities of licensing out SHED pipelines to business partners which we
had been contacting has been increasing.
Furthermore, as a future growth strategy, the Company has been promoting research and development of the second generation
SHED (designer cell, reinforced cell therapy with SHED) that enhance the functions of SHED modified by gene transfection anddevelopment of new culture method to achieve higher therapeutic goals. Especially, the Company collaborates with Hamamatsu
University School of Medicine regarding the innovative research results with the second generation SHED in preclinical modelsof brain cancer and is getting pre-clinical data steadily.
Through these actions, the Company accelerates its own SHED research and development activities as well as strengthen thepipelines by collaborating with academia and drives its growth strategy (KWB2.0) to bring SHED drugs into the market.
2. Biosimilar Business
Since 2012, the Company launched Filgrastim biosimilars (BS), darbepoetin alfa BS and Ranibizumab BS. By these three products,
the Company is getting more revenue which exceeds its fixed operating costs continuously and established stable profit foundation
for its future growth. Furthermore, the Company aims for launching the fourth biosimilar product by the end of the calendar yearof 2023. This is a great progress to achieve FY2025 strategic target.
3. New Biologics BusinessIn the new biologics business, the Company entered into the research collaboration agreement with Sapporo Medical University on
anti-cancer drug using antibody with cancer cell invasion ability and with MabGenesis for the acquisition of new antibodies withcancer cell killing effect in January 2020. The Company executed the research collaboration agreement with Chiome Bioscience
Inc. (Chiome) in May, 2022 for accelerating the antibody-drug research in the oncology field by the combining knowledge andtechnologies of the Company and Chiome. Moreover, the Company has received a patent grant from Japan Patent Office for antiRAMP2 antibodies (RAMP: Receptor Activity Modifying Protein, project code: GND-004) and is actively engaged in finding adevelopment partner.
III. Outlook
No changes in FY2023 financial forecasts disclosed on May 12, 2023.

- 4 -Kidswell Bio Corporation (4584) Financial Results for 1Q FY2023

IV．Financial statements and notes to financial statements(A) Balance sheet(in thousand yen)

AssetsCurrent assets
Cash and cash equivalents
Trade receivables
Products
In-process inventory
Advance payments
Other current assets
Total current assets
Non-current assets
Tangible fixed assets
Intangible fixed assets
Investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade payables
Long-term debts to be repaid within one year
Account payable
Income taxes payable
Other current liabilities
Total current liabilities
Non-current liabilities
Convertible bonds
Long-term debts
Reserve for retirement allowance
Total non-current liabilities
Total liabilities
Shareholders’ equity
Shareholders capital
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders capital
Equity warrants
Total shareholders’ equity
Total liabilities and shareholders’ equity

As of the end of the previous
fiscal year
(March 31, 2023)- 5 -As of the end of the current fiscal
quarter(June 30, 2023)

1,067,162
1,088,766
213,007422,308
821,536
84,373
3,697,155

624,513
170,945
258,596
868,494
821,533
103,056
2,847,139

1,476
2,297
193,836
197,609
3,894,765

1,437
2,105
193,760
197,303
3,044,442

155,563
375,000
482,286
32,68010,3081,055,839

53,348375,000
311,156
16,484
11,232
767,221500,000
1,075,000
30,4201,605,420
2,661,259

500,000
975,000
33,375
1,508,375
2,275,596

1,509,497
10,815,098-11,287,004-73
1,037,518
195,987
1,233,505
3,894,765

1,511,685
10,817,286-11,757,633-73
571,265
197,581
768,846
3,044,442

Kidswell Bio Corporation (4584) Financial Results for 1Q FY2023(B) Income statement(Quarterly cumulative period)(in thousand yen)

610,878
292,703
318,175

This quarterly cumulative
period(April 1, 2023 to June 30,
2023)
45,979853
45,126

105,490
250,676
356,167-37,991

312,535
187,640
500,175-455,049

360
360

2,089
7
2,096

3,924
164
30,0008,931
43,020-80,652-80,652
302
302-80,954

10,830
779
148
5,615
17,373-470,326-470,326
302
302-470,629

Previous quarterly cumulative
period(April 1, 2022 to June 30, 2022)
Gross sales
Cost of goods sold
Gross profit
Selling, general and administrative expenses
Research and development expenses
Other expenses
Total selling, general and administrative expenses
Operating loss
Non-operating income
Material Sale income
Miscellaneous income
Non-operating expenses
Non-operating expenses
Interest expense
Interest on corporate bonds
Stock issuance expenses
Loan arrangement fee paid
Foreign exchange loss
Total non-operating expenses
Ordinary loss
Net loss for the quarter before taxes adjustments
Corporate, residential and enterprise taxes
Total corporate and other taxes
Net loss for the quarter- 6 -Kidswell Bio Corporation (4584) Financial Results for 1Q FY2023(C) Notes to financial statements(Notes on going concern assumption)
There is no reporting item applicable to this matter.
(Notes on material changes of shareholders’ equity)
There is no reporting item applicable to this matter.
(Important subsequent event）
Issuance of the 18th series of convertible bonds with exercise price adjustment clause
The Company resolved at the Board of the Directors meeting on July 10, 2023 to issue the 18th series of convertible bonds with
exercise price adjustment clause and payment for the issuance was completed on July 26, 2023.
Outline of the 18th series of stock acquisition rights(1)

Closing date（Issuance date）

July 26,2023(2)

Subscription for shares and issuing
methodAllotee: CVI Investments, Inc.
Issuing method: By the method of third-party allocation(3)

Number of issuances

150,000 units

4)

Types of shares subject to stockacquisition rights

Ordinary stock

(5)
(6)
(7)

Number of shares subject to stockacquisition rights
Total amount of issue price of stockacquisition rights
Exercise price

15,000,000 shares
JPY 22,800,000
JPY 152 per share

Amount (Value of property to be(8)

contributed when exercising the stockacquisition rights)

JPY 3,247,800,000*
Initial exercise price: JPY 215.
15,000,000 common shares (100 shares per unit of the stock acquisitionrights）
There is no upper limit of exercise price, and the minimum exercise
price is JYP 119.
The exercise price of the 18th stock acquisition rights shall be(9)

Exercise price and exercise pricedetermined by August 3, 2023 as the first revision date, and every

adjustment clause

Thursday thereafter (hereinafter referred to as the "18th stockacquisition rights amendment date"). If the amount rounded up to thenearest 1 yen of an amount equivalent to 90% of the lowest volume
weighted average price of ordinary trading of the KWB’s common stockon the Tokyo Stock Exchange on each of the fifteen consecutive trading
days prior to the adjustment day.
If the revised exercise price on the date of correction is less than theminimum exercise price (JPY 119), the exercise price shall be theminimum exercise price.

(10) Exercise period(11)

From July 7, 2023 to January 27, 2026

Amount of capital in case of issuing
The amount shall be obtained by multiplying the amount of capitalshares subject to stock acquisition rights- 7 -Kidswell Bio Corporation (4584) Financial Results for 1Q FY2023

increase limit in accordance with Article 17 of the Company Calculation
Regulations by 0.5. The amount of additional capital reserves shall beobtained by subtracting the amount of additional capital from theamount of capital increase limit.
(12) Purpose of financing

For securing the working capital of biosimilar business*Note: The mentioned amount is assumed that all of the stock acquisition rights have been exercised at the initial exercise
price. If the exercise price is modified or adjusted, the amount will be reduced. If the stock acquisition rights are not exercised
during the exercise period, or if our stock acquisition rights are canceled, the amount to be financed will change.

- 8 -Kidswell Bio Corporation (4584) Financial Results for 1Q FY2023- 9 -