Kidswell Bio Corporation (4584) Financial Results for 1Q FY2022

August 5, 2022

Summary of Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2023
(Extracted from Japanese version)[Japanese GAAP]
Company name:

Kidswell Bio Corporation

Listing: Tokyo Stock Exchange

Stock code:
Representative:

4584
Masaharu Tani, President & CEO

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

Contact:

Yasuo Sakae, Corporate Officer, CFO
Tel: +81-3-6222-9547

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

August 12, 2022-

Preparation of supplementary materials for financial results:
Holding of financial result meeting:

Yes
None
(All amounts are rounded down to the nearest million yen)

1.

Financial Results for the Fiscal Year Ending March 31, 2023 (April 1, 2022 – June 30, 2022)(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

%

610

-

-37

-

-80

-

-80

-

-

-

-

-

-

-

-

-

First quarter of the fiscal year
ending Mar. 31, 2023
First quarter of the fiscal year
ended Mar. 31, 2022

Net income

Diluted net

per share

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

Yen

Yen

-2.57

-

ended Mar. 31, 2022
(Note)
1. 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. Since the Company shifted to non-consolidated financial statements from the fiscal year ending March 31, 2023, the result in thefirst quarter of the fiscal year ended Mar. 31, 2022 and percentage for year-on-year changes are not recorded.
(2) Financial position
Total assets
Million yen

equity ratio

Million yen

%

1,643
1,702

33.5
43.8

As of June 30, 2022
4,304
As of Mar. 31, 2022
3,470
(Reference) Shareholders’ equity
First quarter of the fiscal year ending March 31, 2023: 1,444 million yen
2.

Shareholders’

Net assets

Fiscal Year ended March 31, 2022: 1,518 million yen

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

Total

Yen

Yen

Yen

Yen

Yen

Fiscal year ended Mar. 31, 2022

-

0.00

-

0.00

0.00

Fiscal year ending Mar. 31, 2023-

Fiscal year ending Mar. 31, 2023
0.00
0.00
(forecasts)(Note) Changes to the most recent forecasted dividend amount: None

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0.00

Kidswell Bio Corporation (4584) Financial Results for 1Q FY2022

3.

Business Forecast for the Fiscal Year Ending March 31, 2023 (April 1, 2022 – March 31, 2023)(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

-

-31.81

2,900
-980
-999
-1,000
Full year(Note) Changes to the most recent business forecast: None
Since the Company mainly manages annual performance, only full-year performance forecasts are shown.

* Notes
1. Special accounting treatments used in preparation of financial statements of the quarter: None
2. 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
4. 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, 2023: 31,444,547 shares
At the end of the fiscal year ended March, 2022: 31,437,547 sharesb. Number of treasury shares at the end of period
At the end of the fiscal year ending March, 2023: 92 shares
At the end of the fiscal year ended March, 2022: 92 sharesc. Average number of shares outstanding during the period
At the end of the fiscal year ending March, 2023: 31,440,208 shares
At the end of the fiscal year ended March, 2021: 29,912,862 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 FY2022○Table of Contents
I. Overview of business results for the current fiscal quarter……………………………………………………………………

4

II．Financial statements and notes to financial statements……………………………………………………………

5(A) Balance sheet……………………………………………………………………………………………………………

5(B) Income statement…………………………………………………………………………………………………………

6(C) Notes to financial statements………………………………………………………………………………………………

7(Notes on going concern assumption) ………………………………………………………………………………………

7(Notes on material changes of shareholders’ equity) …………………………………………………………………………

7(Important subsequent event) …………………………………………………………………………………………………

7

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Kidswell Bio Corporation (4584) Financial Results for 1Q FY2022

I. Overview of business results for the current fiscal quarter
1. Biosimilar Business
The Company recorded stable profits from royalties based on sales of the neutropenia medicine "Filgrastim BS" by Fuji
Pharmaceutical Co., Ltd. and Mochida Pharmaceutical Co., Ltd., and the biosimilar of darbepoetin alfa jointly developed with Sanwa
Kagaku Kenkyusho Co., Ltd. The Company has been collaborating with Senju Pharmaceutical Co., Ltd. based on the joint
development agreement for the biosimilar in the ophthalmic area (Project name: GBS-007) executed on May 12, 2016, and Senju
Pharmaceutical Co., Ltd. has received an approval of manufacturing and sales in Japan from the Ministry of Health, Labour andWelfare on September 27, 2021 and had it launched in the market on December 9, 2021. This is the third biosimilar product of theCompany and is expected to contribute to the Company’s stable business foundation as a revenue source.
2. New Biologics BusinessIn the new biologics business, the Company entered into a 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 a 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.
3. Cell Therapy (Regenerative Medicine) BusinessTo succeed in the regenerative medicine business, the Company has been aggressively promoting multiple projects collaborative
research and business partnering with academias as well as companies by utilizing SHED as important research source. As to
CSC (cardiac stem cells, project name: JRM-001), the Company transferred all shares of Japan Regenerative Medicine Co., Ltd.
(JRM) to Metcela, which would lead to the development of JRM-001 by combining experience, knowledge, and technologies inheart disease field, and continues support to JRM.
Furthermore, regarding the progress of a designer cell (reinforced cell therapy utilizing SHED) as the Company’s future growth
driver, the Company executed a collaborative research agreement with NanoCarrier Co., Ltd. (NanoCarrier) on September 8,
2021, and a contracted development agreement with BioMimetics Sympathies Inc. (BMS) on the development of new cell culture
method for directivity of SHED to specific diseases on December 6, 2021. Regarding the development of a master cell bank
(MCB), which is an essential step in commercializing SHED as a regenerative medicine product, "ChiVo Net Future Medical
Children's Volunteer Network" was launched for deciduous teeth donation, and the Company established appropriate process tocollect deciduous teeth from donors through collaboration with University of Tokyo Hospital and Showa University Dental
Hospital. Then, the Company completed manufacturing MCB in compliance with GMP by Nikon CeLL innovation Co., Ltd. andis proceeding with the final quality check for establishing MCB.
As a result, the sales amount was 610,878 thousand yen, operational loss was 37,991 thousand yen, ordinary loss was 80,652
thousand yen and net loss for the first quarter of the current fiscal year was 80,954 thousand yen.

- 4 -Kidswell Bio Corporation (4584) Financial Results for 1Q FY2022

II．Financial statements and notes to financial statements(A) Balance sheet

As of the end of the previous
fiscal year
(March 31, 2022)
AssetsCurrent assets
Cash and cash equivalents
Trade receivables
Products
In-process inventory
Advance payments
Long-term debts to be repaid within one year froma subsidiary
Other current assets
Allowance for doubtful accounts
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
Accrued expenses
Income taxes payable
Contract liabilities
Reserve for loss on orders
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- 5 -（in thousand yen）
As of the end of the current fiscal
quarter(June 30, 2022)

1,160,934
461,854
200,118
788,696495,544

1,532,423
685,813
168,132
1,014,889
594,575

600,000－

161,537-573,745
3,294,940

83,809－4,079,644

1,641
3,064
170,690
175,3963,470,336

1,600
2,872
220,585
225,057
4,304,701

45,47975,000252,760
37,832
216,000
475,2438,851
1,111,168

59,056250,000
149,569
16,255
216,000
475,243
9,556
1,175,680

100,000
525,000
31,260656,260
1,767,428

100,000
1,350,000
35,565
1,485,565
2,661,245

1,421,212
10,726,813-10,629,570-73
1,518,382
184,525
1,702,908
3,470,336

1,424,523
10,730,124-10,710,524-73
1,444,049
199,406
1,643,456
4,304,701

Kidswell Bio Corporation (4584) Financial Results for 1Q FY2022(B) Income statement(Quarterly cumulative period)（in thousand yen）
This 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
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expense
Stock issuance expenses
Commission paid
Foreign exchange loss
Miscellaneous loss
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

610,878
292,703
318,175
105,490
250,676
356,167-37,991
360
360
3,924
164
30,0008,931
43,020-80,652-80,652
302
302-80,954- 6 -Kidswell Bio Corporation (4584) Financial Results for 1Q FY2022(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 4th series of convertible bonds with stock acquisition rights and the 15th series of stock acquisition rights
The Company resolved at the Board of the Directors meeting on June 23, 2022 to issue the 4th series of convertible bonds
with stock acquisition rights and the 15th series of stock acquisition rights and payment for the issuance was completed on
July 14, 2022.
1. 4th series of convertible bonds with stock acquisition rights(1) Total amount of Issuances

JPY 500,000,000(2) Issue amountJPY 100 per face value of JPY 100 of each convertible bond(3) Closing date（Issuance date）

July 14, 2022

(4) Subscription for shares and issuing

Allotee: CVI Investments, Inc.
Issuing method: By the method of third-party allocation

method(5) Coupon rate

Annual rate: 0.625%(6) Redemption price

JPY 100 per face value of JPY 100(7) Maturity dateAugust 6, 2026

(8) Items on stock acquisition rights① Number of issuances

40 units②Types of shares subject to stockacquisition rights

Ordinary stock
The number of ordinary stocks newly issued or our ordinary stock
exercised by the Company is the number of the total payment amount of③Number of shares subject to stockacquisition rights

the bond issued for the exercise request divided by the conversion pricestated in ④ below.
However, fractions less than one share resulting from exercise will be
rounded down and no cash adjustment will be made.
Initial conversion price JPY 291
6 months after the closing date, and semiannually thereafter, theconversion price will be adjusted to the lesser of either; (i) 90%(fractions less than one will be rounded up) of the then prevailing market
price, the average(fractions less than one will be rounded up) of the two④Exercise pricelowest volume weighted average prices for the common shares during
the fifteen trading day period immediately preceding the applicable dateor (ii) the prevailing conversion price on the CB adjustment date.
However, if the adjusted conversion price on the CB adjustment datefalls below 132 yen, the conversion price will be the minimum
conversion price.

⑤Exercise period

JPY 291 per share- 7 -Kidswell Bio Corporation (4584) Financial Results for 1Q FY2022

The amount shall be obtained by multiplying the amount of capital⑥Amount of capital in case of issuingshares subject to stock acquisitionrightsincrease 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 the amountof capital increase limit.

(9) GuaranteeNone(10) Purpose of financing

Facility reinforcement funds for long-term stable supply of GBS-007

2. 15th series of stock acquisition rights(1) Day of allotment(2) Issuing method and allotee(3) Number of shares(4)Type of shares subject to stockacquisition rights

July 14, 2022
Issuing method: By the method of third-party allocation
Allotee: CVI Investments, Inc.
13,746 shares
Ordinary stocks(5)

Number of shares subject to stockacquisition rights

1,374,600 shares(6)

Total amount of issue price of stockacquisition rights

JPY1,938,186(7) Issue price of stock acquisition rights(8)

Amount (Value of property to becontributed when exercising the stock

JPY141 per stock acquisition right
JPY 400,008,600*

acquisition rights)(9) Exercise price

JPY 291 per share(10) Exercise period

From July 15, 2022 to July 15, 2027
The amount shall be obtained by multiplying the amount of capitalincrease limit in accordance with Article 17 of the Company Calculation(11) Amount of capital in case of issuing
Regulations by 0.5. The amount of additional capital reserves shall beshares subject to stock acquisition rights
obtained by subtracting the amount of additional capital from theamount of capital increase limit.
(12) Purpose of financing

Facility reinforcement funds for long-term stable supply of GBS-007*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 notexercised during the exercise period, or if our stock acquisition rights are canceled, the amount to be financed will change.

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