Moolec Science SA(US:MLEC)2023-10-30 21:20PART I Introductory Note and Presentation of Financial and Other Information The consummation of the Business Combination established the company's public status, IFRS reporting standards, and June 30 fiscal year-end - On December 30, 2022, Moolec Science SA consummated its Business Combination with LightJump Acquisition Corporation, becoming the new public holding company75 - As a result of the transaction, Moolec Limited and LightJump became direct subsidiaries of Moolec Science SA79 - The company's audited consolidated financial statements are prepared in accordance with IFRS as issued by the IASB82 Key Information The company faces significant risks related to its early-stage operations, unproven technology, competition, GMO perception, and potential PFIC tax status Risk Factors Operational, financial, regulatory, and market acceptance risks stem from the company's early-stage nature, historical losses, and reliance on molecular farming - The company is an early-stage entity with a history of financial losses, reporting a net loss of US$51.8 million for the year ended June 30, 2023, and an accumulated deficit of US$58.6 million102 - Future revenue is highly dependent on the success of its molecular farming technology, for which there is currently limited performance data108 - The company faces challenges from public perception of genetically modified organisms (GMOs), which could negatively impact product acceptance and sales141 - The company was likely a Passive Foreign Investment Company (PFIC) for the taxable year ending June 30, 2023, posing adverse U.S. tax consequences for shareholders101244 Information on the Company The company operates as a science-based ingredient producer using molecular farming, highlighted by its history, recent acquisitions, and product pipeline History and Development of the Company The company evolved from a Bioceres spin-off, recently acquiring ValoraSoy for processing capabilities and securing approximately $30 million in financing - Moolec is a science-based ingredient company that uses molecular farming technology developed over a decade at Bioceres before Moolec was spun-out in 2020246 - On April 24, 2023, the company acquired ValoraSoy S.A. to consolidate its molecular farming technology with industrial processing capabilities250254 - On October 15, 2023, Moolec entered into agreements for convertible notes with Insud and Bioceres, totaling approximately $30 million in financing272274804 Business Overview The company's operations center on a pipeline of genetically engineered crops to produce animal proteins, supported by R&D partnerships and a growing IP portfolio Product Development Pipeline and Timeline | Project | Application | Host | Development Stage | Planned Commercial Launch | | :--- | :--- | :--- | :--- | :--- | | SPC2 | Food Ingredient | Safflower | Scale-up | 2025 | | GLASO | Nutritional Oil | Safflower | Scale-up | 2025 | | YEEA1 | Nutritional Supplement/Food Ingredient | Yeast | Development | 2025 | | SOOY1 | Meat replacement | Soybean | Development | 2027 | | SOOY2 | Meat replacement | Soybean | Transformation | 2029 | | SOOY3 | Meat replacement | Soybean | Transformation | 2029 | | PEEA1 | Meat replacement | Pea | Transformation | 2028 | - The company's intellectual property portfolio includes over 26 patents (granted and pending) and 22 trademarks across key jurisdictions297298299 - Moolec has received regulatory approvals from the USDA-APHIS and FDA for its GLA safflower and from Argentina's MAGP for its chymosin safflower318320 Organizational Structure Moolec Science SA is the parent holding company with key subsidiaries in the UK, USA, and Argentina, and a joint arrangement in Spain Main Subsidiaries and Joint Arrangements (as of June 30, 2023) | Name | Jurisdiction of Incorporation | Ownership Interest | Voting Interest | | :--- | :--- | :--- | :--- | | Moolec Science Limited | England | 100% | 100% | | LightJump Acquisition Corporation | Delaware | 100% | 100% | | Valorasoy S.A. | Argentina | 100% | 100% | | AG Biomolecules LLC | Delaware | 100% | 100% | | Microo Foods Ingredients S.L. | Spain | 50% | 50% | Operating and Financial Review and Prospects A net loss of $51.8 million in fiscal 2023 was driven by a non-cash listing cost, while the company secured $30 million in post-period financing Operating Results Fiscal year 2023 results show a net loss of $51.8 million, primarily from a $42.7 million non-cash listing cost, with first revenues of $0.9 million from ValoraSoy Consolidated Statements of Comprehensive Loss (FY 2023 vs. FY 2022) | Metric | For the year ended June 30, 2023 (USD) | For the year ended June 30, 2022 (USD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 905,049 | — | N/A | | Loss from operations | (6,653,805) | (3,652,433) | 82.2% | | Share based payment cost of listing shares | (42,705,061) | — | N/A | | Transaction expenses | (3,535,046) | — | N/A | | Net loss for the year | (51,788,880) | (4,526,905) | 1,044.0% | | Basic and diluted loss per share | (1.50) | (0.15) | 900.0% | - Revenue of $905,049 in FY2023 was generated following the acquisition of ValoraSoy, as the company had no revenue in the prior year342 - The significant increase in net loss was primarily driven by a one-time, non-cash charge of $42.7 million for share-based payment costs related to the public listing351 Liquidity and Capital Resources Liquidity is sourced from shareholder funding and financing activities, with $2.5 million in cash and a new $50 million equity facility as of June 30, 2023 Consolidated Statement of Cash Flows Summary | Cash Flow Activity | For the year ended June 30, 2023 (USD) | For the year ended June 30, 2022 (USD) | | :--- | :--- | :--- | | Net cash used in operating activities | (7,511,353) | (1,885,979) | | Net cash used in investing activities | (2,336,820) | — | | Net cash generated from financing activities | 11,281,661 | 2,000,000 | | Net increase in cash and cash equivalents | 1,433,488 | 114,021 | | Cash and cash equivalents at end of year | 2,527,673 | 1,081,808 | - In April 2023, the company entered into a committed equity financing facility with Nomura, allowing it to sell up to $50 million of its ordinary shares359 - As of June 30, 2023, total outstanding borrowings amounted to $2.65 million366 Directors, Senior Management, and Employees The company is led by a five-member board and an experienced executive team, with 45 employees as of June 30, 2023 - The aggregate compensation for senior management for the year ended June 30, 2023, was US$1.2 million, which includes restricted stock units382 - The company's board consists of five directors and has established an Audit Committee, a Compensation Committee, and a Nominating Committee386387389 Employee Count by Year | Year (as of June 30) | Total Employees | | :--- | :--- | | 2023 | 45 | | 2022 | 9 | | 2021 | 6 | Major Share Ownership (as of June 30, 2023) | Beneficial Owner | Percentage Owned (%) | | :--- | :--- | | THEO I SCSp | 40.9% | | Bioceres Group PLC | 40.9% | | Union Group Ventures Limited | 40.4% | | BG Farming Technologies Ltd. | 38.8% | Major Shareholders and Related Party Transactions Ownership is concentrated among a few major entities, and the company maintains a formal policy for reviewing related party transactions - Major shareholders, including THEO I SCSp, Bioceres Group PLC, and Union Group Ventures Limited, each reported beneficial ownership of over 40% of the company's share capital in January 2023410 - The Board of Directors has adopted a written policy for reviewing and approving related party transactions exceeding US$120,000405 Additional Information The company's corporate structure includes 37.6 million shares and 11.1 million warrants, governed by Luxembourg law with potential PFIC tax risks for U.S. investors - As of June 30, 2023, the company had 37,563,768 Ordinary Shares and 11,110,000 warrants outstanding423 - The company is incorporated in the Grand Duchy of Luxembourg, and its corporate affairs are governed by its articles of association and Luxembourg law231240 - Material U.S. tax considerations include the risk that the company was a Passive Foreign Investment Company (PFIC) for its taxable year ending June 30, 2023491 PART II Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2023, while being exempt from an internal control audit - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2023516 - The annual report does not include a management report or auditor attestation on internal control over financial reporting, due to its status as a newly-public and emerging growth company518519 PART III Financial Statements Audited IFRS financial statements for fiscal years 2022 and 2023 show significant asset growth and a net loss driven by one-time listing costs Consolidated statements of comprehensive loss A net loss of $51.8 million in fiscal 2023 was driven by a one-time, non-cash share-based payment cost of $42.7 million Key Figures from Statement of Comprehensive Loss (FY 2023) | Item | Amount (USD) | | :--- | :--- | | Revenue | 905,049 | | Loss from operations | (6,653,805) | | Share based payment cost of listing shares | (42,705,061) | | Net loss of the year | (51,788,880) | | Total comprehensive loss for the year | (51,770,768) | Consolidated statements of financial position Total assets grew to $24.1 million as of June 30, 2023, driven by acquisitions and financing, with total equity increasing to $10.1 million Key Figures from Statement of Financial Position | Item | As of June 30, 2023 (USD) | As of June 30, 2022 (USD) | | :--- | :--- | :--- | | Total Assets | 24,051,289 | 5,691,717 | | Total non-current assets | 18,719,453 | 4,607,848 | | Total current assets | 5,331,836 | 1,083,869 | | Total Liabilities | 13,945,356 | 4,087,384 | | Total current liabilities | 12,599,191 | 4,087,384 | | Total Equity | 10,105,933 | 1,604,333 | Consolidated statements of cash flow Financing activities generated $11.3 million in cash, offsetting operational and investing outflows and resulting in a year-end cash balance of $2.5 million Consolidated Cash Flow Summary (FY 2023) | Item | Amount (USD) | | :--- | :--- | | Net cash used in operating activities | (7,511,353) | | Net cash used in investing activities | (2,336,820) | | Net cash generated from financing activities | 11,281,661 | | Net increase in cash and cash equivalents | 1,433,488 | Notes to the Consolidated financial statements Notes detail the accounting for the business combination, the ValoraSoy acquisition, and significant subsequent financing events - The business combination with LightJump is accounted for as a capital reorganization, with a non-cash listing cost of $42.7 million recognized in accordance with IFRS 2589 - On April 24, 2023, the company acquired ValoraSoy S.A. for a total consideration of $2.6 million, recognizing $2.4 million in net identifiable assets and $249,725 in goodwill592594 - Subsequent to the reporting period, the company secured approximately $30 million in cash and in-kind contributions through convertible note agreements803804805