CytoMed Therapeutics (GDTC) - 2023 Q4 - Annual Report

PART I ITEM 3. KEY INFORMATION This section details significant investment risks, encompassing financial position, business operations, manufacturing, intellectual property, commercialization, and share ownership Risk Factors The company faces extensive risks including financial losses, product development dependency, manufacturing complexities, intellectual property reliance, commercialization challenges, and concentrated share ownership - The company is a pre-clinical stage entity with no approved products and a limited operating history since 2018[38] - Business success is highly dependent on four unapproved product candidates: CTM-N2D, iPSC-gdNKT, CTM-GDT, and CTM-MSC[54][66] - The company heavily relies on three key technology licenses from Accelerate Technologies Pte. Ltd. (ATPL), whose termination would severely impact core product development[165] - Principal shareholders, officers, and directors beneficially own approximately 70.80% of outstanding ordinary shares, granting significant control over shareholder matters[238] Accumulated Losses (S$) | Date | Accumulated Losses (S$) | | :--- | :--- | | Dec 31, 2021 | S$5.07 million | | Dec 31, 2022 | S$8.20 million | | Dec 31, 2023 | S$12.33 million | ITEM 4. INFORMATION ON THE COMPANY This section provides a comprehensive overview of CytoMed Therapeutics, covering its history, business operations, organizational structure, and properties History and Development of the Company CytoMed Therapeutics Limited, incorporated in Singapore in 2018, operates as a holding company with its main business through its Malaysian subsidiary - The company was incorporated in Singapore on March 9, 2018, converting to a public limited company on January 19, 2023[304] - A 1-for-380.83 reverse split of its ordinary shares became effective on January 17, 2023[306] Business Overview CytoMed develops 'off-the-shelf' cell-based immunotherapies using proprietary platforms, with its lead candidate CTM-N2D entering Phase I clinical trials - The company develops 'off-the-shelf' cell-based immunotherapies using healthy donor blood cells and induced pluripotent stem cell (iPSC) technologies[310][311] - The lead product, CTM-N2D, is being evaluated in the ANGELICA Trial, a Phase I study assessing its safety in human subjects[311][312] - The company operates its own cGMP facility in Johor, Malaysia, capable of manufacturing products for Phase I and II clinical trials after NPRA audit[319][328] Product Pipeline and Development Stage | PRODUCT CANDIDATE | INDICATION | STAGE OF DEVELOPMENT | NEXT ANTICIPATED MILESTONES | | :--- | :--- | :--- | :--- | | CTM-N2D | R/R SOLID TUMORS | PHASE I | Patient Recruitment 2Q 2024 | | iPSC-gdNKT | R/R SOLID TUMORS | DISCOVERY & PROCESS DEVELOPMENT | Preclinical Studies After 2024 | | CTM-GDT | R/R SOLID TUMORS | PRECLINICAL STUDIES & TRIAL APPLICATION | IND/CTX Application After 2023 | | CTM-MSC | Cartilage Injury | PRECLINICAL STUDIES | Preclinical Studies in Progress | Organizational Structure The company is a Singapore-based holding company, conducting primary business operations through its wholly-owned Malaysian subsidiary - CytoMed Therapeutics Limited is a Singapore-based holding company, with main business activities managed by its wholly-owned Malaysian subsidiary, CytoMed Malaysia[598] Property, Plants and Equipment The company owns a Singapore leasehold for its office and R&D lab, and a freehold cGMP facility in Johor, Malaysia - The company owns the leasehold for its Singapore office and R&D lab at 1 Commonwealth Lane, valid until March 1, 2038[428] - The company owns a freehold, three-story cGMP facility in Johor, Malaysia, with approximately 8,600 square feet of gross floor area[432][434] ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS This section analyzes the company's financial performance, highlighting increasing net losses, IPO-supported liquidity, cash flows, and funding requirements Operating Results The company reported no revenue from 2021-2023, with net loss increasing to S$4.13 million in 2023 due to higher IPO and public company expenses - The company, a pre-clinical stage entity, has not generated any revenue from product sales since its inception[606][608] - Other expenses surged to S$2.21 million in 2023 from S$0.49 million in 2022, primarily due to offering and public company costs[620] - Research income, from manufacturing cells for researchers on a cost-recovery basis, increased by 39.5% in 2023 to S$507,736[609][611] Consolidated Statement of Profit or Loss (S$) | | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | | Revenue | - | - | - | | Other operating income | 154,610 | 485,374 | 803,904 | | Research expenses | (1,090,623) | (1,522,765) | (1,589,693) | | Other expenses | (518,766) | (494,675) | (2,213,142) | | Loss for the year | (2,051,903) | (3,131,452) | (4,133,170) | Liquidity and Capital Resources The company's liquidity is primarily funded by its S$10.31 million IPO proceeds, with cash and equivalents increasing to S$9.00 million by year-end 2023 - The company's IPO on April 18, 2023, raised net proceeds of approximately S$10.31 million (U.S.$7.81 million)[604] Cash and Cash Equivalents & Accumulated Losses (S$) | As of December 31 | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | S$2.51 million | S$1.58 million | S$9.00 million | | Accumulated losses | S$5.07 million | S$8.20 million | S$12.33 million | Summary of Cash Flows (S$) | For the year ended Dec 31 | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (1,712,985) | (1,398,409) | (3,432,830) | | Net cash used in investing activities | (823,666) | (473,305) | (2,829,175) | | Net cash generated from financing activities | 4,173,396 | 968,716 | 10,919,885 | ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES This section details the company's leadership, compensation practices, board structure, and employee base, including its 34 full-time employees Directors and Senior Management The company's leadership comprises a nine-member Board of Directors, including four executive and five independent directors, along with key executive officers - The Board of Directors comprises 9 members: 4 executive directors and 5 independent directors[664][699] Compensation This subsection details 2023 compensation for Named Executive Officers and non-employee directors, including annual cash retainers and the adoption of a Clawback Policy - Non-employee directors receive annual cash retainers for Board service (U.S.$12,000) and committee service, with additional retainers for chairpersons[697] 2023 Named Executive Officer Compensation (U.S.$) | Name and Principal Position | Salary (U.S.$) | Bonus (U.S.$) | All Other Compensation (U.S.$) | Total (U.S.$) | | :--- | :--- | :--- | :--- | :--- | | CHOO Chee Kong, Chairman | 23,043 | - | 4,273 | 27,316 | | Dr. ZENG Jieming, Chief Scientific and Medical Officer | 88,226 | 1,516 | - | 89,742 | | Dr. TAN Wee Kiat, Co-CEO and COO | 86,614 | 1,516 | - | 88,130 | Employees The company employs 34 full-time staff, with 28 in R&D and manufacturing, and has adopted a 2023 Equity Incentive Plan - The company has 34 full-time employees, with 28 (approximately 82%) focused on R&D and manufacturing[713] - The company adopted the 2023 Equity Incentive Plan, making 1,279,117 ordinary shares available for issuance as share options or restricted shares[717][718] ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS This section details the company's ownership structure, including major shareholders, and significant related party transactions Major Shareholders The company's ownership is concentrated among a few major shareholders, with Glorious Finance Limited holding 40.33% and all directors and NEOs owning 33.31% Beneficial Ownership of Ordinary Shares (%) | Shareholder | Number of Shares | Percentage (%) | | :--- | :--- | :--- | | Glorious Finance Limited | 4,653,604 | 40.33% | | mDR Limited | 1,336,923 | 11.59% | | WANG Shu | 883,858 | 7.66% | | ZENG Jieming | 589,239 | 5.11% | | All directors and NEOs as a group (9 persons) | 3,844,299 | 33.31% | Related Party Transactions Significant related party transactions include Chairman CHOO Chee Kong's personal guarantees for loans and the company's investment in Landmark Medical Centre - Chairman CHOO Chee Kong provided a personal guarantee for a RM2 million credit facility for the Malaysian subsidiary's cGMP Facility construction[737] - The company acquired a 20% equity stake in Landmark Medical Centre Sdn Bhd (LMC), a private hospital where director Dr. Lucas LUK Tien Wee is a shareholder and Medical Director[743] ITEM 8. FINANCIAL INFORMATION This section confirms the inclusion of financial statements, absence of significant legal proceedings, and the company's policy of retaining earnings for business expansion - The company has not been subject to any significant legal or arbitration proceedings[753] - The company does not intend to pay dividends in the near future, planning to retain earnings to finance business expansion[757] ITEM 10. ADDITIONAL INFORMATION This section covers supplementary corporate information, including material contracts, exchange controls, and detailed taxation considerations for Singapore and U.S. Holders Taxation This subsection details material tax implications for investors in Singapore and the United States, including the risk of PFIC classification for U.S. Holders - Under Singapore's one-tier tax system, dividends paid by the company are tax-exempt for shareholders, regardless of residency[780] - Singapore does not impose tax on capital gains, though gains from share disposal could be considered income if from trade or business activities[781] - There is a risk the company could be classified as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes, leading to adverse tax treatment for U.S. Holders[803][805] PART II ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS This section addresses the use of proceeds from the company's IPO, confirming approximately S$10.31 million in net proceeds and no material change in their planned use - The company's Initial Public Offering (IPO) generated net proceeds of approximately S$10.31 million (U.S.$7.81 million)[824] - As of December 31, 2023, there has been no material change in the intended use of IPO proceeds as described in the registration statement[825] ITEM 15. CONTROLS AND PROCEDURES This section discusses the ineffectiveness of the company's disclosure controls and procedures as of December 31, 2023, due to insufficient financial reporting personnel - Management concluded that as of December 31, 2023, the company's disclosure controls and procedures were ineffective[826] - The ineffectiveness stemmed from insufficient financial reporting and accounting personnel with adequate knowledge of U.S. GAAP and SEC reporting requirements[826] ITEM 16. CORPORATE GOVERNANCE AND OTHER DISCLOSURES This section covers corporate governance, including the Audit Committee Financial Expert, Code of Ethics, accountant fees, home country practices, and controlled company status - The board identified Mark LEONG Kei Wei as the 'Audit Committee Financial Expert'[833] - As a foreign private issuer, the company follows Singaporean home country practice for shareholder meeting quorum and is exempt from Nasdaq's independent director majority rule[842] - The company is a 'controlled company' under Nasdaq rules due to principal shareholders, officers, and directors holding a majority of its ordinary shares[843] Principal Accountant Fees (U.S.$) | Fee Type | 2022 (U.S.$) | 2023 (U.S.$) | | :--- | :--- | :--- | | Audit Fees | 70,000 | 85,000 | | Audit-Related Fees | 18,000 | 20,000 | | Tax Fees | - | - | | All Other Fees | - | - | PART III ITEM 18. FINANCIAL STATEMENTS This section presents the audited consolidated financial statements for CytoMed Therapeutics Limited and its subsidiaries for the three years ended December 31, 2023 Consolidated Statements of Financial Positions Total assets significantly increased to S$12.37 million in 2023, while total liabilities decreased to S$1.12 million, leading to a substantial rise in total equity Consolidated Statements of Financial Positions (S$) | | 2022 | 2023 | | :--- | :--- | :--- | | Total current assets | 2,493,862 | 10,096,631 | | Total non-current assets | 2,733,196 | 2,272,239 | | Total assets | 5,227,058 | 12,368,870 | | Total current liabilities | 4,165,224 | 716,943 | | Total non-current liabilities | 475,536 | 407,772 | | Total liabilities | 4,640,760 | 1,124,715 | | Total equity | 586,298 | 11,244,155 | Consolidated Statements of Profit or Loss and Other Comprehensive Loss The company reported no revenue from 2021-2023, with the annual loss widening to S$4.13 million in 2023 due to increased expenses Consolidated Statements of Profit or Loss and Other Comprehensive Loss (S$) | | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | | Revenue | - | - | - | | Loss before income tax | (2,051,903) | (3,129,812) | (4,132,517) | | Loss for the year | (2,051,903) | (3,131,452) | (4,133,170) | | Total comprehensive loss for the year | (2,074,531) | (3,227,956) | (4,223,088) | Consolidated Statements of Changes in Equity Total equity significantly increased to S$11.24 million by end of 2023, primarily driven by S$14.81 million in new share issuances from IPO and loan conversions Consolidated Statements of Changes in Equity (S$) | | Share capital | Accumulated losses | Total equity | | :--- | :--- | :--- | :--- | | Balance at Dec 31, 2021 | 6,548,960 | (5,067,332) | 2,591,604 | | Total comprehensive loss for 2022 | - | (3,131,209) | (3,227,956) | | Issuance of shares in 2022 | 2,364,045 | - | 1,222,650 | | Balance at Dec 31, 2022 | 8,913,005 | (8,198,541) | 586,298 | | Total comprehensive loss for 2023 | - | (4,132,896) | (4,223,088) | | Issuance of shares in 2023 | 14,807,015 | - | 14,807,015 | | Balance at Dec 31, 2023 | 23,720,020 | (12,331,437) | 11,244,155 | Consolidated Statements of Cash Flows Operating activities used S$3.43 million in cash for 2023, while financing activities provided S$10.92 million, resulting in a net increase in cash and equivalents to S$6.22 million Consolidated Statements of Cash Flows (S$) | | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (1,712,985) | (1,398,409) | (3,432,830) | | Net cash used in investing activities | (823,666) | (473,305) | (2,829,175) | | Net cash from financing activities | 4,173,396 | 968,716 | 10,919,885 | | Net increase/(decrease) in cash | 1,636,745 | (902,998) | 4,657,880 | | Cash and cash equivalents at end of year | 2,512,768 | 1,579,718 | 6,224,187 |