Årsrapport 30700228 EY Godkendt Revisionspartnerselskab Dirch Passers Allé 36 Postboks 250, 2000 Frederiksberg 2021-12-07 2022-12-31 42886866 Kiox Pharmaceuticals ApS Stolbjergvej 26C 3070 Snekkersten 2021-12-07 Snekkersten Danske Bank EY Godkendt Revisionspartnerselskab 30700228 Dirch Passers Allé 36 2000 Frederiksberg 2023-06-23 Mikkel Walmar Regnskabsklasse B Andre erklæringer uden sikkerhed true 2023-06-23 2023-06-23 CaseWare Working Papers Copenhagen Mikkel Walmar Copenhagen Anders Roe Eriksen State Authorised Public Accountant mne46667 2632 -2632 255 -2887 -2887 20000 20000 17113 37113 37113 40000 -2887 37113 37113 40000 0 -2887 40000 -2887 255 Today, the Executive Board has discussed and approved the annual report of Kiox Pharmaceuticals ApS for the financial year as of the establishment of the Company 7 December 2021 - 31 December 2022. The annual report, which has not been audited, has been prepared in accordance with the provisions of the Danish Financial Statements Act. The Executive Board has considered the criteria for omission of audit to be met. In my opinion, the financial statements give a true and fair view of the financial position of the Company at 31 December 2022 and of the results of the Company's operations for the financial year as of the establishment of the Company 7 December 2021 - 31 December 2022. Further, in my opinion, the Management's review gives a fair review of the matters discussed in the Management's review. I recommend that the annual report be approved at the annual general meeting. To the general management of Kiox Pharmaceuticals ApS We have compiled the financial statements of Kiox Pharmaceuticals ApS for the financial year as of the establishment of the Company 7 December 2021 - 31 December 2022 based on the Company's bookkeeping and other information provided. The financial statements comprise an income statement, balance sheet, statement of changes in equity and notes, including accounting policies. We performed this compilation engagement in accordance with ISRS 4410 Compilation Engagements. We have applied our expertise in accounting and financial reporting to assist you in the preparation and presentation of the financial statements in accordance with the Danish Financial Statements Act. We have complied with relevant requirements in the Danish Auditors Act and International Ethics Standards Board for Professional Accountants' International Code of Ethics for Professional Accountants (IESBA Code), including principles of integrity, objectivity, professional competence and due care. The financial statements and the accuracy and completeness of the information used to compile the financial statements are your responsibility. Since a compilation engagement is not an assurance engagement, we are not required to verify the accuracy or completeness of the information you provided to us to compile the financial statements. Accordingly, we do not express an audit opinion or a review conclusion on whether the financial statements are prepared in accordance with the Danish Financial Statements Act. The Company is a biotech Company incorporated in December 2021 focusing on development of inhaled treatments for interstitial lung diseases. At 31 December 2022, the Company was incorporated however no activity was incurred. The income statement for 2021/22 shows a loss of DKK 2,887, and the balance sheet at 31 December 2022 shows equity of DKK 37,113. Subsequent to the financial year-end, the Company has received additional financing, DKK 700 thousand, which enables the Company to initiate R&D activities. No events materially affecting the Company's financial position have occurred subsequent to the financial year-end. The annual report of Kiox Pharmaceuticals ApS for 2021/22 has been prepared in accordance with the provisions in the Danish Financial Statements Act applying to reporting class B entities and elective choice of certain provisions applying to reporting class C entities. The annual report of Kiox Pharmaceuticals ApS for 2021/22 is the first financial period. Reporting currency The financial statements are presented in Danish kroner (DKK). On initial recognition, transactions denominated in foreign currencies are translated at the exchange rate at the transaction date. Foreign exchange differences arising between the exchange rates at the transaction date and the date of payment are recognised in the income statement as financial income or financial expenses. Receivables and payables and other monetary items denominated in foreign currencies are translated at the exchange rate at the balance sheet date. The difference between the exchange rates at the balance sheet date and the date at which the receivable or payable arose or was recognised in the most recent financial statements is recognised in the income statement as financial income or financial expenses. Other external expenses include the year's expenses relating to the Company's core activities, including administration expenses to the bank. Financial expenses are recognised in the income statements at the amounts that concern the financial year. Net financials include interest expenses as well as allowances and surcharges under the advance-payment-of-tax scheme, etc. Tax for the year includes current tax on the year's expected taxable income and the year's deferred tax adjustments. The portion of the tax for the year that relates to the profit/loss for the year is recognised in the income statement, whereas the portion that relates to transactions taken to equity is recognised in equity. The Company and its Danish group entities are jointly taxed. The total Danish income tax charge is allocated between profit/loss-making Danish entities in proportion to their taxable income (full absorption). Jointly taxed entities entitled to a tax refund are reimbursed by the management company based on the rates applicable to interest allowances, and jointly taxed entities which have paid too little tax pay a surcharge according to the rates applicable to interest surcharges to the management company. The Company has chosen IAS 39 as interpretation for impairment write-down of financial receivables. Receivables are measured at amortised cost. An impairment loss is recognised if there is objective evidence that a receivable or a group of receivables is impaired. If there is objective evidence that an individual receivable has been impaired, an impairment loss is recognised on an individual basis. Impairment losses are calculated as the difference between the carrying amount of the receivables and the present value of the expected cash flows, including the realisable value of any collateral received. The effective interest rate for the individual receivable or portfolio is used as discount rate. Cash comprise bank accounts in DKK which minimal risk of changes to credit risk. Current tax payables and receivables are recognised in the balance sheet as the estimated income tax charge for the year, adjusted for prior-year taxes and tax paid on account. Deferred tax is measured according to the liability method on all temporary differences between the carrying amount and the tax base of assets and liabilities. However, deferred tax is not recognised on temporary differences relating to goodwill which is not deductible for tax purposes and on office premises and other items where temporary differences, apart from business combinations, arise at the date of acquisition without affecting either profit/loss for the year or taxable income. Where alternative tax rules can be applied to determine the tax base, deferred tax is measured based on Management's intended use of the asset or settlement of the liability, respectively. Deferred tax is measured according to the tax rules and at the tax rates applicable at the balance sheet date when the deferred tax is expected to crystallise as current tax. Deferred tax assets are recognised at the expected value of their utilisation; either as a set-off against tax on future income or as a set-off against deferred tax liabilities in the same legal tax entity. Changes in deferred tax due to changes in the tax rate are recognised in the income statement. The Company has chosen IAS 39 as interpretation for liabilities. Financial liabilities are recognised at the date of borrowing at the net proceeds received less transaction costs paid. On subsequent recognition, financial liabilities are measured at amortised cost, corresponding to the capitalised value, using the effective interest rate. Accordingly, the difference between the proceeds and the nominal value is recognised in the income statement over the term of the loan. Financial liabilities also include the capitalised residual lease liability in respect of finance leases. Other liabilities are measured at net realisable value. Subsequent to the financial year-end, the Company has received additional financing, DKK 700 thousand, which enables the Company to initiate R&D activities. No events materially affecting the Company's financial position have occurred subsequent to the financial year-end. The Company's share capital has remained DKK 40,000 since the establishment. At 31 December 2022, the Company holds a deferred tax related to tax loss carry-forwards. As it is uncertain if these tax losses can be utilised within a foreseeable future, their carrying amount has not been recognised in the financial statements. The Company is jointly taxed with its parent company, 26c Holding ApS, which acts as management company, and has limited and alternative liability together with other jointly taxed group entities for payment of income taxes for income year X onwards as well as withholding taxes on interest, royalties and dividends falling due for payment on or after 7 December 2021. The Company has not provided any security or other collateral in assets at 31 December 2022. 42886866 2021-12-07 2022-12-31 42886866 2022-12-31 42886866 2021-12-07 2022-12-31 1 42886866 2021-12-07 2022-12-31 1 42886866 2021-12-07 2022-12-31 e:RetainedEarningsMember 42886866 2021-12-07 2022-12-31 e:ContributedCapitalMember 42886866 2022-12-31 e:ContributedCapitalMember 42886866 2021-12-07 2022-12-31 e:RetainedEarningsMember 42886866 2022-12-31 e:RetainedEarningsMember iso4217:DKK