2021
Annual Report
3 ONWARD Annual Report
Table of Contents
1
2
3
4
5
6
ONWARD at a Glance 5
Message from the
Chairman & CEO 7
2021 Achievements 9
Overview 11
Our Strategy 19
Research &
Preclinical Development 21
7
ARC Therapy
Product Development 35
8
Clinical Trials &
Regulatory Approvals 43
9
Commercialization 49
10
People & Culture 59
11
Corporate Responsibility 65
12 Privacy & Data Governance 69
13 Operational Review 71
14 Financial Review 77
15 2022 Outlook 83
16
Governance 85
17
Risk Management
& Control 107
18
Investor Relations 137
19
Report of the Non-Executive
Directors 141
In this Annual Report ‘ONWARD’, ‘the Company’, ‘the Group’,
‘we’, ‘us’ and ‘our’ are sometimes used for convenience in
contexts where reference is made to ONWARD Medical N.V.
and/or any of its subsidiaries in general or where no useful
purpose is served by identifying the particular company.
20
Board of Directors’
Statements 149
21 Remuneration Report 151
22 Financials 165
23
Consolidated Financial
Statements 167
24
Company Financial
Statements 261
25
Other Information 277
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Section Name
5 ONWARD Annual Report
Founded in 2015
75+ employees
HQ in Eindhoven, the Netherlands
Science and Engineering Center in Lausanne, Switzerland
Growing US presence in Boston, Massachuses
IPO 2021, Euronext Brussels and Amsterdam
320+ patents issued or pending
3 FDA Breakthrough Device Designations
ONWARD
at a Glance
2 proprietary technology platforms
Almost EUR 8 million invested in R&D in 2021
Almost EUR 5 million invested in Clinical and
Regulatory activities in 2021
Enrollment completed in the company’s first
pivotal trial, Up-LIFT
Robust future therapy pipeline
Experienced, international management team
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
7 ONWARD Annual Report
Dear Shareholders, Colleagues, Partners, and Collaborators,
It is a privilege to lead this company and its many wonderful employees, research
collaborators, and business partners. Our work is important and meaningful, and together
with you, we are working hard to make a dierence in the lives of people with spinal cord
injury (SCI).
Nearly 7,000,000 people worldwide have spinal cord injury
1
. While most people associate
SCI with paralysis and loss of sensation, there are oen other accompanying challenges
such as infection, incontinence, pressure sores, poor blood pressure regulation, and loss of
sexual function. The quality of life following spinal cord injury can be quite poor for those
injured and their loved ones who provide care. SCI is also an expensive condition, the
average lifetime cost of care exceeding EUR 2.2 million (USD 2.5 million) for someone with
paraplegia and EUR 4.4 million (USD 5.0 million) for someone with tetraplegia
2
.
Conventional rehabilitation does not oer sucient promise, with most people reaching a
plateau in their progress aer three to six months. Thereaer, many of those injured face
decades of continuing challenges, declines in quality of life, and dependence on outside
care. ONWARD seeks to fill this void, bringing forward therapies that can improve strength,
function, and quality of life even for those injured many years ago. Indeed, our vision is to
help people across the range of challenges faced aer a spinal cord injury.
Our Vision
Empowered by movement, people with spinal cord injury will enjoy life in every way that
maers to them
Our team is pursuing this vision with urgency and determination, developing ONWARD
ARC Therapy with the intent to commercialize and make our solutions broadly available
from 2023 in the United States and Europe. We have two technology platforms, one
external (called ARC
EX
) and the other implantable (called ARC
IM
).
The work to complete and commercialize these platforms is aided by three FDA
Breakthrough Device Designation awards and protected by over 320 issued or pending
patents worldwide. While many of these innovations were created by ONWARD’s
innovative R&D team, others have been exclusively licensed from the top neuroscience
research universities in the world, underscoring ONWARD’s position as pioneer and leader
in our space.
With the completion of our successful initial public oering on Euronext in late 2021, we
are now well capitalized and focused on fulfilling our vision to help people with spinal cord
injury in their activities of daily life. We pledge to be good stewards of this capital and
hope our many new investors enjoy good returns, financial and otherwise, from the journey
you have undertaken alongside us.
We are aided in our pursuits by our many strong relationships with SCI advocacy groups
across the globe, such as the Christopher Reeve Foundation in the United States. We are
grateful for these partnerships and the insights they provide.
We are proud of our many achievements in 2021 and we have an ambitious set of goals for
2022 and beyond. Please sign up for updates on our website or follow ONWARD on social
media so we can keep you well informed of our progress throughout the year.
Warm regards,
Jan Øhrstrøm & Dave Marver
1
Kumar et al. 2018, “Traumatic Spinal Injury: Global Epidemiology and Worldwide Volume”, World Neurosurg., vol. 113, pp. e345-e363, May
2018, doi: 10.1016/j.wneu.2018.02.033.
2
2020 NSCISC Annual Report, US
1 2 3 4 5 6 7 8 9 10 11 12 13
Message from the Chairman & CEO
14 15 16 17 18 19 20 21 22 23 24 25
9 ONWARD Annual Report
We made strong progress in 2021 in several important areas:
In January, we initiated our first pivotal trial to generate the clinical evidence required to
submit for regulatory authorization to commercialize our therapies in the US and Europe.
The trial, called Up-LIFT, is designed to evaluate the ability of our transcutaneous ARC
EX
therapy to restore strength and function in the hands and arms aer spinal cord injury.
In December, we completed enrollment of Up-LIFT with 65 subjects at 14 centers in the
US, Canada, the UK, and the Netherlands. In our view, completing enrollment ahead of
schedule in a year plagued by COVID-19 and its many challenges signals the enthusiastic
response of the SCI clinical community to our therapy. We are currently optimizing
our ARC
EX
technology platform with the expectation that we will receive regulatory
authorization and permission to commercialize our transcutaneous therapy, enabling us to
realize our first revenue in 2023.
Also in January, our science partners at EPFL in Lausanne, Switzerland and the
University of Calgary in Canada published a seminal paper outlining the use of spinal
cord stimulation to restore normal blood pressure in people suering from orthostatic
hypotension, a very common side eect of SCI. This paper was published in Nature, one of
the world’s premiere scientific journals. Blood pressure regulation and trunk (torso) control
are the initial planned indications for our ARC
IM
implantable technology platform, and we
have exclusively licensed much of the associated intellectual property from EPFL. The
January Nature publication oers a rigorous scientific understanding of the mechanism of
action for our blood pressure indication, in addition to providing a strong reference we can
use when commercializing this therapy in the future.
2021 Achievements
In early 2021, we also received our third Breakthrough Device Designation award from the
US Food and Drug Administration (FDA). These awards recognize devices that the FDA
considers as truly innovative and that address an unmet need. The Breakthrough Device
Designation provides for more frequent contact with FDA, more flexible clinical trial design,
and a streamlined approval process. ONWARD now has three such awards, underscoring
the pioneering nature of our therapies.
Perhaps our most impactful achievements in 2021 were in fundraising. We raised a
successful pre-IPO financing in the form of a EUR 30 million convertible note in early 2021,
followed by a EUR 80 million initial public oering on Euronext Brussels and Amsterdam
in late October. We expect these financings to provide the company with capital through
the end of 2024, supporting our development activities, conduct of clinical trials, and
preparation for commercialization.
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11 ONWARD Annual Report
ONWARD’s mission is to enable people with spinal cord injury to regain movement and
other functions so they may enjoy life in every way that maers to them. We develop and
plan to commercialize therapies that address major challenges faced by people with SCI,
leveraging the Company’s ARC
IM
and ARC
EX
platforms to deliver spinal cord stimulation for
SCI patients across a broad spectrum of injury locations and impairment severities. While
the Company’s primary objective will be to serve the needs of people with SCI, we envision
that our therapies may also benefit other populations with similar challenges, such as
people who have suered strokes, or have Parkinson’s disease or other neurodegenerative
disorders. We also aim to reward those who invest their capital, time and ideas in our
Company, while engaging in sustainable, equitable, and inclusive business practices.
Overview
2
Kumar et al. 2018, “Traumatic Spinal Injury: Global Epidemiology and Worldwide Volume”, World Neurosurg., vol. 113, pp. e345-e363, May
2018, doi: 10.1016/j.wneu.2018.02.033.
3
National Spinal Cord Injury Statistical Center, Facts and Figures at a Glance. Birmingham, AL: University of Alabama at Birmingham, 2019.
1 2 3 4 5 6 7 8 9 10 11 12 13
The Case for Innovative Neurostimulation Therapies
Seven million people worldwide have a spinal cord injury. The annual global incidence
exceeds 768,000. In the US and Europe, there are approximately 650,000 people with SCI
and the annual incidence is approximately 50,000, including 31,000 in Europe
2
and around
18,000 in the US
3
.
This results not only in disability and poor health for individuals, but also in significant costs
for economies, due to lost productivity and high healthcare costs. The average lifetime cost
to support a person with a severe spinal cord injury can exceed EUR 4.4 million.
Currently, the neuromodulation market is comprised primarily of revenues from spinal cord
stimulation for pain management and deep brain stimulation for epilepsy and Parkinson’s
disease. Market revenues totaled USD 8.2 billion in 2019 and were projected to grow at
more than 15% over the following five years.
ONWARD is pioneering and creating a new segment within neuromodulation, by
stimulating the spinal cord to restore mobility and autonomic functions in people with
spinal cord injury, and potentially also those with stroke and Parkinson’s disease.
14 15 16 17 18 19 20 21 22 23 24 25
13 ONWARD Annual Report
Market – A Large
Unmet Medical Need
The SCI market is large and underserved
US
Europe
Prevalence
Prevalence
Incidence
Incidence
294,000
1
352,000
2
17,800
1
31,800
3
1 2020 NSCISC Annual Statistical Report Complete Public Version
2 European prevalence calculated by annual Incidence* 25 years of additional lifetime expectancy
3 Kumar et al. 2018, Traumatic Spinal Injury: Global Epidemiology and Worldwide Volume.
(traumatic spinal injury is broader than traumatic spinal cord injury).
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Overview
15 ONWARD Annual Report
1 2 3 4 5 6 7 8 9 10 11 12 13
SCI Causes
& Patient Profile
Damage to the spinal cord resulting in
loss of function
14 15 16 17 18 19 20 21 22 23 24 25
Overview
Source: (1) 2020 NSCISC Annual Statistical Report Complete Public Version
• Nearly half of the injuries occur
between the ages of 16 and 30 years
1
• 78% of new SCI cases are male
1
Profile of SCI Patient SCI Causes
14.0% Violence
7.8% Sports
38.9% Vehicular
4.2% Medical, Surgical
32.2% Falls
3.2% Other
17 ONWARD Annual Report
1 2 3 4 5 6 7 8 9 10 11 12 13
Overview
Neurostimulation
Market
Opportunity to create new segment, stimulating the
spinal cord for movement and autonomic function
Sources: Global Market Insights Neurostimulation Devices Market; Fortune Business Insights Spinal Cord Stimulation Market; Harmsen
I, E, Hasanova D, Elias G, J, B, Boutet A, Neudorfer C, Loh A, Germann J, Lozano A, M: Trends in Clinical Trials for Spinal Cord Stimulation.
Stereotact Funct Neurosurg 2021;99:123-134; Johnson RL, Wilson CG. A review of vagus nerve stimulation as a therapeutic intervention. J
Inflamm Res. 2018;11:203-213. Mayo Clinic
$8.2B 15.4%CAGR
Neurostimulation has emerged as a dynamic field for treatment of a range of
clinical conditions
(2019) (2020 - 2026)
$2.9B 8.0%CAGR
Spinal cord stimulation and DBS are most well developed current applications
(2019) (2020 - 2026)
Growth Trends:
• Rising prevalence of neurological disorders
• Increasing capital availability
• Emergence of minimally invasive approaches
Deep Brain Stimulation
Addiction, Chronic pain, Cluster
headache, Dementia, Depression
(major), Huntington’s disease, MS,
Stroke, Touree, Traumatic brain
injury, Sleep disorder, Autism
Emerging
Vagus Nerve Stimulation
Alzheimer’s, Obesity, Lung
injury, Cardiovascular disease,
Stroke, Diabetes, Anxiety,
Pain management
Spinal Cord Stimulation
Mobility, blood pressure
control,bladder and bowel
control, trunk control,
upper limb function, sexual
function, spasticity
Sacral Nerve Stimulation
Interstitial cystitis
Deep Brain Stimulation
Dystonia, Epilepsy, Essential
tremor, Obsessive-compulsive
disorder, Depression,
Parkinson’s disease
FDA Approved
Hypoglossal Nerve Stimulation
Sleep apnea
Vagus Nerve Stimulation
Depression, Epilepsy
Spinal Cord Stimulation
Pain management
Sacral Nerve Stimulation
Urinary incontinence,
Fecal incontinence
14 15 16 17 18 19 20 21 22 23 24 25
19 ONWARD Annual Report
Our Strategy
Our strategy is to build an enduring, impactful, and successful medical device company
that makes a meaningful dierence in the lives of people with spinal cord injury and their
loved ones.
1. Work with leading neuroscience researchers across the globe to identify breakthrough
therapies for people with spinal cord injury and other movement-related challenges.
2. Leverage our R&D and regulatory capabilities to develop proprietary technologies that
are well suited to deliver our breakthrough therapies at scale; protect these innovations
via rigorous IP prosecution.
3. Commercialize these breakthrough therapies in our target markets using a direct
channel into SCI clinics and hospitals with functional neurosurgery expertise.
The stages for the execution of our strategy are as follows:
ARC Therapy
Product Development
Clinical Trials &
Regulatory Clearance
Commercialization
Research &
Pre-Clinical Development
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
21 ONWARD Annual Report
ONWARD has relationships with several leading academic research centers throughout
the world. Examples include Caltech (USA), University of California at Los Angeles (USA),
University of Louisville (USA), and University of British Columbia (Canada). The Company’s
primary research partnership is with .NeuroRestore, a joint research initiative involving
École polytechnique fédérale de Lausanne (“EPFL”) and Centre Hospitalier Universitaire
Vaudois (“CHUV”) in Lausanne, Switzerland, with whom the Company has an exclusive IP
and commercialization license agreement.
NeuroRestore’s range of research activities is extensive, extending across a continuum
that encompasses basic research, preclinical research that includes rodents and
non-human primates, and human proof-of-concept studies across its network of
advanced research facilities in Switzerland. Several projects that could potentially be
commercialized have shown sucient promise to reach the human proof of concept
stage. The Company will select the most promising of these projects to develop and
commercialize, based primarily on clinical results and commercial viability. Each of the
potential indications can leverage the existing ARC
IM
platform with minor soware and
firmware modifications.
1. Research &
Preclinical Development
The .NeuroRestore team has published extensively in some of the most prestigious
scientific journals. In 2018, Professor Courtine and colleagues published clinical results
in NATURE demonstrating for the first time in humans that motor control and the ability
to walk continuously for at least 20 and up to 90 minutes could be restored even aer
complete paralysis. These results were obtained using an implantable platform consisting
of an IPG and epidural lead. In January 2022, the latest results were published in NATURE
MEDICINE. Three participants with complete sensorimotor spinal cord injury (AIS-A) who
could neither contract their leg muscles nor take a single step were implanted with a new
lead developed by ONWARD. On the first day following implant, all participants were able
to take steps independently on a treadmill with body weight support. Aer 5 months of
rehabilitation, participants were able to use their legs to stand, walk, swim, and/or cycle.
They also regained control of their trunk muscles. This recovery of leg and trunk motor
function also enabled participants to stand independently in community seings.
.NeuroRestore is led by Professor Grégoire Courtine and Neurosurgeon Jocelyne Bloch,
who founded ONWARD’s predecessor entity in 2014 alongside other researchers in
neuroscience and neurosurgery at EPFL and CHUV. Professor Courtine also serves as
ONWARD’s Chief Science Ocer.
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23 ONWARD Annual Report
Network of Advanced
Research Facilities
Technology, research, and medical expertise across
continuum of research stages
1 2 3 4 5 6 7 8 9 10 11 12 13
Research & Preclinical Development
14 15 16 17 18 19 20 21 22 23 24 25
UNIFR – Fribourg
University of Fribourg
Pre-Clinical Center
CHUV – Lausanne
University Hospital of Lausanne #9
worldwide Newsweek magazine
Suva – Sion
Specialized Center for
Acute Spinal Cord Injury
EPFL – Geneva
More than 2,000 scientists
#1 Neuroscience hub in Europe
Fribourg
Lausanne
Geneva
Sion
29 ONWARD Annual Report
ARC Therapy: A Breakthrough in Neuromodulation Technology
ONWARD’s ARC Therapy applies targeted, programmed stimulation of the spinal cord
to restore movement, independence, and health in people with spinal cord injury. The
stimulation can be delivered by an implantable platform, called ARC
IM
, or an external,
transcutaneous platform, called ARC
EX
.
Spinal Cord Injury Disrupts the Brain-Body Connection
When the spinal cord is injured, communication between the brain and the parts of the
nervous system located beneath the lesion is interrupted, either completely or partially.
The person may lose all feeling or movement – or both – in these areas. Functions and
organs controlled by the autonomic nervous system may also be aected, leading to
diculty with breathing, swallowing, blood pressure regulation, sexual arousal, and bowel
and bladder function. This disruption of the body-brain feedback loop can cause a host of
debilitating conditions. People with SCI at the thoracic or cervical level are most aected
by this loss of function.
Nevertheless, even in cases of complete spinal cord injury, some neural pathways in
the spinal cord remain intact but inactive. At present, rehabilitation aer SCI aims to
mobilize these latent nerve connections and promote regeneration through intensive
physiotherapy. Unfortunately, these activity-based therapies have few benefits for
people who cannot produce movements voluntarily. Some symptoms and conditions
can be managed with medication, such as antispasmodics to reduce involuntary muscle
contractions, or with devices, such as catheters to facilitate urination. However, these
solutions can be cumbersome and or carry the risk of harmful side-eects.
There is an urgent need for more eective therapies that enable people with SCI to live
more independent, higher-quality lives. This is where ONWARD’s ARC Therapy has the
potential to make a dramatic impact.
ARC Therapy Activates Intact Nerve Fibers With Biomimetic Stimulation
By delivering precisely timed and calibrated electrical impulses to specific areas of the
spinal cord, ARC Therapy mimics the natural paern of nerve signals sent by the brain.
When combined with volition, this enables users to improve motor control in the arms,
legs, or trunk, making daily activities, like moving in and out of a wheelchair, much easier.
Moreover, programmed neurostimulation has the potential to improve the management
of internal functions, chief among them blood pressure, and bowel and bladder control.
The technology developed by ONWARD is based on pioneering research carried out over
the last two decades by Prof. Grégoire Courtine at the Ecole Polytechnique Fédérale
de Lausanne (EPFL) and Dr. Jocelyne Bloch, Neurosurgeon at the Centre Hospitalier
Universitaire Vaudois (CHUV), along with their colleagues at .NeuroRestore, ONWARD’s
research partner described in the above section.
Using advanced imaging technologies, Prof. Courtine, Dr. Bloch, and the .NeuroRestore
team identified the exact location of the spinal cord neurons that are activated during
locomotion. This enabled them to deliver targeted electrical impulses to trigger the
contraction of specific muscles, in a programmed sequence corresponding to the
desired movement.
5
Most participants in clinical trials using ARC Therapy regain some degree of
independent movement even when the stimulation is switched o. This remarkable result
can be explained by the fact that ARC Therapy stimulates intact nerve fibers responsible
for carrying messages from the body back to the spinal cord (aerent nerves), and
“retrains” them to perform a dierent function, demonstrating the remarkable plasticity
of the nervous system.
Using a similar approach, .NeuroRestore, identified the precise area in the lower thoracic
spinal cord responsible for increasing vascular resistance and normalizing blood
pressure in the event of orthostatic hypotension (a rapid fall in blood pressure that may
occur when siing upright, standing, or changing body position).
6
ONWARD is building on
these insights to adapt its ARC
IM
system to address blood pressure regulation.
1 2 3 4 5 6 7 8 9 10 11 12 13
Research & Preclinical Development
14 15 16 17 18 19 20 21 22 23 24 25
31 ONWARD Annual Report
Three Priority Indications to Improve Quality of Life Aer SCI
Upper Limb Mobility
Since 2015, 60% of new spinal cord injuries in the US have resulted in some form of
tetraplegia
7
. Injuries at the level of the cervical section of the spine (C1-C7) can result in
loss of sensory and motor connections to all areas below the neck, including the arms
and legs. Without the use of our hands, most activities of daily living (tasks as simple as
grooming and eating) are extremely challenging. Beer arm and hand function is therefore
an important rehabilitation goal for a majority of the SCI community, consistently ranked
ahead of walking or sexual function.
In December 2021, we completed enrollment in our first pivotal trial, Up-LIFT, which aims to
evaluate the ability of our transcutaneous ARC
EX
therapy to restore strength and function
in the hands and arms for people living with chronic cervical spinal cord injury. Previous
small-scale pilot studies using a clinical version of our device demonstrated performance
gains in one or more of the various outcome measures. Functional gains were also noted,
such as the ability to pick up and hold objects, manage the use of an object such as a pen
or a utensil, or perform a new task.
Blood Pressure Regulation
The inability to regulate blood pressure following an SCI has profound consequences at
both the acute and chronic stages, aecting nearly 75% of people with spinal cord injury.
8
Immediately aer injury, blood rushes to the area of the lesion and causes swelling, which
starves the nerve cells of oxygen, compounding the initial damage. The outcome for many
patients may be vastly improved if clinicians could intervene immediately to prevent this
process by controlling blood pressure, blood flow, and oxygenation.
At the chronic stage, aer the injury has healed, fluctuations in blood pressure drastically
impact quality of life, especially for people with tetraplegia. It can cause a range
of debilitating conditions including stroke, fatigue, chronic hypotension, and a life-
threatening form of hypertension called autonomic dysreflexia. The chronic condition of
hypotension aects a person’s ability to perform everyday movements like siing up or
leaning over. It can also inhibit a person’s ability to engage in activity-based rehabilitation.
The spinal implant, or lead, developed by ONWARD for this purpose has the potential not
only to normalize blood pressure, but also, thanks to its placement in the thoracic area, to
improve the tone and control of the trunk muscles for people with cervical injuries. Trunk
control is essential to maintain stability when seated, making activities like eating or
dressing much easier.
1 2 3 4 5 6 7 8 9 10 11 12 13
Research & Preclinical Development
14 15 16 17 18 19 20 21 22 23 24 25
33 ONWARD Annual Report
Lower Limb Mobility
In addition to blood pressure regulation, we plan to further investigate the use of ARC
IM
to
improve mobility by restoring movement in the legs and feet. This will build on the success of
STIMO, a first-in-human study that determined the safety and eectiveness of our therapy
to restore walking in individuals with chronic SCI resulting in complete or partial paraplegia.
Starting in 2016, nine participants received high-intensity neurorehabilitation that
combined precisely timed epidural stimulation with over-ground, robot-assisted
rehabilitation training. Aer completing the STIMO program, all participants reported
improvements in mobility and substantial neurological recovery. Several were able to walk
on a treadmill without using their hands for support and, more remarkably, to stand and
walk at will even while the stimulation was inactive.
While walking may seem like an ambitious goal for many, even modest gains in lower limb
function can make a big dierence. Incorporating ARC
IM
in post-acute clinical rehabilitation
programs has the potential to vastly improve long-term outcomes for the recently injured
by promoting neurological recovery. Additionally, we envision that ARC
IM
stimulation may
someday be used “on the go” to perform a variety of everyday movements such as standing
briefly to place a wheelchair in a car.
4
Wagner, F.B., Mignardot, JB., Le Go-Mignardot, C.G. et al. Targeted neurotechnology restores walking in humans with spinal cord injury.
Nature 563, 65–71 (2018), doi: 10.1038/s41586-018-0649-2.
5
Squair, J.W., Gautier, M., Mahe, L. et al. Neuroprosthetic baroreflex controls hemodynamics aer spinal cord injury. Nature 590, 308–314
(2021). hps://doi.org/10.1038/s41586-020-03180-w
6
National Spinal Cord Injury Statistical Center (NSCISC), Facts and Figures at a Glance, 2021 (www.nscisc.uab.edu)
7
National Spinal Cord Injury Statistical Center (NSCISC), Facts and Figures at a Glance, 2021 (www.nscisc.uab.edu)
8
*Krassioukov A., Claydon V.E. The clinical problems in cardiovascular control following spinal cord injury: an overview. Prog Brain Res.
2006;152:223-9. doi: 10.1016/S0079-6123(05)52014-4. PMID: 16198703
1 2 3 4 5 6 7 8 9 10 11 12 13
Research & Preclinical Development
14 15 16 17 18 19 20 21 22 23 24 25
35 ONWARD Annual Report
ONWARD has developed two targeted, programmable neurostimulation platforms:
an implantable system, ARC
IM
, and a non-invasive, transcutaneous system, ARC
EX
,
both of which have been awarded FDA breakthrough device designation for a range
of indications.
Both systems contain the same basic elements: an electrical impulse generator,
electrodes placed in proximity to the spinal cord, either externally or internally, and a
control system that enables clinicians to program the stimulation and users to set some
therapy parameters.
The two ARC Therapy platforms share common components and have a similar user
interface. This optimizes our use of development resources while providing users with a
consistent, easy-to-use experience. We envision that both ARC
IM
and ARC
EX
may be used
to treat someone with SCI, for example leveraging ARC
IM
for blood pressure regulation
while using ARC
EX
for upper limb training.
ARC
IM
has four components (Fig 1 on next page
9
):
1. An epidural lead implanted next to the spinal cord in the area corresponding to the
movement or function being targeted by the therapy. ONWARD is currently developing
a family of leads that are optimized for placement in dierent areas of the spinal cord,
both in terms of their shape and the placement of the electrodes.
2. An implantable pulse generator (IPG) implanted under the skin in the abdominal area
and connected to the lead through a wire. When switched on, this pacemaker-like device
delivers precisely timed and calibrated bursts of electricity to specific electrodes in
the lead.
3. An external control hub that connects wirelessly to the IPG to turn therapy on or o, set
the frequency and intensity of the impulses, and recharge the device through the skin.
The hub is small enough to be worn around the neck or clipped to a belt.
4. A digital interface that doctors and physiotherapists can use to select a stimulation
program and calibrate it using a tablet or computer connected wirelessly to the control
hub. ONWARD expects to use mobile phone and smartwatch technology to enable users
to turn the stimulation on or o and adjust certain parameters using voice commands.
9
The smartwatch in the graphic may be a smartphone once development has been completed
2. Two Platforms,
One System
1 2 3 4 5 6 7 8 9 10 11 12 13
ARC Therapy
14 15 16 17 18 19 20 21 22 23 24 25
37 ONWARD Annual Report
Note:
The renderings in the above graphic are illustrative;
the design of commercial products may dier.
1
2
3
4
39 ONWARD Annual Report
ARC
IM
Leads
ARC
IM
is currently targeted toward improving blood pressure regulation and trunk control
and restoring the ability to stand and walk again. Other potential indications may be
explored in the future, including spasticity reduction, improved sexual function, bladder
control, and bowel control, each enabled by further development of ONWARD’s proprietary
lead portfolio.
Arm & Hand Function
Blood Pressure & Trunk Control
Mobility (Walking & Standing)
Bladder & Bowel Control
C4
T11
T10
T12
L1
S1
L5
S4
1 2 3 4 5 6 7 8 9 10 11 12 13
ARC Therapy
Note: The renderings in the above graphic are illustrative; the design of commercial products may dier.
14 15 16 17 18 19 20 21 22 23 24 25
41 ONWARD Annual Report
ARC
EX
is targeted toward improving strength and function of the upper limbs. It is designed
to be used periodically for 20 or 30 minutes in rehabilitation sessions in the clinic and, at a
later stage, at home. In the future, ARC
EX
may be used to targeted additional indications,
such as trunk control and mobility.
ARC
EX
has three components:
• External patch electrodes placed on the skin of the neck near the area of the spinal
cord that controls movement in the arms and hands.
• A stimulator that delivers programmed electrical impulses directly to the electrodes
through a lead.
• A digital interface with similarities to the interface found in the ARC
IM
system, which
connects wirelessly to the stimulator to adjust its parameters.
ARC
EX
Non-Invasive Platform
External system for transcutaneous
stimulation of the spinal cord
Note: The renderings in the above graphic are illustrative; the design of commercial products may dier.
1 2 3 4 5 6 7 8 9 10 11 12 13
ARC Therapy
14 15 16 17 18 19 20 21 22 23 24 25
43 ONWARD Annual Report
The development, manufacture, and marketing of ONWARD ARC Therapy and
associated technology is subject to government regulation in the United States,
Europe and other countries. To apply for regulatory clearance or approval to market
our devices in any of these jurisdictions, we must complete extensive human
clinical trials that demonstrate their safety and ecacy. In the US, clinical trials
are a requirement for Premarket Approval (PMA) and increasingly also for de novo
clearance and 510(k) submission, all of which we expect to pursue for our various ARC
Therapies. Similarly, under the European Medical Device Regulation (MDR) clinical
investigations are required in view of completing conformity procedures to get a CE
mark, a prerequisite for marketing the device in the EEA.
FDA Regulatory Process
To obtain FDA approval for a medical device, companies must complete several steps:
1. Determine the device’s classification (Class I, II or III)
In the US, ARC
IM
is a Class III
10
device that will require PMA approval, although
for at least one indication it may pursue HDE approval. ARC
EX
is expected to be a
Class II device.
2. Develop the prototype and conduct preclinical testing.
3. Conduct human clinical trials (early feasibility studies, followed by feasibility
studies and then by pivotal studies) and improve the prototype along the way
based on study results.
3. Clinical Trials &
Regulatory Approvals
In the US, clinical trials of investigational devices must be conducted in accordance
with the FDA’s investigational device exemption (IDE) regulations, which govern labeling,
prohibit promotion of the investigational device, and specify an array of recordkeeping,
reporting, and monitoring responsibilities of study sponsors and investigators.
If the device presents a “significant risk” to human health, as defined by the FDA
11
,the
device sponsor must submit an IDE application, supported by appropriate data, such as
animal and laboratory test results, showing that it is safe to test the device in humans
and that the testing protocol is scientifically sound. In addition, the study must be
approved by, and conducted under the oversight of, an Institutional Review Board, or
IRB, for each clinical site. The IRB is responsible for the initial and continuing review of
the IDE and may pose additional requirements for the conduct of the study.
Once the IDE application is approved by the FDA and relevant IRBs, human clinical
trials may begin at a specific number of sites and with a specific maximum number
of patients.
If the device presents a non-significant risk to human health, the sponsor may begin
the clinical trial aer obtaining approval of one or more IRBs without separate approval
from the FDA, but must still follow abbreviated IDE requirements, such as monitoring
the investigation, ensuring that the investigators obtain informed consent, and labeling
and record-keeping requirements.
ONWARD will submit an IDE application for the ARC
IM
Blood Pressure and Mobility
indications. For ARC
EX
Upper Limbs indication, ONWARD will follow abbreviated
IDE requirements.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
45 ONWARD Annual Report
During the study, ONWARD, as the study sponsor, is required to comply with the
applicable FDA requirements, including, for example, trial monitoring, selecting clinical
investigators and providing them with the investigational plan, and ensuring IRB review
and adverse event reporting. The clinical investigators we work with are also subject
to FDA regulations and must obtain patient informed consent, rigorously follow the
investigational plan and study protocol, control the disposition of the investigational
device, and comply with all reporting and recordkeeping requirements.
4. Submit a pre-market notification or application, in case of a Class II or Class III device,
which can be one of the following:
a. 510(k): a premarketing submission to demonstrate equivalence to existing device(s)
to obtain clearance that the device to be marketed is safe and eective.
b. Premarket Approval (PMA), an application containing sucient valid scientific
evidence to provide reasonable assurance that the device is safe and eective for
its intended use or uses.
c. Humanitarian Device Exemption (HDE), an approval pathway created by the FDA for
humanitarian use device (HUD) intended to treat or diagnose a disease or condition
that aects fewer not more than 8,000 individuals in the US per year. The HDE
application is similar in both form and content to the PMA application, but is exempt
from the PMA’s eectiveness requirements.
d. De novo classification, also known as the Evaluation of Automatic Class III
Designation. Created under the Food and Drug Administration Modernization Act of
1997 (FDAMA), this option provides an alternate pathway to classify novel devices
that carry low to moderate risk. Devices classified through the de novo process may
be marketed and used as predicates for future 510(k) submissions.
5. Wait for FDA review and approval. During this process FDA may request several
clarifications to be provided by the manufacturer.
6. Maintain FDA compliance for the devices’ lifespan.
Clinical Trials & Regulatory Approvals
EU Regulatory Process
To be marketed in member countries of the European Economic Area (EEA), our products
must comply with the essential requirements of the new Medical Devices Regulation
(MDR) (2017/745), which became fully applicable on 26 May 2021. The regulation aims to
ensure that the device is deemed acceptable across several dimensions, including its
appropriateness for the intended use, safety, device performance, labeling and packaging,
eects of transportation and storage, and showing a positive balance of risk versus benefit
for the end user.
To obtain approval to market a device in the EEA companies must:
1. Determine the device’s classification (Class I, IIa, IIb or III) according to the
associated risks
In Europe, ARC
IM
is expected to be designated as Class III.
12
In Europe, ARC
EX
is
expected to be designated as a Class IIa device.
13
2. Establish a quality system (QMS) to manage the medical device. The QMS is audited
annually by the Notified Body, resulting in the issuance of a certificate that established
that the QMS is compliant to the ISO 13485 standard.
3. Produce a technical file to satisfy EU MDR General Safety and Performance
Requirements that includes:
• Product Description and Specifications
• Manufacturing Information
• Risk Management File
• Design Verification and Validation Test Reports
• Clinical Evaluation
• Labeling
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
47 ONWARD Annual Report
For Class III devices, a Design Dossier needs to be compiled which contains the data of
the technical file along with a description of the design process for the device
4. Undergo review by notified body to prove device conformity
The conformity assessment procedure varies according to the type of medical device
and its classification. Except for low-risk medical devices (Class I non-sterile, non-
measuring devices), this conformity assessment is conducted by a notified body
accredited by a member state of the EEA.
A successful assessment results in the issuance of the CE marking certificate for
the medical device along with an ISO 13485 certificate that establishes that the
device is compliant with the General Safety and Performance requirements and
European standards.
5. Declare conformity of medical device
The Declaration of Conformity is a legally binding document issued by the company
which declares that the device meets all of the General Safety and Performance
requirements as laid out by EU MDR and any other applicable regulatory standards.
Clinical Trials & Regulatory Approvals
Clinical Trials
In 2021, ONWARD completed enrollment in the Up-LIFT study, the first large-scale pivotal
trial of non-invasive spinal cord stimulation technology. It has 65 subjects enrolled at 14
leading SCI research sites throughout the United States, Canada, the United Kingdom, and
the Netherlands. The Up-LIFT Study is a prospective, single-arm study designed to evaluate
the safety and eectiveness of non-invasive electrical spinal cord stimulation (ARC Therapy)
to treat upper extremity functional deficits in people with chronic tetraplegia.
It is important to note that the results of clinical testing may be unfavorable or, even if the
intended safety and ecacy success criteria are achieved, may not be considered sucient
for regulatory authorities to grant approval or clearance of a product. Additionally, aer a
trial begins, the clinical trial may be terminated at any time for various reasons, including a
belief that the risks to study subjects outweigh the anticipated benefits
10
The FDA defines Class III devices as products that “usually sustain or support life, are implanted or present a potential unreasonable
risk of illness or injury.”
11
A significant risk device is one that presents a potential for serious risk to the health, safety, or welfare of a subject and either is
implanted, used in supporting or sustaining human life, substantially important in diagnosing, curing, mitigating, or treating disease,
or otherwise preventing impairment of human health, or otherwise presents a potential for serious risk to a subject.
12
The EU MDR defines Class III as “strictly high-risk devices.”
13
The EU MDR defines Class IIa as “devices that are installed within the body for only between 60 minutes and 30 days.”
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
49 ONWARD Annual Report
ONWARD does not currently oer any products for commercial sale. We are working
towards approval of the ARC
IM
device for the blood pressure and trunk control indication
with an aim to receive regulatory clearance and start commercialization in 2025. We
believe that we will be able to get the necessary regulatory approvals in the US and Europe
in order to commercialize ARC
EX
starting in 2023. However, our plans to commercialize our
products are dependent on our ability to demonstrate their safety and eectiveness to
regulatory authorities, as described in the previous section.
4. Commercialization
Geographical Focus & Commercial Objectives
ONWARD plans to market our products in the United States and Europe, where most
people with SCI are cared for by a limited number of trauma and rehabilitation centers.
When people suer a spinal cord injury, they typically undergo emergency surgery
in a trauma center, aer which they spend a week in intensive care. They then begin
rehabilitation training, which is generally provided by specialized clinics with the
necessary expertise and equipment. In most cases, this rehabilitation lasts three to six
months, although in some markets it can extend to one year, aer which ongoing therapy
aims principally to maintain gains.
In the initial period following commercial launch, our focus will be on the US and four
selected European markets: Germany, France, UK and the Netherlands. These markets
were selected based on their aractive reimbursement environment for new medical
technologies and sophisticated SCI rehabilitation infrastructure. We plan to deploy a
direct sales and service organization, as the total number of facilities to be targeted,
whether to market our therapies and to support surgical interventions, numbers in the mid
hundreds. If FDA clearance or approval or CE certification permits us to pursue entry into
other large markets, including in Asian markets such as Japan, we will likely do so via a
distribution partner.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
51 ONWARD Annual Report
Commercial Strategy
Patients are concentrated in specialized
rehabilitation clinics
1 2 3 4 5 6 7 8 9 10 11 12 13
Commercialization
14 15 16 17 18 19 20 21 22 23 24 25
~200
105 83
Call Points US Europe
Germany (DE)
Netherlands (NL)
(2019)
Specialized Rehabilitation Clinics Specialized Rehabilitation Clinics
France (FR)
United Kingdom (UK)
53 ONWARD Annual Report
Clinician Customers
in Patient Journey
Specific customer targets at each stage
in patient journey
1 2 3 4 5 6 7 8 9 10 11 12 13
Commercialization
14 15 16 17 18 19 20 21 22 23 24 25
Injury
Decompression
Surgery
24 hours
Rehabilitation
3-6 months
Intensive
Care
~7 days
Plateau
12+ months
Acute Phase Sub-Acute Phase Intermediate Phase Chronic Phase
Trauma
Centers
Trauma and
functional neurosurgeons
SCI
Rehabilitation
Clinics
Neurologists,
rehabilitation physicians
and therapists
Functional neurosurgeons
Patients & caregivers
55 ONWARD Annual Report
Referral Pathway
Physicians will prescribe ARC
EX
for clinic or home
use and refer patients for ARC
IM
implants
• Order clinic use
• Prescribe home use
Referral to functional
neurosurgeon for implant
surgery (likely <2hr)
Decision–Maker
Neurologists &
Rehabilitation Clinicians
1 2 3 4 5 6 7 8 9 10 11 12 13
Commercialization
14 15 16 17 18 19 20 21 22 23 24 25
57 ONWARD Annual Report
Rehabilitation Clinics
Our marketing eorts will focus mainly on clinicians managing SCI patients in specialty
rehabilitation clinics. These include neurologists, rehabilitation physicians, physical
therapists, and occupational therapists providing rehabilitation training post-injury as well as
ongoing support to those who are chronically injured. The laer constitute the largest pool of
SCI patients globally.
We expect clinicians to use our therapies as follows:
• Apply ARC Therapy using ARC
EX
in the clinic
• Prescribe ARC
EX
for use in the home
• Refer patients to functional neurosurgeons for implantation of ARC
IM
and subsequent use
of ARC Therapy in the clinic and home
There are a limited number of specialty rehabilitation clinics in the US and Europe. In the US,
we expect to primarily target the 105 SCI rehabilitation clinics certified by the Commission of
Accredited Rehabilitation Facilities (CARF). CARF certification demonstrates a clinic has a
comprehensive integrated inpatient rehabilitation program, outpatient medical rehabilitation
program, home and community services, residential rehabilitation, and vocational services.
14
These certified centers provide a robust referral base for the Company’s products and will
serve as focused and fertile marketing targets.
In the four selected European markets, there are a total of 83 SCI specialty rehabilitation
centers: 27 in Germany,
15
10 in the United Kingdom,
16
8 in the Netherlands,
17
and 38 in France.
14
CARF International, provider search, United States (carf.org).
15
Deutsche Behandlungszentren (dmgp.de).
16
Medical Management Advice: Royal National Orthopaedic Hospital (rnoh.nhs.uk).
17
PHM50279 93..95 (insci.network).
18
American Trauma Society hps://www.amtrauma.org/page/TraumaLevels, retrieved 09AUG2021.
19
MacKenzie E.J., Hoyt D.B., Sacra J.C., et al. National Inventory of Hospital Trauma Centers. JAMA. 2003;289(12):1515–1522. doi:10.1001/
jama.289.12.1515.
20
National Health Services A4_map (www.nhs.uk) Retrieved 09AUG2021.
21
PHM50279 93..95 (insci.network).
22
Orthopedic Trauma Association Development of trauma systems in Europe—reports from England: OTA International (lww.com)
Retrieved 09 August 2021.
23
France does not have ocial criteria for trauma center levels as the above countries, however Traumabase lists 23 top trauma
hospitals in France. Traumabase Registry hps://www.traumabase.eu/en_US.
Hospitals & Ambulatory Surgery Centers
When patients are referred for an implant of ARC
IM
, surgery will typically be carried out
in hospitals or ambulatory surgery centers by functional neurosurgeons who are already
familiar with device therapy and neuromodulation, and commonly perform implants for
deep brain stimulation and spinal cord stimulation for pain therapy. The implant procedure
for ARC
IM
is substantially similar to that for spinal cord stimulation for pain, so we expect
lile resistance to adoption and a minimal training burden.
Trauma Centers
In addition to rehabilitation centers, we plan to target trauma centers to provide our
therapies at the acute or subacute stage. Major trauma centers provide total care
for all aspects of an injury, and prompt availability of relevant specialists such as
neurosurgeons.
18
They are thus an access point to acute and subacute SCI patients, as
well as neurosurgeons who can implant ARC
IM
devices. We envision that the blood pressure
management indication may be well suited for acute management of SCI, by helping to
stabilize blood pressure and promote spinal cord perfusion.
In the US, most SCI patients are treated at just 190 level 1 or major trauma centers.
19
In the
four selected European markets, there are 152 major trauma centers: 27 in the UK,
20
11 in
the Netherlands,
21
91 in Germany,
22
and 23 in France.
23
1 2 3 4 5 6 7 8 9 10 11 12 13
Commercialization
14 15 16 17 18 19 20 21 22 23 24 25
59 ONWARD Annual Report
We strive to create a positive culture, inspired by our ONWARD Code and our compelling
vision. We also foster a culture of continuous learning, feedback, and development,
providing the necessary tools and opportunities for our people to enhance their skills and
grow in their capabilities and careers.
Our technology is highly innovative, and we seek talented people who bring boldness and
creativity to our organization. We are diverse, with 20 nationalities currently represented
on our team.
We dierentiate ourselves as an employer of choice by fostering a purpose-driven culture
with an entrepreneurial mindset. We oer competitive rewards, encourage learning and
development, and build leadership and change-management expertise among our current
and future leaders.
We have an employee-driven Culture Club that nurtures and reinforces our cultural norms,
builds teamwork and common understanding, and supports SCI-focused charitable events
such as the Wings4Life World Run and Christopher Reeve Foundation 5k Challenge.
People &
Culture
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
61 ONWARD Annual Report
We are OPEN
We seek great ideas from any source. We are hungry for feedback.
We accept criticism with humility.
We are TRUSTING
We assume positive intent. We count on each other to deliver.
We speak truth to our leaders and teammates.
We are COLLABORATIVE
We are a team. We find ways to work well together.
We value our external partnerships.
We are PASSIONATE
We admire the courage of those we serve.
We are driven to fulfill our Vision. We will not fail.
We are EMPOWERED
We encourage ideas. We allow mistakes.
Everyone is accountable.
We are COMMITTED
We pursue a noble cause. We are never distracted nor
deterred. We are grateful for the responsibility we shoulder.
We are PRAGMATIC
We find a way. We surmount obstacles. We find
fulfillment in overcoming.
We are INNOVATIVE
We dream big. Limits do not contain us.
Our imagination defines the possible.
The ONWARD Code
63 ONWARD Annual Report
Our Code is communicated as part of our employee onboarding and reconfirmed in
our monthly meetups. The Company believes it is important to cultivate an open and
transparent culture that allows employees to express, in good faith, any concern they may
have. Our employees are encouraged to raise concerns without fear of retaliation, knowing
issues will be treated confidentially, seriously, fairly and promptly. During the financial year
2021 no concerns were reported.
A Great Place to Work
We strive to provide a positive employee experience, starting with the hiring process. We
have a talent management system to help drive a culture of performance, accountability,
and development. We use this system to track individual objectives, give feedback to
colleagues, and capture employee development and performance. We frequently host
speakers from the SCI community who help us stay connected to our vision and the
meaning and urgency of our work. We participate in charitable events, most commonly
supporting causes to help people with SCI.
Competitive Hiring
Soware engineers and other technology-focused professionals account for
approximately 65% of our recent new hires. As demand for technology talent outstrips
supply, aracting the right people in this highly competitive landscape becomes essential.
We endeavor to aract the best candidates: people who are motivated by our vision and
the opportunity to work on true breakthroughs, rather than incremental gains.
During the COVID-19 pandemic, our pace of technology hiring remained brisk. By
leveraging our professional networks and building partnerships with key academic
institutions and other relevant organizations, we were able to aract great talent. Our
employee referral program also incentivizes our employees to leverage the power of their
networks to recruit people who are a good cultural and organizational fit.
People & Culture
We oer competitive compensation and benefits packages, key for aracting and
retaining talent. Long-term incentives are oered to our senior management and key
individuals as part of our remuneration philosophy. We encourage share ownership among
all of our employees through a stock option plan. This also aligns our long-term incentives
with our long-term objectives, as grants are conditional on continued employment until the
time of vesting.
Employee Well-Being During COVID-19
Safety, employee health and well-being have been the primary driver of our response
during the pandemic.
Following the recommendations of the governments and health authorities of the countries
in which we operate, we transitioned our employees to working from home, unless their
work required access to specialized equipment and facilities found only in our oces,
and as permied by local measures. As a technology company our employees are used to
collaborating across multiple locations and time zones with colleagues who are not in the
same place. This, along with a dedicated communication channel during the pandemic,
enabled us to continue to collaborate eectively and continue delivering on our strategic
priorities. Our sta exhibited a high degree of adaptability and resilience, showing a strong
sense of commitment towards each other and the organization.
We also realized that the pandemic took a toll on individuals’ well-being and mental health.
Hence, we launched a program early in 2022 to help our employees beer manage their
well-being. This consists in a series of workshops, webinars, and information on best
practices from health and mindfulness experts.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
65 ONWARD Annual Report
ONWARD is commied to being a responsible organization that creates long-term value
for all our stakeholders. Environmental, social, and governance (ESG) principles are
integral to the way we do business. They are captured in our ONWARD Code, our Articles of
Association (AOA), our Code of Conduct (COC), our culture, business practices, operations
and supplier agreements.
ESG Principles
Our ESG strategy rests on four core principles:
• Innovating for the underserved: There is no cure for SCI. Our therapies are among
the first to oer the potential to help people with spinal cord injury regain movement
and other functions, improving quality of life for a large, underserved group of people.
Our products also have potential to benefit large populations of stroke suerers and
people with Parkinson’s disease. We have already been granted three Breakthrough
Device Designations (BDD) by the FDA for three dierent indications: restoration of
upper extremity strength and function for ARC
EX
, blood pressure and trunk control and
mobility for and restoration of walking for ARC
IM
. We continuously innovate and strive to
get such designations for other indications, to be able to make a dierence in the lives
of even more people.
• Partnering with patient groups: We enjoy excellent relationships with the world’s
leading patient advocacy groups for people with spinal cord injury. The Christopher
and Dana Reeve Foundation, the world’s largest such organization, is an investor in
ONWARD. We also collaborate with Wings for Life in Europe, the Praxis Foundation in
Canada and International Spinal Research Trust in the UK.
Corporate
Responsibility
• Aracting and retaining the best talent: To deliver on our vision, we are commied
to creating an unrivalled and inclusive environment for our employees. We care deeply
about the well-being and continuous development of our sta as evidenced by the
various programs we have put in place, such as our well-being program. Having a highly
motivated and engaged workforce enables us to retain and aract top talent. We also
engage with partners with spinal cord injury as consultants, who enable our workforce
to have a beer understanding of the challenges that they face.
• Minimizing our environmental footprint: In our operations, we strive to reduce our
carbon footprint, for instance by replacing air travel with videoconferencing except
for the most pressing business needs and by encouraging a hybrid workplace, thus
reducing our employees’ commute. We also work with our suppliers to minimize waste
in the manufacturing process.
• Maintain high ethical standards: At ONWARD, we are open and act with integrity.
We are commied to high ethical standards in dealing with our business partners as
outlined in our Code of Conduct, which covers anti-bribery and anti-money laundering,
government relations and political aairs and international business practices. Our
Code of Conduct ensures our people across the organization understand what is
expected of them when acting on behalf of the Company. We aim to comply with all
applicable anti-bribery laws, including the US Foreign Corrupt Practices Act. We apply
the highest quality and safety standards to everything that we do, and we ensure strong
labor practices in our supply chain. We also work hard to secure key personal data and
comply with GDPR (General Data Protection Regulations) and HIPAA. We uphold human
rights and operate in geographies with a strong track record on this topic.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
67 ONWARD Annual Report
ESG Strategy
Our ESG Strategy includes four areas in support of
nine UN Sustainable Development Goals
1
1 2 3 4 5 6 7 8 9 10 11 12 13
Corporate Responsability
14 15 16 17 18 19 20 21 22 23 24 25
Minimizing Our Environmental Footprint
We strive to reduce our carbon footprint
and waste in our operations
Innovating for the Underserved
We innovate to help people with Spinal
Cord Injury, empowered by movement, to
enjoy life in every way that maers to them
Maintaining High Ethical Standards
We act with integrity, respect human
rights and apply the highest quality and
safety standards
Aracting & Retaining Top Talent
We are commied to creating a positive,
diverse and inclusive work environment
for all our employees, underpinned by
continuous development
Environment
Environment Social
Governance
Social
Governance
Source: 1 hps://sdgs.un.org/goals
69 ONWARD Annual Report
ONWARD is commied to ensuring that data security and confidentiality are built into our
products and processes. The personal data that we process in the course of our operations
cover our suppliers and business contacts, applicants, visitors and website visitors, our
employees, and our customers, including health and medical information. We collect
patient health data with the sole purpose of continuously improving the eciency and
safety of our therapies.
We are subject to various regional, national and state laws that protect the confidentiality
and security of patient health information, including patient medical records. We have
chosen to apply the two most rigorous privacy regulations to our global operations,
namely the United States’ Health Insurance Portability and Accountability Act (HIPAA)
and the European Union’s General Data Protection Regulation ((EU) 2016/679; GDPR). This
legislation includes the right to access or amend certain records containing protected
health information, or to request that its use or disclosure be restricted.
We have strengthened our product compliance with cybersecurity and data protection
requirements under GDPR and HIPAA. We plan to create traceability in accordance with
relevant standards and provide evidence that we are compliant with the regulations. We
are currently evaluating our process for compliance with GDPR and HIPAA requirements
and expect to close any gaps in 2022. We are hardening our data management processes
and we regularly train our sta on security and privacy issues.
Privacy & Data
Governance
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
71 ONWARD Annual Report
Although COVID introduced a unique set of challenges, ONWARD made considerable
progress in 2021:
Science & Intellectual Property
As the pioneer in our space, we have forged relationships and exclusively licensed important
intellectual property from many of the world’s leading neuroscience research laboratories
such as Caltech (USA), University of California at Los Angeles (USA), University of Louisville
(USA), and University of British Columbia (Canada).
Our primary research partnership is with .NeuroRestore, a joint research initiative of EPFL
and CHUV in Lausanne, Switzerland, with whom we have an exclusive IP license agreement.
In 2021 we signed a framework agreement with .NeuroRestore governing future research
initiatives, as well as contracts covering existing and ongoing research. Additionally, we
supported research on blood pressure and trunk control, mobility, and incontinence.
Benefiing from these research collaborations and in combination with our own innovations,
ONWARD’s IP portfolio grew to over 320 issued or pending patents in 2021 (a 26% annual
increase). We also out-licensed certain ONWARD IP for the first time, an initiative we are
likely to expand. We will continue to consolidate and grow our IP portfolio in 2022 and
beyond, a key strength of the company.
Operational Review
Research & Development
Our engineering team made considerable progress across several development initiatives
in 2021:
• ARC
EX
System development: We completed soware prototypes for the patient and
clinician programmers (tablet, smartphone and smartwatch ), the stimulator hardware
prototype, and initiated full development with selected key supplier partners.
• ARC
IM
Lead Platform: We used sophisticated modeling to complete designs and
prototyped the Thoracic and Lumbar lead models
• Agile at Scale: We created a blueprint for Agile-at-Scale, which will be implemented in
2022 to improve our velocity and overall eectiveness.
• ARC
IM
Platform: We completed the full 1.0 system in preparation for regulatory
submission for first-in-human trials, expected to begin in 2022. We also successfully
completed deliverables for Phase I of the Defense Research Projects Agency (DARPA)
project, as described below.
ONWARD is part of a research consortium including partners in the US, Canada and
Switzerland that has been awarded a research funding by DARPA to advance innovative
SCI therapies. In response to the DARPA “Bridging the Gap Plus” funding call, the
consortium proposed the development of a new clinical intervention to modulate blood
pressure and spinal cord perfusion and oxygenation in the hours following spinal cord
injury. The intervention includes spinal cord stimulation using ARC
IM
, combined with
implanted sensors for blood pressure and spinal cord perfusion, as well as stem cells and
scaolds to be implanted in the lesion site to promote neural regrowth across the injury.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
73 ONWARD Annual Report
The DARPA grant is a five-year project (October 2021 to September 2025) for a total of
USD 36 million, of which ONWARD could potentially receive USD 6.3 million. To receive
this funding in full, we must meet specific milestones at each stage:
Phase 1: System design, IPG soware and firmware update for spinal cord stimulation for
blood pressure control (already granted)
Phase 2: System development completion (to be granted), development of a dedicated
lead (contingent), and clinical validation in ten chronic patients in Switzerland and
Canada (contingent)
Phase 3: FDA IDE secured and clinical validation shown in five acute patients in Canada
(to be granted)
We believe that our involvement in the DARPA consortium will contribute to our leadership
and expertise in blood pressure management and pave the way for the introduction of
next-generation systems that may follow the initial configuration of ARC
IM
we expect to
launch for blood pressure.
Operational Review
Clinical & Regulatory
We expect to commercialize our first technology platform and therapy, ARC
EX
for the
restoration of upper limb function, in 2023.
In 2021, we completed enrollment in our Up-LIFT pivotal trial in less than 12 months,
ahead of schedule, despite COVID-related challenges. The Up-LIFT study is designed to
evaluate the safety and eectiveness of non-invasive electrical spinal cord stimulation
administered by a clinical version of ARC
EX
to treat upper extremity functional deficits
in people with chronic tetraplegia. Study Principal Investigators are Edelle Field-Fote,
PT, PhD, of the Shepherd Center, Atlanta, and Chet Moritz, PT, PhD, of the University of
Washington, Seale.
24
The first planned indication for our ARC
IM
implantable platform is restoration of normal
blood pressure and trunk control. The Breakthrough Device Designation awarded by the
FDA for this indication in early 2021 is recognition of the truly innovative nature of this
device and its potential to address an unmet need.
Quality
ONWARD has a robust quality system that is compliant with current applicable standards.
In 2018, we obtained the ISO 13485 certification designed for organizations involved in the
design, production, installation, and servicing of medical devices and related services.
25
The most recent audit was conducted and passed in late 2021 by TÜV SÜD, a well-
respected notified body with global reach.
We also conducted audits of key suppliers and partners to ensure their compliance with
appropriate regulatory standards and company requirements. We have continued to
strengthen our Quality function by hiring additional qualified sta.
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75 ONWARD Annual Report
Commercial Operations
ONWARD does not currently oer any products for commercial sale. Following the
expected successful completion of Up-LIFT, we plan to commercialize ARC
EX
in the US and
Europe in 2023 for the improvement of strength and function of the upper extremities. In
2025, we expect to launch ARC
IM
commercially in the US and selected European markets
to restore normal blood pressure and trunk control. In 2025, we expect to commercialize
ARC
IM
in the US for mobility via HDE from the FDA (The European authorization process for
ARC
IM
for the mobility indication is not yet determined.)
Given the modest number of centers and clinicians responsible for providing rehabilitation
training, managing SCI patients, and performing accompanying surgeries (as detailed on
p. 57), we plan to deploy our own direct sales and service organization in both the US and
Europe, using distributor partners selectively where appropriate.
In 2021, ONWARD started building its commercial organization by recruiting Vice President
of Marketing and Market Access, Andy Dolan (bio under Management Team).
Financing
To support our R&D activities, conduct clinical trials, and prepare for commercialization,
we successfully raised EUR 80 million through an initial public oering on Euronext
Brussels and Amsterdam in late October 2021. This successful financing was preceded by
a pre-IPO convertible note financing of EUR 30 million in April 2021.
24
Details for the Up-LIFT study can be found on ClinicalTrials.gov, under identifier NCT04697472.
25
ISO 13485:2016 Medical devices – Quality management systems – Requirements for regulatory purposes.
Operational Review
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77 ONWARD Annual Report
This financial review should be read with the operational review and the Company’s
consolidated financial statements in this Annual Report, which have been prepared in
accordance with International Financial Reporting Standards (IFRS) as published by the
International Accounting Standards Board and as adopted by the European Union and
with Part 9 of Book 2 of the Dutch Civil Code.
EUR’ Million 2021 2020
Total Grant Income 1,4 0,8
Total Operating Expenses
Science Expenses
Marketing & Market Access Expenses
Research & Development Expenses
Clinical & Regulatory Expenses
Patent Fees & Related Expenses
Quality Assurance Expenses
General & Administrative Expenses
(30,0)
(2,7)
(1,5)
(7,9)
(4,8)
(1,4)
(1,0)
(10,7)
(16,3)
(1,1)
(0,4)
(5,8)
(2,8)
(1,2)
(0,4)
(4,7)
Operating Loss for the Period
Net financial result
(28,6)
(5,7)
(15,5)
(4,5)
Net loss for the period (34,3) (20,0)
Cash positions at end of year
Interest-bearing loans
Equity
89,4
(11,5)
82,7
6,4
(41,8)
(32,1)
Financial Review
Total Grant Income
Total Grant Income increased to EUR 1.4 million in 2021, compared to EUR 0.8 million in
2020. The increase mainly relates to the DARPA Phase I grant that was applicable for the
full 12 months in 2021 as opposed to only 3 months in 2020.
Science Expenses
The Company’s science expenses consist primarily of the costs of sponsored research
activities that are undertaken by universities with which it collaborates. Since its
inception, the Company has had a close working relationship with two of the founders of
the Company, Grégoire Courtine, Professor at EPFL and Jocelyne Bloch, Neurosurgeon at
CHUV, Professor at Université de Lausanne.
The activities between the Company and EPFL are formalized in research agreements
which govern the activities sponsored by the Company. In addition to these scientific
research expenses also the consultancy expenses and related shared-based payment
expenses for Grégoire Courtine and Jocelyne Bloch are included. Science expenses
increased by 144% from EUR 1.1 million in 2020 to EUR 2.7 million in 2021, of this increase
EUR 1.8 million relates to the share-based payment expense as a result of the Employee
Investment Plan that vested on the date of the IPO. The increase is oset by a decrease in
scientific research expenses of EUR 0.2 million due to research activities being limited to
blood pressure and bladder and bowel indications in 2021.
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79 ONWARD Annual Report
Marketing & Market Access Expenses
Marketing and Market Access Expenses increased by 273% from EUR 0.4 million in 2020 to
EUR 1.5 million in 2021 as a result of spending on the ONWARD rebranding, combined with
market access investigative activities in Europe and the US, as well as the share-based
payment expense as a result of the Employee Investment Plan that vested on the date of
the IPO.
Research & Development Expenses
Research and development expenses consist of product development, engineering to
develop and support our products, testing, consulting services, and other costs associated
with ARC therapies that do not meet the development capitalization criteria. These
expenses primarily include employee compensation and outsourced development
expenses. Research and development expenses increased by 37% from EUR 5.8 million in
2020 to EUR 7.9 million in 2021 due to progress in the development initiatives, as described
above in the operational review, as well as the share-based payment expense as a result of
the Employee Investment plan that vested on the date of the IPO.
Clinical & Regulatory Expenses
Clinical expenses consist primarily of clinical studies related to the development of our
ARC
EX
system, consulting services, and other costs associated with clinical activities.
These expenses include employee compensation, clinical trial management and
monitoring, payments to clinical investigators, data management, and travel expenses to
our various clinical trial locations. Clinical expenses increased by 72% from EUR 2.8 million
in 2020 to EUR 4.8 million in 2021. The increase was mainly due to an increase in sta and
consulting to support the study, continuous recruitment for the Up-LIFT study in the US,
and the share-based payment expense as a result of the Employee Investment Plan that
vested on the date of the IPO.
Financial Review
Patent Fees & Related Expenses
Patent Fees and Related Expenses consist primarily of costs required to maintain
ONWARD’s growing IP portfolio.
Quality Assurance Expenses
Quality Assurance expenses include employee compensation, consulting, testing and
travel expenses incurred to ensure the quality of our products. These costs increased by
175% from EUR 0.4 million in 2020 to EUR 1 million in 2021. The increase was due to the
hiring of new sta, quality assurance activities, and the share-based payment expense as
a result of the Employee Investment Plan that vested on the date of the IPO.
General & Administrative Expenses
General and administrative expenses increased by 278% from EUR 4.7 million in 2020 to
EUR 10.7 million in 2021. The increase is due to consulting expenses, sta and legal fees to
support the Company growth as well as the costs incurred relating to the IPO. The increase
also includes the share-based payment expense as a result of the Employee Investment
Plan that vested on the date of the IPO.
Net Financial Result
The net financial expense increased by 27% from EUR 4.5 million in 2020 to EUR 5.7 million
in 2021. Costs in 2021 consists mainly of interest on the Company’s sources of funding from
the innovation loan from RVO NL (Dutch Government), the convertible loan (CLA), and the
accrued dividend of the preference A shares.
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81 ONWARD Annual Report
Cash Position
The increase in ONWARD’s cash position at the end of the year is primarily due to proceeds
from the IPO in October 2021, as well as the proceeds from the convertible loan financing in
April 2021.
The table below summarizes the cash flows of the Company for the year 2021.
The increase in cash outflow from operating activities of EUR 12.9 million in 2020 to EUR
19.9 million in 2021 is due to higher losses due mainly from higher general and administrative
expenses relating to the IPO as well as increases in the costs as explained above.
Cash flow from investing activities represented a net outflow of EUR 2.3 million, related to the
acquisition of property, plant, and equipment and license fee payments to UCLA and Caltech.
The increase in cash inflow of EUR 101 million from financing activities is primarily due to
proceeds from the IPO in October 2021 and the convertible loan financing in April 2021.
The increase in the eect of exchange rates is due to higher activity in the US relating to the
Up-LIFT clinical trial.
EUR’ Million 2021 2020
Net cash generated / (used) from operating activities
Net cash generated / (used) from investing activities
Net cash generated / (used) from financing activities
Eect of exchange rates on cash and cash equivalent
(19,874)
(2,
324)
105,361
(100)
(12.900)
(173)
4,
367
(41)
Interest-bearing Loans
Interest-bearing loans on 31 December 2021 decreased by EUR 30 million. This is mainly
due to the conversion of the preference A shares into ordinary shares immediately
preceding the IPO in October 2021. This resulted in a decrease in interest-bearing loans
relating to the financial liability portion and accrued dividend.
Equity
The Company has a positive equity position of EUR 82.7 million at year-end 2021 versus
a negative position EUR 32.1 million at year-end 2020, an increase of EUR 114.8 million.
The main drivers of this increase are the proceeds of a share oering of EUR 80.1 million,
conversion of the CLA into ordinary shares of EUR 31 million, the conversion of the
preference A shares into ordinary shares of EUR 34 million and the accelerated vesting of
the employee investment plan of EUR 8.5 million. The increase is oset by the loss of EUR
34.3 million and the capitalization of costs relating to the issue of new shares during the
IPO of EUR 4.9 million.
Financial Review
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83 ONWARD Annual Report
We expect to achieve several important milestones in 2022.
By mid-year, we expect to complete conduct of the Up-LIFT trial, at which time we
expect to release top-line data showing the eectiveness of our transcutaneous therapy
in restoring strength and function in the hands and arms of people with SCI. Late this
year or in early 2023, we plan to file regulatory submissions for de novo clearance to
commercialize in the US and CE marking to commercialize in Europe. These authorizations
are expected in 2023.
During 2022, we expect to launch first-in-human use of our ARC
IM
implantable platform for
blood pressure regulation and trunk control in people with SCI.
In addition, we expect further publications in the world’s leading scientific and medical
journals this year, highlighting the promise of our therapies to help people with SCI and
other movement-related disorders in new and critical areas.
Lastly, we expect to make progress across several fronts to prepare our business for
commercial launch in 2023.
To achieve these important milestones, we will continue to invest in our product
development, clinical trials, and robust quality assurance. We plan to hire additional
sta in 2022, mainly within our Clinical and Development teams but also in Operations,
beginning with a VP Operations. In late 2022 or early 2023, we will place a greater focus on
recruiting for commercial roles to cover our target markets. We expect our current funding
to be sucient to support our ambitions through the end of 2024.
2022 Outlook
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85 ONWARD Annual Report
General
• ONWARD Medical S.A. (the Swiss subsidiary established on 12 December 2014)
• ONWARD Medical Inc. (the US subsidiary established on 13 September 2013)
The Company and its subsidiaries act as one company, the subsidiaries are mainly
established to follow local regulations.
ONWARD’s corporate governance is guided by the rules and principles set out in the Dutch
2016 Corporate Governance Code (the CGC)
26
,by the Company’s Articles of Association
(available on the Company’s website) and by Dutch law.
27
Governance Framework
The Company’s overall governance framework and the most important governance
elements at each level are the following:
• For the shareholders: the Articles of Association and Shareholder Dialogue policy
• For the Board: the Board Rules, the Charter of the Audit Commiee, the Charter of the
Compensation commiee and the Charter of the Nomination Commiee
Governance
Board of Directors
ONWARD has a one-tier board consisting of one or more executive directors (uitvoerend
bestuurders) and one or more non-executive directors (niet-uitvoerend bestuurders) all of
whom are individuals. Our CEO, as executive director, with the support of the Management
Team, is charged primarily with the Company’s day-to-day business and operations and
the implementation of the Company’s strategy. The non-executive directors are primarily
responsible for supervising the performance of the duties of the directors. Whereas, in the
case of a two-tier governance structure, supervisory and management roles are divided
between two corporate bodies, in a one-tier governance structure such as that adopted
by ONWARD, non-executive directors and executive directors share responsibility for the
management of the company for those tasks and duties that are not delegated to one or
more other specific directors by virtue of Dutch law, the Articles of Association or any other
arrangement catered for therein (e.g., the Rules of the Board). It is therefore important that
the Board ensure sucient independent supervision by non-executive directors.
In accordance with the CGC, the role of the Board is to provide leadership and supervision
to the Company on maers of strategy, risk management and policies. It has overall
responsibility for the management and control of the Company and is authorized to
take all actions it deems necessary to achieve the Company’s purpose. In performing
their duties the directors must be guided by the best interests of the company as well as
of its stakeholders, which include its business partners, employees, and shareholders.
The Board has drawn up Rules concerning its organization, decision-making, and other
internal maers. These Rules are available on the ONWARD website under the Investors/
Governance tab.
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87 ONWARD Annual Report
The composition of the Board aims to ensure a broad diversity of experience, knowledge,
and skills. The directors are appointed by the Company’s Annual General Meeting of
shareholders upon nomination by the Board. The general meeting may dismiss a director
at any time by a two-thirds majority vote if less than half of the issued share capital is
represented at the General Meeting, unless the resolution for dismissal is passed at the
proposal of the Board.
Dutch Law does not set a limit on the maximum number of consecutive terms that a
director may serve. According to the CGC non-executive directors may be elected for a
maximum of two consecutive four-year terms and, subsequently, for a maximum of two
consecutive two-year terms.
The Board meets as oen as any Director considers necessary or appropriate.
Resolutions are passed by a simple majority of votes cast. In the case of a tie in the
vote of the Board, the resolution is not passed. Any resolutions that concern a material
change to the character or identity of the Company or its business must be submied to
the General Meeting for approval.
28
Composition of the Board of Directors
As of the date of this Annual Report, the Company has a one-tier Board consisting of
nine members.
Name Year of Birth Nationality Gender Position
Year
Appointed
End of Term
Jan Øhrstrøm 1957 Danish Male
Independent
Non-Executive
Director &
Chairperson
2016
Annual General
Meeting of 2024
Dave Marver 1968 American Male
Executive
Director & CEO
2020
Annual General
Meeting of 2025
Grégoire
Courtine
1975 French Male
Non-Executive
Director & CSO
2016
Annual General
Meeting of 2023
Ian Curtis 1968 British Male
Independent
Non-Executive
Director &
Vice-Chair
2019
Annual General
Meeting of 2025
Fredericus
Colen
1952 Dutch Male
Independent
Non-Executive
Director
2017
Annual General
Meeting of 2025
Regina Hodits 1969 Austrian Female
Non-Executive
Director
2016
Annual General
Meeting of 2023
Roel Bulthuis 1976 Dutch Male
Non-Executive
Director
2020
Annual General
Meeting of 2022
John
de Koning
1968 Dutch Male
Non-Executive
Director
2016
Annual General
Meeting of 2024
Patrick
Van Beneden
1962 Belgian Male
Non-Executive
Director
2016
Annual General
Meeting of 2022
Governance
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
89 ONWARD Annual Report
Biographies of the Board Members
Jan Øhrstrøm has over 30 years of experience in the medical technology and
pharmaceutical industries, with a proven track record driving successful product
approvals, private financings, and IPOs. He has held senior management roles at
NovoNordisk, ProFibrix B.V. and ZymoGenetics, among others. He is currently CEO of
VarmX B.V., a company specializing in blood cloing agents, and is chairman of Blaze
Bioscience Inc. He holds an MD from the University of Copenhagen. Jan is the Board
Chair as well as Chair of the Compensation Commiee and Chair of the Nominating and
Corporate Governance Commiee.
Dave Marver (CEO) is an accomplished chief executive and director with more than 25
years of international experience in public, private, and emerging companies. Previously,
Dave spent almost 15 years with Medtronic in a variety of leadership positions in the US
and Europe, including vice president roles in sales, marketing, strategy, and business
development. He then joined NASDAQ-listed Cardiac Science Corporation as CEO,
before co-founding two start-ups. He holds a BA from Duke University and an MBA from
University of California Los Angeles.
Grégoire Courtine is a fulltime professor of neuroscience and neurotechnology at EPFL
and Director of .NeuroRestore, a research center at EPFL and CHUV that develops
innovative therapies using neurostimulation and other approaches. His ground-breaking
research in neuroscience has been recognized by several prestigious prizes, including
the Rolex Award, the Schellenberg Research Prize, and the Chancellor’s Award of the
University of California. He holds a PhD in Neurosciences from INSERM, Paris, and a PhD
in Medicine from the University of Pavia, Italy. As a founding member, Grégoire serves as a
non-executive director in addition to his role as CSO.
Ian Curtis is a member of the board of the Christopher and Dana Reeve Foundation and
the International Spinal Research Trust. As the father of a young woman living with SCI, Ian
is deeply commied to advancing research and treatment for SCI. He holds a BA in History
from Durham University and is a member of the Institute of Chartered Accountants in
England and Wales, and is the Chairman of HPC plc. Ian is the Board Vice-Chair as well as
Chair of the Audit Commiee.
Fred Colen has over 40 years of experience in the medical device industry, with a track
record in building strong organizations to bring new technology to market. Fred is
President and CEO of Neovasc Inc., a Canadian publicly traded company developing
products for the cardiovascular marketplace. Previously, he held senior executive roles at
Boston Scientific and St Jude Medical. He holds Master’s degrees in Electrical Engineering
and Medical Technology from RWTH Aachen University, Germany. Fred is a Member of the
Audit Commiee and of the Compensation Commiee.
Regina Hodits has over 20 years of experience in venture capital and is a managing
partner at Wellington Partners Life Science Venture Capital Consulting GmbH, where
she focuses on early-stage and growth investments. Before joining Wellington, Regina
led the European life sciences eorts of Boston-based Atlas Venture. She was a founding
investor in Bicycle Therapeutics, F-star, and JenaValve, and currently serves on the boards
of Carisma, Sidekick, SNIPR Biome, and Stipe. Regina holds PhD in Biochemistry from
the Technical University of Vienna. Regina is a Member of the Nominating and Corporate
Governance Commiee.
Roel Bulthuis combines 20 years of experience across venture capital, pharma business
development, and investment banking at M-Ventures, Merck Serono, and Fortis Bank. He
is currently Managing Partner at INKEF capital and the head of its healthcare investment
team. A graduate of the prestigious Kauman Fellows program, he serves as a director
of ten companies. He holds an MS in Biopharmaceutical Sciences from Leiden University
and an MBA in Finance from the Helsinki School of Economics. Roel is a Member of the
Compensation Commiee.
John de Koning is a General Partner at LSP, one of the largest European investment firms
providing financing for life sciences and health care companies. Since joining LSP in
2006, John has led some of its most successful investments and served on the board of
several companies, including argenx, Merus, and Prosensa. He holds an MS in Molecular
Biology from the University of Utrecht and a PhD in Oncology from the Erasmus University
Roerdam. John is a Member of the Nominating and Corporate Governance Commiee.
Governance
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91 ONWARD Annual Report
Patrick Van Beneden is an Associate Partner at Gimv N.V., a leading European private equity
firm. As Partner of GIMV for 35 years, Patrick has established a stellar track record in early
and late-stage investments in the life sciences, including Devgen, CropDesign, Plexxikon, and
Endosense. He is a board member of FIRE1, Biotalys, and JenaValve Technology. He holds a
Master’s degree in Financial Sciences from VLEKHO Business School in Brussels. Patrick is a
Member of the Audit Commiee.
Director Independence
In accordance with best practice provision 2.1.7 of the CGC, the majority of the non-executive
directors must be independent and at most one non-executive director does not have to
meet the independence criteria. A board member is considered “not independent” if they,
a spouse, partner, or close family member (related by blood or marriage up to the second
degree) meet any of the conditions listed below:
a. Has been an employee or member of the management board of the company, including
associated companies (as referred to in Section 5:48 of the Financial Supervision Act Wet
op het financieel toezicht/ W) in the five years prior to their appointment.
b. Receives personal financial compensation from the company, or an associated company,
other than the compensation received for the work performed as a board member.
c. Has had an important business relationship with the company or an associated company
in the year prior to the appointment.
d. Is an executive of a company in which a member of the management board of the
company which he supervises is a non-executive board member.
e. Has temporarily performed management duties during the previous twelve months in the
absence or incapacity of a member of the management board.
f. Has a shareholding in the company of at least 10%.
g. Is a member of the management board or supervisory board, or a representative in some
other way, of a legal entity that holds at least 10% of the shares in the company, unless the
entity is a group company.
At the date of this Annual Report, the Board consists of nine members, eight of which
are non-executive directors. Five of these non-executive directors are deemed “not
independent” based on meeting certain of the conditions above. This is a deviation from
the requirement of best practice provision 2.1.7ii of the CGC. (Refer to ‘Deviations from the
Best Practices Provisions of the Dutch Corporate Governance Code’.)
Commiees within the Board of Directors
The Board has established the following three commiees:
• The Audit Commiee
• The Compensation Commiee
• The Nomination and Corporate Governance Commiee
Non-executive directors are appointed to the commiees by the Board. The commiees
report their findings to the Board, which is ultimately responsible for all decision-making.
The role, responsibility and functioning of each of the commiees is summarized below.
Audit Commiee
The Audit Commiee consists of three members: Ian Curtis (Chair), Patrick Van Beneden,
and Fredericus Colen.
In accordance with its charter, the Audit Commiee is charged with the following maers:
a. Monitoring the Board with respect to:
• Relations with the internal audit function and the external auditor, as well as
compliance with recommendations and follow-up of comments
• The Company’s funding •The application of information and communication
technology by the Company, including risks relating to cybersecurity
• The Company’s tax policy
Governance
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
93 ONWARD Annual Report
b. Issuing recommendations concerning the appointment and the dismissal of the head of
the internal audit function, as relevant, and reviewing and discussing the performance
of the internal audit function.
c. Reviewing and discussing the Company’s audit plan, including with the internal audit
function and the external auditor.
d. Reviewing and discussing the essence of the audit results, also with the internal audit
function, including:
• Flaws in the eectiveness of the Company’s internal risk management and control
systems (the “Internal Controls”)
• Findings and observations with a material impact on the Company’s risk profile
• Failings in the follow-up of recommendations made previously by the internal
audit function
e. Monitoring the audit of the Company’s annual accounts and annual report and the
Company’s financial reporting processes and making proposals to safeguard the
integrity of these processes.
f. Reviewing and discussing the eectiveness of the design and operation of the Internal
Controls with the Board, the CEO and the CFO, including identified material failings
in the Internal Controls and material changes made to, and material improvements
planned for, the Internal Controls.
g. Reviewing and monitoring the independence of the external auditor, also considering
any non-audit services rendered by the external auditor.
h. Submiing proposals to the Board concerning the external auditor’s engagement
to audit the Company’s financial statements, including the scope of the audit, the
materiality standard to be applied and the external auditor’s fees.
The members of the Audit Commiee are appointed and dismissed by the Board. More
than half of all its members, including the chairperson, are independent within the
meaning of the CGC and at least one commiee member must have competence in
accounting and/or auditing.
The Audit Commiee shall meet as oen as it determines is appropriate to carry out its
responsibilities and each meeting shall be presided over by the chairperson and, in the
absence of the chairperson, one of the other members shall be designated as the acting
chairperson of the meeting.
Compensation Commiee
The Compensation Commiee consist of three members: Jan Øhrstrøm (Chair), Roel
Bulthuis and Fredericus Colen. In deviation from best practice provision 2.3.4/5.1.4 of the
CGC, the Compensation Commiee is led by the Jan Øhrstrøm, who is also Chairperson of
the Board. (Refer to ‘Deviations from the Best Practices Provisions of the Dutch Corporate
Governance Code’.). The Board considers that the experience and continuity of Mr.
Øhrstrøm being chair of the Compensation Commiee outweighs the disadvantages of
him holding both positions.
In accordance with its charter, the Compensation Commiee is charged with the
following maers:
a. Submiing proposals to the Board concerning changes to the Company’s
compensation policy.
b. Submiing proposals to the Board concerning the compensation of individual
directors, covering:
• Compensation structure
• Amount of the fixed and variable compensation components
• Applicable performance criteria
Governance
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
95 ONWARD Annual Report
• Scenario analyses that have been carried out
• Pay ratios within the company’s group
• Views of the director concerned regarding the amount and structure of his or her
own compensation
c. The preparation of the Company’s compensation report for the Board.
Nomination & Corporate Governance Commiee
The Nomination and Corporate Governance Commiee consists of three directors: Jan
Øhrstrøm (chair), John de Koning and Regina Hodits. Jan Øhrstrøm serves as chairperson
of the Nomination and Corporate Governance Commiee. In deviation from the CGC
more than half of the commiee members are not “independent” within the meaning of
the Code, namely John de Koning and Regina Hodits. (Refer to ‘Deviations from the Best
Practices Provisions of the Dutch Corporate Governance Code’). The Board considers that
the experience and continuity of Mr. de Koning and Ms. Hodits outweigh the disadvantages
of these deviations from the CGC.
In accordance with its charter, the Nomination and Governance Commiee is charged
with the following maers:
a. Drawing up selection criteria and appointment procedures for the directors
b. Reviewing the size and composition of the Board and submiing proposals for the
composition profile of the Board
c. Reviewing the functioning of individual directors and reporting on such a review to
the Board
d. Drawing up a plan for the succession of directors
e. Submiing proposals for (re)appointment of directors
f. Supervising the policy of the Board regarding the selection criteria and appointment
procedures for the Company’s senior management and executive ocers
Management Team
Name Position Member Since
Dave Marver Chief Executive Ocer 2020
Grégoire Courtine Chief Science Ocer 2016
John Murphy Chief Technology Ocer 2020
Marko Jansen Chief Financial Ocer 2017
Hendrik Lambert VP Clinical & Regulatory 2016
David Harari Managing Director USA 2019
Andy Dolan VP Marketing 2021
Vincent Delare VP Business Development 2016
Rano Burkhanova Global HR Director 2020
Management Team
The Management Team is responsible for running the Company in accordance with the
strategies, policies and budgets determined by the Board. It has all powers except for
those reserved for the Board and the General Meeting of shareholders by law and the
Company’s Articles of Association.
The members of the Management Team commit to carrying out their duties in accordance
with the highest business, ethical, moral, and legal standards laid out in the Company’s
Code of Business Conduct and Ethics (see onwd.com, Investors/governance).
The Management Team generally meets at least once a week.
Governance
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97 ONWARD Annual Report
Biographies of the Management Team
Dave Marver (see biography above).
Grégoire Courtine (see biography above).
John Murphy has over 25 years of experience driving the development of medical implants
and neurostimulation devices at LivaNova, Abbo, and Medtronic. His leadership expertise
spans the continuum of R&D, with a focus on consumer-centric design, IP generation, and
agile processes. Prior to joining ONWARD in 2020, John was the Chief Technology Ocer
of LivaNova Neuromodulation. He holds a BS in Electrical Engineering from the University
of North Carolina at Charloe and a PhD in Production Systems and Robotics from EPFL.
Marko Jansen has 25 years of experience in financial management across both
multinational companies and innovative startups. Building on his extensive expertise in
financial analysis and agile project management, Marko has served as the company’s CFO
since 2017. Prior to that, he held senior positions at Audionova International B.V., a hearing
aid company, and nVent Erico, a global electrical equipment manufacturer. Marko began
his career in public accounting with Arthur Andersen. He is a licensed CPA and holds a BA
in Accounting and a PhD in Business Economics from the University of Tilburg.
Hendrik Lambert has over 20 years of experience in leading clinical and regulatory
strategies for high-risk (Class III) medical devices in both Europe and the US, from initial
design to market approval. Before joining ONWARD in 2015, Hendrik was Vice President
for Clinical and Regulatory Aairs at Endosense, a Geneva-based Medtech company
developing innovative products for the cardiology market, which was acquired by St. Jude
Medical. He holds a PhD in Biomedical Engineering from the University of Ghent, Belgium.
David Harari is a talented scientific leader with 30 years of experience in the clinical and
regulatory management of medical devices, from initial concept to commercialization.
Before joining ONWARD in 2019 to lead its US aliate, David held senior positions in
clinical aairs with Guidant, Boston Scientific, Endosense, St Jude Medical, and Vytronus
Inc. He holds a BS in Engineering Sciences and Biomedical Engineering from the University
of Michigan.
Andy Dolan has 20 years of experience in marketing, business development, and
organizational leadership at medical device companies, both private and public. Before
joining ONWARD in 2021, Andy held senior roles in sales and marketing at ReWalk
Robotics, Boston Scientific, Johnson & Johnson, and Integra LifeSciences. He holds an MBA
from the University of Massachuses and a graduate certificate in bioengineering from
Tus University. He also serves as a United States Navy Reserve Public Aairs Ocer.
Vincent Delare co-founded ONWARD in 2014 and currently oversees the company’s
extensive IP portfolio and business development activities. Vincent combines expertise
in science and business management: he has led pioneering research on electrical
stimulation and neural circuit reorganization and has been recognized by several business
prizes, including Hello Tomorrow, Venture Best Business Idea, and the Wellcome Trust
Award. He previously served as the company’s CEO and Chief Technology Ocer. Vincent
holds a PhD in Neurosciences from EPFL, Lausanne.
Rano Burkhanova is an accomplished talent development executive with 15 years of
experience with multinational companies in the US and the Netherlands. Before joining
ONWARD in 2020, Rano managed leadership development, gender diversity, and
engagement programs for Danone Nutrition, Elsevier, and Medtronic. She holds an MA
in Human Resources Management from Cornell University and an MBA from the Quantic
School of Science and Technology.
Governance
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99 ONWARD Annual Report
Diversity
On 28 September 2021, a bill (Wetsvoorstel inzake evenwichtige man vrouw verhouding
in de top van het bedrijfsleven) introducing stricter gender diversity measures was
adopted by the Dutch Senate of the Dutch House of Representatives (Eerste Kamer).
The bill entered into force on 1 January 2022. The new legislation requires Dutch listed
companies to ensure that men and women each hold at least one third of the seats on their
supervisory boards. In a one-tier board, this one-third quota is applicable to non-executive
directors only. The quota will apply to new appointments; companies may thus reappoint
a non-executive director without complying with the one-third quota, but only if the re-
appointment occurs within eight years of the initial appointment. A new appointment
that fails to comply with the quota will in principle be regarded as null and void (nietig).
Companies will be required to report annually on their progress to achieve diversity.
The Board has adopted a diversity policy which became eective on the date of first
trading. The policy defines concrete objectives to achieve a Board that comprises one-
third of female members, while also ensuring a diversity in terms of background, skills, and
age. This policy is available on our website.
29
As of the date of this report, ONWARD’s Board consists of 8 male directors and 1 female
director. The Company has retained a leading medical technology search firm to assist in
its eorts to recruit independent directors with backgrounds that would help it achieve its
independence and diversity objectives by the end of 2023.
Conflicts of Interest
According to principle 2.7.4 of the CGC, the Company must report on directors’ conflicts
of interest in transactions in its management report where the conflict of interest is of
material significance to the Company or to the relevant director. Directors and members
of management are expected to arrange their personal aairs so as to avoid conflict of
interest. Any potential conflict of interest must be brought to the aention of the Board.
Certain directors and members of the Management Team have a direct or indirect
beneficial interest in ONWARD’s share capital or serve as a representative of a legal entity
that is a major shareholder. In their capacity as non-executive directors, their primary
duty is to supervise the performance of the executive directors and the management
of the Company and its business. A conflict of interest may arise if a decision aimed at
contributing to the Company’s long-term and sustainable success negatively impacts its
share price in the short term, thereby reducing the value of the shareholding of which the
non-executive director is a representative.
As at 31 December 2021, the potential conflicts of interests between the duties to the
Company of each of the directors and members of the Management and their private
interests or other professional duties were as follows:
a. Grégoire Courtine is the Chief Science Ocer and a Non-Executive Director of the Company
b. Roel Bulthuis is a director of INKEF Capital, a major Shareholder of the Company and
Non-Executive Director of the Company.
c. John de Koning represents LSP V Coöperatieve U.A., a major shareholder of the
Company and Non-Executive Director of the Company.
d. Regina Hodits represents Wellington Partners Life Science Venture Capital Consulting
GmbH, a major Shareholder of the Company and Non-Executive Director of the Company.
No conflicts of interest were reported to the Board in 2021.
Governance
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101 ONWARD Annual Report
Related Party Transactions
While ONWARD does not have a related party transaction policy, it complies with the
recommendations of the Dutch Civil Code (DCC) in this respect.
The Dutch act to implement the EU Shareholder Rights Directive II (Bevordering van de
langetermijnbetrokkenheid van aandeelhouders, “Dutch SRD Act”) which entered into
force on 1 December 2019, added new rules on related party transactions to the DCC.
These rules stipulate that “material transactions” with “related parties” that are not
entered into within the ordinary course of business or not concluded on normal market
terms must be approved by the Board and be publicly announced at the time of or before
the transaction takes place. The Board is required to establish an internal procedure to
periodically assess whether transactions with related parties are concluded in the ordinary
course of business and on normal market terms.
In particular, all transactions between ONWARD and a shareholder holding 10% or more of
issued share capital should be agreed on customary terms. Decisions to enter into such
a transaction that is of material significance to the Company and/or to the Shareholder
concerned should be approved by the Board. Any such transaction should be disclosed
in the Company’s board report, together with an armative statement that these
recommendations of the Code have been complied with.
No related party transactions were reported to the Board in 2021.
General Meeting
The main powers of the General Meeting relate to:
• the issuance of shares or rights to shares, restriction or exclusion of pre-emptive rights
of shareholders, repurchase of shares and reduction of the issued share capital
• the amendment of the Articles of Association
• the appointment, suspension and dismissal of members of the Board
• decisions of the Board involving a significant change in the Company’s identity
of character
• the approval of the remuneration policy of the Board
• the adoption of the Financial Statements and declaration of dividends
• the appointment of the Company’s external auditor
The Annual General Meeting is held within six months aer the end of the financial year to
discuss and, if applicable, approve, the Annual Report, the Annual Accounts and any of the
other topics mentioned above.
The Annual General Meeting and, if necessary, other General Meetings, are convened by
the Board. The agenda and explanatory Notes are published on the Company website.
The first Annual General Meeting is scheduled for 10 June 2022.
ONWARD’s authorized share capital (maatschappelijk kapitaal) amounts to EUR
12,225,000 divided into 50,937,500 Ordinary Shares and 50,937,500 Preferred Shares with
a nominal value of EUR 0.12 each. All of the issued Ordinary Shares are fully paid-up and
represent capital in the Company. No Shareholders have any voting rights dierent from
any other Shareholder. At 31 December 2021, 30,184,388 Ordinary Shares represented all
issued capital.
Governance
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103 ONWARD Annual Report
Deviations from the Best Practices Provisions of the Dutch Corporate Governance Code
ONWARD acknowledges the importance of good governance and is commied to adhering
to the best practices of the CGC as much as possible. As of the date of this annual report,
we reports the following deviations from the CGC:
• Best practice provision 2.1.7ii. The CGC provides that the criteria referred to in best
practice provision 2.1.8, when applicable, should account for less than half of the total
number of non-executive directors. Five of the non-executive directors are deemed “not
independent” in accordance with best practice provision 2.1.7ii.
Prof. Courtine, one of the Company’s founders, is considered “not independent” as
he is the Chief Science Ocer of the Company and receives personal compensation
for this role. Regina Hodits, John de Koning, Roel Bulthuis, and Patrick Van Beneden
are considered “not independent” as they are representatives of major shareholders
holding at least 10% of the shares in the Company (Wellington, LSP, Inkef and GIMV).
These shareholders have a long term interest in the Company and have made these
senior partners or sta available in service to the Company as directors. The Board
considers that Regina Hodits, John de Koning, Roel Bulthuis, and Patrick Van Beneden
fit the intended profile of the Board and that their contributions outweigh any perceived
disadvantage of non-independence. In addition, the Board believes that continuity in
its membership is key to ensuring the Company’s successful transition from private to
public company following its initial public oering on 21 October 2021. The Company
has retained a leading medical technology search firm to assist in its eorts to recruit
independent non-executive directors with backgrounds that would help it achieve its
independence and diversity objectives by the end of 2023.
• Best practice provision 2.2.6/2.2.7. The CGC recommends that non-executive
directors should evaluate their own functioning and the functioning of the executive
directors. Since ONWARD became a listed company in October 2021, following its initial
public oering, the Board has not yet formalized the policy and process for evaluation
of its functioning. The Board intends to evaluate its functioning on the basis of a
self-evaluation form distributed to, and completed by, the directors. As part of these
evaluations, the Board will consider (i) substantive aspects, mutual interactions, and
the interaction between the non-executive directors and the executive directors, (ii)
events that occurred in practice from which lessons may be learned, and (iii) the desired
profile, composition, competencies, and expertise of the Board. These evaluations will
intend to facilitate an examination and discussion by the Board of its eectiveness and
potential areas for improvement. Based on these evaluations, the Board will conclude
whether it is functioning properly. The Board intends to formalize the policy and process
for self-evaluation during 2022.
• Best practice provision 2.3.4/5.1.4. The CGC provides that the Compensation
Commiee should not be chaired by the Chairperson of the Board. In deviation from
the CGC, the Compensation Commiee is chaired by the Chairperson of the Board.
The Board considered that the experience and continuity of Jan Øhrstrøm being
chairperson of the Compensation Commiee outweighs the disadvantages of him also
being the Chairperson of the Board. For the reasons provided, the Company does not
intend to fully comply with this best practice provision.
• Best practice provision 2.3.4. The CGC provides that more than half of the members of
the Commiees should be independent within the meaning of best practice provision
2.1.8. The Nomination and Corporate Governance Commiee consists of three
directors: Jan Øhrstrøm (chair), John de Koning, and Regina Hodits. In deviation from
the CGC more than half of the commiee members are not “independent” within the
meaning of the Code, namely John de Koning and Regina Hodits. The Board considered
that the experience and continuity of Mr. de Koning and Ms. Hodits outweigh the
Governance
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105 ONWARD Annual Report
26
Available on the website of the Monitoring Commissie
27
Available on ONWARD’s website under Investors/Governance
28
See article 18 of the Articles of Association for more detailed information on Board decision-making.
29
Available on ONWARD’s website under Investors/Governance
disadvantages of these deviations from the CGC. For the reasons provided, the
Company does not intend to fully comply with this best practice provision.
• Best practice provision 3.1.2v recommends that variable remuneration should be linked
to measurable performance criteria determined in advance. To align the employee’s
interest with the interests of the Shareholders and to allow the participation in the
long-term growth of the Company, options were granted to the management team in
December 2021. There are no specific performance conditions associated to these
options, only a service condition. However, considering that the value of the option is
linked to the share price of ONWARD it includes an inherent performance criterion.
Furthermore, the size of the stock option is linked to the position and job grade of the
individual and is contingent on the performance of the individual. We will consider if
more clear measurable performance criteria should be added to future grants.
• Best practice provision 3.3.2. The CGC recommends against providing equity
awards as part of the compensation of a non-executive director. In recognition for his
extraordinary contributions in 2021, the Chairman of the Board was granted a one-time
option award of 38,000 shares concurrent with the executive equity grants. Our current
non-executive director compensation policy does not include an ongoing equity award
for the Board Chair and we do not intend to make supplemental equity awards to the
Board Chair (or any non-executive directors) outside of the policy going forward.
• Best practice provision 3.3.3. The CGC recommends that shares held by a non-
executive director in the company on whose board of directors they serve should be held
as a long-term investment. The Company’s Compensation Policy does not include such
a requirement.
• Best practice provision 3.4.1iii The CGC recommends that scenario analyses be
taken into consideration in determining the remuneration of the Executive Director.
Since ONWARD became a listed company only in October 2021, following its initial
public oering, no scenario analysis was taken into consideration in determining the
remuneration of the Executive Director for 2021. The Remuneration Commiee will
consider performing scenario analyses in 2022.
• Best practice provision 4.3.3. The CGC recommends that the General Meeting should
be capable of passing a resolution cancelling the binding nature of a nomination or
dismissal by simple majority, representing no more than one-third of the issued share
capital. Under the Articles of Association, directors can only be appointed or dismissed
by the General Meeting by simple majority of votes cast, provided that the Board
proposes the appointment or dismissal. In other cases, the General Meeting can only
pass a resolution to appoint or dismiss a director by a two-thirds majority representing
more than half of the issued share capital. The Company deems this appropriate
considering the remaining shareholdings and involvement of the Company’s current
significant shareholders.
Governance
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107 ONWARD Annual Report
Analyzing, monitoring, and managing the internal and external risks is crucial to ensure
that we are able to meet our ambitious targets, that our financial information is reliable,
and that our activities are compliant with all applicable laws and regulations. Current
risks primarily concern research and development of our therapies, securing regulatory
approvals, protecting our intellectual property, and maintaining equity in the Company’s
mid-to long-term financing.
The Management Team is responsible for developing, implementing and operating
adequate risk management and internal control systems. The Board has a control
function with respect to these systems. Our risk management and internal control
systems are reviewed, updated and optimized as an ongoing process based on internal
evaluations, discussions with the Board and the Audit Commiee, and audits from
external parties.
As ONWARD has not established a separate internal audit function, the Board assesses
annually whether adequate alternative measures have been taken. Based on the
recommendations of the Audit Commiee, the directors may consider whether it is
necessary to establish an internal audit function. In 2021 no material failings in the
internal risk management and control systems were discovered. It should be noted
that these systems cannot provide absolute assurance that the Company will realize
its targets, nor can they prevent all misstatements, errors and non-compliances with
legislation, rules, and regulations.
Risk Management
& Control
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109 ONWARD Annual Report
Risk Control Maers
Due to its size and history, the Company does not yet have a fully deployed and formalized
risk detection, evaluation, and management system in place. The Board and Management
Team continuously analyze the potential risks, evaluate their (financial) impact and
likelihood, and determine appropriate measures to minimize these risks. The risk
assessments are updated in line with changing internal and external circumstances. The
Board and Management Team meet regularly to review developments, set targets and
milestones, and evaluate progress towards realizing them. During these meetings, they
also review ONWARD’s financial position and present budgets/cashflow forecasts, which
are followed up and regularly adjusted to changing prospects. The Management Team
monitors risks as they arise and evolve, assesses their development, and implements the
necessary countermeasures as required.
To manage our business risks, we use highly experienced sta and external consultants
for our research and clinical studies. The results of our studies are monitored constantly,
closely, and systematically. This enables us to react early to new findings, as well as in the
conduct of pre-clinical and clinical activities. By closely monitoring the costs associated
with these activities through our regular internal budget and monitoring processes, we are
able to recognize any deviations from our financial plans early on, and initiate appropriate
countermeasures in time.
We are highly dependent on third parties to enable us to meet our regulatory requirements
and our own quality standards. We therefore take special care in selecting our contractors.
Major clinical trial and component service providers are selected through a stringent
selection process driven by the Management Team, during which we assess the quality and
experience of a number of candidates. We constantly review and assess the operational
performance of the organizations we work with.
We use only highly specialized consultants and aorneys to secure and monitor our IP.
In addition, the Management Team monitors ongoing patent protection and potential
conflicts on a regular basis.
Risk Management & Control
Our risk management and internal control system in relation to our financial reporting
process is designed to provide reasonable assurance that the books and records
accurately reflect transactions necessary to permit preparation of financial statements,
that the financial reporting is consistent and in compliance with legal regulations and
generally accepted accounting principles and that published financial data do not contain
any material misstatements. The system also provides reasonable assurance that all
receipts and expenditures are only made by people authorized to do so and that assets
are safeguarded. As part of this system, we have adopted various internal rules and
regulations, including standard operating procedures, the dual-control principle, spot
checks, automated expenses reimbursement tooling, internal contract approval processes,
and signatory rules.
Risk Appetite
Our risk appetite is dierent for the various risk categories ONWARD is exposed to, namely:
Risks related to our industry may aect our strategic ambitions. We are prepared to take
moderate to high strategic risks to achieve our ambitions and to create the right balance
between risk and long-term reward.
Risks related to the business and intellectual property include adverse unexpected
developments resulting from internal processes, people and systems, or from external
events which are linked to the actual operation of the business. We aim to minimize these
risks, only accepting a low level, to ensure that quality standards are unaected and
intellectual property is protected.
Risks related to government regulation relate to unanticipated failures to comply with
applicable laws and regulations. We aim to minimize these risks by aiming to be fully
compliant with these laws and regulations.
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111 ONWARD Annual Report
Risks related to the financial position, need for additional capital and taxation occur
in connection with funding, treasury, tax, accounting and reporting. ONWARD is prudent
with respect to these financial risks with the aim to maintain long terms solvency. We
are commied to transparent and truthful accounting and reporting that allow users of
the financial statements to take decisions considering these risks. We currently do not
engage in any hedging activities. The financial risk management is set out in note 4.3 of
our consolidated financial statements.
Description of the Principal Risks Associated with the Company’s Activities
The following section describes the main risks and uncertainties that we consider as
the major threats to achieve our objectives. Additional factors not listed here may also
have an adverse eect on our business, financial condition, results of operations, and
prospects, and could adversely aect our share price. All these risks are contingencies
which may or may not occur.
Risks Related to the Company’s Industry
If ONWARD obtains clearance or approval for its products, their commercial success will
depend in part upon the level of reimbursement it receives from third parties for the cost
of its products to users.
In most markets, third parties, such as health insurers, government-managed health care
schemes, or managed care organizations, decide which treatments they will cover and
how much of the cost they will reimburse. These reimbursement systems vary widely,
meaning that approval for reimbursement must be obtained on a country-by-country
basis. ONWARD’s business could be adversely aected if hospitals and other users are
not able to obtain and maintain coverage and adequate reimbursement for procedures
using our devices.
Additionally, third-party payors, especially in the United States, are increasingly
examining not only the safety and eectiveness of products but also their cost
eectiveness when making coverage and payment decisions. It is uncertain whether
the Company’s current products, or any planned or future products, will be viewed as
suciently cost eective to warrant coverage and adequate reimbursement levels in any
given jurisdiction.
Risks Related to the Company’s Business
ONWARD is wholly dependent on the success of two investigational devices, the ARC
IM
and ARC
EX
platforms. Even if the Company is able to complete clinical development and
obtain favorable clinical results for the initial indications it is pursuing, it may not be able
to obtain regulatory clearance or approval for, or successfully commercialize, its ARC
IM
and ARC
EX
platforms.
ONWARD currently has only two investigational devices in clinical development, the
ARC
IM
and ARC
EX
platforms, and our business depends almost entirely on the successful
clinical development, regulatory clearance or approval, and commercialization of these
investigational devices, which may never occur. We currently have no products available
for sale, generates no revenues from sales of any products, and may never be able to
develop marketable products.
Our ARC
IM
and ARC
EX
platforms will require substantial additional clinical development,
testing, manufacturing process development, and regulatory clearance or approval before
we are permied to commence their commercialization. For example, before obtaining
PMA approval for our ARC
IM
platform, we must demonstrate, among other things, that
the product is safe and eective for use in each target indication, a process that can take
many years. If we opt to seek approval via the HDE pathway for the commercial sale of
ARC
IM
, we must demonstrate through extensive preclinical testing and clinical trials that
the product candidate does not pose an unreasonable or significant risk of illness or injury,
and that the probable benefit to health outweighs the risk of injury or illness from its use,
considering the probable risks and benefits of currently available devices or alternative
forms of treatment. Of the substantial number of medical devices in development in the
United States, only a small percentage successfully complete the regulatory clearance
or approval process required by the FDA and are commercialized. Similarly, a substantial
number of medical devices in development will eventually not obtain a certificate of
conformity required for commercialization in the European Economic Area. Accordingly,
even if we are able to obtain the requisite capital to continue to fund our development and
clinical programs, we may be unable to successfully develop or commercialize our ARC
IM
and ARC
EX
platforms or any other product candidate.
Risk Management & Control
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113 ONWARD Annual Report
Enrollment and retention of patients in clinical trials, is an expensive and time-consuming
process and could be made more dicult or rendered impossible by multiple factors
outside its control, which could cause significant delays in the completion of such trials or
may cause it to abandon one or more clinical trials.
ONWARD may encounter delays or diculties in enrolling, or be unable to enroll, a
sucient number of patients to complete any of its clinical trials on its current timelines, or
at all, and even once enrolled, it may be unable to retain a sucient number of patients to
complete any of its trials.
Patient enrollment in clinical trials and completion of patient follow-up depend on many
factors, including the size of the patient population, the nature of the trial protocol, the
proximity of patients to clinical sites, the eligibility criteria for the clinical trial, patient
compliance, competing clinical trials and clinicians’ and patients’ perceptions as to the
potential advantages of the product being studied in relation to other available therapies,
including any new treatments that may be cleared or approved for the indications we are
investigating. Patients may be discouraged from enrolling in its clinical trials if the trial
protocol requires them to undergo extensive post-treatment procedures or follow-up to
assess the safety and eectiveness of a product candidate, or they may be persuaded
to participate in contemporaneous clinical trials of a competitor’s product candidate.
Patients participating in our clinical trials may drop out before completion of the trial or
experience adverse medical events unrelated to its products. Delays in patient enrollment
or failure of patients to continue to participate in a clinical trial may delay commencement
or completion of the clinical trial, cause an increase in the costs of the clinical trial and
delays, or result in the failure of the clinical trial.
Some of the indications that our investigational devices are intended to treat are
limited, so it expects only a subset of patients with spinal cord injury to be eligible for
its clinical trials. The protocols for our clinical trials generally mandate that a patient
cannot be involved in more than one clinical trial for the same indication. Therefore,
subjects that participate in ongoing clinical trials for products that are competitive with
our investigational devices are not eligible to participate in its clinical trials. ONWARD
cannot guarantee that any of its programs will identify a sucient number of patients to
complete clinical development, pursue regulatory clearance or approval and market its
investigational devices, if cleared or approved.
An inability to recruit and enroll a sucient number of patients for any of its current or
future clinical trials would result in significant delays or may require us to abandon one or
more clinical trials altogether, which could impact its ability to develop its investigational
devices and may have a material adverse eect on its business, results of operations and
financial condition.
The Company must obtain FDA clearance or approval before it can sell any of its products
in the United States and CE Certification before it can sell any of its products in the
European Union. Approval of similar regulatory authorities in countries outside the United
States and the European Union is required before it can sell its products in countries that
do not accept FDA clearance or approval or CE Certification. The Company may incur
additional costs or experience delays in completing, or ultimately be unable to complete,
the development and commercialization of its products if such clearance or approval is
denied or delayed.
The development, manufacture, and commercialization of our products are subject to
government regulation. In the United States, Europe and most other countries, ONWARD
must complete rigorous preclinical testing and extensive human clinical trials that
demonstrate the safety and ecacy of our devices before we can apply for regulatory
clearance or approval to market them. Regulatory bodies such as the FDA may limit
approval to specific indications, restrict the distribution of a device, or refuse to grant
clearance for additional or expanded indications, which could limit our potential revenues.
To market our devices for use in clinics in the United States, we will need to obtain de
novo classification for ARC
EX
. If this is granted, we intend to pursue additional clearances,
including for use in the home. ARC
IM
is a Class III device that will require PMA approval
to be marketed in the United States, while for at least one indication, it may pursue HDE
approval. In Europe, under the Medical Device Regulation (MDR), ARC
EX
is expected to be
classified as a Class IIa device and ARC
IM
as Class III.
Although we believe that our preclinical and clinical data will be sucient to support
regulatory clearance or approval, if the data we submit is not acceptable to the relevant
regulatory authorities, clearance or approval may be delayed or may not be feasible, which
could adversely impact our business and financial condition.
Risk Management & Control
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115 ONWARD Annual Report
The Company relies on a limited number of third-party suppliers and contract
manufacturers for the manufacture and assembly of its products, and a loss or
degradation in performance of these suppliers and contract manufacturers could have a
material adverse eect on its business, financial condition, and results of operations.
We rely on a limited number of third parties, some of which are sole suppliers, to purchase
materials and components, and/or to manufacture and assemble our ARC
EX
and ARC
IM
platforms. Our ability to supply our products for clinical trials and, ultimately, to market
them and to develop future products, depends on the availability of sucient quantities of
materials, components, and manufacturing services that meet regulatory requirements.
While we seek to maintain sucient levels of inventory at all times, this may not fully
protect us from interruptions to supply.
Our suppliers and contract manufacturers have generally met our demand for their
products and services on a timely basis. However, relationships with suppliers may be
disrupted due to a number of factors, such as unforeseen events that delay production
or a decision by either party to terminate the relationship. In that event, we are confident
that we will be able to find alternative suppliers for all our needs. However, because of the
relatively low volume of orders and bespoke nature of our requirements, establishing new
relationships would be a time-consuming and expensive process. We would need to verify
that the new supplier or third-party manufacturer maintains their facilities, procedures,
and operations in accordance with ONWARD’s quality standards and with all applicable
regulatory requirements. In addition, our contract manufacturers could require that we
move production to a dierent facility or use alternative materials or components. Any of
these events could require us to modify the designs or specifications of our products, and
to secure new regulatory approval before implementing the change, which could result in
further delay or a refusal to grant clearance.
If there are quality issues, or if the performance of its products does not meet the
expectations of physicians or patients, the Company may be subject to claims and liability,
and its brand, reputation, and business could be adversely aected.
In the course of conducting our business, ONWARD must adequately address quality
issues that may arise with the ARC
IM
and ARC
EX
systems, including defects in third-party
components included in its products. Additionally, even if free of quality issues, our
products may not meet the expectations of physicians or patients with respect to achieving
desired results.
The internal procedures designed to minimize risks that may arise from quality issues
may not be sucient to eliminate or mitigate occurrences of these issues and associated
liabilities. In addition, even in the absence of quality issues, wey may be subject to claims
and liability if the performance of its products does not meet the expectations of physicians
or patients.
The Company relies on relationships with academic research centers to support its
research and development activities, and it may not be able to enhance its product
oerings through its research and development eorts.
ONWARD’s primary research partnership is with .NeuroRestore, a joint initiative of
EPFL and CHUV in Lausanne, Switzerland, with whom we have an exclusive IP and
commercialization license agreement. Additionally, we have relationships with several
leading research universities around the world, including Caltech, the University of
California at Los Angeles, the University of Louisville, and the University of British Columbia.
.NeuroRestore’s conducts ground-breaking research ranging from basic research to
preclinical research all the way to human proof-of-concept studies. ONWARD will select the
most promising projects developed by .NeuroRestore to develop and commercialize, based
primarily on clinical results and commercial viability. If our relationships with .NeuroRestore
or our other academic partners were to be terminated or otherwise modified, it could
adversely aect our ability to expand potential indications for our ARC Therapy in the future.
Grégoire Courtine, ONWARD’s Chief Science Ocer, is a professor at EPFL. If this
potential conflict of interest is not prudently managed, it could adversely aect our ability
to license intellectual property from EPFL and commercialize therapies that rely on that
intellectual property.
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ONWARD may also decide to invest in developing new partnerships and licensing
agreements to provide us with new product oerings without significant research and
development activities. However, these agreements may not give us exclusive rights to
use the intellectual property for all relevant fields of use or territories where we wish to
develop or commercialize our products. As a result, we may not be able to prevent other
companies from developing and commercializing competing products. Moreover, if these
licenses were terminated, competitors would have the freedom to develop products similar
or identical to ours.
Despite thorough market research, our products may not incorporate all the features
sought by consumers, their caregivers or healthcare providers. We may also experience
delays in various phases of product development that cause customers to delay or forgo
purchases of our devices. Even if we are able to successfully develop these products, they
may not generate sales in excess of the costs of development. Lastly, they may be quickly
rendered obsolete by changing consumer preferences or the arrival on the market of
competing products with new technologies or features.
Active implantable medical devices such as the ARC
IM
platform carry risks associated
with the surgical procedure for implant or removal of the device, use of the device, or the
therapy delivered by the device.
The ARC
IM
system includes a component that is implanted in the patient through a surgical
procedure. It is not possible to design and build electronic implantable medical devices
that are 100% reliable, since all electronic devices carry a risk of failure. Furthermore,
all surgical procedures carry risks, and the eectiveness of any medical therapy varies
between patients. The consequences of a failure of the ARC
IM
system may include
complications arising from product use or the surgical procedure and could potentially
range from minor to life-threatening eects and even death. Such adverse events
could lead to product liability lawsuits, medical malpractice lawsuits, investigations by
regulatory authorities, adverse publicity, or even criminal charges that may negatively
impact our ability to conduct our business, obtain regulatory approval for the ARC
IM
system, and commercialize it.
Interim, “topline,” and preliminary data from its clinical trials that the Company announces
or publishes from time to time may change as more patient data become available and are
subject to confirmation, regulatory audit, and verification procedures that could result in
material changes in the final data.
From time to time, ONWARD may publicly disclose preliminary or “topline” data from our
preclinical studies and clinical trials, based on a preliminary analysis of the data available
at the time. Preliminary results are subject to change and should be viewed with caution.
They may dier from future results of the same studies, or they may be qualified with
dierent conclusions or considerations once the final data has been fully evaluated. That
is because clinical outcomes may materially change as continued patient enrolment and
treatment makes more patient data available, or as clinical trial participants continue
other treatments for their disease. Dierences between preliminary or interim data and
final data could significantly harm our business prospects. In addition, disclosure of interim
data by ONWARD or our competitors could result in volatility in our share price.
If the interim, topline, or preliminary data that we report dier from actual results, or if third
parties, including regulatory authorities, disagree with the conclusions reached, this could
adversely aect our ability to obtain approval for and commercialize our investigational
devices, and harm our business, operating results, prospects or financial condition.
The Company’s operations and reputation may be impaired if its information technology
systems fail to perform adequately or if it is the subject of a data breach or cyber-aack.
Our information technology (IT) systems are essential to the successful operation of our
business. We seek to allocate and manage the resources necessary to build, maintain and
protect our IT systems and infrastructure, as well as oversee third-party service providers.
Any failure of our IT systems to perform as anticipated could disrupt our operations and
result in transaction or reporting errors that could harm our business.
Our IT systems may be vulnerable to cyber-aacks or other security incidents, service
disruptions, or other system or process failures. Such incidents could result in unauthorized
access to vendor, consumer, or other types of confidential data, as well as disruptions to
operations. While we have experienced such incidents in the past, to date none has
been material.
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We rely on third-party vendors for some of our IT processes and data management needs,
which makes our operations vulnerable to a failure by any one of these vendors to perform
adequately or maintain eective internal controls.
To address these risks, we maintain an information security program that includes
updating technology, developing security policies and procedures, implementing and
assessing the eectiveness of controls, conducting risk assessments of third-party service
providers, and adopting business processes designed to mitigate the risk of security
breaches. However, there can be no assurance that these measures will prevent or limit the
negative impact of a future incident on our operations or business reputation.
A pandemic, epidemic or outbreak of an infectious disease in Europe, the United States
or worldwide, including the outbreak of the novel strain of coronavirus disease, COVID-19,
could adversely aect its business.
In 2021, the Company’s business, financial condition and results of operations were
negatively aected by COVID-19 pandemic as well as the various restrictions and
measures imposed by national, state and local authorities in an eort to control the
spread of the disease. Among others, research and development of our ARC
IM
System
was impacted by work-from-home requirements, which limited our ability to test and
debug hardware and soware systems, as these processes require access to laboratories
and equipment. We experienced delays in patient enrollment in our Up-LIFT Study from
September 2020 to January 2021, as well as reduced productivity as a result of employee’s
inability to work due to illness.
A future wide-scale outbreak of infectious disease similar to COVID-19 could negatively
aect our business in numerous ways. Our sales representatives, clinical specialists and
other personnel may be unable to travel and access customers for training and case
support. Our production schedule may be aected if suppliers cannot manufacture or
deliver parts and components on time. Pandemic-related restrictions could lead, among
others, to inventory shortages or obsolescence; delays in approval of our devices by
regulatory authorities; delays in decisions by insurance companies regarding coverage of
our products; delays in clinical trials; delays in growing our sales organization; adjustments
or disruptions to the business of third parties we work with, including suppliers, medical
institutions and clinical investigators; decrease in collectability of our account receivables
due to the adverse impact of the pandemic on our clients’ cash flows; and reduced
capacity of our suppliers to advance our investigational devices through clinical trials.
While it is dicult to predict the potential economic impact and duration of a future
outbreak, the current pandemic has resulted in significant disruption of global financial
markets, reducing our ability to access capital, which could in the future negatively aect
our liquidity. In addition, a recession or market correction could have an adverse eect on
our long-term business as hospitals reduce capital spending. To the extent the COVID-19
pandemic adversely aects our business and financial results, it may also heighten many of
the other risks described in this section, including those relating to incurring future operating
losses, advance of the ARC
IM
and ARC
EX
platforms through regulatory pathways, and if
cleared or approved, successful commercialization, supply chain and distribution channels.
Risks Related to Government Regulation
The Company may not receive the necessary approvals, granted de novo classifications, or
clearances for its ARC
EX
and ARC
IM
platforms or future devices and expanded indications,
and failure to timely obtain these regulatory clearances or approvals would adversely
aect its ability to grow its business.
ONWARD is seeking de novo classification to market ARC
EX
for use in clinics in the United
States. If this is granted, we intend to pursue additional regulatory clearances, including
for use in the home. ARC
IM
is a Class III device that will require PMA approval in order to
be marketed in the United States, while for at least one indication, it may pursue HDE
approval. In Europe, under the MDR, ARC
EX
is expected to be designated as a Class IIa
device and ARC
IM
as Class III.
The road to regulatory approval of a new medical device is long, expensive, and uncertain.
The FDA and other regulatory authorities can delay, limit, or deny approval, grant of a de
novo classification, or clearance of a device for many reasons, including:
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121 ONWARD Annual Report
• Inability to demonstrate that the products are safe or eective for their intended uses
(or for a 510(k) device, that they are substantially equivalent to the predicate)
• Disagreement with the design or implementation of clinical trials or the interpretation
of data
• Serious and unexpected adverse device eects experienced by participants in
clinical trials
• Insuciently supportive data from preclinical studies and clinical trials
• Inability to demonstrate that the clinical and other benefits of the device outweigh
the risk
• Manufacturing process or facilities used do not meet applicable requirements
• Changes in policies or regulations that increase cost of compliance or render clinical
data and filings insucient for approval or clearance
Despite the time, eort and cost invested, our investigational devices may not pass these
stringent regulatory hurdles, which could harm our business. Furthermore, regulatory
authorities may place restrictions on the indicated uses of the device, limiting its market
size. If the FDA requires us to go through a lengthier, more rigorous process that expected
for future products, or for modifications to existing products, their introduction could be
delayed or canceled, which could adversely aect our ability to grow our business.
In the EEA, compliance with the requirements of the Council Directive 93/42/EEC (EU
Medical Devices Directive) is a prerequisite to be able to ax the Conformité Européenne
(CE), mark to our products, without which they cannot be sold or marketed in the EEA. The
EU Medical Devices Directive is being replaced by a new Medical Devices Regulation in the
EEA (Regulation (EU) 2017/745). The MDR, which became fully applicable on 26 May 2021,
impose the same basic requirements as the EU Medical Devices Directive, but is generally
more stringent, especially in terms of risk classes and the oversight provided by notified
bodies that perform conformity assessments of devices.
Following its departure from the EU on 31 January 2020, the UK continued to follow the
same regulations as the EU during a transition period which ended on 31 December 2020.
From that point, all medical devices must be registered with the Medicines and Healthcare
products Regulatory Agency (MHRA) before being placed on the UK market. European
CE marks will continue to be recognized in UK until June 30, 2023, following which a UK
Conformity Assessed (UKCA) mark will be required for a medical device to be marketed in
the United Kingdom. The new Medical Devices Regulation will not automatically apply in
the UK, so the regulation of medical devices in the UK may diverge from EU Regulations
in future.
In general, If ONWARD fails to remain in compliance with applicable European laws and
regulations, we would be unable to continue to ax the CE mark to our products, which
would prevent us from selling them within the EEA, adversely aecting our business.
Similarly, our ability to market our products in the UK could be aected by any failure to
maintain compliance with UK regulations.
The clinical development process required to obtain regulatory clearances or approvals is
lengthy and expensive with uncertain outcomes, and the data developed in those clinical
trials is subject to interpretation by EU Regulators, FDA and foreign regulatory authorities.
If clinical trials of the current ARC
EX
platform and ARC
IM
platform and future products do
not produce results necessary to support regulatory clearance or approval, a granted de
novo classification or clearance in the United States or, with respect to the Company’s
current or future products, elsewhere, it will be unable to commercialize these products
and may incur additional costs or experience delays in completing, or ultimately be unable
to complete, the commercialization of those products.
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123 ONWARD Annual Report
Significant setbacks or failure can occur at any time during the clinical development
process, adversely aecting the cost, timing or successful completion of the trials. The
following circumstances could harm our ability to complete development or commercialize
our products:
• The FDA may reject our IDE application and notify us that we may not begin
investigational human clinical trials.
• Regulatory authorities may disagree as to the design or implementation of our
clinical trials.
• Regulators and/or institutional review boards (IRBs) may not authorize us or our
research partner to begin or continue a clinical trial at a particular site.
• We may be unable to agree on acceptable terms with prospective contract research
organizations (CRO), and clinical trial sites, the terms of which can vary significantly
and require long negotiations.
• Clinical trials may produce negative or inconclusive results, or we may not agree with
regulatory authorities on the interpretation of these results. Consequently, we may
decide, or be required by regulators, to conduct additional clinical trials or abandon the
development of a product.
• The number of subjects or patients required for clinical trials may be larger than we
anticipated, enrollment in these trials may be insucient or slow, the number of trials
being conducted at any given time may be high, resulting in fewer available patients for
our clinical trial, or patients may drop out at a higher-than-expected rate.
• Our third-party contractors may fail to comply with regulatory requirements or meet
their contractual obligations in a timely manner, or at all.
• We may have to suspend or terminate clinical trials for various reasons, including a
finding that the subjects are being exposed to unacceptable health risks.
• We may have to amend clinical trial protocols or conduct additional studies to reflect
changes in regulatory requirements or guidance.
• We may be required to terminate clinical research for various reasons, including safety
issues or noncompliance with regulatory requirements.
• The cost of clinical trials may be greater than anticipated.
• Clinical sites may not adhere to the clinical protocol or may drop out of a trial.
• We may be unable to recruit a sucient number of trial sites or trial subjects.
• Regulators, IRBs, or other reviewing bodies may fail to approve or subsequently find
fault with our manufacturing processes; the supply of devices or other materials
necessary to conduct clinical trials may be insucient, inadequate, or not available at
an acceptable cost.
• Approval policies or regulations may change in a manner that rends our clinical data
insucient for approval.
• Our current or future products may have undesirable side eects or other unexpected
characteristics.
We depend on CROs to conduct our clinical trials in a timely manner and in compliance
with good clinical practice (GCP) requirements. If a CRO fails to comply fully with GCP
standards or experiences delays in conducting the trial, this could result in increased
costs and/or program delays. In addition, clinical trials conducted in countries outside
the United States and Europe may entail additional delays, shipment costs, or regulatory
requirements, as well as risks associated with clinical investigators who are unknown to
the FDA, or with dierent standards of diagnosis, screening, and medical care. Any of
these occurrences could have an adverse eect on the Company’s business, financial
condition and results of operations.
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125 ONWARD Annual Report
We may from time to time publicly announce the date at which we expect to reach
various clinical, regulatory, or product development milestones. These could include the
submission to the FDA of an IDE application to commence a clinical trial, the enrollment
of patients in a trial, or the release of data from clinical trials. However, the actual timing
of these milestones may vary dramatically compared to our estimates, in some cases for
reasons beyond our control, potentially delaying the commercialization of our products or
causing our share price to decline.
If the Company or its suppliers fail to comply with FDA regulatory requirements, or if
it experiences unanticipated problems with any cleared or approved products, these
products could be subject to restrictions or withdrawal from the market.
If we successfully secure FDA approval and clearance, our investigational devices will
remain subject to oversight and regulation by the FDA throughout the manufacturing and
commercialization processes. In particular, we and our suppliers or manufacturers will
be required to comply with the FDA’s Quality System Regulations (QSR), which cover the
manner in which we conduct and document the design, testing, production, control, quality
assurance, labelling, packaging, sterilization, storage, and shipping of our products.
The FDA audits compliance with the QSR and other regulatory requirements through
periodic announced and unannounced inspections of manufacturing and other facilities.
Failure to meet these QSR requirements could delay production and lead to fines,
diculties in obtaining regulatory clearances and approvals, withdrawal of PMAs that
have already been granted, product recalls, and various enforcement actions or sanctions.
Such compliance failures or sanctions could have a material adverse eect on our
reputation, business, results of operations, and financial condition.
Risks Related to the Company’s Intellectual Property
The Company licenses certain technology underlying the development of its
investigational devices and the loss of the license would result in a material adverse eect
on its business, financial position, and operating results and cause the market value of its
Ordinary Shares to decline.
ONWARD licenses technology from EPFL, UCLA, California Institute for Technology
(Caltech), University of Louisville, University of Minnesota, University of Calgary and
University of British Columbia that is integrated into our company portfolio under five
licenses, each exclusive in the Company’s Field of Uses. Under the dierent license
agreements, the Company has agreed to milestone payments and/or to meet certain
reporting obligations. In the event that the Company were to breach any of the obligations
under the agreement and fail to cure timely, EPFL, UCLA, Caltech, would have the right
to terminate the agreement upon notice. In addition, EPFL, UCLA and Caltech have the
right to terminate its license upon the bankruptcy or receivership of the Company. If the
Company is unable to continue to use or license this technology on reasonable terms,
or if this technology fails to operate properly, we may not be able to secure alternatives,
negatively aecting our ability to develop our products.
It is dicult and costly to protect its intellectual property and its proprietary technologies,
and the Company may not be able to ensure their protection.
We rely upon a combination of patents and trade secrets to protect the intellectual
property related to our proprietary technologies. Patents and other proprietary rights
provide uncertain protections, and we may be unable to protect our intellectual property
for various reasons, including complex factual and legal issues that create uncertainty
as to the validity, scope and enforceability of a particular patent. As a result, we may be
unsuccessful in defending our patents and other proprietary rights against third-party
challenges, which could have a material adverse eect on our business.
Patents do not automatically provide a competitive advantage. Competitors may be able
to design around our patents and develop products that provide comparable or superior
outcomes. Any changes we make to our products, including design improvements that we
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127 ONWARD Annual Report
believe make them more marketable, may not be covered by previously licensed patents.
We may be required to file new applications and/or seek other forms of protection covering
these alterations.
Changes in either the patent laws or their interpretation in the United States and other
countries may diminish our ability to stop third parties from making, using, selling,
or importing products that infringe on our intellectual property. Infringement and/or
misappropriation suits are very expensive and time-consuming to prosecute and could
result in a court deciding that one or more of our patents is invalid, unenforceable, or both.
Even if the validity of our patents is upheld, a court may refuse to stop the other party from
using the technology on the grounds that their activities are not covered by the patents.
We may in the future obtain certain intellectual property related to our technology from third
parties. If that is the case, we cannot be certain that these third parties took the necessary
actions to maintain the IP rights or that their transfer to us was proper and eective. As
a result, we may be subject to claims challenging their ownership or enforceability, which
would limit our ability to prevent competitors from making or selling duplicate or similar
technologies for which, or in countries where, we have no patent protection.
In addition to patents, we rely on trade secrets to protect our technology. We have
established policies to protect our trade secrets, but these may not be eective in
preventing misappropriation or unauthorized disclosure. Litigating a trade secret claim is
expensive and time consuming, and the outcome may be unexpected. In addition, courts
outside the United States are sometimes less willing to protect trade secrets. Moreover, our
competitors may independently develop knowledge and methods that allow them to create
substantially similar products or services without misappropriating our trade secrets.
Patent terms may be inadequate to protect its competitive position on its future products
for an adequate amount of time.
In both the United States and Europe, the lifespan of a patent is generally 20 years from
its earliest filing date. Various extensions may be available, but the life of a patent, and the
protection it aords, is limited. Even if patents covering the Company’s future products
are obtained, once the patent has expired, it may be open to competition from competitive
products. ONWARD’s current patent portfolio will begin to naturally expire in 2031.
However, given the amount of time required for the development, testing and regulatory
review of new products, certain patents protecting our future products might expire before
or shortly aer commercialization begins. As a result, our patent portfolio may not provide
the Group with sucient rights to exclude others from commercializing similar or identical
products for a sucient amount of time.
If the Company is unable to protect the confidentiality of its trade secrets, its business or
competitive position could be harmed.
To protect our confidential and proprietary information, we rely upon non-patent
protection such as trademark or trade secret protection and confidentiality agreements
with employees, consultants, vendors, and third parties. We also implement commonly
accepted physical and technological security measures to protect our confidential
information. However, these various measures may not prevent an employee or consultant
from misappropriating our trade secrets and providing them to a competitor. Unauthorized
parties may also aempt to copy or reverse engineer certain aspects of our products
that we consider proprietary. Enforcing a claim that a party illegally disclosed or
misappropriated a trade secret can be expensive and time-consuming, and the outcome
is unpredictable. The criteria for protection of trade secrets can vary among dierent
jurisdictions. Moreover, trade secrets may be independently developed by others in a
manner that could prevent legal recourse.
If any of our confidential or proprietary information were to be disclosed or
misappropriated, or if any such information was independently developed by a competitor,
our business and competitive position could be harmed.
The Company relies on licenses and sublicenses to certain patent rights with third parties.
If the Company fails to comply with its obligations under its patent licenses with third
parties, it could lose license rights that are important to its business. Additionally, the
Company may not be able to control the prosecution or maintenance of such patent rights,
which could adversely aect its business.
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129 ONWARD Annual Report
ONWARD relies on licenses and sublicenses to certain patent rights and other intellectual
property from third parties that are necessary to the development of our products,
including the soware modules that we expect to integrate into our ARC
IM
and ARC
EX
platforms. All the following circumstances related to licensing could have a material
adverse eect on our competitive position, business, financial conditions, results of
operations and prospects:
• Future licenses we enter into may not provide exclusive rights to use the related
intellectual property for all the fields of use or territories in which we wish to develop
or commercialize our products. We would therefore not be able to prevent other
companies from developing and marketing competing products.
• As some of the underlying intellectual property rights related to a license would not
belong to us, our rights would be subject to the continuation and compliance with the
terms of the licensing agreement. If the agreement is terminated, competitors would
have the freedom to develop and market products similar or identical to ours.
• If our licensor concludes that we have materially breached the license agreement
and terminates it, we may have to cease developing, manufacturing or marketing any
product covered by these agreements.
• A license agreement may not grant us the right to control the preparation, filing,
prosecution or maintenance of patents and patent applications covering our products.
If our licensing partner fails to adequately manage these rights, we may be unable to
prevent competitors from developing or commercializing similar or identical products.
• Where we have the right to control the prosecution and maintenance of the relevant
patents, we may still be adversely aected by actions that took place prior to the date
upon which we assumed control.
• Where we are permied to pursue the enforcement or defense of these patents, we
cannot be certain that the licensors will provide us with the necessary cooperation,
or that they will allocate sucient resources to defend their interests. An adverse
outcome from any legal action, even we are not a party to it, could harm our business
by preventing us from continuing to license intellectual property we need to operate
our business.
• If other third parties, in addition to the licensor, have ownership rights to these patents,
they may be able to license them to our competitors. We may need to obtain additional
rights from them or we could be prevented from developing and commercializing the
related products.
• If we need to amend existing licenses, the licensor may impose terms that are more
favorable to them, including terms that could enable third parties (potentially including
our competitors) to receive licenses to a portion of the related intellectual property.
The Company may be required to pay certain milestones and royalties and fulfil other
obligations under its license agreements with third-party licensors.
ONWARD may be required to pay milestones and royalties related to the development or
commercialization of products using technologies that we may license or sublicense from
third parties. These payments could adversely aect our profitability related to products
that we may seek to develop or commercialize in the future. We may need to meet specified
milestones or fulfill certain obligations to maintain these licensing agreements, such as
devoting a certain quantity of resources to developing our products. Failure to satisfy such
obligations could result in the termination of our rights under such agreements.
Risks Related to the Company’s Financial Position, Need for Additional Capital & Taxation
The Company has incurred significant operating losses since inception, and expects to
incur operating losses in the future, and it may not be able to achieve or sustain profitability.
ONWARD is a medical technology company with no commercial operating history. To date,
we have invested substantially all of our eorts in the research and development of, and
seeking regulatory clearance or approval for, our ARC
IM
and ARC
EX
platforms. We are not
profitable and has incurred losses each year since beginning operations in 2014 and have
no commercial operating history upon which to evaluate our business and prospects. Any
predictions about future success, performance or viability may not be as accurate as they
could be if the Company had a longer operating history or commercial revenues.
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131 ONWARD Annual Report
ONWARD has not yet derived sucient revenues to support operations, as our activities
have consisted of developing our technology and conducting preclinical studies and clinical
trials. As of 31 December 2021, the loss brought forward amounted to EUR 34 million. These
losses have resulted primarily from costs incurred in the development of the ARC
IM
and
ARC
EX
platforms, and from general and administrative costs associated with operations.
The current or future clinical trials of any current or future investigational devices are, and
the manufacturing and marketing of any such investigational devices will be, subject to
extensive and rigorous review and regulation by the FDA and other government authorities
in the United States and in other countries where the Company intends to test and, if cleared
or approved, market such investigational devices. We expect our operating expenses
to continue to increase as we (i) continue research and development activities for our
ARC
IM
and ARC
EX
technology platforms and related technologies; (ii) seek FDA regulatory
clearances and approvals for the ARC
IM
and ARC
EX
platforms or other future investigational
devices in the US, regulatory approvals in Europe, and potentially other regulatory approvals
in other jurisdictions; (iii) build our commercial infrastructure; and (iv) incurs additional
operational costs associated with being a public company. As a result, ONWARD expects to
continue to incur operating losses for the foreseeable future. The expected future operating
losses, combined with prior operating losses, may adversely aect the market price of our
Ordinary Shares and ability to raise capital and continue operations.
We expect sales of our ARC
IM
and ARC
EX
platforms, if cleared or approved, to account for a
majority of our future revenue. If the ARC
IM
and/or ARC
EX
platforms do not achieve regulatory
clearance or approval, an adequate level of acceptance by physicians, healthcare payors,
and patients or adequate reimbursement from third-party payors, the Company may not
generate sucient revenue and may not be able to achieve profitability. Even if we do
achieve profitability, we may not be able to sustain or increase profitability in subsequent
periods or on an ongoing basis. In such a case, it will be more dicult for us to finance our
business and realize our strategic objectives, which would have a material and adverse
eect on our business, financial condition, and results of operations and cause the market
price of our Ordinary Shares to decline.
The Company will require additional capital to finance its planned operations, which may not
be available to it on acceptable terms or at all.
As of 31 December 2021, ONWARD had cash and cash equivalents of KEUR xxx. Based on
cash flow forecasts for 2022 and 2023, we believe that this will be sucient to meet our
capital requirements and fund our operations for at least 12 months as of the date of this
Annual Report. However, we have based these estimates on assumptions that may prove
to be incorrect and we could spend our available financial resources much faster than
currently expected.
The Company’s expenses will also increase substantially in connection with any
potential commercialization of our products in the US and Europe, including the hiring
of qualified and sales personnel. Additional expenditures will include costs associated
with manufacturing and supply, expenses related to the deployment of a direct sales
and service organization, costs and expenses incidental to being a public company, and
general operations. In addition, other unanticipated costs may arise.
The Company’s present and future funding requirements will depend on many factors, including:
• Continuing our research and development eorts, completing ongoing and planned
clinical trials, and applying for (i) de novo classification granting marketing
authorization for ARC
EX
for use in clinics, and thereaer 510(k) clearance for use of
ARC
EX
in the home, and (ii) PMA approval, which will be required for ARCIM, though we
expect to pursue approval to legally market at least one indication via HDE.
• Conducting additional clinical trials of our ARC
EX
and ARC
IM
platforms for
future indications.
• Our ability to retain and compensate the highly qualified personnel necessary to
execute our plans.
• If cleared or approved, the costs associated with manufacturing, selling, and marketing
our products in Europe and the United States, as well as other foreign jurisdictions,
including the cost and timing of implementing our sales and marketing plan and
expanding manufacturing capabilities.
• Our ability to eectively market and sell, and achieve sucient market acceptance and
market share for, our products.
Risk Management & Control
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
133 ONWARD Annual Report
• The costs to maintain, expand, and defend the scope of our intellectual property
portfolio, as well as any other action required in connection with licensing, preparing,
filing, prosecuting, defending, and enforcing any patents or other intellectual
property rights.
• The emergence of competing technologies and other adverse market developments,
and the need to enhance our products and/or develop new products to maintain
market share.
Our ability to establish and maintain strategic licensing or other arrangements and the
financial terms of such agreements.
Our needs to implement additional internal systems and infrastructure, including financial
and reporting systems, incidental to being a public company.
The Company may need to raise additional capital; if we do so through public or private
equity oerings, the ownership interest of existing shareholders will be diluted, and the
terms of these securities may include liquidation or other preferences that adversely aect
these shareholders’ rights. If the Company raises additional capital through debt financing,
we may be subject to covenants limiting or restricting our ability to take specific actions,
such as incurring additional debt or liens, making capital expenditures, or declaring
dividends. If we raise additional capital through marketing and distribution arrangements
or other collaborations, strategic alliances or licensing arrangements with third parties,
we may have to relinquish certain valuable rights to our ARC
IM
and ARC
EX
platforms,
technologies, future revenue streams, or research programs, or grant licenses on terms
that may not be favorable to us. If we are unable to obtain adequate financing when
needed and on terms that are acceptable to us, we may have to delay, reduce the scope of
or suspend the implementation of our sales and marketing plan and our ongoing research
and development eorts, which would have a material adverse eect on our business,
financial condition, and results of operations.
The Company’s operating results may vary significantly from period to period, which may
negatively impact the price of its Ordinary Shares in the future.
ONWARD’s revenue and results of operations may fluctuate from period to period due to,
among others:
• The cost of obtaining and maintaining FDA and other regulatory clearances or
approvals for our ARC
IM
and ARC
EX
platforms, as well as any other future indication we
may seek to develop our investigational devices to address.
• Potential revenue generated by sales of our ARC
IM
and ARC
EX
platforms for cleared or
approved indications, if any.
• Expenses incurred in manufacturing and selling our ARC
IM
and ARC
EX
platforms, if
cleared or approved.
• Costs associated with scaling up and expanding our manufacturing capacity.
• Costs associated with building and expanding our sales and marketing eorts in the
US, Europe, and internationally.
• Costs associated with conducting research and development eorts for future
improvements to, or versions of, our ARC
IM
and ARC
EX
platforms.
• Cost of complying with regulatory requirements.
• Costs associated with capital expenditures.
• Costs associated with any future litigation.
• Costs and timing of preparing, filing and prosecuting patent applications, maintaining
and enforcing our IP rights and defending any IP-related claims. And
• The severity, duration and impact of the Covid-19 pandemic, which may adversely
impact our business and planned development and future commercialization of our
ARC
IM
and ARC
EX
platforms.
Risk Management & Control
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
135 ONWARD Annual Report
Because of these and other factors, it is likely that ONWARD will experience fluctuating
revenues, operating results, and cash flows. In that case, period-to-period comparisons
of financial results may not necessarily be meaningful, and results of operations in prior
periods should not be relied upon as an indication of future performance as this will not
meet investor expectations or those of public market analysts.
Any unanticipated change in revenues or operating results is likely to cause the price of our
Ordinary Shares to fluctuate. New information may cause investors and analysts to revalue
our business, which could cause a decline in the price of our Ordinary Shares.
The Company’s ability to use its net operating losses and research and development credit
carryforwards to oset future taxable income may be subject to certain United States
Federal income tax and Dutch tax limitations.
In general, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended,
a corporation that undergoes an “ownership change,” generally defined as a greater
than 50% change by value in its equity ownership over a three-year period, is subject
to limitations on its ability to utilize its pre-change net operating losses (NOL) and its
research and development credit carryforwards to oset future taxable income. The
Company’s existing NOLs and research and development credit carryforwards may
be subject to limitations arising from previous ownership changes, and if it undergoes
an ownership change, our ability to utilize NOLs and research and development credit
carryforwards could be further limited by Sections 382 and 383 of the Internal Revenue
Code. In addition, our ability to deduct net interest expense may be limited if the Company
has insucient taxable income for the year during which the interest is incurred, and any
carryovers of such disallowed interest would be subject to the limitation rules similar to
those applicable to NOLs and other aributes. Future changes in share ownership, some of
which might be beyond our control, could result in an ownership change under Section 382
of the Internal Revenue Code. For these reasons, in the event that ONWARD experiences
a change of control, we may not be able to utilize a material portion of the NOLs, research
and development credit carryforwards or disallowed interest expense carryovers, even if
we aain profitability.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
137 ONWARD Annual Report
We engage and maintain open dialogue with investors and analysts through a variety of
communication channels, including the General Meeting, roadshows, investor conferences,
presentations, and webcasts.
Up-to-date financial information about ONWARD is published on our Investor Relations
website. Investors and analysts are encouraged to visit the website regularly for detailed
coverage of the share price, shareholder meetings, half-year and annual results, press
releases, presentations, webcasts, and investor relations events.
Financial Calendar 2022
• 26 April: Annual Report and Q1 Business Update
• 10 June: Annual General Meeting
• 27 September: Interim Report
• 8 November: Q3 Business Update
During a closed period prior to the publication of the annual and half-year results, we
do not engage in discussion with analysts, investors and financial journalists or make
presentations at investor conferences.
Closed periods based on the 2022 financial calendar:
• 28 March–26 April 2022
• 29 August–27 September 2022
1 2 3 4 5 6 7 8 9 10 11 12 13
Investor Relations
Dividend Policy
ONWARD has not declared or paid dividends on our shares in the past and does not
currently have the intention to pay dividends. Any declaration of dividends will be based
upon the Company’s earnings, financial condition, capital requirements and other factors
considered important by the Board.
Dutch law and the Articles of Association do not require the Company to declare dividends.
Currently, the Board expects to retain all earnings, if any, generated by the ONWARD’s
operations for the development and growth of the business and does not anticipate paying
any dividends to the shareholders in the near future.
Capital Structure & Voting Rights
The authorized share capital of ONWARD comprises 50,937,500 Ordinary Shares and
50,937,500 Preferred Shares. All of the issued Ordinary Shares are fully paid-up and
represent capital in the Company. There are no convertible securities, exchangeable
securities or securities with warrants in the Company. No shareholders have any voting
rights dierent from any other shareholder and no voting rights are limited in any
manner. ONWARD is not aware of any agreements that might result in a limitation of the
transferability of the voting rights on shares in its capital.
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139 ONWARD Annual Report
Shareholder Structure
Pursuant to the Dutch Financial Supervision Act (Wet op het financieel toezicht),
substantial holdings in the Company must be disclosed to the Netherlands Authority for
the Financial Markets (Stichting Autoriteit Financiële Markten, AFM). According to the
register kept by the AFM the following shareholders disclosed that they have a direct
or indirect (potential) interest between 3% and 25% in the Company’s total issued share
capital as at 31 December 2021:
• NRT Holdings LLC (12.30%, notification date 22 October 2021)
• Inkef Capital B.V. (12.26%, notification date 22 October 2021)
• LSP V Management B.V. (11.48%, notification date 22 October 2021)
• Wellington Partners Nominee Ltd. (10.94%, notification date 22 October 2021)
• GIMV NV (10.82%, notification date 22 October 2021)
• Stichting G-Therapeutics Participaties (8.94%
a
, notification date 22 October 2021)
• Staat der Nederlanden (Invest-NL Capital) (3.65%, notification date 22 October 2021)
• D.L. Marver (3.23%, notification date 22 October 2021)
a: The 8.94% interest includes 3.20% of D.L. Marver’s holding.
1 2 3 4 5 6 7 8 9 10 11 12 13
Listing
The shares of ONWARD Medical N.V. trade on Euronext in Brussels (primary listing) and
Euronext Amsterdam (secondary listing) under the symbol “ONWD” since the IPO on 21
October 2021.
Share Price
Analyst Coverage
ONWARD was covered by two brokers at the end of 2021.
Broker Analysts
Degroof Petercam David Seynnaeve, PhD and Laura Roba
Kepler Cheuvreux Damien Choplain and Daan Vandenberk, CFA
Investor Relations
14 15 16 17 18 19 20 21 22 23 24 25
141 ONWARD Annual Report
Provided below is the report of the Non-Executive Directors of the Company for the financial
year 2021, as referred to in best practice provision 5.1.5 of the CGC.
Supervision by the Non-Executive Directors
The Non-Executive Directors are in charge of supervising the policies implemented by the
Executive Director and the management team, and the general aairs of the Company and
its aliated entities, including the deployment of the Company’s strategy regarding long-
term value creation.
With a view of maintaining supervision of the Company, the Non-Executive Directors
regularly discussed strategic maers with the Executive Director and management team
during meetings of the Board of Directors, such as the annual financial reports, financing
transactions, yearly budget and long-term business plans.
Furthermore, the Non-Executive Directors have examined and monitored each and all stages
of the domiciliation process and taken all relevant decisions.
The Board has allocated certain specific responsibilities to the Audit Commiee,
Compensation Commiee and the Nomination and Corporate Governance Commiee.
Further details on how these Commiees have carried out their duties are set forth in the
sections below pertaining to each commiee. The Non-Executive Directors have been
regularly informed by each commiee of the results and recommendations of these meetings
in accordance with best practice provision 2.3.5 of the CGC, and the conclusions of those
commiees were considered when draing this report of the Non-Executive Directors.
1 2 3 4 5 6 7 8 9 10 11 12 13
Report of the
Non-Executive Directors
Audit Commiee
The main topics discussed by the Commiee in 2021 were:
• The operation of the internal risk management and control systems, including
supervision of the enforcement of the relevant legislation and regulations and
supervision of the operation of codes of conduct
• The provision of financial information by the company (including but not limited to
the choice of accounting policies, application and assessment of the eects of new
rules, information about the treatment of estimated items in the financial statements,
forecasts and external auditors)
• Relations with the external auditor, including the audit plan and the external auditor’s
independence (also considering any non-audit services provided) and remuneration
• The financing of the company
• The need for an internal audit function
• Various updates on the application of information and communication technology,
including cyber security maers
The Commiee made recommendations and issued advice in relation to these topics to
the entire Board for approval (if applicable). During 2021, since becoming a listed entity, the
Audit Commiee held one meeting (aendance details provided in the table below).
14 15 16 17 18 19 20 21 22 23 24 25
143 ONWARD Annual Report
Compensation Commiee
The main activities carried out by the Compensation Commiee during 2021 were:
• Submied proposals to the board concerning changes to the Company’s
compensation policy
• Submied proposals to the board concerning the compensation of individual Directors
and the management team that included the compensation structure, amount of fixed
and variable compensation components, applicable performance criteria, scenario
analyses and pay ratios within the group
• Approved the proposal to grant stock options for the management team
• Evaluated a preliminary proposal of the employee stock ownership plan (reserved to
non-director employees)
• Prepared the compensation report
The Commiee made recommendations and issued advice in relation to these topics
were made by the Commiee to the Board for approval (if applicable). During 2021, since
becoming a listed entity, the Compensation Commiee held one meeting (aendance
details provided in the table below).
Nomination & Corporate Governance Commiee
The main activities carried out by the Nomination and Corporate Governance Commiee
during 2021 were:
• Established selection criteria and appointment procedures for directors
• Reviewed the size and composition of the Board and submied proposals for the
composition profile of the Board (when required)
• Reviewed the functioning of individual directors and reported on the results of the
review to the Board
1 2 3 4 5 6 7 8 9 10 11 12 13
• Draed a plan for the succession of directors
• Submied proposals for (re)appointment of directors
• Supervised the policy of the Board regarding the selection criteria and appointment
procedures for the Company’s senior management and executive ocers
• Examined the corporate governance report pursuant to applicable law
A search for new Directors to the Board was initiated prior to the IPO and the recruiter
provided several potential candidates to the Commiee. There has been considerable
communication among Commiee members (including the topics above as well as
candidate screening and feedback, Chairman interactions with search firm etc.) but no
formal Commiee meeting was held in 2021 since the IPO in October 2021. The Commiee
made recommendations and issued advice in relation to these topics to the Board for
approval (if applicable) based on these communications.
The Non-Executive Directors also examined the report prepared by the Compensation
Commiee then approved by the Board. The Non-Executive Directors were able to review
and evaluate the performance of the Nomination and Corporate Governance Commiee.
There is no need to amend the size or composition of any of the commiees.
Evaluation
Each year the Non-Executive Directors should evaluate their own functioning, the
functioning of the Board commiees and the functioning of the Executive Directors.
Since ONWARD became a listed company only in October 2021, following its initial
public oering, the Board has not yet formalized the policy and process for evaluating its
functioning. This is a deviation from the requirements of best practice provisions 2.1.7 and
2.1.8 of the CGC. Also refer to the section ‘Deviations from the Best Practices Provisions of
the Dutch Corporate Governance Code’ of the governance section for further information.
The Board believes that its commiees have functioned well in carrying out their duties to
the extent possible for the 2021 year.
Report of the Non-Executive Directors
14 15 16 17 18 19 20 21 22 23 24 25
145 ONWARD Annual Report
Internal Audit Function
As per the recommendation of the Audit Commiee, the Board concluded that due to
the size of the Company it does not yet require an internal audit function to be created.
The Board has assessed whether adequate alternative measures have been taken and
will consider each year whether it is necessary to establish an internal audit department.
In arriving at this conclusion, the Board took into consideration that the Company
has provided for management to support the assessment and testing of our risk
management and control systems.
Independence of the Non-Executive Directors
Each Non-Executive Director owes a duty to the Company to properly perform the duties
assigned to them and to act in the Company’s corporate interest. Under Dutch law, the
Company’s corporate interest extends to the interests of all our stakeholders, including
shareholders, creditors, and employees.
The Non-Executive Directors have determined that five of the eight Non-Executive
Directors do not qualify as independent in accordance with best practice provisions 2.1.7
and 2.1.8 of the CGC. Prof. Courtine, one of the founders of ONWARD, is considered “not
independent” as he is the Chief Science Ocer of the Company and receives personal
compensation for this role. Regina Hodits, John de Koning, Roel Bulthuis, and Patrick
Van Beneden are considered “not independent” as they are representatives of major
shareholders holding at least 10% of the shares in the Company (Wellington, LSP, Inkef
and GIMV). These four shareholders have a long-term interest in the Company and were
willing to back this up by making senior partners or sta with relevant knowledge and
experience available to the Company. Also refer to the paragraph ‘Deviations from the
Best Practices Provisions of the Dutch Corporate Governance Code’ of the governance
section for further information.
1 2 3 4 5 6 7 8 9 10 11 12 13
Report of the Non-Executive Directors
14 15 16 17 18 19 20 21 22 23 24 25
147 ONWARD Annual Report
21 October – 31 December 2021
Board of Directors Audit Commiee Compensation Commiee
Nomination & Corporate Governance
Commiee
Member & Principal Position
Independent
According to CGC
% of Aendance at
Meetings
Member
Aendance % at
Meetings
Member
Aendance % at
Meetings
Member
Aendance % at
Meetings
Dave Marver Executive
Director & CEO
No 100%
Jan Øhrstrøm Non-Executive
Director & Chairperson
Yes 100% X
a
100% X
a
100%
Grégoire Courtine
Non-Executive Director and
CSO
No 100%
Ian Curtis
Non-Executive Director and
Vice-Chairperson
Yes 100% X
a
100%
Fredericus Colen
Non-Executive Director
Yes 100% X 100% X 100%
Regina Hodits
Non-Executive Director
No 100% X 100%
Roel Bulthuis
Non-Executive Director
No 100% X 100%
John de Koning
Non-Executive Director
No 100% X 100%
Patrick Van Beneden
Non-Executive Director
No 100% X 100%
Number of Meetings Held: 1 1 1 0
b
a: Chairperson of the respective commiee.
b: No formal Commiee meeting was held in 2021 since the IPO in October 2021
1 2 3 4 5 6 7 8 9 10 11 12 13
Meetings of the
Board & Commiees
Report of the Non-Executive Directors
14 15 16 17 18 19 20 21 22 23 24 25
149 ONWARD Annual Report
The Report of the Board of Directors (the Report) (consisting of pages 4 up to and including
139) and such parts of the financial statements as referred to in the Report, comprise the
Bestuursverslag, within the meaning of article 2:391 of the DCC.
The Board of Directors confirms, in accordance with best practice provision 1.4.3 of the
Dutch Corporate Governance Code, and with reference to the risk management and
control section on pages 107–134 and the financial review on pages 76–81, that to the best
of its knowledge:
• The Report provides sucient insights into any deficiencies in the eectiveness of the
internal risk and control systems; no deficiencies in the eectiveness of the internal risk
and control systems have been identified
• The Company’s internal risk management and control systems provide reasonable
assurance that financial reporting does not contain any material inaccuracies
• There is a reasonable expectation that the Company will be able to continue its
operations and meet its liabilities for at least 12 months. Therefore, it is appropriate to
adopt the going concern basis in preparing the financial reporting, as referred to in note
1.6 of the Consolidated Financial Statements
• There are no material risks or uncertainties that could reasonably be expected to have
a material adverse eect on the continuity of the Company’s operations in the coming
twelve months
1 2 3 4 5 6 7 8 9 10 11 12 13
Board of Directors’
Statements
With reference to section 5.25c paragraph 2c of the Financial Markets Supervision Act, the
Board states that, to the best of its knowledge:
• The consolidated financial statements as at and for the year ended 31 December
2021, which have been prepared in accordance with International Financial Reporting
Standards as adopted by the European Union and with Part 9 of Book 2 of the Dutch
Civil Code, give a true and fair view of the assets, liabilities, financial position, and loss
of the Company and the undertakings included in the consolidation taken as a whole
• The Report provides a fair view of the situation on the balance sheet date and of
developments during the financial year of the issuer and of its aliated companies
whose information has been included in its financial statements, together with a
description of the main risks the issuer faces.
Amsterdam, 25 April 2022 – Board of Directors
14 15 16 17 18 19 20 21 22 23 24 25
151 ONWARD Annual Report
1 2 3 4 5 6 7 8 9 10 11 12 13
Remuneration
Report
This remuneration report gives an overview of the remuneration of the Board in 2021 and
explains how this relates to the Company’s policy with regard to the remuneration of its
Non-Executive and Executive Directors (the Compensation Policy), which policy was
adopted at the Company’s general meeting on 11 October 2021. This Remuneration Report
has been prepared in line with Section 2:135b of the Dutch Civil Code and best practice
provision 3.4.1 of the CGC. This report will be submied to the Annual General Meeting
(AGM) for an advisory vote. The first AGM of the Company is scheduled for 10 June 2022.
Eective as of 21 October 2021, the Company completed its conversion into an N.V..
The Compensation Policy is available on the Company’s website (onwd.com) under
Governance Documents.
14 15 16 17 18 19 20 21 22 23 24 25
153 ONWARD Annual Report
Remuneration of the Executive Director
The annual remuneration of the Executive Director comprises the following two components:
• Fixed remuneration, comprising an annual base salary and optional benefits, such
as medical insurance, life insurance, retirement benefits, travel expenses and/or
representation allowances
• Variable remuneration, comprising an annual performance-based compensation
(depending on the achievement of individual and corporate objectives as defined on an
annual basis) and share-based remuneration
Fixed Remuneration
The amount of the fixed remuneration depends on the Executive Director’s function and
responsibilities, as well as typical compensation levels in the industry and in the market,
especially in comparison with similar listed companies in the MedTech sector. The fixed
remuneration is paid out as a monthly salary.
Variable Remuneration
The short-term variable remuneration consists of annual performance-based compensation
(a bonus) defined on a yearly basis. The company takes into account both corporate and
individual objectives. Corporate objectives are centered around strategic R&D deliverables,
key regulatory milestones, financing goals These corporate objectives are measured through
a set of specific targets that help track progress towards their completion.
The long-term variable remuneration consists of periodic grants of stock options that vest
monthly over a four-year vesting period. Stock options create an ownership opportunity
for executives linked to the long-term performance of the company’s share price, aligning
their interests with those of shareholders over the 10-year term of the options. If the share
price does not increase from the date of grant, no value is realized under the scheme. Stock
options are commonly leveraged as the primary equity vehicle amongst our industry peer
group in Europe and the US. Award sizes are determined at the point of grant in reference to
competitive award values and percentage of ownership delivered within our peer group.
1 2 3 4 5 6 7 8 9 10 11 12 13
The Company has implemented share-based remuneration as follows:
• Share-based remuneration takes the form of options for shares
• These options may not be transferred, pledged or otherwise encumbered; subject to,
amongst others, the applicable yearly exercise periods, they may be exercised aer
expiration of at least 10 years aer their issuance
• In case of termination of the management agreement of an Executive Director (other
than termination by the Executive Director for good cause) who holds share options, or
if that Executive Director is dismissed, such options are subject to reverse vesting (and
as such will be forfeited) over a period of 36 months aer their grant
• The plan is not based on the achievement of specific performance related KPI’s.
However, the size of the stock option grant is linked to the job grade of the position and
is contingent on the performance of the individual in the previous calendar year
• The plan is based on the premise that stock options contain an inherent performance
criterion for the recipient, who is invested in the successful performance of the
company leading to an increase in the share price
There are no specific performance conditions associated to this grant, only a service
condition. This is a deviation from the requirements of best practice provision 3.1.2 v of the
CGC. Also refer to the section ‘Deviations from the Best Practices Provisions of the Dutch
Corporate Governance Code’ of the governance section for further information.
Remuneration Report
14 15 16 17 18 19 20 21 22 23 24 25
155 ONWARD Annual Report
An award leer was granted to the Executive Director in December 2021 to the varying
degree contingent on the impact and scope of his role. The main conditions for exercise of
these options are described above.
Reduction or Clawback of Variable Remuneration
Pursuant to Dutch law, the variable remuneration of the Executive Director may
be reduced, or the Executive Directors may be obliged to pay part of their variable
remuneration to the Company if certain circumstances apply:
• Test of reasonableness and fairness: according to Dutch law, the Board may adjust
any variable remuneration payable to an Executive Director to an appropriate level
if payment of the variable remuneration were to be unacceptable according to the
criteria of reasonableness and fairness
• Clawback: the Board has the authority under Dutch law to recover from an Executive
Director any variable remuneration paid based on incorrect financial or other data
These rules do not apply to the variable remuneration granted to the Executive Director
prior to the Conversion.
Executive
Director
Financial
Year
Grant
Date
Type of
Security
Options
Vested /
Unvested
Exercise
Price
Expiration
Date
Dave Marver 2021 15/12/2021 Stock
Options
Vested: 0
Unvested:
188,000
EUR 9,70 15/12/2031
1 2 3 4 5 6 7 8 9 10 11 12 13
Contribution to Long-Term Performance & Value Creation
The remuneration of the Executive Director is consistent with and supports ONWARD’s
strategy. It also supports our ongoing eorts to improve our overall performance, facilitate
growth and sustainable success, and enhance our long-term value and interests. As a
result, our compensation packages are designed to enable us to compete in a global
market, including the challenging US labor market, in order to aract both the required
top talent to execute our long-term strategy and the necessary non-executive expertise
to eectively supervise its execution, with the purpose of creating long-term value and
sustainable growth in the best interest of the Company and all of our stakeholders.
Remuneration Report
14 15 16 17 18 19 20 21 22 23 24 25
157 ONWARD Annual Report
Executive Director’s Remuneration for 2021
A detailed breakdown of the remuneration of the Executive Director is presented in the
table below.
a: Share-based remuneration relates to the employee investment plan (EIP) that vested on the date of the IPO (EUR 2,118,495). The
expense relating to the stock options granted 15 December 2021 amounted to EUR 21,289.
EUR’000
Dave Marver CEO since 1 July 2020
2021 2020
Base Salary 340 207
Pension Benefits 28 5
Relocation & Other Benefits 228 –
Total Fixed Compensation 596 212
Annual Performance-Based Compensation 595 50
Share-Based Remuneration / Stock Options 2,140
a
746
Total Variable Compensation 2,735 796
Total Compensation 3,331 1,008
1 2 3 4 5 6 7 8 9 10 11 12 13
Liability Insurance (D&O) & Indemnity
The Company maintains D&O insurance covering the Executive Director, with a reasonable
retained amount. Pursuant to article 23 of the Articles of Association, the Executive
Director is indemnified, held harmless, and reimbursed by the Company for all expenses,
financial eects of judgements, fines, and amounts paid in selement actually and
reasonably incurred by him in connection with an action, suit, proceeding or investigation
against him in his capacity as Executive Director.
Scenario Analyses
Since ONWARD became a listed company only in October 2021, following its initial
public oering, no scenario analysis was taken into consideration in determining the
remuneration of the Executive Director for 2021. This is a deviation from the requirements
of best practice provision 3.4.1iii of the CGC. Also refer to the section ‘Deviations from the
Best Practices Provisions of the Dutch Corporate Governance Code’ of the governance
section for further information.
Performance Assessment
The variable remuneration of the Executive Director is determined by the Board (whereby
the Executive Director has not taken part in the discussions and decision-making by
the Board) based on an annual performance assessment and professional judgement.
The variable remuneration is linked to the performance against a set of financial and
non-financial targets that is consistent with and supportive of the strategy and long-
term interests of the Company. These targets include, among other topics, performance,
business development, strategy, investor relations and general management. Risk
alignment is also embedded in the target seing to promote sound and eective risk
management. The variable remuneration is paid out according to how the Company’s
business develops, the scope of the Executive Director’s achievement, as well as the
realization of the Company’s general objectives.
Remuneration Report
14 15 16 17 18 19 20 21 22 23 24 25
159 ONWARD Annual Report
For our Executive Director, there was a set of both financial and non-financial KPIs as
listed below:
• Complete enrollment in the Up-LIFT Study
• Complete development of ARC
IM
System
• Initiate enrollment in HEMO FiH Hybrid Study
• Establish ONWD as leading stakeholder in SCI community
• Create culture of performance, accountability, and meaning
• Raise capital to sustain operations through mid-2022
For 2021 only the on-target performance and corresponding award was formalized. Aer
conclusion of the financial year, the Board assesses to what extent the KPIs have been
met and determines the bonus payout percentage for the Executive Director. Bonus
compensation is at the discretion of the Remuneration Commiee and ultimately the
Board. On the recommendation of the Remuneration Commiee, it was recognized by the
Board that the company had an exceptional and very successful year that included two
fundraising events in which the CEO played an integral part and the CEO was granted a
175% bonus payout relating to 2021.
Name of Director,
Position
Type of
Performance
Criteria
Relative
Weighting
a. On Target Performance
b. Corresponding Award
Dave Marver, CEO Strategic Objectives 80% a. 100%
b. EUR 272,000
Financial Objectives 20% a. 100%
b. EUR 68,000
1 2 3 4 5 6 7 8 9 10 11 12 13
Remuneration of Non-Executive Directors
It should be in the Non-Executive Directors’ interest to focus on the Company’s sustainable
and long-term successful development. As such, the Company believes that fixed
remuneration for the Non-Executive Directors is eective. Regardless of their remuneration,
all Non-Executive Directors are entitled to reimbursement for their travel expenses.
The fees are as follows:
Determination of Non-Executive Directors’ Remuneration
EUR’000 Chairman Member
Board of Directors 45 45
Audit Commiee 12 6
Compensation Commiee 10 5
Nomination and Corporate Governance
Commiee
8 4
Remuneration Report
14 15 16 17 18 19 20 21 22 23 24 25
161 ONWARD Annual Report
The remuneration of the Non-Executive Directors for 2021 amounted to:
In recognition for his extraordinary contributions in 2021, the Chairman of the Board
was granted a one-time option award of 38,000 shares concurrent with the executive
equity grants. This was in addition to the fees as Chairman of the Board and his various
Commiee positions. This is in deviation from best practice provision 3.3.2 of the CGC,
which recommends against providing equity awards as part of the compensation of a non-
executive director. (Refer to Deviations from the Best Practices Provisions of the Dutch
Corporate Governance Code.)
Name Board
Audit
Commiee
Compensation
Commiee
Nomination
& Corporate
Governance
Commiee
Total 2021
Compensation
Jan Øhrstrøm Chair Chair Chair 533,577
a
Gregoire
Courtine
Member 980,918
b
Fred Colen Member Member Member 96,820
c
a: The compensation includes the vesting of the Employee Investment Plan on IPO, the 2021 expense for the one-o option award of
38,000 shares that was approved by the board and the reimbursement of travel expenses.
b: The compensation includes the remuneration paid in relation to his role as CSO (EUR 118,522), as well as the vesting of the Employee
Investment Plan on IPO (EUR 807,161) and stock options granted in December 2021 under the new long term incentive plan (EUR 7,021).
c: The compensation includes the vesting of the Employee Investment Plan on IPO.
1 2 3 4 5 6 7 8 9 10 11 12 13
Liability Insurance (D&O) & Indemnity
The Company maintains D&O insurance covering all the Non-Executive Directors.
Pursuant to article 23 of the Articles of Association, Non-Executive Directors are
indemnified, held harmless, and reimbursed by the Company for all expenses, financial
eects of judgements, fines, and amounts paid in selement actually and reasonably
incurred by them in connection with an action, suit, proceeding, or investigation against
them in their capacity as Non-Executive Director.
Historical Development
The table below provides an overview of the annual compensation of the Executive
Director and full-time equivalent (FTE) employees for the financial years 2020 and 2021.
The amounts mentioned in the table are gross amounts before the impact of social
security or income tax deductions.
EUR’000 2021 2020 Change %
Net loss of the period 34,314 20,014 -71%
Executive Director 3,331 1,008 65%
a
FTE employees 76.7 55 39%
Employee costs of FTE employees 15,519 8,534 82%
Cost per FTE 202 155 30%
Non-Executive Directors 1,616 959 69%
a: CEO was appointed on 1 July 2020. For comparability the change % was calculated by extrapolating the 2020 salary for 12 months
(EUR 2,016 thousand).
Remuneration Report
14 15 16 17 18 19 20 21 22 23 24 25
163 ONWARD Annual Report
Pay Ratio
Based on best practice provision 3.4.1 of the CGC, the Company shall disclose the pay
ratio between the remuneration of the Executive Directors and that of a representative
reference group of employees of the Company and, if applicable, comment on any
important variation in the pay ratios in comparison with the previous financial year.
The entire workforce of the Company is included in the reference group expressed in the
form of full-time equivalent employees (FTE). The full-time equivalence of each employee
is calculated based on the number of hours worked by the employee in each period,
compared to the maximum number of hours/period allowed, as per the local law prevalent
in the country of operation. As of 31 December 2021, there were 76.7 FTEs.
The calculation of the pay ratios is based on the average of the remuneration received
by the employees of the reference group. The remuneration taken into account is that
received during the year concerned. If all or part of the remuneration was paid in a foreign
currency, the exchange rate used was the average exchange rate of the relevant currency
into euros for the year ended 31 December 2021.
The Company used both fixed and variable remuneration components when determining
the pay ratio for a given year. The pay ratio disclosed by the Company reflects the last
financial year. The average Executive Director to employee pay ratio stands at 16 in 2021
compared to 13 in 2020. For a meaningful comparison, as the CEO was appointed on 1 July
2020, the 2020 pay ratio was calculated by extrapolating the CEO remuneration in 2020
for 12 months (EUR 2,016 thousand).
1 2 3 4 5 6 7 8 9 10 11 12 13
Remuneration Report
14 15 16 17 18 19 20 21 22 23 24 25
Financials
167 ONWARD Annual Report
1 2 3 4 5 6 7 8 9 10 11 12 13
Consolidated Statement
of Profit & Loss
Consolidated Financial Statements
For the Year Ended 31 December
All amounts in EUR ‘000 Notes 2021 2020
Grants 2.1 1,399 800
Total Revenues & Other Income 1,399 800
Science expenses
Research & Development expenses
Clinical & Regulatory expenses
Marketing & Market Access expenses
Patent & related expenses
Quality assurance expenses
General & administrative expenses
2.2,2.9
2.3,2.9
2.4,2.9
2.5,2.9
2.6,2.9
2.7,2.9
2.8,2.9
(2,686 )
(7,932 )
(4,775 )
(1,516 )
(1,361 )
(993 )
(10,667 )
(1,123 )
(5,823 )
(2,770 )
(394 )
(1,186 )
(361 )
(4,655 )
Total Operating Expenses (29,931 ) (16,312 )
Operating Loss for the Period
Financial income
Financial expense
4.5
(28,532 )
(5,713 )
(15,512 )
(4,482 )
14 15 16 17 18 19 20 21 22 23 24 25
169 ONWARD Annual Report
Net Finance Expense (5,713 ) (4,482 )
Loss for the Period Before Taxes
Income tax expense 2.11
(34,245 )
(69 )
(19,994 )
(20 )
Net Loss for the Period (34,314 ) (20,014 )
Aributable to:
Equity holders of the parent
Non-controlling interests
(34,314 )
(20,014 )
(34,314 ) (20,014 )
Earnings Per Share (€):
Basic earnings per share:
Diluted earnings per share:
4.1
4.1
(3.62 )
(3.62 )
(5.56 )
(5.56 )
1 2 3 4 5 6 7 8 9 10 11 12 13
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
171 ONWARD Annual Report
1 2 3 4 5 6 7 8 9 10 11 12 13
For the Year Ended 31 December
All amounts in EUR ‘000 Notes 2021 2020
Net Loss for the Period
Remeasurement of post-employment benefits
5.0
(34,314 )
(714 )
(20,014 )
Other comprehensive income that will not be
reclassified to profit or loss in subsequent pe-
riods (net of tax)
Currency translation dierences
(714 )
(441 )
Other comprehensive income that will be
reclassified to profit or loss in subsequent
periods (net of tax)
Total Comprehensive Result for the Year, Net
of Tax
(34,779 ) (20,420 )
Aributable to:
Equity holders of the parent
Non-controlling interests
(34,779 )
(20,420 )
(34,779 ) (20,420 )
Consolidated Statement
of Comprehensive Income
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
173 ONWARD Annual Report
1 2 3 4 5 6 7 8 9 10 11 12 13
For the Year Ended 31 December
All amounts in EUR ‘000 Notes 2021 2020
Assets
Non-Current Assets
Intangible fixed assets
Property, plant and equipment
Right of use assets
3.0
3.1
3.2
Current Assets
Indirect tax receivables
Receivable from related parties
Other current assets
Cash and cash equivalents
3.3
3.4
3.5
Consolidated Statement
of Financial Position
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
175 ONWARD Annual Report
* Other reserves include the foreign currency translation reserve that qualifies as a legal reserve under Dutch Law.
1 2 3 4 5 6 7 8 9 10 11 12 13
Equity & Liabilities
Equity & Reserves
Issued capital
Share premium
Other reserves*
Retained earnings
4.0
4.0
4.0
(214 )
(75,974 )
(53,111 )
Total Equity Aributable to Shareholders 82,683 (32,095 )
Non-Current Liabilities
Interest-bearing loans
Deferred tax liability
Lease liability
Post-employment benefits
4.2
2.11
3.2
5.0
Current Liabilities
Income tax liabilities
Lease liability
Trade payables
Other payables
3.2
3.6
3.7
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
177 ONWARD Annual Report
All amounts in EUR ‘000 Notes Issued Capital* Share Premium Other Reserves** Retained Earnings 2020
As at 1 January 2020 – 3,083 15,127 (33,131 ) (14,923 )
Loss for the year 2020
Other comprehensive income
(441 )
(20,014 )
(20,014 )
(406 )
Total comprehensive result
Share based payments
Issue of share capital
(441 )
(19,979 )
(20,420 )
As at 31 December 2020 4.0 – 3,083 17,933 (53,111 ) (32,095 )
As at 1 January 2021 – 3,083 17,933 (53,111 ) (32,095 )
Loss for the year 2021
Other comprehensive income
(34,314 )
(714 )
(34,314 )
(465 )
Total comprehensive result – – 249 (35,028 ) (34,779 )
Conversion of preference A-shares
Reversed stock-split
Share based payments: EIP
Share based payments: EIP accelerated vesting
Conversion of CLA
Issue of share capital: EPFL option
Issue of share capital: IPO
Issue of share capital: Over-allotment
Capitalization of costs related to IPO and issue of new shares
Share based payments: LTIP
4.0,4.1
4.0
2.10
2.10
4.0,4.1
4.0
4.0
4.0
4.0
2.10
(2,445 )
(4,939 )
(14,794 )
(12,165 )
(4,939 )
As at 31 December 2021 4.0 3,622 155,248 (214 ) (75,974 ) 82,683
* share capital amounts to EUR 28.74 as at 31 December 2020
** Other reserves include the foreign currency translation reserve that qualifies as a legal reserve under Dutch Law.
1 2 3 4 5 6 7 8 9 10 11 12 13
Consolidated Statement
of Changes in Equity
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
179 ONWARD Annual Report
1 2 3 4 5 6 7 8 9 10 11 12 13
For the Year Ended 31 December
All amounts in EUR ‘000 Notes 2021 2020
Cash Flows from Operating Activities
Loss for the Period Before Taxes (34,245 ) (19,994 )
Adjusted for:
• Depreciation and impairment of property, plant and
equipment and right-of-use assets
3.1, 3.2 329 271
• Share based payment transaction expense 2.10 8,564 2,700
• Post-employment benefits 246 (5 )
• Net finance costs 5,713 4,482
• Net foreign exchange dierences (43 )
• Other non-cash items (2 ) (7 )
Changes in working capital:
Increase (-) Decrease (+) in Trade and other receivables (2,358 ) (221 )
Increase (+) Decrease (-) in Trade and other payables 2,097 (48 )
Consolidated Statement
of Cash Flows
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
181 ONWARD Annual Report
Interests received
Interests paid
Income tax paid
Bank Charges paid
4.5
4.5
4.5
(146 )
(14 )
(17 )
(37 )
(31 )
(11 )
Net cash generated /(used) from operating activities (19,874 ) (12,901 )
Cash flows from investing activities
Investments in fixed assets
Investments in intangible fixed assets
3.1
3.0
(91 )
(2,233 )
(173 )
Net cash generated/(used) from investing activities (2,324 ) (173 )
Cash flows from financing activities
Proceeds from interest-bearing loans
Payment of principal portion of lease liabilities
Proceeds from issuance of shares
Transaction costs on issuance of shares
4.2
3.2
4.0
(144 )
(4,601 )
(126 )
Net cash generated/(used) from financing activities 105,361 4,368
Movement in cash and cash equivalents
Cash and cash equivalents at 1 January
Eect of exchange rates on cash and cash equivalents
Changes in cash and cash equivalents during the period
(100 )
(41 )
(8,706 )
Cash and cash equivalents at 31 December 89,443 6,382
1 2 3 4 5 6 7 8 9 10 11 12 13
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
183 ONWARD Annual Report
1. Section 1: General Information & Basis of Preparation
1.1 Corporate Information
General
legal name changed to ONWARD Medical N. V . (“ONWARD”). The registered oce is located
at High T ech Campus 32, Eindhoven, the Netherlands . ONW ARD Medical N. V . is registered in
the Commercial Register of the Chamber of Commerce under number 64598748.
The financial statements have been prepared by the board of directors and were authorized
for issue on 25 April 2022. The financial statements will be submied for adoption to the
General Meeting on 10 June 2022.
1 2 3 4 5 6 7 8 9 10 11 12 13
Notes to the Consolidated
Financial Statements
1.2 Group Information
Information about subsidiaries
The consolidated financial statements of the Group include:
• ONWARD Medical SA, Switzerland; principal activities: the development and
commercialization of an Implantable Neuro Stimulation System (INS) medical device
solution to improve the lives of Spinal Cord Injured people. Holding 100%.
• ONWARD Medical Inc, United States of America; principal activities: the development
and commercialization of a non-invasive medical device solution to improve the lives of
Spinal Cord Injured people. Holding 100%.
1.3 First-time adoption of IFRS
As stated in the special purpose consolidated financial statement of ONWARD Medical
B.V., the financial statements, for the year ended 31 December 2020, were the first the
Group had prepared in accordance with IFRS. Detailed disclosure relating to the first-time
adoption is included in Note 6 of the special purpose consolidated financial statements
that was made publicly available through the Prospectus issued in the lead up to the IPO
that was completed on 21 October 2021.
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
185 ONWARD Annual Report
The statutory financial statements, filed with the Chamber of Commerce, for ONWARD
Medical B.V. for the 2020 financial year, were not consolidated financial statements and
were prepared in accordance with local generally accepted accounting principles (Local
GAAP) in the Netherlands.
Below is a reconciliation of the equity and net loss as stated in the statutory financial
statements, to the equity and net loss as stated in the 2020 special purpose consolidated
financial statements:
2020
Equity balance per statutory financial statements
IFRS adjustment: Cumulative preference A-shares
IFRS adjustment: IAS 19 Swiss pension plan valuation
IFRS adjustment: Foreign currency revaluation of the NRT acquisition,
including deferred tax
240
(31,407)
(399)
(529)
Equity balance per special purpose consolidated financial statements (32,095)
2020
Net loss per statutory financial statements
IFRS adjustment: Cumulative preference A-shares
IFRS adjustment: IAS 19 Swiss pension plan valuation
IFRS adjustment: Share-based payment expense
IFRS adjustment: Lease
(13,823)
(3,537)
4
(2,700)
42
Net loss per special purpose consolidated financial statements (20,014)
1 2 3 4 5 6 7 8 9 10 11 12 13
1.4 Basis of Preparation
The Consolidated financial statements of the Group have been prepared in accordance
with International Financial Reporting Standards (IFRS) and IFRIC interpretations as
adopted by the European Union and with Part 9 of Book 2 of the Dutch Civil Code.
The Consolidated financial statements have been prepared on a historical cost basis.
Income and expenses are accounted for on an accrual basis. The Consolidated financial
statements provide comparative information in respect of the previous period. Certain
prior year amounts have been reclassified for consistency with the current year
presentation. Refer to section 1.10 below.
The Consolidated financial statements are presented in euros and all values are rounded to
the nearest thousand (€000), except when otherwise indicated, and for the number of shares
and the per share amount. Due to rounding, amounts may not add up to totals provided.
1.5 Basis of Consolidation
The Consolidated financial statements comprise the financial statements of the Group
and its subsidiaries as at 31 December 2021. Control is achieved when the Group is
exposed, or has rights, to variable returns from its involvement with the investee and has
the ability to aect those returns through its power over the investee. Specifically, the
Group controls an investee if and only if the Group has:
• Power over the investee (i.e. existing rights that give it the current ability to direct the
relevant activities of the investee)
• Exposure, or rights, to variable returns from its involvement with the investee, and
• The ability to use its power over the investee to aect its returns
The Group re-assesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements of control.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary
and ceases when the Group loses control of the subsidiary. Assets, liabilities, income
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
187 ONWARD Annual Report
and expenses of a subsidiary acquired or disposed of during the year are included in the
statement of comprehensive income from the date the Group gains control until the date
the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are aributed
to the equity holders of the parent of the Group and to the non-controlling interests, even
if this results in the non-controlling interests having a deficit balance. When necessary,
adjustments are made to the financial statements of subsidiaries to bring their accounting
policies into line with the Group’s accounting policies. All intra-group assets and liabilities,
equity, income, expenses and cash flows relating to transactions between members of the
Group are eliminated in full on consolidation.
1.6 Going Concern
As at 31 December 2021 the Company had cash and cash equivalents of EUR 89 million.
Based on cash flow forecasts for the years 2022 and 2023, which include significant
expenses and cash outflows in relation to -among others- the ongoing clinical trials and
the continuation of research and development projects, the Company believes that this
cash position will be sucient to meet the Company’s capital requirements and fund its
operations for at least 12 months as from the date of this Annual Report.
Inherent uncertainties in these forecasts may have an impact on the Company’s cash
position. To continue development and reach commercialization as planned, the Company
may need to aract additional funding in future. Please note that the Company’s long-term
success is contingent on achieving FDA approval and CE mark of its products.
In view of the above, and notwithstanding a loss brought forward of EUR 76 million as of
31 December 2021 the application of the valuation rules in the assumption of a “going
concern” is justified. As a result, the consolidated financial statements have been prepared
on a going concern basis.
1 2 3 4 5 6 7 8 9 10 11 12 13
1.7 Summary of Other Significant Accounting Policies
a) Business Combinations
Business combinations are accounted for using the acquisition method. The cost of an
acquisition is measured as the aggregate of the consideration transferred, measured at
acquisition date fair value and the amount of any non-controlling interest in the acquiree.
For each business combination, the Group elects whether to measure the non-controlling
interest in the acquiree at fair value or at the proportionate share of the acquirer’s
identifiable net assets. Acquisition-related costs are expensed as incurred and included in
administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities
assumed for appropriate classification and designation in accordance with the contractual
terms, economic circumstances and pertinent conditions as at the acquisition date. This
includes the separation of embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, any previously held equity interest is re-
measured at its acquisition date fair value and any resulting gain or loss is recognized in
profit or loss. It is then considered in the determination of goodwill.
Any contingent consideration to be transferred by the acquirer will be recognized at fair
value at the acquisition date. Contingent consideration classified as an asset or liability
that is a financial instrument and within the scope of IFRS 9 Financial Instruments, is
measured at fair value with changes in fair value recognized in the statement of profit
or loss in accordance with IFRS 9. Other contingent consideration that is not within the
scope of IFRS 9 is measured at fair value at each reporting date with changes in fair value
recognized in profit and loss.
b) Current Versus Non-current Classification
The Group presents assets and liabilities in the statement of financial position based on
current/non-current classification. An asset is current when it is:
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
189 ONWARD Annual Report
• Expected to be realized or intended to be sold or consumed in normal operating cycle
• Held primarily for the purpose of trading
• Expected to be realized within twelve months aer the reporting period, or
• Cash or cash equivalent unless restricted from being exchanged or used to sele a
liability for at least twelve months aer the reporting period
All other assets are classified as non-current.
A liability is current when:
• It is expected to be seled in normal operating cycle
• It is held primarily for the purpose of trading
• It is due to be seled within twelve months aer the reporting period, or
• There is no unconditional right to defer the selement of the liability for at least twelve
months aer the reporting period
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
c) Foreign Currencies
The Group’s consolidated financial statements are presented in euros, which is also the
parent company’s functional currency. For each entity, the Group determines the functional
currency and items included in the financial statements of each entity are measured using
that functional currency.
Transactions & Balances
Transactions in foreign currencies are initially recorded by the Group entities at their respective
functional currency spot rates at the date the transaction first qualifies for recognition.
1 2 3 4 5 6 7 8 9 10 11 12 13
Monetary assets and liabilities denominated in foreign currencies are retranslated at the
functional currency spot rate of exchange at the reporting date.
Dierences arising on selement or translation of monetary items are recognized in profit
or loss with the exception of monetary items that are designated as part of the hedge of the
Group’s net investment of a foreign operation. These are recognized in other comprehensive
income until the net investment is disposed of, at which time, the cumulative amount is
reclassified to profit or loss. Tax charges and credits aributable to exchange dierences on
those monetary items are also recorded in other comprehensive income.
Non-monetary items that are measured in terms of historical cost in a foreign currency
are translated using the exchange rates as at the dates of the initial transactions. Non-
monetary items measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value is determined. The gain or loss arising
on translation of non-monetary items measured at fair value is treated in line with the
recognition of gain or loss on change in fair value of the item (i.e., translation dierences on
items whose fair value gain or loss is recognized in other comprehensive income or profit or
loss are also recognized in other comprehensive income or profit or loss, respectively).
Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments
to the carrying amounts of assets and liabilities arising on the acquisition are treated as
assets and liabilities of the foreign operation and translated at the spot rate of exchange at
the reporting date.
Group Companies
On consolidation, the assets and liabilities of foreign operations are translated into euros
at the rate of exchange prevailing at the reporting date and their income statements are
translated at the monthly average exchange rates.
The exchange dierences arising on translation for consolidation are recognized in
other comprehensive income. On disposal of a foreign operation, the component of other
comprehensive income relating to that particular foreign operation is recognized in profit
or loss.
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
191 ONWARD Annual Report
1.8 Significant Accounting Judgments, Estimates & Assumptions
The preparation of the Group’s consolidated financial statements requires management
to make judgments, estimates and assumptions that aect the reported amounts of
revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the
end of the reporting period. However, uncertainty about these assumptions and estimates
could result in outcomes that require a material adjustment to the carrying amount of the
asset or liability aected in future periods.
The Group based its assumptions and estimates on parameters available when
the consolidated financial statements were prepared. Existing circumstances and
assumptions about future developments, however, may change due to market changes or
circumstances arising beyond the control of the Group. Such changes are reflected in the
assumptions when they occur.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognized in the period in which the estimate is revised if the
revision aects only that period, or in the period of revision and the future periods if the
revision aects both current and future periods.
The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year,
are included in each of the respective notes as referenced below:
Research & Development
Share-based Payments
Post-employment Benefits
Taxes
(Note 2.3)
(Note 2.10)
(Note 5.0)
(Note 2.11)
1 2 3 4 5 6 7 8 9 10 11 12 13
1.9 New Accounting Standards & Developments
1.9.1 New and Amended Standards and Interpretations
Several amendments apply for the first time in 2021, but do not have an impact on the
consolidated financial statements of the Group. The Group has not early adopted any
standards, interpretations or amendments that have been issued but are not yet eective.
The nature and the impact of each of the following new standards, amendments and/or
interpretations are described below:
• Amendments to IFRS 4 Insurance Contracts – deferral of IFRS 9, eective 1 January 2021
• Amendments to IFRS 9 Financial Instruments, IFRS 7 Financial Instruments: Disclosures,
IAS 39 Financial Instruments: Recognition and measurement, IFRS 4 Insurance
contracts and IFRS 16 Leases- Interest Rate Benchmark Reform – Phase 2, eective 1
January 2021
• Amendments to IFRS 16 Leases – Covid-19 related rent concessions beyond 30 June
2021, eective 1 April 2021
Amendments to IFRS 4 Insurance Contracts – deferral of IFRS 9
The amendment to IFRS 4 provides a temporary exemption that permits, but does not
require, the qualifying insurer to apply IAS 39 Financial Instruments: Recognition and
Measurement rather than IFRS 9 for annual periods beginning before 1 January 2023.
This standard is not applicable to the Group.
Amendments to IFRS 9 Financial Instruments, IFRS 7 Financial Instruments: Disclosures,
IAS 39 Financial Instruments: Recognition and measurement, IFRS 4 Insurance
contracts and IFRS 16 Leases- Interest Rate Benchmark Reform – Phase 2, eective 1
January 2021
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
193 ONWARD Annual Report
The amendments provide temporary reliefs which address the financial reporting eects
when an interbank oered rate (IBOR) is replaced with an alternative nearly risk-free
interest rate (RFR).
The amendments include the following practical expedients:
• A practical expedient to require contractual changes, or changes to cash flows that
are directly required by the reform, to be treated as changes to a floating interest rate,
equivalent to a movement in a market rate of interest
• Permit changes required by IBOR reform to be made to hedge designations and hedge
documentation without the hedging relationship being discontinued
• Provide temporary relief to entities from having to meet the separately identifiable
requirement when an RFR instrument is designated as a hedge of a risk component.
These amendments had no impact on the consolidated financial statements of the
Group. The Group intends to use the practical expedients in future periods if they
become applicable.
Amendments to IFRS 16 Leases – Covid-19 related rent concessions beyond 30 June
2021, eective 1 April 2021
The amendments provide relief to lessees from applying IFRS 16 guidance on lease
modification accounting for rent concessions arising as a direct consequence of the
Covid-19 pandemic. As a practical expedient, a lessee may elect not to assess whether
a Covid-19 related rent concession from a lessor is a lease modification. A lessee that
makes this election accounts for any change in lease payments resulting from the Covid-19
related rent concession the same way it would account for the change under IFRS 16, if the
change were not a lease modification. This amendment has extended the relief by one year
to cover rent concessions that reduce only lease payments due on or before 30 June 2022.
The amendment applies to annual reporting periods beginning on or aer 1 April 2021.
These amendments had no impact on the consolidated financial statements of the Group.
1 2 3 4 5 6 7 8 9 10 11 12 13
1.9.2 Standards Issued but Not Yet Eective
The new and amended standards and interpretations that are issued, but not yet eective,
up to the date of issuance of the Group’s financial statements are disclosed below.
The Group intends to adopt these new and amended standards and interpretations, if
applicable, when they become eective.
IFRS 17 Insurance Contracts
In May 2017, the IASB issued IFRS 17 Insurance Contracts (IFRS 17), a comprehensive new
accounting standard for insurance contracts covering recognition and measurement,
presentation and disclosure. Once eective, IFRS 17 will replace IFRS 4 Insurance
Contracts (IFRS 4) that was issued in 2005. IFRS 17 applies to all types of insurance
contracts (i.e., life, non-life, direct insurance and re-insurance), regardless of the type of
entities that issue them, as well as to certain guarantees and financial instruments with
discretionary participation features.
A few scope exceptions will apply. The overall objective of IFRS 17 is to provide an
accounting model for insurance contracts that is more useful and consistent for insurers. In
contrast to the requirements in IFRS 4, which are largely based on grandfathering previous
local accounting policies, IFRS 17 provides a comprehensive model for insurance contracts,
covering all relevant accounting aspects. The core of IFRS 17 is the general model,
supplemented by:
• A specific adaptation for contracts with direct participation features (the variable
fee approach)
• A simplified approach (the premium allocation approach) mainly for short-duration contracts
IFRS 17 is eective for reporting periods beginning on or aer 1 January 2023, with
comparative figures required. Early application is permied, provided the entity also
applies IFRS 9 and IFRS 15 on or before the date it first applies IFRS 17. This standard is not
applicable to the Group.
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
195 ONWARD Annual Report
Amendments to IAS 1: Classification of Liabilities as Current or Non-current
In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the
requirements for classifying liabilities as current or non-current. The amendments clarify:
• What is meant by a right to defer selement
• That a right to defer must exist at the end of the reporting period
• That classification is unaected by the likelihood that an entity will exercise its
deferral right
• That only if an embedded derivative in a convertible liability is itself an equity
instrument would the terms of a liability not impact its classification.
The amendments are eective for annual reporting periods beginning on or aer 1 January
2023 and must be applied retrospectively. The Group is currently assessing the impact
the amendments will have on current practice and whether existing loan agreements may
require renegotiation.
Amendments to IFRS 3: Reference to the Conceptual Framework
In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations - Reference
to the Conceptual Framework. The amendments are intended to replace a reference to the
Framework for the Preparation and Presentation of Financial Statements, issued in 1989,
with a reference to the Conceptual Framework for Financial Reporting issued in March
2018 without significantly changing its requirements. The amendments add an exception
to the recognition principle of IFRS 3 to avoid the issue of potential ‘day 2’ gains or losses
arising for liabilities and contingent liabilities that would be within the scope of IAS 37
or IFRIC 21 Levies, if incurred separately. At the same time, the amendments add a new
paragraph to IFRS 3 to clarify that contingent assets do not qualify for recognition at the
acquisition date. The amendments are eective for annual reporting periods beginning on
or aer 1 January 2022 and apply prospectively. The amendments are not expected to have
a material impact on the Group.
1 2 3 4 5 6 7 8 9 10 11 12 13
Amendments to IAS 16: Property, Plant and Equipment Proceeds before intended use
In May 2020, the IASB issued Property, Plant and Equipment — Proceeds before Intended
Use, which prohibits entities deducting from the cost of an item of property, plant and
equipment, any proceeds from selling items produced while bringing that asset to the
location and condition necessary for it to be capable of operating in the manner intended
by management. Instead, an entity recognises the proceeds from selling such items, and
the costs of producing those items, in profit or loss. The amendment is eective for annual
reporting periods beginning on or aer 1 January 2022 and must be applied retrospectively
to items of property, plant and equipment made available for use on or aer the beginning
of the earliest period presented when the entity first applies the amendment. The
amendments are not expected to have a material impact on the Group.
Amendments to IAS 37: Onerous Contracts – Costs of Fulfilling a Contract
In May 2020, the IASB issued amendments to IAS 37 to specify which costs an entity
needs to include when assessing whether a contract is onerous or loss-making. The
amendments apply a “directly related cost approach”. The costs that relate directly to a
contract to provide goods or services include both incremental costs and an allocation
of costs directly related to contract activities. General and administrative costs do not
relate directly to a contract and are excluded unless they are explicitly chargeable to
the counterparty under the contract. The amendments are eective for annual reporting
periods beginning on or aer 1 January 2022. The Group will apply these amendments to
contracts for which it has not yet fulfilled all its obligations at the beginning of the annual
reporting period in which it first applies the amendments. The amendments are not
expected to have a material impact on the Group.
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2
In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2
Making Materiality Judgements, in which it provides guidance and examples to help entities
apply materiality judgements to accounting policy disclosures. The amendments aim to
help entities provide accounting policy disclosures that are more useful by replacing the
requirement for entities to disclose their ‘significant’ accounting policies with a requirement
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
197 ONWARD Annual Report
to disclose their ‘material’ accounting policies and adding guidance on how entities apply
the concept of materiality in making decisions about accounting policy disclosures.
The amendments to IAS 1 are applicable for annual periods beginning on or aer 1 January
2023 with earlier application permied. Since the amendments to the Practice Statement
2 provide non-mandatory guidance on the application of the definition of material to
accounting policy information, an eective date for these amendments is not necessary.
The Group is currently assessing the impact of the amendments to determine the impact
they will have on the Group’s accounting policy disclosures.
Definition of Accounting Estimates - Amendments to IAS 8
In February 2021, the IASB issued amendments to IAS 8, in which it introduces a definition
of ‘accounting estimates’. The amendments clarify the distinction between changes in
accounting estimates and changes in accounting policies and the correction of errors.
Also, they clarify how entities use measurement techniques and inputs to develop
accounting estimates.
The amendments are eective for annual reporting periods beginning on or aer 1 January
2023 and apply to changes in accounting policies and changes in accounting estimates
that occur on or aer the start of that period. Earlier application is permied as long as
this fact is disclosed.
The amendments are not expected to have a material impact on the Group.
Amendments to IAS 12 - Deferred Tax related to Assets and Liabilities arising from a
Single Transaction
In May 2021, the Board issued amendments to IAS 12, which narrow the scope of the initial
recognition exception under IAS 12, so that it no longer applies to transactions that give
rise to equal taxable and deductible temporary dierences. The amendments clarify
1 2 3 4 5 6 7 8 9 10 11 12 13
that where payments that sele a liability are deductible for tax purposes, it is a maer
of judgement (having considered the applicable tax law) whether such deductions are
aributable for tax purposes to the liability recognized in the financial statements (and
interest expense) or to the related asset component (and interest expense). This judgement
is important in determining whether any temporary dierences exist on initial recognition
of the asset and liability. Under the amendments, the initial recognition exception does not
apply to transactions that, on initial recognition, give rise to equal taxable and deductible
temporary dierences. It only applies if the recognition of a lease asset and lease liability (or
decommissioning liability and decommissioning asset component) give rise to taxable and
deductible temporary dierences that are not equal. An entity should apply the amendments
to transactions that occur on or aer the beginning of the earliest comparative period
presented. Eective for annual periods beginning on or aer 1 January 2023.
Amendments to IFRS 1: First-time Adoption of International Financial Reporting
Standards – Subsidiary as a first-time adopter
As part of its 2018-2020 annual improvements to IFRS standards process, the IASB
issued an amendment to IFRS 1 First-time Adoption of International Financial Reporting
Standards. The amendment permits a subsidiary that elects to apply paragraph D16(a)
of IFRS 1 to measure cumulative translation dierences using the amounts reported
by the parent, based on the parent’s date of transition to IFRS. This amendment is also
applied to an associate or joint venture that elects to apply paragraph D16(a) of IFRS 1. The
amendment is eective for annual reporting periods beginning on or aer 1 January 2022
with earlier adoption permied. The amendments are not expected to have a material
impact on the Group.
IFRS 9 Financial Instruments – Fees in the ’10 per cent’ test for derecognition of
financial liabilities
As part of its 2018-2020 annual improvements to IFRS standards process the IASB issued
amendment to IFRS 9. The amendment clarifies the fees that an entity includes when
assessing whether the terms of a new or modified financial liability are substantially
dierent from the terms of the original financial liability. These fees include only those paid
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
199 ONWARD Annual Report
or received between the borrower and the lender, including fees paid or received by either
the borrower or lender on the other’s behalf. An entity applies the amendment to financial
liabilities that are modified or exchanged on or aer the beginning of the annual reporting
period in which the entity first applies the amendment.
The amendment is eective for annual reporting periods beginning on or aer 1 January
2022 with earlier adoption permied. The Group will apply the amendments to financial
liabilities that are modified or exchanged on or aer the beginning of the annual reporting
period in which the entity first applies the amendment. The amendments are not expected
to have a material impact on the Group.
1.10 Changes in Accounting Policies & Disclosures
1.10.1 Change in Disclosure in the Consolidated Statement of Profit & Loss
The Group has reassessed the presentation of line items in the consolidated statement
of profit and loss and decided to present the costs of Quality assurance as a separate
line item as opposed to a component of General and administrative expenses. This
presentation aligns with the internal budgeting and monitoring process. Quality assurance
is a key function towards obtaining regulatory approval for commercialization. This
presentation is also in line with companies within the industry and will therefore
enhance comparability.
Also the following notes were restated:
Reported:
2020
Restated:
2020
Change
Quality assurance expenses
General and administrative expenses
–
5,016
361
4,655
361
(361)
1 2 3 4 5 6 7 8 9 10 11 12 13
2. Section 2: Results of the Year
Reported:
2020
Restated:
2020
Change
2.7 Quality assurance expenses
Sta costs
Outsourced cost
–
–
318
43
318
43
– 361 361
Reported:
2020
Restated:
2020
Change
2.8 General and administrative expenses
Sta costs
Outsourced cost
Depreciation
2,765
2,189
62
2,447
2,146
62
(318)
(43)
–
5,016 4,655 (361)
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
201 ONWARD Annual Report
2.0 Segment Reporting
Based on the organizational structure, as well as the nature of financial information
available and reviewed by the Company’s chief operating decision makers to assess
performance and make decisions about resource allocations, the Company has concluded
that its total operations represent one reportable segment.
2.1 Revenues & Other Income
Accounting Policy: Government subsidies are recognized where there is reasonable
assurance that the subsidy will be received, and all aached conditions will be complied
with. When the subsidy relates to an expense item, it is recognized as income on a
systematic basis over the periods that the related costs, for which it is intended to
compensate, are expensed. The governments subsidies are presented on a gross basis
except for the WBSO (“Wet Bevordering Speur & Ontwikkeling”) that is presented need
with the expensed amount for personnel expenses.
2021 2020
Government subsidies (EU)
Total revenues and other income
1,399
1,399
800
800
1 2 3 4 5 6 7 8 9 10 11 12 13
Recognized
Grants Total Grant* 2021 2020
RESTORE
DISPERSE
WALKAGAIN
CONFIRM
BESTABLE
SWISS LOCAL (one -os)
PREP2GO
DARPA
ZonMW
370
311
500
416
99
–
348
1,152
250
–
–
–
139
16
41
139
981
83
37
36
185
197
25
24
104
192
–
Total 1,399 800
Government subsidies have been received for the research and development of several
development projects. There are no unfulfilled conditions or contingencies aached to
these subsidies.
*) Please refer to the terms and conditions of the subsidies included below.
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
203 ONWARD Annual Report
Terms & Conditions
CONFIRM
This Eurostars funding agreement with the Swiss Innovation Agency Innosuisse for a
total amount of EUR 416,293 started in May 2019 and ended in October 2021, with follow
up reporting resulting in the additional 25.75% granting of the allocated amount. The
remainder of the grant was received in 2021 aer submission of the final report. In this
project, ONWARD collaborated with Inomed A.G., Universitätsklinikum Heidelberg and
EPFL to develop an intra-operative neuromonitoring system and algorithms facilitating the
surgical implantation of ARC
IM
.
BESTABLE
This Eurobench funding agreement with PKF ATTEST INNCOME S.L. and the Spanish
National Research Council CSIC for a total amount of EUR 100,000 started in September
2019 and ended in December 2021. An amount equal to 85% of the grant is paid during
the grant period in tranches in 2019, 2020 and 2021. The remaining 15% of the total
grant amount will be paid aer submission of the final report. In this project, ONWARD
is collaborating with the Technical University of Del and the University Rehabilitation
Institute to develop a benchmarking system for assessment of balance performance.
PREP2GO
This Eurostars funding agreement with the Netherlands enterprise agency RVO for a total
amount of EUR 347,802 started in April 2020 and ends in September 2022. An amount
equal to 90% of the grant is paid during the grant period in tranches in 2020, 2021 and
2022. The remaining 10% of the grant is being paid aer submission of the final report.
In this project, ONWARD is collaborating with Zurich Medtech A.G., IT’IS Foundation,
Universitair Medisch Centrum Utrecht and EPFL to automatize the simulation framework
that was developed in the RESTORE project, to facilitate the pre-operative planning for
ARC Therapy for clinicians.
1 2 3 4 5 6 7 8 9 10 11 12 13
DARPA
This US Department of Defense funding agreement for phase 1 for a total amount of
EUR 1,152,000 (or USD 1,354,000) started in October 2020 and ends in March 2022.In
October 2021 an amount of EUR 477,000 (or USD 560,000) was accelerated from phase
2 and made available for spending in phase 1. The grant amounts are being charged on a
monthly basis over the 18 months period based on actual incurred costs. The agreement
with the DOD provides for additional funding beyond March 2022. Phase 2 was approved
in February 2022 for an amount of EUR 1,318,798 (or USD 1,500,000). In this project,
ONWARD is collaborating with a large consortium of academic partners, companies, and
consultants to develop a new clinical intervention to modulate blood pressure and spinal
cord perfusion and oxygenation in the hours following SCI. This correspond to a roadmap
development of ARC-IM to be used in the hours following SCI.
ZonMW
This Dutch funding agreement is with the Netherlands Organisation for Health Research
and development for a total amount of EUR 250,000 that started in January 2021 and
ends in January 2024. An amount equal to 80% of the grant is being paid during the grant
period in three equal tranches in 2021, 2022 and 2023. The remaining 20% of the grant will
be paid aer submission of the final report. In this project, ONWARD is collaborating with
the University of Bordeaux, CHUV and EPFL to develop a research interface for ARC
IM
and
evaluating its use to alleviate locomotor deficits in Parkinson’s disease.
2.2 Science Expenses
2021 2020
Sta costs
Outsourced cost
2,555
131
779
344
2,686 1,123
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
205 ONWARD Annual Report
1 2 3 4 5 6 7 8 9 10 11 12 13
The Company’s science expenses consist primarily of cost of sponsored research activities
that are undertaken by universities with which it collaborates. Since its inception, the
Company has had a close working relationship with two of the founders of the Company,
Grégoire Courtine, Professor at EPFL and Jocelyne Bloch, Neurosurgeon at CHUV,
Professor at Université de Lausanne.
The activities between the Company and EPFL are formalized in research agreements
which govern the activities of Professor Courtine sponsored by the Company. The
increase in 2021 is due to the share-based payment expense resulting from the Employee
Investment plan that vested on the date of the IPO.
2.3 Research & Development Expenses
Accounting Policy: Research costs are expensed as incurred. Development expenditures
on an individual project are recognized as an intangible asset when the Group can
demonstrate:
• The technical feasibility of completing the intangible asset so that it will be available for
use or sale
• Its intention to complete and its ability to use or sell the asset
• How the asset will generate future economic benefits
• The availability of resources to complete the asset
• The ability to measure reliably the expenditure during development
• The ability to use the intangible asset generated
Significant Estimate: The Group has evaluated the nature of the project research and
development costs and concluded that all expenses incurred were related to research
and pre-development of future products. Therefore, all costs have been expensed and are
recognized in the statement of profit and loss.
The Company’s research and development expenses consist primarily of the cost of
external suppliers and third-party contractors involved in the design and development
of the ARC
IM
systems as well as the employee related expenses for research and
development, including salaries and benefits. The increase in 2021 is due to the share-
based payment expense resulting from the Employee Investment plan that vested on the
date of the IPO.
2.4 Clinical & Regulatory Expenses
The Company’s clinical and regulatory expenses consist of the employee related expenses
including salaries and benefits for employees working on clinical trials. The increase in
2021 is due to the share-based payment expense resulting from the Employee Investment
plan that vested on the date of the IPO as well the ongoing Up-LIFT study.
2021 2020
Sta costs
Outsourced cost
Depreciation and amortization expense
5,218
2,715
–
3,538
2,068
199
7,932 5,823
2021 2020
Sta expenses
Outsourced expenses
Depreciation and amortization expense
2,905
1,871
–
2,278
482
11
4,775 2,770
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
207 ONWARD Annual Report
2.5 Marketing & Market Access Expenses
The Company’s marketing and market access expenses include rebranding activities
relating to the introduction of the ONWARD brand as well as the investigating activities on
the future therapy reimbursement performed by third party consultants. The increase in
2021 is due to the share-based payment expense resulting from the Employee Investment
plan that vested on the date of the IPO.
2.6 IP & License Agreement Expenses
The Company’s patents fees and related expenses include the cost for patent prosecution
applications, consulting fees for new innovative ideas as well as annuity maintenance fees
and license fees for existing ideas as well as related employee expenses, including salary
and benefits in the area of business development.
2021 2020
Sta expenses
Outsourced expenses
329
1,032
277
908
1,361
1,185
2021 2020
Sta expenses
Outsourced expenses
916
600
209
185
1,516 394
1 2 3 4 5 6 7 8 9 10 11 12 13
2.7 Quality Assurance Expenses
Quality assurance expenses consist primarily of quality control, quality assurance and
regulatory expenses. These expenses include employee expenses, including salary benefits
for personnel, consulting, testing and travel expenses. The increase in 2021 is due to the
share-based payment expense resulting from the Employee Investment plan that vested
on the date of the IPO.
2.8 General & Administrative Expenses
The Company’s general and administrative expenses consist of employee expenses,
including salary and benefits for personnel and contractors in executive, finance,
accounting, tax, and human resources, as well as operating expenses relating to audit,
legal and supply chain. The increase in 2021 is primarily due to the share-based payment
expense resulting from the Employee Investment plan that vested on the date of the IPO as
well as the costs incurred relating to the IPO not capitalized.
2021 2020
Sta costs
Outsourced cost
960
33
318
43
993 361
2021 2020
Sta costs
Outsourced cost
Depreciation and amortization expense
5,968
4,370
329
2,447
2,146
62
10,667 4,655
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
209 ONWARD Annual Report
2.9 Employee Benefit Expenses
Accounting Policy: Group companies operate various pension schemes. The schemes
are funded through payments to insurance companies or trustee-administered funds,
determined by periodic actuarial calculations. The Group has both defined benefit and
defined contribution plans.
Defined Contribution Plan
A defined contribution plan is a pension plan under which the Group pays fixed
contributions into a separate entity. The Group has no legal or constructive obligations
to pay further contributions if the fund does not hold sucient assets to pay all benefits
to employees relating to employee services in the current and prior periods. For defined
contribution plans, the Group pays contributions to publicly or privately administered
pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no
further payment obligations once the contributions have been paid. The contributions are
recognized as personnel expenses in the consolidated income statement when due.
All related expenses are recognized in the statement of income. Contributions payable or
prepaid contributions as at year-end are recognized under accruals and deferred income,
and prepayments and accrued income, respectively.
Defined Benefit Plan
The Group operates a defined benefit pension plan in Switzerland, which requires
contributions to be made to a separately administered fund. The cost of providing benefits
under the defined benefit plan is determined using the projected unit credit method.
Remeasurements, comprising of actuarial gains and losses are recognised in the
statement of financial position with a corresponding debit or credit to retained earnings
through OCI in the period in which they occur. Remeasurements are not reclassified to
profit or loss in subsequent periods.
1 2 3 4 5 6 7 8 9 10 11 12 13
2021 2020
Wages and salaries
Social security costs
Pension costs – defined benefit plan
Pension costs – other
Share based benefit expenses
Other labour costs
7,203
908
445
101
8,564
1,629
6,037
615
51
154
2,700
993
18,850 10,550
Consolidated Financial Statements
Past service costs are recognised in profit or loss on the earlier of:
• The date of the plan amendment or curtailment, and
• The date that the Group recognises related restructuring costs
Net interest is calculated by applying the discount rate to the net defined benefit liability
or asset. The Group recognises the changes in the net defined benefit obligation due
to service costs comprising current service costs, past-service costs, gains and losses
on curtailments and non-routine selements as part of operating expenses and the net
interest expense or income as part of net finance costs in the consolidated statement of
profit and loss.
Significant Estimate: The cost of the defined benefit pension plan and the present value
of the pension obligation are determined using actuarial valuations. An actuarial valuation
involves making various assumptions that may dier from actual developments in the
future. These include the determination of the discount rate, future salary increases,
mortality rates and future pension increases. Due to the complexities involved in the
valuation and its long-term nature, a defined benefit obligation is sensitive to changes in
these assumptions. All assumptions are reviewed at each reporting date.
14 15 16 17 18 19 20 21 22 23 24 25
211 ONWARD Annual Report
As at 31 December 2021, the ONWARD Group employed 76.9 full-time equivalents,
including white-collar employees and contractors. The following table presents a
breakdown of the Company’s full-time equivalents as at 31 December 2021 and 2020:
As of 31 December 2021, the Company had 35.5 full-time equivalents located in The
Netherlands (2020: 35.5), 32.9 full-time equivalents located in Switzerland (2020: 14.4) and
8.5 (2020: 5.0) full-time equivalents located in the United States.
2.10 Share-Based Payments
Accounting Policy: Employees (including senior executives) of the Group receive
remuneration in the form of share-based payments, whereby employees render services as
consideration for equity instruments (equity-seled transactions).
2021 2020
Science
Research & Development
Clinical & Regulatory
Marketing & Market Access
Patent & Related Expenses
Quality Assurance
General & Administrative Expenses
0.2
41.6
15.7
2.0
1.0
4.8
11.6
0.2
28.1
14.0
1.0
1.0
3
7.7
76.9 55.0
1 2 3 4 5 6 7 8 9 10 11 12 13
Consolidated Financial Statements
Equity-Seled Transactions
The cost of equity-seled transactions is determined by the fair value at the date when the
grant is made using an appropriate valuation model.
That cost is recognized, together with a corresponding increase in other reserves in
equity, over the period in which the performance and/or service conditions are fulfilled
in employee benefits expense. The cumulative expense recognized for equity-seled
transactions at each reporting date until the vesting date reflects the extent to which
the vesting period has expired and the Group’s best estimate of the number of equity
instruments that will ultimately vest. The statement of profit or loss expense or credit for
a period represents the movement in cumulative expense recognized as at the beginning
and end of that period and is recognized in operating expenses.
No expense is recognized for awards that do not ultimately vest, except for equity-seled
transactions for which vesting is conditional upon a market or non-vesting condition.
These are treated as vesting irrespective of whether or not the market or non-vesting
condition is satisfied, provided that all other performance and/or service conditions
are satisfied.
When the terms of an equity-seled award are modified, the minimum expense recognized
is the expense had the terms had not been modified, if the original terms of the award are
met. An additional expense is recognized for any modification that increases the total fair
value of the share-based payment transaction or is otherwise beneficial to the employee
as measured at the date of modification.
Significant Estimate: The Group measures the cost of equity-seled transactions with
employees by reference to the fair value of the equity instruments at the date at which
they are granted. Estimating fair value for share-based payment transactions requires
determination of the most appropriate valuation model, which is dependent on the terms
and conditions of the grant.
14 15 16 17 18 19 20 21 22 23 24 25
213 ONWARD Annual Report
Employee Investment Plan (EIP)
Under the Employee Investment Plan, eligible employees have the opportunity to
subscribe for, indirectly via Stichting G-Therapeutics Participaties (“STAK”), an equity
stake in ONWARD Medical N.V.. The Employee Investment Plan was set-up to align the
Employee’s interest with the interests of the Shareholders and to participate in the long
term growth of the Company.
Eligible employees were granted depository receipts (DR) via the STAK by means of a
deed of issuance. At the time of the deed issuance, the eligible employee accepted the
obligation to subscribe to (purchase) the DRs for a value of € 0,01 cent and payment
was required within 10 days. The agreement did not provide the eligible employee with
any options to be exercised at a future date. From this point the owners obtained all
rights and obligations from indirect share ownership. One depository receipt at all times
equaled one ordinary non-voting E share in the capital of The Company. In the event of
the distribution of proceeds, the ordinary shares (also from the DRs) would rank equal to
all other shares aer selement with preferred A shares. The DRs were not transferrable.
The DRs had a one year cli from grant date, aer this one year cli period 25% of the
issue vests and the remaining 75% vested over the remaining 3 years. When employment
ceased the non-vested part was forfeited except in the event of illness or death. The DRs
issued to employees were considered to be shares in accordance with IFRS 2, that were
issued under an equity seled shared based compensation plan. In article 3.2. of the Deed
of issuance of the DRs it was determined that a trade sale of the Company or an IPO, of
not less than EUR 50M at a price per share to the public not less than EUR 5,- per share,
would trigger accelerated vesting of the DR’s. At each of these two events all Depositary
Receipts under the EIP plan were fully deemed vested.
The IPO on 21 October 2021 raised EUR 80M at a share price of EUR 12.75. Taking into
account the reversed stock split that was contemplated just prior to the IPO the share
price would have been € 5.10 per share on the outstanding shares prior to the reversed
stock split. As both conditions of the IPO event were met, all DR’s were deemed fully
vested at 21 October 2021. The vesting resulted in a share-based payment expense of EUR
8.5 million.
1 2 3 4 5 6 7 8 9 10 11 12 13
Long-Term Incentive Plan (LTIP)
Following the IPO, and the vesting of the EIP, the Board has agreed upon a new LTIP plan
to align the Employee’s interest with the interests of the Shareholders and to allow the
employee to participate in the long-term growth of the Company. The LTIP is an omnibus
plan with the flexibility to issue dierent type of equity incentives.
ONWARD has awarded options over its ordinary shares to participants (referred to as
the “Award” or “Grant’) at Grant Date 15 December 2021. Each option represents the right
to receive one ordinary share of ONWARD against payment of the exercise price. The
options expire 10 years aer the Grant Date and become exercisable on vesting. The
Grant is subject to continued provision of services to the Company under a graded vesting
schedule, with 25% of the Grant vesting on the first anniversary of the Grant Date, and the
remaining 75% of the Grant vesting in equal, monthly tranches over the 3 years following
the first anniversary of the Grant Date (i.e.2.083% per month). The number of Options that
will vest and become unconditional is only subject to a continued service condition. This
is a non-market vesting condition since the vesting condition is not linked to the share
price of ONWARD. In total 612,000 options were granted to eleven participants. All options
granted have the same conditions. Options do not sele automatically and are exercised
at the option of the participant.
This fair value per option has been applied to the granted Awards on 15 December 2021
resulting in a share-based payment expense of EUR 69 thousand.
The fair value of the awarded options was determined by applying a Binomial Option
Pricing Model that allows for exercising of the option before the end of the option’s life.
Financial
Year
Grant
Date
Type of
Security
Options
Vested /
Unvested
Exercise
Price
Expiration
Date
Fair
Value
2021 15/12/2021 Stock
Options
Vested: 0
Unvested:
612,000
EUR 9,70 15/12/2031 EUR 4,89
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
215 ONWARD Annual Report
As the Options cannot be exercised between the Grant Date and the vesting date, the Hull-
White binomial formula, commonly used to value American options, was used. With the
Hull-White model the impact of a certain time-based event – such as a vesting period, or
an early exercise – can be taken into account.
Due to the dierent vesting dates for the dierent tranches in the option we have
calculated the unique option values per tranche according to each vesting date. The total
option value per employee is then derived using a weighted average overall calculated
option value for each vesting date.
The following parameters were used in the option model for the calculation of the fair value
of the options:
a: Vesting period is 1 – 4 years and depends on the vesting date of the specific tranche.
2021
Fair value on date of measurement (EUR) 4.89
Share price (EUR)
Exercise price (EUR)
Expected volatility
Term of the option
Expected dividend
Risk-free interest rate
Time to expiration
9.20
9.70
58.90%
4
a
–
-0.30%
10
1 2 3 4 5 6 7 8 9 10 11 12 13
2.11 Income Tax
Accounting Policy:
Current Income Tax
Current income tax assets and liabilities for the current period are measured at the
amount expected to be recovered from or paid to the taxation authorities. The tax rates
and tax laws used to compute the amount are those that are enacted or substantively
enacted, at the reporting date in the countries where the Group operates and generates
taxable income.
Current income tax relating to items recognized directly in equity is recognized in equity
and not in the statement of profit or loss. Management periodically evaluates positions
taken in the tax returns with respect to situations in which applicable tax regulations are
subject to interpretation and establishes provisions where appropriate.
Deferred Tax
Deferred tax is provided using the liability method on temporary dierences between
the tax basis of assets and liabilities and their carrying amounts for financial reporting
purposes at the reporting date.
Deferred tax assets are recognized for all deductible temporary dierences, the carry
forward of unused tax credits and any unused tax losses. Deferred tax assets are
recognized to the extent that it is probable that taxable profit will be available against
which the deductible temporary dierences and the carry forward of unused tax credits
and unused tax losses can be utilized, except:
• When the deferred tax asset relating to the deductible temporary dierence arises
from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, aects neither the accounting profit
nor taxable profit or loss.
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
217 ONWARD Annual Report
• In respect of deductible temporary dierences associated with investments in
subsidiaries, associates and interests in joint ventures, deferred tax assets are
recognized only to the extent that it is probable that the temporary dierences will
reverse in the foreseeable future and taxable profit will be available against which the
temporary dierences can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced
to the extent that it is no longer probable that sucient taxable profit will be available to
allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets
are reassessed at each reporting date and are recognized to the extent that it has become
probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply
in the year when the asset is realized or the liability is seled, based on tax rates (and tax
laws) that have been enacted or substantively enacted at the reporting date.
Significant Estimate: The Group has losses before tax which arose in the Netherlands
that are available to oset against future profits of the Dutch entity in which the loss arose.
However, these losses may not be used to oset taxable income elsewhere in the Group. The
Group evaluated and judged that at this moment it is not suciently likely that future profits
will be generated in the Dutch entity that can oset a deferred tax asset.
All Switzerland operations have a cost-plus agreement. The taxable amounts are seled.
There are no NOL’s. Last fiscal year seled is 2018. Considering the uncertainty and limited
future profits, the Group will, consistent with the treatment in the Dutch entity, not recognize
any deferred tax assets relating to any temporary dierences for the Swiss entity.
All NOL’s in the US entity prior to the business combination are not carried forward due to
ownership change. Losses since the transaction can be carried forward for 20 years. These
losses have not been recognized in the balance sheet to date.
1 2 3 4 5 6 7 8 9 10 11 12 13
2021 2020
Current income tax
Deferred income tax
(69)
–
(20)
–
Total corporate income tax in profit and loss (69) (20)
Current Income Tax charge at tax rate of 25%
Net operating tax losses not recognized
Eect of Tax rate dierence Switzerland and US
8,561
(8,621)
(9)
4,999
(5,051)
32
(69) (20)
The estimated unused Dutch operating tax losses for which no deferred tax asset is
recognized amounts to EUR 59 million (2020: EUR 39 million). These losses may be carried
forward indefinitely.
The unused US operating tax losses for which no deferred tax asset is recognized expire
aer 2038 (EUR 58k), 2039 (EUR 618k) and 2040 (EUR 697k).
The deferred tax liability arose on the acquisition of NeuroRecovery Technolgies, Inc (‘NRT’)
in 2019 (subsequently renamed to ONWARD Medical Inc.). In 2021 License fees paid were
capitalized as an intangible asset that increased the deferred tax liability:
2021 2020
Opening balance as at January 1
Foreign currency translation dierence
Addition (License fees)
(1,343)
(78)
(570)
(1,448)
105
–
Deferred tax liability as at December 31 (1,991) (1,343)
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
219 ONWARD Annual Report
3. Section 3: Non-current Asset & Working Capital
3.0 Intangible Assets
Goodwill
Accounting policy: Goodwill is initially measured at cost, being the excess of the aggregate
of the consideration transferred and the amount recognized for non-controlling interests,
and any previous interest held, over the net identifiable assets acquired and liabilities
assumed. If the fair value of the net assets acquired is in excess of the aggregate
consideration transferred, the Group re-assesses whether it has correctly identified all
of the assets acquired and all of the liabilities assumed and reviews the procedures used
to measure the amounts to be recognized at the acquisition date. If the re-assessment
still results in an excess of the fair value of net assets acquired over the aggregate
consideration transferred, then the gain is recognized in profit or loss.
Aer initial recognition, goodwill is measured at cost less any accumulated impairment
losses. For the purpose of impairment testing, goodwill acquired in a business combination
is, from the acquisition date, allocated to each of the Group’s cash-generating units that
are expected to benefit from the combination, irrespective of whether other assets or
liabilities of the acquiree are assigned to those units.
Where goodwill has been allocated to a cash-generating unit and part of the operation
within that unit is disposed of, the goodwill associated with the disposed operation is
included in the carrying amount of the operation when determining the gain or loss on
2021 2020
Goodwill
In-Process R&D
License fees
1,70
2
6
,109
2,218
1,607
5,218
–
Net book value at December 31 10,029 6,825
1 2 3 4 5 6 7 8 9 10 11 12 13
disposal. Goodwill disposed in these circumstances is measured based on the relative
values of the disposed operation and the portion of the cash-generating unit retained.
In-Process R&D
Accounting Policy: The cost of in-process R&D acquired in a business combination is the
fair value at the date of acquisition.
Following initial recognition of the development expenditure as an asset, the asset
is carried at cost less any accumulated amortization and accumulated impairment
losses. Amortization of the asset begins when development is complete and the asset is
available for use. It is amortized over the period of expected future benefit. Amortization is
2021 2020
Cost
Accumulated amortization
1,607
–
1,732
–
Net book value at January 1 1,607 1,732
Additions
Foreign currency translation dierence
Depreciation for the year
Impairments
95
–
–
–
(125)
–
–
Net change
Cost
Accumulated amortization
1,702
–
(125)
1,607
–
Net book value at December 31
1,702
1,607
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
–
95
221 ONWARD Annual Report
2021 2020
Cost
Accumulated changes
5,370
(152)
5,777
(127)
Net book value at January 1 5,218 5,650
Foreign currency translation dierence
Additions
Depreciation for the year
Impairments
321
–
–
(407)
–
(25)
–
Net change
Cost
Accumulated changes
89
1
6,261
(152)
(432)
5,370
(152)
Net book value at December 31
6,
109
5,218
recorded in operating expenses. During the period of development, the asset is tested for
impairment annually.
License Fees
Accounting Policy: License fees for the exclusive right to certain patents, critical in
the development of the ARC Therapies, are capitalized and measured at cost on
initial recognition.
Following initial recognition of the license fees as an asset, the asset is carried at cost less
any accumulated amortization and accumulated impairment losses. Amortization of the
asset begins when development of the ARC Therapies (ONWARD R&D) is complete and
the asset is available for use. It is amortized over the period of expected future benefit.
1 2 3 4 5 6 7 8 9 10 11 12 13
Amortization is recorded in operating expenses. During the period of development, the
asset is tested for impairment annually.
Impairment Assessment
The In-process R&D was acquired through the acquisition of GTX Medical SA (now
ONWARD Medical SA) and the business combination with NRT Inc.(now ONWARD Medical
Inc.). The value of the In-process R&D is contingent on the success of the FDA approval
of the NRT product. In terms of the NRT acquisition agreement ONWARD also received,
and assumed responsibility for, the exclusive license agreements with the Regents of the
University of California (“UCLA”) and the California Institute of Technology (“Caltech”). In
2021 2020
Cost
Accumulated changes
–
–
–
–
Net book value at January 1 – –
Additions
Foreign currency translation dierence
Depreciation for the year
Impairments
2,233
(15)
–
–
–
–
–
–
Net change
Cost
Accumulated changes
2,218
2,218
–
–
–
–
Net book value at December 31
2,218
–
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
570
223 ONWARD Annual Report
terms of these agreements, the occurrence of the IPO triggered the change in ownership
clauses and resulted in additional payments to be made. These payments, as well as the
annual license fee payments, are recognized as a separate class of intangible assets.
As per the accounting policies above goodwill, in-process R&D and license fees are
tested for impairment annually. ONWARD performed its annual impairment test at year
end (consistent with the prior year) based on the most recent budgets and forecast
calculations. These budgets and forecast calculations cover a period of five years. A long-
term growth rate is calculated and applied to project future cash flows aer the fih year.
Significant Estimates:
Key assumptions used in the impairment test was the growth rate, EBITDA and the rate for
discounting the projected cash flows.
• Growth rate estimate: rate is based on published industry research.
• EBITDA: Revenue is expected only towards the end of 2023, starting with rehabilitation
first. Home use following in later years. Based on management’s best estimate EBITDA
will not be positive prior to 2026.
• Discount rate: Discount rates represent the current market assessment of the
risks specific to ONWARD. The discount rate calculation is based on the specific
circumstances of the Group and is derived from its weighted average cost of capital
(WACC). The WACC takes into account both debt and equity. The cost of equity is
derived from the expected return on investment by the Group’s investors. The cost of
debt is based on the interest-bearing borrowings the Group is obliged to service.
1 2 3 4 5 6 7 8 9 10 11 12 13
The cash flow projections were determined using management’s internal forecasts that
cover an initial period from 2022 to 2026, aer which a terminal value was calculated. The
values assigned to the key assumptions represent management’s assessment of future
expectations and were based on historical data from both external and internal sources.
ONWARD performed a sensitivity analysis and noted that a reasonable change in either
the discount rate (to 20%) or terminal growth rate (to 0%), or both the discount rate (to
20%) and terminal growth rate (to 0%), would not cause the carrying amount to exceed its
recoverable amount. Also, should the expected revenues towards the end of 2023 move
out with one year to 2024, this would still not cause the carrying amount to exceed its
recoverable amount.
2021 2020
Discount rate
Terminal value growth rate
9.22%
1.70%
14.45%
a
1.75%
a: The 2020 discount rate did not consider the advancement of the studies in the US. Enrolment of the pivotal study has been completed
and the study is progressing well, lowering the risk included in the 2020 assessment.
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
225 ONWARD Annual Report
3.1 Property, Plant & Equipment
Accounting Policy: Property, plant and equipment is stated at cost, net of accumulated
depreciation and accumulated impairment losses, if any. Such cost includes the cost of
replacing part of the property, plant and equipment and borrowing costs for long-term
construction projects if the recognition criteria are met. When significant parts of property,
plant and equipment are required to be replaced at intervals, the Group recognizes such
parts as individual assets with specific useful lives and depreciates them accordingly.
Likewise, when a major inspection is performed, its cost is recognized in the carrying amount
of the plant and equipment as a replacement if the recognition criteria are satisfied. All other
repair and maintenance costs are recognized in profit or loss as incurred.
Property, plant and equipment transferred from customers is initially measured at the fair
value at the date on which control is obtained.
Depreciation is calculated on a straight-line basis over the estimated useful lives of the
assets as follows:
• Oce equipment – 3 years
An item of property, plant and equipment and any significant part initially recognized is
derecognized upon disposal or when no future economic benefits are expected from its
use or disposal. Any gain or loss arising from de-recognition of the asset (calculated as
the dierence between the net disposal proceeds and the carrying amount of the asset) is
included in the income statement when the asset is derecognized.
The residual values, useful lives and methods of depreciation of property, plant and
equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
1 2 3 4 5 6 7 8 9 10 11 12 13
Oce Equipment
2021 2020
Cost
Accumulated depreciation
711
(463)
538
(323)
Net book value at January 1 248 215
Investments
Assets acquired from business combination
Depreciation for the year
91
–
(149)
173
–
(140)
Net change
Cost
Accumulated depreciation
(58)
802
(612)
33
711
(463)
Net book value at December 31 190 248
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
227 ONWARD Annual Report
At the commencement date of the lease, the Group recognizes lease liabilities measured
at the present value of lease payments to be made over the lease term. The lease
payments include fixed payments (including in-substance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an index or a rate, and
amounts expected to be paid under residual value guarantees. The lease payments also
include the exercise price of a purchase option reasonably certain to be exercised by the
Group and payments of penalties for terminating the lease, if the lease term reflects the
Group exercising the option to terminate.
Variable lease payments that do not depend on an index or a rate are recognized as
expenses (unless they are incurred to produce inventories) in the period in which the event
or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental
borrowing rate at the lease commencement date because the interest rate implicit in
the lease is not readily determinable. Aer the commencement date, the amount of
lease liabilities is increased to reflect the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount of lease liabilities is remeasured if there
is a modification, a change in the lease term, a change in the lease payments (e.g., changes
to future payments resulting from a change in an index or rate used to determine such
lease payments) or a change in the assessment of an option to purchase the underlying
asset. The Group’s lease liabilities are included in Lease liabilities (see Note 16).
• Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of
machinery and equipment (i.e., those leases that have a lease term of 12 months or less
from the commencement date and do not contain a purchase option). It also applies the
lease of low-value assets recognition exemption to leases of oce equipment that are
considered to be low value. Lease payments on short-term leases and leases of low-value
assets are recognized as expense on a straight-line basis over the lease term.
3.2 Right of Use Assets & Lease Liabilities
Accounting Policy: The Group assesses at contract inception whether a contract is, or
contains, a lease. That is, if the contract conveys the right to control the use of an identified
asset for a period of time in exchange for consideration.
Group as a Lessee
The Group applies a single recognition and measurement approach for all leases, except
for short-term leases and leases of low-value assets. The Group recognizes lease liabilities
to make lease payments and right-of-use assets representing the right to use the
underlying assets.
• Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e.,
the date the underlying asset is available for use). Right-of-use assets are measured at
cost, less any accumulated depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of
lease liabilities recognised, initial direct costs incurred, and lease payments made at or
before the commencement date less any lease incentives received.
Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease
term and the estimated useful lives of the assets, as follows:
• Plant and machinery 3 to 15 years
• Motor vehicles and other equipment 3 to 5 years
If ownership of the leased asset transfers to the Group at the end of the lease term or
the cost reflects the exercise of a purchase option, depreciation is calculated using the
estimated useful life of the asset.
• Lease Liabilities
1 2 3 4 5 6 7 8 9 10 11 12 13
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
229 ONWARD Annual Report
Right-of-use Assets
The Group leases the oce building in Eindhoven. In November 2021 the Group also
entered into a 5-year lease for oces in Lausanne, Switzerland. Both these leases are
classified as right of use assets.
Key movements relating to this lease are presented below:
The oce building is leased for oce space. The lease includes an extension option
exercisable up to one year before the end of the non-cancellable lease term. The option
to renew the lease is for an additional period of the same duration aer the end of the
contract term and are at the option of the Group as lessee. The Group has elected not to
exercise the option and no new lease agreement has been entered into as replacement yet.
2021 2020
Net book value at January 1 149 254
Additions
Depreciation for the year
2,220
(179)
–
(105)
Net book value at December 31 2,190 149
1 2 3 4 5 6 7 8 9 10 11 12 13
Lease Liabilities
The maturity of the lease liability in relation to the oce building is as follows:
Movement of the lease liability:
The incremental borrowing rate applied is 6% for the Eindhoven oce and 4% for the
Lausanne oce.
Additionally, the group leases a car with contract term of one year. This lease is a short-
term lease. The expense recognised in profit and loss for the year is EUR 10k (2020: EUR
70k – this included the amounts paid in respect of the previous oce in Lausanne). The
Group has elected not to recognise a right-of-use asset and lease liability for this lease.
2021 2020
Balance as at January 1 198 324
Addition: Lausanne oce
Repayments
Of which relates to interest
2,220
(225)
21
–
(139)
13
Total lease liability 2,214 198
2021 2020
Less than one year
One to five years
More than five years
473
1,741
–
137
61
–
Net book value at December 31 2,214 198
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
231 ONWARD Annual Report
3.3 Indirect Tax Receivables
The tax receivables consist of refundable VAT and are collectable within 12 months.
3.4 Other Current Assets
At 31 December 2021, the Group had other current assets of EUR 2,546k (2020: EUR
436k) mainly related to prepayments of the D&O Insurance and suppliers, grant
amounts receivable and prepaid pension and insurance premiums. The Group has
pledged EUR 297k (2020: EUR 20k) of its cash at banks to fulfil collateral requirements
relating to the EPFL and new Lausanne office rental agreement.
3.5 Cash & Cash Equivalents
Accounting Policy: Cash and short-term deposits in the statement of financial position
comprise cash at banks and on hand and short-term deposits with a maturity of three
months or less, that are readily convertible to a known amount of cash and subject to an
insignificant risk of change in value.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents
consist of cash and short-term deposits as defined above, net of outstanding bank
overdras as they are considered an integral part of the Group’s cash management.
Short-term deposits comprise a liquidity management account that is used, depending on
the immediate cash requirements of the Group, and earns interest at the respective short-
term deposit interest rates.
At December 31, 2020, the Group had no bank overdras. All cash is freely at the disposal
of the company.
2021 2020
Cash at bank 89,443 6,382
Total cash and cash equivalents
89,443 6,382
1 2 3 4 5 6 7 8 9 10 11 12 13
3.6 Trade & Other Payables
Trade payables and accrued expenses are non-interest bearing and are normally seled
on 30-90 day terms.
3.7 Other Payables
The other payables can be broken down as follows:
Other relates mainly to accrued expenses.
2021 2020
Wage tax and social security
Government grants
Bonus
Invoices to be received
Other
126
–
1,770
160
1,978
367
101
843
102
177
4,034 1,590
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
233 ONWARD Annual Report
4. Section 4: Financing, Financial Risk Management & Financial Instruments
4.0 Issued Capital & Reserves
Evolution of Share Capital & Share Premium
As at 1 January 2021, the issued share capital of the Company comprises of 4,806,221
ordinary shares O and 8,501,172 non-voting ordinary shares E with a nominal value of
EUR 0.000003 each and 37,666,666 preference shares A with a nominal value of
EUR 0.000001 each.
As part of the Corporate Conversion:
(i) all outstanding non-voting ordinary shares E, ordinary shares O and preference A
shares were converted into Ordinary Shares on a 1:1 ratio,
(ii) such Ordinary Shares were subject to a 5:2 Reverse Stock Split, and
(iii) the nominal value of all Ordinary Shares were increased to EUR 0.12.
This was aected by a notarial deed executed on 21 October 2021 (first day of trading).
Aer the Corporate Conversion but prior to Selement the Company issued shares to
EPFL and to the Lenders under the Convertible Loan Agreement.
269,213 new shares in the Company with an aggregate value of EUR 32,306 was issued
to EPFL.
The conversion of the convertible loan (CLA) (including interest) in shares (triggered by
the IPO) resulted in an aggregate capital increase in the Company of EUR 31,121,902
(including share premium) in exchange for 3,254,578 new shares in the Company.
On 21 October 2021 (Selement Date), the Company’s authorized (maatschappelijk
kapitaal) share capital amounts to EUR 12,225,000 divided into 50,937,500 Ordinary
Shares and 50,937,500 Preferred Shares with a nominal value of EUR 0.12 each. All of the
issued Ordinary Shares are fully paid-up and represent capital in the Company. There
1 2 3 4 5 6 7 8 9 10 11 12 13
are no convertible securities, exchangeable securities or securities with warrants in the
Company at the date of conversion. No share or loan capital of any member of the Group
is under option or agreed, conditionally or unconditionally, to be put under option. No
Shareholders have any voting rights dierent from any other Shareholder.
The Initial Public Oering (IPO) and exercise of the over-allotment warrant resulted in an
aggregate capital increase in the Company of EUR 79,397,585 (including share premium)
in exchange for 6,282,791 new shares in the Company at the price of EUR 12,75 per share.
As part of the initial public oering, the Company incurred direct-aributable transaction
costs of EUR 4,939,319 which have been deducted from the share premium. The costs
capitalised relates to fees and commission paid to agents, advisors, auditors, brokers and
dealers and levies by regulatory agencies and security exchanges.
Convertible Preference A Shares
Accounting Policy: Convertible preference shares are separated into liability and equity
components based on the terms of the contract.
On issuance of the convertible preference shares, the fair value of the liability component
is determined using a market rate for an equivalent non-convertible instrument. This
amount is classified as a financial liability measured at amortized cost (net of transaction
costs) until it is extinguished on conversion or redemption. Upon conversion, the liability is
reclassified to equity and no gain or loss is recognized in the statement of profit and loss.
The remainder of the proceeds is allocated to the conversion option that is recognized and
included in equity. Transaction costs are deducted from equity, net of associated income
tax. The carrying amount of the conversion option is not remeasured in subsequent years.
Transaction costs are apportioned between the liability and equity components of the
convertible preference shares, based on the allocation of proceeds to the liability and
equity components when the instruments are initially recognized.
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
235 ONWARD Annual Report
maturity event for this instrument. The carrying value of the financial liability was therefore
derecognised and recognised as equity (share premium reserve) The equity component of
the conversion option (previously recognized in other reserves) was reclassified to share
premium on conversion, before the reversed stock split was aected on all ordinary shares
and the nominal value increased to EUR 0,12 per share. Refer to ‘Other reserves’ below and
Note 4.3 Financial liabilities for further details.
EPFL Options
Significant Estimate: The rights provided to Ecole Polythechnique Fédérale de Lausanne
(EPFL) have been evaluated. The Group accounts for these options as equity seled
transactions as per IFRS 2.
The Ecole Polythechnique Fédérale de Lausanne (EPFL) has the right to acquire 493,778
Ordinary shares at nominal value set forth in the terms of the license agreement in respect
of the use of EPFL’s intellectual property rights (the “EPFL Option 1”). The EPFL Option
1 can be exercised by EPFL until an initial public oering (“IPO”) or an exit transaction
(“Exit”). An “Exit” shall mean: (i) the sale of all or substantially all of the Company’s assets,
or (ii) the sale of more than fiy per cent (50%) of the Company’s issued and outstanding
capital stock, to any company, entity or person, or (iii) the liquidation, dissolution or winding
up of the Company including, without limitation, any merger or consolidation where the
Company is not the surviving company.
In addition EPFL has the right to acquire 0.3% of the total Ordinary shares of the Company
at zero consideration at the time of an IPO as set forth in the terms of the license
agreement in respect of the use of EPFL’s intellectual property rights (the “EPFL Option 2”).
Under this agreement EPFL also has a right to receive the cash value equivalent to the
number of shares representing 0.3% of the total capital stock of the Company existing, on
a fully diluted basis, at the time of an Exit not being an IPO. An Exit, not being an IPO, is not
considered to be the most probable outcome. The rights are non-cumulative and shall only
apply once according to the earliest event. Cash selement is therefore not probable.
The preference shares carry a dividend of 6% per annum. The dividend rights are
cumulative. The preference shares rank ahead of the ordinary shares in the event of
a liquidation. The preference A shares can be converted into Ordinary Shares of the
company under dierent scenarios, where the rights and number of Ordinary Shares
received diers. In the event of an IPO, conversion is mandatory at a fixed conversion rate
of 1:1, subject to adjustments for any changes in the share capitalization of the Company.
The equity component of the issued convertible preference A shares was determined at
each issue date. The preference shares were valued by discounting the future dividend
payments to their present value. The value of the embedded conversion options is equal to
the remaining dierence between the transaction value of the Preference Shares and the
fair value of the debt portion.
For the discounting of the expected future interest and principal payments, an appropriate
discount rate is determined using the (historic) debt spreads as determined by Aswath
Damodaran, a renowned valuation practitioner. The applied debt spreads are based on the
issue dates of the Preference Shares, as well as an indicative credit rating to incorporate
the implied credit risk of Onward as at the valuation date. Moody’s rating methodology for
pharmaceutical companies was used to estimate an indicative credit rating for Onward.
This methodology not only considers financial metrics but also qualitative factors and the
potential of Onward and its pipeline. Notching adjustments are included to incorporate the
risk profile of the subordinate ranking of the preference shares.
For the valuation management assumed mandatory conversion upon IPO as the most likely
scenario at a conversion rate of one ordinary share for one preference share. The liability
component was included in Interest-bearing loans and borrowings. An assumed maturity
period of 10 years from the first issuance date in 2016 was chosen. This was considered a
best estimate for a normal go-to-market period for similar types of devices. This was kept
consistent for all subsequent issues. Based on the result of the valuation management
used the mid-range of the outcome for the recognition of the embedded conversion option.
As part of the corporate conversion (prior to IPO), all preference A shares were converted
to Ordinary shares at a ratio of 1:1 based on the numbers of preference A shares.
Consistent with the valuation the mandatory conversion upon IPO is viewed as the
1 2 3 4 5 6 7 8 9 10 11 12 13
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
237 ONWARD Annual Report
These rights were accounted for under IFRS 2 as equity seled share based payments.
The fair value of the goods and services received on the respective grant dates were
considered negligible mainly due to the lack of regulatory approvals.
Immediately before the IPO an agreement was reached with EPFL regarding the exercising
of their options as described above. The total numbers of shares issued to EPFL under
both options were 269,213 at the nominal amount of EUR 32,306. These shares were issued
at zero consideration and as a cost to the Company.
Convertible Loan Agreement
On 20 April 2021 the Company entered into a Convertible Loan Agreement of EUR 30
million (EUR 27.1 million (the “Principal Amount”) furnished per 30 June 2021, with an
additional EUR 2.9 million executed in July 2021). The outstanding portion of the Principal
Amount shall bear interest at a rate of 8% per year. Under Convertible Loan, there are
several situations that would trigger a conversion of the loan into shares:
• Upon closing of a qualified financing event
• Upon closing of a financing round not qualifying as a qualified financing event
• Upon entering into a liquidity event prior to conversion or repayment
• Upon a milestone event
• Upon election by the option holder
These conversion options are mutually exclusive.
Accounting Policy: For recognition as equity all conversion options should meet the fixed-
for-fixed requirement of IAS 32. This is not the case for each of the conversion options.
Generally, multiple embedded derivatives in a single hybrid contract are treated as a
single compound embedded derivative. These conversion options are considered a single
compound embedded derivative as a) they relate to the same underlying risk exposure
(the valuation of the Company) and b) these conversion options are mutually exclusive
and therefore not independent of each other. Based on the aforementioned, the option
1 2 3 4 5 6 7 8 9 10 11 12 13
is considered an embedded derivative which is bifurcated and classified as a financial
liability through profit and loss (“FVPL”).
Initial and subsequent measurement will be in line with the accounting policy as included
in Note 4.2 Financial liabilities at fair value through profit and loss (“FVPL”). Interest related
to the financial liability is recognised in profit and loss. On conversion at maturity, the
financial liability is reclassified to equity and no gain or loss is recognised.
The fair value of the embedded conversion options could not be measured reliably with
reference to the terms and conditions as there is no active market. The fair value of the
embedded conversion options is therefore equal to the dierence between the fair value of
the Convertible loan and the fair value of the debt portion.
At the Issue Date, the fair value of the debt portion and the fair value of the embedded
derivatives together have a total fair value equal to the issue price of the Convertible Loan,
given that the Convertible Loan was issued to market participants and therefore the total
fair value should equal the transaction price. The expected cash flows are estimated per
issue date based on the terms of the convertible loan agreement. This agreement specifies
that an interest rate of 8.0% per annum is charged. The interest is accrued and repaid at
maturity. As a result, there is one expected payment of principal and accrued interest at
maturity date of the loan. For the discounting of the expected future interest and principal
payments, an appropriate discount rate is determined using the (historic) debt spreads as
determined by Aswath Damodaran, a renowned valuation practitioner. The applied debt
spreads are based on the issue date of the Convertible Loan, as well as an indicative credit
rating to incorporate the implied credit risk of Onward as at the valuation date.
Moody’s rating methodology for pharmaceutical companies was used to estimate an
indicative credit rating for Onward. This methodology not only considers financial metrics
but also qualitative factors and the potential of Onward and its pipeline. Notching
adjustments are included to incorporate the risk profile of the unsecured nature of the
convertible bonds. Based on the result of the valuation management used the mid-range
of the outcome for the recognition of the embedded conversion option. The embedded
conversion option recognised amounted to EUR 2,480,179 within Other financial liabilities.
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
239 ONWARD Annual Report
Aer the corporate conversion but immediately before the IPO the full loan amount,
including contractual interest accrued converted into ordinary shares. The conversion
option was revalued immediately prior to selement and the dierence was recognised in
profit and loss. The numbers of shares issued varied as a result of the pricing mechanisms
within the agreement. 3,254,578 shares were issued at a value of EUR 31,121,902 (including
share premium), representing the carrying value of the loan at conversion. The shares
issued represents full and final selement of the convertible loan.
Other Reserves
Currency
Translation
Dierences
Stock
Compensation
Reserve
Conversion
Option
Preference
Shares
Total
Other
Reserves
Balance at January 1, 2020
Series A Financing (jul’20)
Series A Financing (oct’20)
Series A Financing (nov’20)
Share based payment expense for the year
Currency translation dierences
Balance at December 31, 2020
Conversion of preference share on IPO
Share based payment expense: EIP
Share based payments: EIP accelerated vesting
Share based payment expense: LTIP
Currency translation dierences
(91)
–
–
–
–
(441)
(532)
–
–
–
–
249
971
–
–
–
2,700
3,671
–
8,494
(12,165)
69
–
14,246
337
53
158
–
14,794
(14,794)
–
–
–
–
15,126
337
53
158
2,700
(441)
17,933
(14,794)
8,494
(12,165)
69
249
Balance at December 31, 2021 (283) 69 – (214)
1 2 3 4 5 6 7 8 9 10 11 12 13
Currency Translation Reserve
Exchange gains and losses arising from the translation of the functional currency of
foreign operations to the reporting currency of the parent are accounted for in this legal
reserve. In the case of the sale of a participating interest, the associated accumulated
translation dierences are transferred to the profit and loss account, and presented
therein as part of the result on the sale.
The foreign currency translation reserve relates to the investment in United States.
Stock Compensation Reserve
The stock compensation reserve is used to recognize the value of equity-seled share-
based payments provided to employees, including key management personnel, as part of
their remuneration.
4.1 Earnings Per Share (EPS)
Accounting Policy: Basic EPS is calculated by dividing the profit for the year aributable
to ordinary equity holders of the parent by the weighted average number of ordinary
shares outstanding during the year.
Diluted EPS is calculated by dividing the profit aributable to ordinary equity holders
of the parent (aer adjusting for interest on the convertible preference shares) by the
weighted average number of ordinary shares outstanding during the year plus the
weighted average number of ordinary shares that would be issued on conversion of all the
dilutive potential ordinary shares into ordinary shares.
The objective of determining diluted EPS is to reflect the maximum possible dilutive
eect arising from potential ordinary shares outstanding during the period. The Group is
currently loss making and there are currently no anti-dilutive potential ordinary shares to
be considered. Therefore diluted EPS is disregarded for 2021.
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
241 ONWARD Annual Report
There have been no other transactions involving ordinary shares or potential ordinary shares
between the reporting date and the date of authorization of these financial statements.
The following tables reflect the income and share data used in the EPS calculation:
Profit (Loss) Aributable to Ordinary Shareholders
Weighted-average Number of Ordinary Shares
* Ordinary shares were subject to a 5:2 reverse stock split as part of the corporate conversion. The comparative weighted average
number of ordinary shares (2020) was restated to include the eect of the reverse stock split.
4.2 Financial Liabilities
Accounting Policy:
Financial Instruments – Initial Recognition & Subsequent Measurement
A financial instrument is any contract that gives rise to a financial asset of one entity and
a financial liability or equity instrument of another entity. Financial assets and financial
liabilities are initially recognized when the Company becomes a party to the contractual
provisions of the instrument.
• Financial Liabilities
2021
Thousands
2020
Thousands
Weighted average number of ordinary shares for basic EPS
Weighted average number of ordinary shares for basic EPS (adjusted*)
9,485
9,485
9,002
3,601
2021 2020
Profit (loss) for the year, aributable to equity holders of the parent (34,314) (20,014)
1 2 3 4 5 6 7 8 9 10 11 12 13
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings, payables, or as derivatives designated as
hedging instruments in an eective hedge, as appropriate.
Financial liabilities are classified as measured at amortized cost or at Fair Value through
Profit or Loss (“ FVPL”). A financial liability is classified as FVPL if it is classified as held-
for-trading, it is a derivative or it is designated as such on initial recognition. Financial
liabilities at FVPL are measured at fair value and net gains and losses, including any
interest expense, are recognized in profit or loss. Other financial liabilities are subsequently
measured at amortized cost using the eective interest method. Interest expense and
foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on
derecognition is also recognized in profit or loss
All financial liabilities are recognized initially at fair value and, in the case of liabilities at
amortized cost , net of directly aributable transaction costs.
The Group’s financial liabilities include trade, other payables, loans and borrowings.
For purposes of subsequent measurement, financial liabilities are classified in
two categories:
• Financial liabilities at fair value through profit and loss
• Financial liabilities at amortized cost (loans and borrowings)
Financial liabilities at fair value through profit or loss (“FVPL”)
Financial liabilities at fair value through profit or loss include financial liabilities held for
trading and financial liabilities designated upon initial recognition as at fair value through
profit or loss.
Financial liabilities are classified as held for trading if they are incurred for the purpose of
repurchasing in the near term. This category also includes derivative financial instruments
entered into by the Group that are not designated as hedging instruments in hedge
relationships as defined by IFRS 9. Separated embedded derivatives are also classified as
held for trading unless they are designated as eective hedging instruments.
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
243 ONWARD Annual Report
Gains or losses on liabilities held for trading are recognized in the statement of profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are
designated at the initial date of recognition, and only if the criteria in IFRS 9 are satisfied.
The Group has not designated any financial liability as at fair value through profit or loss.
Financial Liabilities at Amortized Cost (Loans & Borrowings)
This is the category most relevant to the Group. Aer initial recognition, interest-bearing
loans and borrowings are subsequently measured at amortized cost using the eective
interest rate (“EIR”) method. Gains and losses are recognized in the profit or loss when the
liabilities are derecognized as well as through the EIR amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition
and fees or costs that are an integral part of the EIR. The EIR amortization is included as
finance costs in the statement of profit or loss.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged
or cancelled or expires. When an existing financial liability is replaced by another from
the same lender on substantially dierent terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the derecognition of
the original liability and the recognition of a new liability at fair value. The dierence in the
respective carrying amounts is recognised in the statement of profit or loss.
• Oseing of Financial Instruments
Financial assets and financial liabilities are oset and the net amount is reported in the
consolidated statement of financial position if there is a currently enforceable legal right to
oset the recognized amounts and there is an intention to sele on a net basis, to realize the
assets and sele the liabilities simultaneously. No oseing is currently applied.
1 2 3 4 5 6 7 8 9 10 11 12 13
Innovation Loan
At February 5, 2016, the Group was granted a loan from RVO NL (Dutch Government) of
EUR 10 million payable according a set payment scheme.
The loan carries interest at 10%.
The current redemption plan for the loan is as presented below:
Certain Intellectual Property (patents registered), have been pledged to the RVO NL in
case of default of repayment of the loan. These patents have not been capitalized as at 31
December 2021.
2021 2020
Loan as per January 1
Loan amount received
Interest accrued during the year
10,410
–
1,041
7,561
1,994
855
Net book value at December 31 11,451 10,410
Date % of Loan Amount
1 January 2026
1 April 2026
1 July 2026
1 October 2026
1 January 2027
1 April 2027
1 July 2027
15.0
15.0
17.5
17.5
17.5
17.5
All due interest
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
245 ONWARD Annual Report
Convertible Preference A Shares
On 31 December 2020, there were 37,666,666 convertible preference A shares in issue (2019:
35,583,332; 2018: 20,000,001). The preference shares carry a dividend of 6% per annum. The
dividend rights are cumulative. The preference shares rank ahead of the ordinary shares in
the event of a liquidation. The preference A shares can be converted into Ordinary Shares
of the company under dierent scenarios, where the rights and number of Ordinary Shares
received diers as summarized below:
For the purpose of the valuation management assumed mandatory conversion upon IPO as
the most likely scenario at a conversion rate of one ordinary share for one preference share.
Conversion occurred immediately preceeding the IPO on 21 October 2021, refer to Note 4.1
for further details. The IPO is considered to be the maturity event.
Conversion Option
Option Holder/
Lender/ Mandatory
Fixed or Variable Number of Shares
Voluntary conversion Option holder Fixed, 1:1 conversion rate subject to adjustments for
any changes in the share capitalization
of the Company
Conversion upon IPO Mandatory
Conversion upon other
Financing
Option holder
SSA Defaulting Party
of Issuer
Mandatory Fixed, 10:1 conversion ratio
2021 2020
Balance as at January 1
Preference shares issued
Cumulative preference dividend (accrued)
Conversion to ordinary shares - IPO
31,407
–
3,266
(34,673)
25,918
1,952
3,537
–
Balance as at December 31 – 31,407
1 2 3 4 5 6 7 8 9 10 11 12 13
Convertible Loan
On 20 April 2021 the Company entered into a Convertible Loan Agreement of EUR 30
million (EUR 27.1 million (the “Principal Amount”), with an additional EUR 2.9 million
executed in July 2021). The annual interest rate is 8%. The convertible loan was repayable
within 36 months from date of signing the agreement. The repayment date was therefore
2024. The conversion option was considered an embedded derivative which is bifurcated
and treated as a financial instrument at fair value through profit and loss. Based on the
valuation performed this instrument was recognized at the amount of EUR 2,480,179 within
other financial liabilities and the loan at the amount of EUR 27,519,821 was included in
interest-bearing liabilities. Interest accrued for the period, also included in the conversion
amounted to EUR 1,122,034. Refer to Note 4.1 for further details.
2021
Loan opening balance
Loan amount received
Interest accrued during the period
Conversion to ordinary shares - IPO
–
30,000
1,122
(31,122)
Closing net book value –
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
247 ONWARD Annual Report
4.3 Financial Risk Management Objectives & Policies
The Group’s principal financial liabilities comprise of loans and borrowings and trade and
other payables. The main purpose of these financial liabilities is to finance the Group’s
operations and to provide guarantees to support its operations.
The Group is responsible for implementing and evaluating policies which govern the funding,
investments and any use of derivative financial instruments. The Group is exposed to various
risks. The Group monitors risk exposure on an ongoing basis, as summarized below:
Liquidity Risk
The Company manages liquidity risk by continuously monitoring forecast and actual cash
flows. The Group’s objective is to maintain a balance between continuity of funding and
flexibility through the use of subsidies and grants, and sucient progress towards regulatory
approval, which is related to future financing rounds.
Cash is invested in low risk investments such as short-term bank deposits or savings
accounts. The Company mainly makes use of liquid investment in current accounts (in Euro)
or short-term deposit accounts. The ability of the Company to maintain adequate cash
reserves to support its activities in the medium term is highly dependent on the Company’s
ability to raise additional funds.
The following table details the undiscounted remaining contractual maturity for the
Company’s financial liabilities with agreed repayment periods, including both interest and
principal cash flows:
As of 31 December 2021:
Less than
1 Year
1-3
Years
3-5
Years
More than
5 Years
Total
Innovation loan
Lease liability
Trade & other payables
–
473
4,459
–
1,741
–
6,500
–
–
12,798
–
–
19,298
2,214
4,459
Total 4,932 1,741 6,500 12,798 25,971
1 2 3 4 5 6 7 8 9 10 11 12 13
As of 31 December 2020:
Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will
fluctuate because of changes in market prices. The Company’s activities may expose it
to changes in foreign currency exchange rates and interest rates. The Company is not
exposed to any equity price risk or commodity price risk as it does not invest in these
classes of investments.
Credit Risk
Because of the absence of sales to third parties and therefore trade receivables, credit
risk arises mainly from cash and cash equivalents and deposits with banks and financial
institutions. The Company only works with international reputable commercial banks
and financial institutions. The Company holds accounts with ING, Belfius, UBS and First
American Bank.
Currency Risk
Currency risk is the risk that reported financial performance, or the fair value or future cash
flows of a financial instrument, will fluctuate because of changes in foreign exchange rates.
The Group is exposed to currency risk for the activities mainly in the US as the accounting
is performed in US dollars whereas the functional currency of the Group is the euro. The
risk is currently managed by replenishing the US bank account at regular intervals to
account for both the positive and negative changes.
Less than
1 Year
1-3
Years
3-5
Years
More than
5 Years
Total
Innovation loan
Convertible preference
A shares
Lease liability
Trade & other payables
–
–
137
2,501
–
–
61
–
–
–
–
–
19,298
60,541
–
–
19,298
60,541
198
2,501
Total 2,638 61 – 79,839 82,538
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
249 ONWARD Annual Report
4.4 Fair Value & Fair Value Hierarchy of the Financial Statements
Accounting Policy: All assets and liabilities for which fair value is measured or disclosed
in the financial statements are categorised within the fair value hierarchy, described as
follows, based on the lowest level input that is significant to the fair value measurement as
a whole:
• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets
or liabilities
• Level 2 — Valuation techniques for which the lowest level input that is significant to the
fair value measurement is directly or indirectly observable
• Level 3 — Valuation techniques for which the lowest level input that is significant to the
fair value measurement is unobservable.
The carrying amounts and fair values of the Group’s financial instruments are as follows,
including its fair value hierarchy:
Carrying
Amount
Estimated
Fair Value
11,451
11,451
13,218
46,942
2021
Financial liabilities
Innovation credit loan (Level 2)
T
otal financial liabilities
2020
Financial liabilities
Innovation credit loan (Level 2)
Convertible preference A shares (Level 3)
Total financial liabilities
10,410
31,407
41,817
11,393
35,549
46,942
1 2 3 4 5 6 7 8 9 10 11 12 13
Management has assessed that the fair values of cash and cash equivalents, accounts
payable, taxes and social securities and other payables approximate to their carrying
amounts largely due to the short-term maturities of these instruments.
The fair values of the financial assets and liabilities are included at the amount at which
the instrument could be exchanged in a current transaction between willing parties, other
than in a forced or liquidation sale. The following methods and assumptions were used to
estimate the fair values:
The fair value of Innovation credit loan and due interest have been calculated by discounting
the expected future cash flows using rates currently available for instruments with similar
terms, credit risk and remaining maturities.
During the period, there were no transfers of fair value measurements between Level 1 and
Level 2 and no transfers into or out of Level 3 for both financial assets and financial liabilities.
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
251 ONWARD Annual Report
4.5 Financial Expense
Accounting Policy: Interest income is recognized by applying the eective interest rate,
except for short-term receivables when the eect of discounting is immaterial. The
Company’s financial assets include cash and cash equivalents, trade receivable, and other
long term and current receivables.
Borrowing costs directly aributable to the acquisition, construction or production of
an asset that necessarily takes a substantial period of time to get ready for its intended
use or sale are capitalized as part of the cost of the asset. All other borrowing costs are
expensed in the period in which they occur. Borrowing costs consist of interest and other
costs that an entity incurs in connection with the borrowing of funds.
2021 2020
Interest on loans
Interest post-employment benefits
Interest banks
Interest on lease liabilities
Exchange losses
Bank charges
(5,430)
1
(146)
(21)
(100)
(17)
(4,392)
(1)
(23)
(14)
(41)
(11)
Total Financial expense (5,713) (4,482)
1 2 3 4 5 6 7 8 9 10 11 12 13
5. Section 5: Other Disclosures
5.0 Post-employment Benefits: Defined Benefit Obligation
Accounting policy: Group companies operate various pension schemes. The schemes
are funded through payments to insurance companies or trustee-administered funds,
determined by periodic actuarial calculations. The Group has both defined benefit and
defined contribution plans.
Defined Benefit Plan
The Group operates a defined benefit pension plan in Switzerland, which requires
contributions to be made to a separately administered fund. The cost of providing benefits
under the defined benefit plan is determined using the projected unit credit method.
Remeasurements, comprising of actuarial gains and losses are recognised in the
statement of financial position with a corresponding debit or credit to retained earnings
through OCI in the period in which they occur. Remeasurements are not reclassified to
profit or loss in subsequent periods.
Past service costs are recognised in profit or loss on the earlier of:
• The date of the plan amendment or curtailment, and
• The date that the Group recognises related restructuring costs
Net interest is calculated by applying the discount rate to the net defined benefit liability
or asset. The Group recognises the changes in the net defined benefit obligation due
to service costs comprising current service costs, past-service costs, gains and losses
on curtailments and non-routine selements as part of operating expenses and the net
interest expense or income as part of net finance costs in the consolidated statement of
profit and loss.
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
253 ONWARD Annual Report
A defined benefit plan is a pension plan that is not a defined contribution plan. Typically,
defined benefit plans specify an amount of pension benefit that an employee will receive
upon retirement, typically dependent on one or more factors such as age, years of service
and compensation. The benefits paid to employees in Switzerland qualify as a defined
benefit plan.
The pension plan for Swiss employees (“the Pension Fund”) is a defined benefit plan. The
Pension Fund provides benefits for retirement, disability and surviving dependents that
meet or exceed the minimum benefits required under the Federal Law on Occupational
Retirement, Survivors’ and Disability Insurance (“BVG”), including the legal coordination
charge, which is also insured. The monthly premium to fund the Pension Fund’s benefits
is split equally between the employer and the employees. Contributions, which vary by
the age of the employees, range from 6-13% of the covered salary and are credited to the
employees’ individual retirement savings accounts. The Pension Fund is responsible for
capital investments and pursues an investment strategy with a prescribed investment
policy. The Group assumes an average retirement age of 62 (female) and 63 (male),
respectively. Upon retiring (including early and partial retirement), insured persons are
entitled to a lifelong retirement pension if employees do not choose to withdraw the entire
balance, or portion thereof, of their individual retirement savings accounts in the form of a
capital payment.
The Pension Fund is administered by Allianz Suisse, Switzerland, which is legally separate
from the Group and is governed by a foundation board. In addition, there is a pension fund
commission comprised of two employee and two employer representatives. The duties of
the foundation board, as well as the pension fund commission, are laid out in the BVG and
the specific pension fund rules. They are required by law to act in the best interest of the
2021 2020
Plan assets
Obligation
1,756
(3,144)
879
(1,278)
Net liability 1,388 399
1 2 3 4 5 6 7 8 9 10 11 12 13
participants and are responsible for seing certain policies (e.g. investment, contribution
and indexation policies) for the Pension Fund. At least four times a year, the foundation
board, as well as the pension fund commission, meet to analyze consequences and decide
on adjustments in the investment strategy.
Pursuant to the BVG, additional employer and employee contributions may be imposed
whenever a significant funding deficit arises in accordance with the BVG. In addition to
investment risk, the Pension Fund is exposed to actuarial risk, longevity risk, currency risk
and interest rate risk.
In addition to the pension plan for Swiss employees, a defined benefit plan for Swiss
management also provides retirement benefits and risk insurance for death and disability
for components of remuneration in excess of the maximum insurable amount of salary
under the plan described above.
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
255 ONWARD Annual Report
Movement of Net Defined-benefit Liability
2021 2020
Balance as at January 1
Service costs
Admin costs
Past service costs
399
167
14
264
429
41
10
-
Employee benefit expenses
Net interest costs / (income)
445
(1)
51
1
Included in statement of profit and loss 444 52
Actuarial gains / (losses)
- Financial assumptions
- Demographic assumptions
- Experience adjustment
- Return on assets excluding interest income
(94)
–
727
81
35
(72)
(8)
10
Exchange rate dierences
714
30
(35)
6
Included in statement of comprehensive income
Contributions by employer
744
(199)
(29)
(53)
Balance as at December 31 1,388 399
1 2 3 4 5 6 7 8 9 10 11 12 13
The principal assumptions used in determining post-employment (pension) benefit
obligations for the plan are shown below:
A quantitative sensitivity analysis for significant assumptions as at 31 December is
shown below:
The sensitivity analyses have been determined based on a method that extrapolates
the impact on the defined benefit obligation as a result of reasonable changes in key
assumptions occurring at the end of the reporting period. The sensitivity analyses are
based on a change in a significant assumption, keeping all other assumptions constant.
The sensitivity analyses may not be representative of an actual change in the defined
benefit obligation as it is unlikely that changes in assumptions would occur in isolation
from one another.
2021 2020
Discount rate
Salary increase
Interest credit rate
Mortality base table
Longevity improvement
0,30%
2,50%
0,60%
BVG2020
CMI2018; 1,25%
0,15%
2,50%
0,60%
BVG2020
CMI2018; 1,25%
2021 2020
Discount rate
+ 25bps
- 25bps
Salary increase
+ 25bps
- 25bps
Interest credit rate
+ 25bps
- 25bps
Mortality base table
Life expectancy + 1 year
Life expectancy - 1 year
(147)
159
102
(62)
30
(29)
35
(33)
(57)
62
4
(4)
24
(19)
26
(26)
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
257 ONWARD Annual Report
The following are the expected payments or contributions to the defined benefit plan in
future years:
The average duration of the defined benefit plan obligation at the end of the reporting
period is 19 years (2020: 19 years).
Plan Assets Allocation
The asset allocation in the Swiss pension plan at December 31 was as follows:
Plan assets in 2021 do not include property occupied by or financial instruments issued
by ONWARD.
2021 2020
Within the next 12 months
Between 2 and 5 years
Beyond 5 years
123
640
1,428
51
205
472
Total expected payments
2,191 727
2021 2020
Bonds
Equities
Loans
Mortgages
Real Estate
Cash, derivatives and funds
1,004
168
52
207
300
25
519
70
44
106
141
1,756 879
1 2 3 4 5 6 7 8 9 10 11 12 13
5.1 Commitments & Contingencies
Legal Claim Contingencies
As at December 31, 2021, the Group had no legal claim contingencies.
Guarantees
The Group has provided a guarantee to High Tech Campus for EUR 41k, to EPFL for EUR
24k and to Wincasa for EUR 273k as collateral for the lease of the oce spaces.
Royalties
The Group has entered into three license agreements with EPFL that will pay out royalties
in case the Company is able to generate revenues in the future for products directly linked
to these licenses. The royalty scheme with EPFL is based on net sales.
On 27 September 2019 Neurorecovery Technologies Inc. (now ONWARD Medical Inc.)
entered into a license agreement with the Regents of the University of California acting
through Technology Development Group UCLA campus granting an exclusive license on
certain patents in certain fields of neuromodulation and spinal cord stimulation and a
non-exclusive license on certain other patent rights. Various revenue milestone payments
are due under the exclusive license and fixed royalty payments are due under the non-
exclusive license. The agreement contains various milestone and diligence obligations
ranging from USD 10k to USD 50k payable upon entering a phase III clinical trial, regulatory
approval and/or first commercial sale.
On 8 October 2019 Neurorecovery Technologies Inc. (now ONWARD Medical Inc.) entered
into a license agreement with the California Institute of Technology (“Caltech”), the laer
on behalf of various intellectual property owners, including UCLA, University of Louisville,
DEI and USC, granting an exclusive license on certain technology in certain fields of
epidural and transcutaneous neuromodulation and a non-exclusive license of certain other
intellectual property. Various revenue milestone payments, diligence obligations and fixed
royalty payments are due under the license. These payments range from USD 20k to USD
75k payable upon FDA approval, CE Mark and/or first commercial sale.
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
259 ONWARD Annual Report
5.2 Related Party Transactions
Note 1.2 provides the information about the Group’s structure including the details of
the subsidiaries. Transactions between the Company and its subsidiaries have been
eliminated on consolidation and are not disclosed in the notes.
The Group considers the board and the management team to be key management as
defined in IAS 24 ‘Related parties’. Full details of the remuneration of the board (CEO and
non-executives) are included in the Remuneration report.
2021
Salary, Bonuses
& Other (Short-
term Employee
Benefits)
Pension
Premiums (Post-
employment
Benefits)
Share-based
Payment
Total
Management team,
excluding CEO
CEO
Non-executive directors
2,073
1,163
431
78
28
–
2,164
2,140
1,180
4,315
3,331
1,611
3,667 106 5,484 9,256
2020
Salary, Bonuses
& Other (Short-
term Employee
Benefits)
Pension
Premiums (Post-
employment
Benefits)
Share-based
Payment
Total
Management team,
excluding CEO
CEO
Non-executive directors
1,385
427
340
33
5
–
840
746
619
2,258
1,178
959
2,152 38 2,205 4,395
1 2 3 4 5 6 7 8 9 10 11 12 13
5.3 Events Aer the Reporting Period
No other events have taken place aer the reporting period to date that need to be reported.
Consolidated Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
261 ONWARD Annual Report
1 2 3 4 5 6 7 8 9 10 11 12 13
For the Year Ended 31 December
All amounts in EUR ‘000 Notes 2021 2020
Grants 1,219 580
Total operating income
General and administrative expenses
B 1,219
(27,254)
580
(13,862)
Total operating expenses
Operating result for the period
Financial expenses
C
D
(27,254)
(26,035)
(5,662)
(13,862)
(13,283)
(4,483)
Result before tax
Income tax expense
Share in result of participating interests
E
(31,697)
–
(2,617)
(17,766)
8
(2,256)
Result aer tax (34,314) (20,014)
Company Statement
of Income
Company Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
The notes on pages 266 to 275 are an integral part of these separate financial statements.
263 ONWARD Annual Report
1 2 3 4 5 6 7 8 9 10 11 12 13
(Before appropriation on result) For the Year Ended 31 December
All amounts in EUR ‘000 Notes 2021 2020
Assets
Non-current assets
Property, plant and equipment
Financial assets
F
G
197
2,459
365
3,102
2,656 3,467
Current assets
Trade and other receivables
Cash at bank and in hand
H
I
7,846
88,777
2,948
6,294
96,623 9,241
99,279 12,708
Company
Balance Sheet
Company Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
265 ONWARD Annual Report
1 2 3 4 5 6 7 8 9 10 11 12 13
Equity & Liabilities
Equity and reserves
Issued capital
Share premium
Other reserves
Legal reserve: Currency translation dierences
Retained earnings
Result for the year
J
3,622
155,248
69
(283)
(41,660)
(34,314)
–
3,083
18,465
(532)
(33,097)
(20,014)
Total equity 82,683 (32,095)
Provisions
K
214 –
Non-current liabilities
L
11,451 41,817
Current liabilities
M
4,931 2,924
99,279 12,708
Company Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
The notes on pages 266 to 275 are an integral part of these separate financial statements.
267 ONWARD Annual Report
A. Presentation Of Financial Statements And Recognition And Measurement Principles
The description of the activities of ONWARD Medical N.V. (the company) and the company
structure, as included in the notes to the consolidated financial statements, also applies to
the company financial statements.
These separate financial statements have been prepared in accordance with Title 9, Book
2 of the Dutch Civil Code. For seing the principles for the recognition and measurement of
assets and liabilities and determination of results for its separate financial statements, the
Company makes use of the option provided in section 2:362(8) of the Dutch Civil Code. This
means that the principles for the recognition and measurement of assets and liabilities
and determination of the result (hereinaer referred to as principles for recognition and
measurement) of the separate financial statements of the Company are the same as those
applied for the consolidated EU-IFRS financial statements. These principles also include
the classification and presentation of financial instruments, being equity instruments
or financial liabilities. In case no other principles are mentioned, refer to the accounting
principles as described in the consolidated financial statements. For an appropriate
interpretation of these statutory financial statements, the separate financial statements
should be read in conjunction with the consolidated financial statements.
Information on the use of financial instruments and on related risks for the group is
provided in the notes to the consolidated financial statements of the group.
1 2 3 4 5 6 7 8 9 10 11 12 13
Notes to the Company
Financial Statements
B. Operating Income
Operating income relates to grant income received. Government subsidies have been
received for the research and development of several development projects. There are no
unfulfilled conditions or contingencies aached to these subsidies.
Recognized
Grants Total Grant* 2021 2020
RESTORE
DISPERSE
WALKAGAIN
BESTABLE
PREP2GO
DARPA
ZonMW
370
311
500
99
348
1,152
250
–
–
–
16
139
981
83
37
36
185
25
104
192
–
Total 1,219 580
Company Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
269 ONWARD Annual Report
C. Operating Expenses
Operating expenses by nature are as follows:
D. Finanicial Income & Expenses
E. Share in Results from Participating Interests
An amount of EUR 2.617 million (2020: EUR 2.256 million) of share in results from
participating interests relates to group companies.
2021 2020
Employee benefits
Other operating expenses
Depreciation
12,122
14,909
223
2,629
10,976
257
27,254 13,862
2021 2020
Interest on loans
Interest banks
Interest on lease liabilities
Exchange losses
Bank charges
(5,430)
(146)
(7)
(65)
(14)
(4,392)
(24)
(14)
(41)
(12)
Total Finance expense
(5,662) (4,483)
1 2 3 4 5 6 7 8 9 10 11 12 13
F. Property, Plant & Equipment
2021 2020
Cost
Accumulated depreciation
1,116
(751)
950
(519)
Net book value at 1 January
Investments
Assets acquired from business combination
Depreciation for the year
365
55
–
(223)
431
166
–
(232)
Net change
Cost
Accumulated depreciation
(168)
1,171
(974)
(66)
1,116
(751)
Net book value at 31 December 197 365
Company Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
271 ONWARD Annual Report
G. Financial Fixed Assets
Financial fixed assets consist of participating interests in group companies. Financial
fixed assets are accounted for in the Company financial statements at net asset value.
They are tested for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised for the
amount by which the asset’s carrying amount exceeds its recoverable amount.
The Company has the firm intention to support its subsidiary, ONWARD Medical SA, to
meet its obligations to third parties. A provision has been recognised for the negative value
of the investment to the amount of EUR 214k (2020: Nil).
2021 2020
Cost
Accumulated impairments
3,102
–
5,765
–
Net book value at 1 January
Revaluations through OCI
Exchange dierences
Share in result of participating interests
Addition: License fees
Provision: negative participating interest
3,102
(714)
255
(2,617)
2,219
214
5,765
35
(442)
(2,256)
–
–
Net change
Cost
Accumulated impairments
(643)
2,459
–
(2,663)
3,102
–
Net book value at 31 December 2,459 3,102
1 2 3 4 5 6 7 8 9 10 11 12 13
H. Receivables
Amounts due from group companies are recognized initially at fair value and subsequently
at amortized cost. Amortized cost is determined using the eective interest rate. The
company recognize a credit loss for financial assets (such as a loan) based on an expected
credit loss (ECL) which will occur in the coming twelve months or – aer a significant
decrease in credit quality or when the simplified model can be used – based on the entire
remaining loan term.
For intercompany receivables the ECL would be applicable as well, however this could
cause dierences between equity in the consolidated and separate financial statements.
For this reason, the company elected to eliminate these dierences through the respective
receivable account in the separate financial statements.
2021 2020
Indirect tax receivable
Receivables from related parties
Other
Advance payments made
290
5,492
820
1,244
72
2,476
400
–
7,846 2,948
Company Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
273 ONWARD Annual Report
I. Cash & Cash Equivalents
Short-term deposits comprise a liquidity management account that is used, depending
on the immediate cash requirements of the Company, and earns interest at the respective
short-term deposit interest rates.
At December 31, 2021, the Company had no bank overdras. All cash is freely at the
disposal of the company.
J. Shareholders’ Equity
For the statement of changes in equity for the year ended 31 December 2021, please refer
to Consolidated statement of changes in equity in the consolidated financial statements.
Additional information on the shareholders’ equity is disclosed in note 4.0 of the
consolidated financial statements.
K. Provisions
2021 2020
Cash at bank 88,777 6,294
88,777 6,294
2021 2020
Opening balance as at 1 January
Negative participating interest
–
214
–
–
Balance as at 31 December 214 –
1 2 3 4 5 6 7 8 9 10 11 12 13
2021 2020
Balance as at 31 December 11,451 41,817
L. Non-Current Liabilities
2021
Innovation
Loan
Convertible
Preference A
Shares
Convertible
Loan
Loan as per 1 January
Loan amount received / preference shares issued
Interest / cumulative dividend accrued during the year
Conversion to ordinary shares - IPO
10,410
–
1,041
–
31,407
–
3,266
(34,673)
–
30,000
1,122
(31,122)
Net book value at 31 December 11,451 – –
2020
Innovation Loan
Convertible
Preference A Shares
Loan as per 1 January
Loan amount received / preference shares issued
Interest / cumulative dividend accrued during the year
7,561
1,994
855
25,918
1,952
3,537
Net book value at 31 December 10,410 31,407
Company Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
275 ONWARD Annual Report
M. Current Liabilities
Amounts due to group companies recognized as financial liabilities at amortized cost as
per the policy in the consolidated financial statements.
N. Compensation of the Board Of Directors
The members of the Board and the Management Team are considered key management
personnel as defined in IAS 24 ‘Related party disclosures’. For details on their
remuneration, reference is made to note 5.3 of the consolidated financial statements. Full
details of the remuneration of the board (CEO and non-executives) are included in the
Remuneration report.
O. Fees for Audit & Other Services
In accordance with article 382.a of Part 9, Book 2, of the Netherlands Civil Code, the total
audit cost can be specified as follows:
2021 2020
Trade payables
Payables from related parties
Other payables
464
2,358
2,109
724
1,255
1,006
4,931 2,985
Ernst & Young Accountants LLP
2021 2020
Audit of financial statements
Audit of special purpose financial statements
Other assurance services
180
679
39
43
–
27
898 70
1 2 3 4 5 6 7 8 9 10 11 12 13
P. Subsequent Events
No other events have taken place aer the reporting period to date that need to be reported.
Q. Proposed Appropriation of Result
The Management Board proposes to add the net loss in full to the retained earnings.
Company Financial Statements
14 15 16 17 18 19 20 21 22 23 24 25
277 ONWARD Annual Report
Independent Auditor’s Report
To: the shareholders and board of directors of ONWARD Medical N.V.
Report on the Audit of the Financial Statements 2021 Included in the Annual Report
Our Opinion
We have audited the financial statements 2021 of ONWARD Medical N.V. based in Amsterdam.
The financial statements comprise the consolidated and company financial statements.
In our opinion:
• The accompanying consolidated financial statements give a true and fair view of the
financial position of ONWARD Medical N.V. as at 31 December 2021 and of its result and
its cash flows for 2021 in accordance with International Financial Reporting Standards
as adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch
Civil Code
• The accompanying company financial statements give a true and fair view of the
financial position of ONWARD Medical N.V. as at 31 December 2021 and of its result for
2021 in accordance with Part 9 of Book 2 of the Dutch Civil Code
1 2 3 4 5 6 7 8 9 10 11 12 13
Other Information
The consolidated financial statements comprise:
• The consolidated statement of financial position as at 31 December 2021
• The following statements for 2021: the consolidated statement of profit and loss, the
consolidated statement of comprehensive income, the consolidated statement of
changes in equity and cash flows
• The notes comprising a summary of the significant accounting policies and other
explanatory information.
The company financial statements comprise:
• The company balance sheet as at 31 December 2021
• The company statement of income for 2021
• The notes comprising a summary of the accounting policies and other
explanatory information.
14 15 16 17 18 19 20 21 22 23 24 25
279 ONWARD Annual Report
Basis for Our Opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards
on Auditing. Our responsibilities under those standards are further described in the Our
responsibilities for the audit of the financial statements section of our report.
We are independent of ONWARD Medical N.V. in accordance with the EU Regulation
on specific requirements regarding statutory audit of public-interest entities, the “Wet
toezicht accountantsorganisaties” (Wta, Audit firms supervision act), the “Verordening
inzake de onafhankelijkheid van accountants bij assurance-opdrachten” (ViO, Code of
Ethics for Professional Accountants, a regulation with respect to independence) and other
relevant independence regulations in the Netherlands. Furthermore we have complied with
the “Verordening gedrags- en beroepsregels accountants” (VGBA, Dutch Code of Ethics).
We believe the audit evidence we have obtained is sucient and appropriate to provide a
basis for our opinion.
Information in Support of Our Opinion
We designed our audit procedures in the context of our audit of the financial statements
as a whole and in forming our opinion thereon. The following information in support of our
opinion and any findings were addressed in this context, and we do not provide a separate
opinion or conclusion on these maers.
Our Understanding of the Business
ONWARD Medical N.V. and its subsidiaries (the “Group”) are developing both an
Implantable Neuro-stimulation System (INS) and a non-invasive system for electrical
stimulation of specific areas of the spinal cord. The group is structured in components and
we tailored our group audit approach accordingly. In October 2021 the company obtained a
primary listing on Euronext in Brussels. We paid specific aention in our audit to a number
of areas driven by the operations of the group and our risk assessment.
We start by determining materiality and identifying and assessing the risks of material
misstatement of the financial statements, whether due to fraud or error in order to design
1 2 3 4 5 6 7 8 9 10 11 12 13
audit procedures responsive to those risks and to obtain audit evidence that is sucient
and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
Materiality
We have also taken into account misstatements and/or possible misstatements that in our
opinion are material for the users of the financial statements for qualitative reasons.
We agreed with the board of directors that misstatements in excess of € 55,000, which are
identified during the audit, would be reported to them, as well as smaller misstatements
that in our view must be reported on qualitative grounds.
Materiality € 1,100,000
Benchmark applied 3% of the operating expenses
Explanation R&D companies such as ONWARD Medical N.V., which are
in the start-up phase, report no or modest revenues. The
stakeholders expect the entity to operate at a loss during
the R&D phase. The value that owners or others generally
aribute to these entities is primarily based on the promise
of future success of the products. Based on these factors we
deem operating expenses to be a suitable basis, as it is one of
the most important measures of the company’s performance.
Other Information
14 15 16 17 18 19 20 21 22 23 24 25
281 ONWARD Annual Report
Scope of the Group Audit
ONWARD Medical N.V. is at the head of a group of entities. The financial information of
this group is included in the consolidated financial statements.
Because we are ultimately responsible for the opinion, we are also responsible
for directing, supervising and performing the group audit. In this respect we have
determined the nature and extent of the audit procedures to be carried out for group
entities. Decisive were the size and/or the risk profile of the group entities or operations.
On this basis, we selected group entities for which an audit or review had to be carried
out on the complete set of financial information or specific items.
Our group audit mainly focused on significant group entities. We selected ONWARD
Medical N.V., ONWARD Medical S.A. and ONWARD Medical Inc. as significant entities
based on their size and/or their risk profile and performed full scope procedures for
these entities. We have performed audit procedures ourselves at these group entities as
the accounting function is centralized for the group.
In total these procedures represent 100% of the group’s total assets, 100% of profit/loss
and 100% of gross revenues.
By performing the procedures mentioned above at components of the group, together
with additional procedures at group level, we have been able to obtain sucient and
appropriate audit evidence about the group’s financial information to provide an opinion
about the consolidated financial statements.
Teaming & Use of Specialists
We ensured that the audit team included the appropriate skills and competences
which are needed for the audit of a listed client in the medical technology industry. We
included specialists in the areas of IT audit, forensics, share based payments, income
tax and actuaries.
1 2 3 4 5 6 7 8 9 10 11 12 13
Our Focus on Fraud and Non-Compliance with Laws and Regulations
Our Responsibility
Although we are not responsible for preventing fraud or non-compliance and we cannot be
expected to detect non-compliance with all laws and regulations, it is our responsibility to
obtain reasonable assurance that the financial statements, taken as a whole, are free from
material misstatement, whether caused by fraud or error.
Our Audit Response Related to Fraud Risks
We identify and assess the risks of material misstatements of the financial statements due
to fraud. During our audit we obtained an understanding of the ONWARD Medical N.V. and
its environment and the components of the system of internal control, including the risk
assessment process and management’s process for responding to the risks of fraud and
monitoring the system of internal control as well as the outcomes.
We refer to section 17 Risk Management and Control in the Annual Report for
management’s fraud risk assessment.
We evaluated the design and relevant aspects of the system of internal control and in
particular the fraud risk assessment, as well as the code of conduct and whistle blower
procedures. We evaluated the design and the implementation and, where considered
appropriate, tested the operating eectiveness, of internal controls designed to mitigate
fraud risks.
As part of our process of identifying fraud risks, we evaluated fraud risk factors with
respect to financial reporting fraud, misappropriation of assets and bribery and corruption
in close co-operation with our forensic specialists. We evaluated whether these factors
indicate that a risk of material misstatement due fraud is present.
We incorporated elements of unpredictability in our audit. We also considered the outcome
of our other audit procedures and evaluated whether any findings were indicative of fraud
or non-compliance.
Other Information
14 15 16 17 18 19 20 21 22 23 24 25
283 ONWARD Annual Report
As in all of our audits, we addressed the risks related to management override of controls.
For the risk related to management override of controls we have performed procedures
among others to evaluate key accounting estimates for management bias that may
represent a risk of material misstatement due to fraud, in particular relating to important
judgment areas and significant accounting estimates as disclosed in note 1.8 to the
financial statements. We have also used data analysis to identify and address high-risk
journal entries.
We considered available information and made enquiries of relevant executives and directors.
The fraud risk we identified, enquires and other available information did not lead to
specific indications for fraud or suspected fraud potentially materially impacting the view
of the financial statements.
Our Audit Response Related to Risks of Non-Compliance with Laws & Regulations
We assessed factors related to the risks of non-compliance with laws and regulations that
could reasonably be expected to have a material eect on the financial statements from
our general industry experience, through discussions with the management board, reading
minutes, and inspection of compliance reports, and performing substantive tests of details
of classes of transactions, account balances or disclosures.
We also inspected legal expenses and correspondence with regulatory authorities and
remained alert to any indication of (suspected) non-compliance throughout the audit.
Finally we obtained wrien representations that all known instances of non-compliance
with laws and regulations have been disclosed to us.
Our Audit Response Related to Going Concern
Management has made a specific assessment of ONWARD Medical N.V.’s ability to
continue as a going concern and to continue its operations for at least the next 12 months
in note 1.6 to the financial statements.
1 2 3 4 5 6 7 8 9 10 11 12 13
We discussed and evaluated the specific assessment with management exercising
professional judgment and maintaining professional skepticism.
We considered whether management’s going concern assessment, based on our
knowledge and understanding obtained through our audit of the financial statements
or otherwise, contains all events or conditions that may cast significant doubt on
the company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw aention in our auditor’s report to the related
disclosures in the financial statements or, if such disclosures are inadequate, to modify
our opinion.
Based on our procedures performed, we did not identify serious doubts on the entity’s
ability to continue as a going concern for the next 12 months.
We performed the following procedures in order to identify and assess the risks of going
concern and to conclude on the appropriateness of management’s use of the going
concern basis of accounting. We discussed and evaluated the specific assessment with
management exercising professional judgment and maintaining professional skepticism,
and specifically focusing on, among others, the process followed by management to
make the assessment and management bias that could represent a risk and the impact
of current events and conditions on the company’s operations.
We evaluated forecasted cash flows, with a focus on whether the company will have
sucient liquidity to continue to meet its financial obligations as they fall due.
Based on our procedures performed, we concluded that the degree of consideration
of all available information in management’s going concern assessment and related
disclosures in the financial statements are appropriate in the circumstances and in
accordance with the financial reporting framework mentioned.
Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause a company to cease to continue
as a going concern.
Other Information
14 15 16 17 18 19 20 21 22 23 24 25
285 ONWARD Annual Report
Our Key Audit Maers
Key audit maers are those maers that, in our professional judgment, were of most
significance in our audit of the financial statements. We have communicated the key audit
maers to board of directors. The key audit maers are not a comprehensive reflection of
all maers discussed.
Risk
At year-end 2021, ONWARD Medical N.V. carried an
intangible
asset balance of € 10.0 million, consisting of
goodwill (€ 1.7 million), capitalized in-process R&D expenses
(€ 6.1 million) and capitalized license fees of € 2.2 million. The
goodwill as well as the in-process R&D expenses relate to the
acquisition of ONWARD Medical Inc in 2019 and subsequent
license fees. In accordance with EU-IFRS, ONWARD Medical
N.V. is required to perform impairment tests on an annual
basis. These impairment tests are significant to our audit
because the assessment process is complex, requires
management judgment, and is based on assumptions that
are affected
by expected future market conditions. Furthermore, the
occurrence of the IPO in October 2021 triggered the change in
ownership clauses in certain license agreements, resulting in
additional payments capitalized in 2021. For these reasons,
we consider this a key audit matter.
1 2 3 4 5 6 7 8 9 10 11 12 13
Our audit approach
As part of our audit procedures we focused on the
assumptions and methodologies used by the company, and
also on the robustness of the planning process to evaluate
whether the company is able to prepare reliable estimates.
The value of the in-process R&D is contingent on the success
of the US Food and Drug Assocoation (FDA) and other
competent authorities’ approval of the company’s products.
To this end, management prepared a “success scenario” and
a “failure scenario” to address the challenges of achieving the
necessary approvals.
The company uses assumptions with respect to growth rate
in the US, based on a report issued by the Congressional
Budget office in the US. In order to assess the reasonability of
input data, the valuation model and the discount rate, we
have, among other procedures, compared the data with
external data such as expected inflation rates, external
market growth expectations and by analyzing sensitivities in
the company’s impairment testing model. With regard to the
sensitivities, we specifically focused on the risk of not
achieving regulatory approval and whether
a reasonable possible change in assumptions, such as the
discount rate and the growth rate, could cause the carrying
amount to exceed its recoverable amount. We also focused
on the adequacy of the company’s disclosures regarding
assumptions and sensitivities as well as consistency between
the going concern forecasts and the inputs in the company’s
impairment testing model.
Other Information
14 15 16 17 18 19 20 21 22 23 24 25
287 ONWARD Annual Report
Report on Other Information Included in the Annual Report
The annual report contains other information in addition to the financial statements and our
auditor’s report thereon.
Based on the following procedures performed, we conclude that the other information:
• Is consistent with the financial statements and does not contain material misstatements
• Contains the information as required by Part 9 of Book 2 for the management board
report and the other information as required by Part 9 of Book 2 of the Dutch Civil Code
and as required by Sections 2:135b and 2:145 sub section 2 of the Dutch Civil Code for the
remuneration report.
We have read the other information. Based on our knowledge and understanding obtained
through our audit of the financial statements or otherwise, we have considered whether the
other information contains material misstatements. By performing these procedures, we
comply with the requirements of Part 9 of Book 2 and Section 2:135b sub-Section 7 of the
Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is
substantially less than the scope of those performed in our audit of the financial statements.
Management is responsible for the preparation of the other information, including the
management board report in accordance with Part 9 of Book 2 of the Dutch Civil Code
and other information required by Part 9 of Book 2 of the Dutch Civil Code. Management
is responsible for ensuring that the remuneration report is drawn up and published in
accordance with Sections 2:135b and 2:145 sub section 2 of the Dutch Civil Code.
Key observations We consider management’s key assumptions and
estimates to be within an acceptable range. We agree with
management’s conclusion that no impairment of intangible
assets is required in 2021. We assessed that the disclosures in
respect of intangible assets in the financial statements (note
3.0) are appropriate.
1 2 3 4 5 6 7 8 9 10 11 12 13
Report on Other Legal and Regulatory Requirements and ESEF
Engagement
We were engaged by the general meeting as auditor of ONWARD Medical N.V. on 11
October 2021, as of the audit for the year 2021 and have operated as statutory auditor ever
since that date.
No Prohibited Non-Audit Services
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU
Regulation on specific requirements regarding statutory audit of public-interest entities.
European Single Electronic Reporting Format (ESEF)
ONWARD Medical N.V. has prepared the annual report in ESEF. The requirements for this
are set out in the Delegated Regulation (EU) 2019/815 with regard to regulatory technical
standards on the specification of a single electronic reporting format (hereinaer: the RTS
on ESEF).
In our opinion, the annual report, prepared in the XHTML format, including the partially
marked-up consolidated financial statements, as included in the reporting package by
ONWARD Medical N.V., complies in all material respects with the RTS on ESEF.
Management is responsible for preparing the annual report, including the financial
statements, in accordance with the RTS on ESEF, whereby management combines the
various components into a single reporting package.
Our responsibility is to obtain reasonable assurance for our opinion whether the annual
report in this reporting package complies with the RTS on ESEF.
Our procedures, taking into account Alert 43 of the NBA (the Netherlands Institute of
Chartered Accountants), included amongst others:
• Obtaining an understanding of the ONWARD Medical N.V.’s financial reporting process,
including the preparation of the reporting package
Other Information
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289 ONWARD Annual Report
• Obtaining the reporting package and performing validations to determine whether
the reporting package containing the Inline XBRL instance document and the XBRL
extension taxonomy files, has been prepared in accordance with the technical
specifications as included in the RTS on ESEF
• Examining the information related to the consolidated financial statements in the
reporting package to determine whether all required mark-ups have been applied and
whether these are in accordance with the RTS on ESEF.
Description of Responsibilities Regarding the Financial Statements
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code.
Furthermore, management is responsible for such internal control as management
determines is necessary to enable the preparation of the financial statements that are free
from material misstatement, whether due to fraud or error.
As part of the preparation of the financial statements, management is responsible for
assessing the company’s ability to continue as a going concern. Based on the financial
reporting frameworks mentioned, management should prepare the financial statements
using the going concern basis of accounting unless management either intends to
liquidate the company or to cease operations, or has no realistic alternative but to do so.
Management should disclose events and circumstances that may cast significant doubt
on the company’s ability to continue as a going concern in the financial statements.
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Our Responsibilities for the Audit of the Financial Statements
Our objective is to plan and perform the audit engagement in a manner that allows us to
obtain sucient and appropriate audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which
means we may not detect all material errors and fraud during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of these financial statements. The materiality aects the
nature, timing and extent of our audit procedures and the evaluation of the eect of
identified misstatements on our opinion.
We have exercised professional judgment and have maintained professional skepticism
throughout the audit, in accordance with Dutch Standards on Auditing, ethical
requirements and independence requirements. The ‘Information in support of our opinion’
section above includes an informative summary of our responsibilities and the work
performed as the basis for our opinion.
Our audit further included among others:
• Performing audit procedures responsive to the risks identified, and obtaining audit
evidence that is sucient and appropriate to provide a basis for our opinion
• Obtaining an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the eectiveness of the company’s internal control
• Evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management
• Evaluating the overall presentation, structure and content of the financial statements,
including the disclosures
• Evaluating whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation
Other Information
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Communication
We communicate with the management board regarding, among other maers, the
planned scope and timing of the audit and significant audit findings, including any
significant findings in internal control that we identify during our audit.
In this respect we also submit an additional report to the audit commiee in accordance
with Article 11 of the EU Regulation on specific requirements regarding statutory audit of
public-interest entities. The information included in this additional report is consistent with
our audit opinion in this auditor’s report.
We provide the audit commiee and management board with a statement that we have
complied with relevant ethical requirements regarding independence, and to communicate
with them all relationships and other maers that may reasonably be thought to bear on
our independence, and where applicable, related safeguards.
From the maers communicated with the audit commiee and management board,
we determine the key audit maers: those maers that were of most significance in the
audit of the financial statements. We describe these maers in our auditor’s report unless
law or regulation precludes public disclosure about the maer or when, in extremely rare
circumstances, not communicating the maer is in the public interest.
The Hague, 25 April 2022
Ernst & Young Accountants LLP
A.A. Kuijpers
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Profit Appropriation
Pursuant to the Articles of Association, the profits shown in the Company’s annual
accounts in respect of a financial year shall be appropriated as follows, and in the following
order of priority:
• to the extent that any preferred shares have been cancelled without full repayment
as described in the articles of association and without any such deficit subsequently
having been paid in full, an amount equal to any such (remaining) deficit shall
be distributed to those who held those preferred shares at the moment of such
cancellation becoming eective;
• To the extent that any Preferred Distribution (or part thereof) in relation to previous
financial years has not yet been paid in full as described in the articles of association, an
amount equal to any such (remaining) deficit shall be distributed on the preferred shares;
• The Preferred Distribution shall be distributed on the preferred shares in respect of the
financial year to which the annual accounts pertain;
• The Board shall determine which part of the remaining profits shall be added to the
Company’s reserves; and
• Subject to a proposal by the board of directors to that eect, the remaining profits shall
be at the disposal of the General Meeting for distribution on the ordinary shares.
Special Statutory Voting Rights
There are no special statutory voting rights.
Shares Carrying Limited Economic Entitlement
The preferred shares in the Company’s capital carry a limited entitlement to the
Company’s profit and reserves. As at 31 December 2021, no preferred shares in the
Company’s capital were issued.
Other Information
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Branches
The Company has no branches. The statutory list of all subsidiaries and aliated
companies, prepared in accordance with the relevant legal requirements (Netherlands
Civil Code, Part 9 of Book 2, Sections 379 and 414), forms part of the notes to the
consolidated financial statements.
Forward Looking Information / Statements
This document contains certain forward-looking statements with respect to the financial
condition, results of operations and business of ONWARD and certain of the plans and
objectives of ONWARD with respect to these items. In particular, the words ‘expect’,
‘anticipate’, ‘estimate’, ‘may’, ‘should’, ‘believe’, ‘outlook’, and similar expressions are intended
to identify forward-looking statements. By their nature, forward-looking statements involve
risk and uncertainty because they relate to events and depend on circumstances that will
occur in the future.
Actual results may dier materially from those expressed in these forward-looking
statements, and you should not place undue reliance on them. For a discussion of factors
that could cause future results to dier from such forward-looking statements, see also the
Risk management and control of this Annual Report.
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Definitions & Abbreviations
The following definitions are used in this report:
510(k)
Clearance under Section 510(k) of the
FDCA
AIS
ASIA impairment scale
AIMD
Active Implantable Medical Device –
Device relying on electrical energy and
intended to be introduced (partially or
totally) into the human body.
ASIA
American Spinal Injury Association
BDD
Breakthrough Device Designation -
Designation given by the FDA to allow a
timely access to devices providing a more
eective treatment or diagnosis of life-
threatening diseases by speeding-up their
development, assessment and review
Brain Spine Interface
Electrical signal produced by the brain
is recorded and translated into a signal
allowing the stimulation of the spine in a
timely manner
Caltech
California Institute for Technology
Cardiovascular
Relating to the heart and blood vessels
CARF
Commission of Accredited Rehabilitation
Facilities
CE
Conformité Européene
Cervical
Relating to the neck or located around the
neck area
CGC
The Dutch corporate governance code
issued on 8 December 2016
Chairperson
The Chairperson of the Board
CHUV
Centre Hospitalier Universitaire Vaudois
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CRO
Contract research organisations
CSO
Chief Scientific Ocer
DARPA
The US Department of Defense Advanced
Research Projects Agency
EBITDA
Earnings before interest, tax, depreciation
and amortization
EEA
European Economic Area
EPFL
École Polytechnique Fédérale de Lausanne
Epidural
Placed or administered outside the dura
mater
Eurostar Grants
A grant from the Eurostars Programme
of EUREKA together with the European
Community, named Prep2Go
FDA
U.S. Food and Drug Administration
FDCA
U.S. Federal Food, Drug, and Cosmetic Act
FTEs
Full time equivalent personnel
GCP
Good Clinical Practice
HDE
Humanitarian Device Exemption
Hemodynamics
Forces involved in blood circulation in the
body
HIPAA
Health Insurance Portability and
Accountability
HUD
Humanitarian use device
Hypertension
Higher blood pressure than normal range
Hypotension
Lower blood pressure than normal range
IPG
ONWARD implantable pulse generator
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Lesion
A damaged region in the body
LTIP
Long-Term Incentive Plan
Lumbar
Relating to the lumbar region of the back
MDR
Medical Device Regulation
Medical Devices Regulation
Regulation (EU) 2017/745
MHRA
Medicines and Healthcare products
Regulatory Agency
Neurodegenerative
Characterized by the degeneration of the
nervous system
Neuromodulation
Field of bioengineering implicating
technologies impacting neural interfaces
Neuroprosthetic
Device used to restore function in the body
via the interface of electrodes and the
nervous system.
Neurostimulation
Application of an electrical stimulation
inducing modulation or activation of the
nervous system for a therapeutic eect
Neurorehabilitation
Supervised program of training to restore
function to patients who suered from a
neurological disorder.
NHS
National Health Service – in the United
Kingdom: refers to the publicly funded
healthcare systems
Orthostatic hypotension
Hypotension caused by transition to an
upright position
Paraplegic
Someone aected by paralysis (partial or
complete) of the lower half of the body due
to an injury or disease of the spinal cord.
Perfusion
Passage of a fluid (blood, water..) through
blood vessels, tissue or organ
PMA
Pre-market approval
Other Information
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QSR
Quality System Regulations
Reeve Foundation
Christopher and Dana Reeve Foundation
RVO
Rijksdienst voor Ondernemend Nederland
Scaold (cellular)
Scaolds engineered to induce cellular
interactions contributing to the formation
of new functional tissues
SCI
Spinal Cord Injury – damage to the nerves
in the spine that circulate signals from
the brain to and from the body. It can
be caused by a trauma or a disease.
This damage can lead to temporary or
permanent dysfunctions.
Sensorimotor paralysis
Condition that decreases the ability of
a person to feel and move due to a
nerve damage
Spasticity
Abnormal increase in muscle tone usually
caused by nerve damage and can be
associated with pain
STIMO
STImulation Movement Overground (title of
clinical study)
Tetraplegic (Quadraplegic)
Someone aected by paralysis (partial or
complete) of upper and lower limbs due to
injury or disease of the spinal cord.
Thoracic
Related to the thoracic region of the back
Transcutaneous
Penetrating through the skin. For example:
transcutaneous stimulation is stimulation
delivered through the skin via electrodes
placed on the skin
UCLA
University of California, Los Angeles
Up-LIFT
Title of a pivotal trial using the Company’s
ARC
EX
System
Vascular
Relating to blood vessels
ZonMw grant
A grant from ZonMw
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Other Information
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Forward to
2022