Quest Pharmatech Inc V.QPT

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OQP, successful spin-off of bio division... Resolving reasons for refusal of opinion 'green light'

QP (KRW 3,890, 460 -10.6%) , a company specializing in automobile interior materials , succeeded in spin-off of the bio division, which was the reason for refusing an audit opinion this year. The company plans to focus on business stabilization this year and resume trading next year.

According to OQP on the 26th, at the extraordinary general meeting of shareholders held on the 23rd, the proposal of a spin-off of OQP Bio in the bio business division and Dool C&T Holdings in the investment and manufacturing management division was approved.
 

The split ratio is 0.678, 0.052, and 0.27 for OQP, OQP Bio, and Dool Mulsan Holdings, respectively. In the case of newly established companies through spin-off, 83,6958 shares are issued in the same way as OQP.

This spin-off is to resolve the refusal of an audit opinion in 2020 that occurred in March. Dasan Accounting Firm will take into account the adequacy of the amount of intangible assets related to OncoQuest, a Canadian drug development company, transferred by OQP through an asset transfer contract in April 2020, significant uncertainties in in-kind investment, and the debt ratio paid in exchange for the acquisition of bio assets. We rejected the audit opinion as it was viewed as uncertainty about the going concern assumption. After that, the KOSDAQ market headquarters of the Korea Exchange granted an improvement period until April 14, 2022.

In a spin-off, a company distributes shares of the newly established company to its shareholders according to their percentage of ownership. Accordingly, shareholders of OQP will have all the shares of OQP Bio and Doool Mulsan Holdings, and OQP will be able to resolve the reason for refusal of the audit opinion as the relationship with the bio division is cut off.

An OQP official said, "The split has resolved the uncertainty of the fair value evaluation of bio-related intangible assets, which is the essential reason for OQP's rejection of opinions on the financial statements." explained.

OQP plans to focus on responding to audits in 2021 and improving existing business performance by the end of the improvement period on April 14, 2022. According to the KOSDAQ listing regulations of the Korea Exchange revised in March 2019, if a listed company has a reason for delisting due to refusal of an audit opinion, the audit opinion for the current fiscal year is changed to an appropriate value or if an audit opinion for the next year is received appropriately, the reason for delisting will be resolved. because it is acknowledged.

The official said, "Accounting auditors in 2021 can already perform OQP audits after spin-off without burden," he said.

OQP Bio has been recruiting patients for the global phase 3 clinical trial of oregobumab, an ovarian cancer treatment, in 83 countries including the United States, Canada, Spain and Taiwan since the second half of last year. In Korea, it received approval from the Ministry of Food and Drug Safety in May and is preparing for clinical trials at six hospitals.

This official said, "We are planning to expand clinical participating hospitals, and we are discussing with IQVIA, a clinical trial agency that has contracted clinical services. In order to start in earnest, we plan to recruit patients with recurrent ovarian cancer and conduct a phase 2 clinical trial for co-administration with the global pharmaceutical company GSK's treatment Gejula."


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