TIDMGDR
RNS Number : 9816G
Genedrive PLC
21 November 2022
genedrive plc
("genedrive" or "the Company" or "the Group")
Audited Final Results
genedrive plc (AIM: GDR), the near patient molecular diagnostics
company, announces its audited Final Results for the year ended 30
June 2022.
Financial Highlights
-- Revenue for the year to 30 June 2022 of GBP0.05m (2021: GBP0.69m)
-- Loss for the year of GBP4.7m (2021: loss of GBP0.7m)
-- R&D spend of GBP3.9m (2021: GBP4.5m)
-- Debt free and cash at bank of GBP4.6m (2021: GBP2.6m)
Operational Highlights
-- JAMA Pediatrics' PALOH (Pharmacogenetics to Avoid Loss of
Hearing) paper published to support the implementation of the
Genedrive(R) MT-RNR1 test in the Neonatal Intensive Care
setting
-- First NHS Deployments and sales of the Genedrive(R) System
for Antibiotic Induced Hearing Loss at Manchester Hospitals
-- Launched 2nd generation Genedrive(R) system to support
strategy focus of assay development to emergency care settings
-- NICE accelerated evaluation of the Genedrive(R) MT-RNR1 ID test
-- NICE includes Genedrive(R) CYP2C19 ID Kit in Diagnostics Assessment Programme
-- Point-of-Care Genedrive(R) COV19-ID Kit received Coronavirus Test Device Approval ("CTDA")
-- New product development programme initiated for use of
Genedrive(R) Point-of-Care device for ischemic stroke treatment in
emergency care settings
-- Filed US FDA Pre-submission for the Genedrive(R) MT-RNR1 ID product range
David Budd, CEO of genedrive plc, said: The Company has made
good progress on advancing our strategy in pharmacogenetics, and
the opportunity to be leaders in the establishment of genetic
testing in acute point of care. Our Genedrive system delivers
unambiguous clinically actionable information on the wards by
nurses with no previous experience in molecular testing, making a
positive impact on health outcomes. Market development and
engagement is positive and growing, as we have unique products with
a positive health economic and clinical outcome."
For further details please contact:
genedrive plc +44 (0)161 989 0245
David Budd: CEO / Russ Shaw: CFO
Peel Hunt LLP (Nominated Adviser
and Joint Broker) +44 (0)20 7418 8900
James Steel / Oliver Duckworth
finnCap (Joint Broker) +44 (0)20 7220 0500
Geoff Nash / George Dollemore /
Nigel Birks / Alice Lane
Walbrook PR Ltd (Media & Investor +44 (0)20 7933 8780 or genedrive@walbrookpr.com
Relations)
+44 (0)7980 541 893 / +44 (0)7876
Paul McManus / Anna Dunphy 741 001
About genedrive plc ( http://www.genedriveplc.com ) genedrive
plc is a molecular diagnostics company developing and
commercialising a low cost, rapid, versatile, simple to use and
robust point of need molecular diagnostics platform for the
diagnosis of infectious diseases and for use in patient
stratification (genotyping), pathogen detection and other
indications. The Company has assays on market for the detection of
MT-RNR1, HCV, certain military biological targets, a high
throughput SARS-CoV-2 assay and a point of care test for
Covid-19.
Chairman's Statement
Resilient and innovating for the future
In response to the COVID-19 pandemic, global diagnostic needs
changed almost overnight and we refocussed the Company's resources
on developing COVID-19 tests to help support the fight against this
devastating virus. Prior to going through the restrictions and
testing regimes that hallmarked the pandemic, we conducted a review
of opportunities for the Genedrive system. That review led us to
identify opportunities to deploy Genedrive(R) in detecting defined
pharmacogenomic markers addressing unmet clinical needs of rapid
molecular diagnostics at the point of care in emergency medicine.
With that in mind, we have made excellent progress towards our
strategic goal of continuous innovation in our point-of-care
products.
Our Antibiotic Induced Hearing Loss (AIHL) test is the world's
first molecular test in an acute point-of-care setting. The test
delivers a molecular diagnostic result in under 30 minutes and
allows for treatment selection options depending on the genetic
variant of the patient. The Genedrive(R) MT-RNR1-ID Kit is now
being fast tracked for assessment in the UK by NICE. This is
testimony to the potential of both better health outcomes for
patients and positive health economic benefits to the NHS and
healthcare systems around the world. I find it hugely rewarding to
see our innovations setting new-borns off on a more positive
healthcare trajectory than was previously possible.
Our COVID-19 POC test was CE-marked in December 2021, later than
originally intended due to complexity of technical development and
regulatory delays but was in the end granted a CTDA (Coronavirus
Test Device Approval) in May 2022. Regrettably, the timing of these
approvals came as restrictions were being lifted, which meant that
we gained limited sales traction in the year. These restrictions
have remained lifted, but we are able to commercialise and supply
if market conditions change. In addition, during the course of our
development work on the COVID-19 POC test, we developed numerous
technical advances around the Genedrive(R) system which we are able
to apply in the development of other tests going forward.
Future developments are focused on maximising the unique
features of the Genedrive(R) device, being speed of result,
low-cost base, long shelf-life at ambient temperatures, and ease of
use as we target new areas for specific clinical opportunities.
Governance and People
I welcome Russ Shaw to the Board, who joined as Chief Financial
Officer on 7 April 2022, replacing Matthew Fowler. I would like to
thank Matthew for his contribution over the last five years and
wish him every success for the future.
The Board remains committed to ensuring its own effectiveness
and unwavering focus ensuring our governance framework, internal
controls, values and culture all align with our strategy and the
objectives of the Company.
Our people are the heart and soul of the Company and I would
like to thank everyone for their resilience, innovation and tenancy
in the development and delivery of our products.
Funding
We completed a placing and open offer in October 2021. The net
proceeds of GBP6.6m has extended our cash runway at least towards
the end of our 2023 financial year using a prudent forecasting
basis that excludes all revenues. Material revenues will extend our
runway further as we continuously assess our future funding options
and requirements. Given the inherent challenges of being first to
market in ground-breaking innovative products, compounded by the
size and complexity of dealing with the NHS, we will seek
additional funding before significant revenue traction is
achieved.
Outlook
Our Genedrive(R) AIHL test has been deployed first to the
Manchester University NHS Foundation Trust. This is a cornerstone
installation for us to act as a reference site to other NHS trusts.
We expect the NICE evaluation, given the health benefits and health
economics, will be the catalyst to springboard our AIHL test into
national commissioning by the NHS.
We have commenced the process for FDA approval, as we see huge
potential for AIHL which is additionally supported by the litigious
nature of the US market.
Finally, I would like to take this opportunity to thank you, as
Shareholders, for continued support and look forward to bringing
you further news as we deliver on our exciting strategy going
forward.
Dr Ian Gilham
Chairman
Chief Executive's Review
Innovation in Point-of-Care molecular diagnostics in Emergency
Medicine
Overview
This year has seen us take great strides towards changing the
way molecular diagnostics and personalised medicine can be
delivered. We continue to identify and tackle unmet clinical needs,
harnessing our expertise of in-vitro diagnostic assay development
and combining this with the advantages of our ever-evolving
Genedrive(R) platform, being small, easy to use, quick to result,
accurate and economical for wide adoption.
I would like to express my gratitude to the team for having the
ambition, innovation and relentless perseverance in bringing the
world's first molecular test to an emergency point-of-care setting.
I echo the Chairman's sentiment, that seeing the impact our AIHL
test is having to prevent deafness in infants is very gratifying
for everyone at the Company.
I am very positive about our Genedrive(R) CYP2C19-ID Kit - a
simple, rapid point-of-care test in development, with no
requirement for user result interpretation and provides results in
a clinically actionable timeframe for ischemic stroke patients.
Similar to AIHL, it uses our capabilities, chemistry and hardware
to rapidly produce a result at an emergency care bedside. By
analysing the genes of a patient's drug metabolic pathway, certain
poor drug options can be removed from the treatment regimen of each
individual patient, with the aim of providing reduced incidence of
subsequent strokes and clots, and better clinical outcomes.
We continue to evolve our Genedrive(R) platform, reducing sole
supplier dependency, onshoring and increasing our in-house
manufacturing capacity and capabilities.
Performance
Significant revenues are still to follow the success of our
product development, but our commercial rigour and market
visibility is greatly improved. Following the launch of MT-RNR1 in
the UK, there is a clear demand to implement the system in many
hospitals. But while a process of national commissioning can be
followed, in the interim each hospital needs to make its own
business case and establish funding for capital equipment and
tests. This process can be slow in an underfunded NHS despite the
very positive health economic case the Genedrive MT-RNR1 ID test
provides. Our process in establishing distributors outside of the
UK has been very targeted as its critical our partners know the
neonatal environment, and can also support point of care and
molecular diagnostics. Our commercial team has made solid progress
in the sales processes in the UK and also in 10 countries
internationally.
We created the fastest point-of-care COVID molecular test,
capable of delivering positive results as quickly as 7.5 minutes
and negative results at 17 minutes. Technical development delays as
well as with approval in the UK with CTDA meant that we received
our approval when the demand for testing had reduced and the world
was transitioning to "living with COVID" as the dominant Omicron
strain had reduced clinical impacts for most. Although we do not
know the trajectory that the pandemic will take, as immunity wanes
and if new variants continue to emerge, the could cause a change in
demand for testing during the winter months, which would present us
with commercial opportunities. As of today, COVID testing following
the summer months has not increased in the UK or
internationally.
Regulatory update
Our in-house Quality and Regulatory specialists successfully
guided the transition from the EU's existing In Vitro Diagnostic
Directive ("IVDD") to the new In Vitro Diagnostic Regulation
("IVDR") which came into effect in May 2022. Our AIHL, COV19, and
HCV portfolio are in compliance with current regulations, and our
new CYP2C19 assay will be the first that needs to fully go through
the new Directive. Initial launch under the UK regulatory
scheme
is currently targeted for April 2023.
Outlook
I am excited for what we are achieving. Our focus on
pharmacogenetic testing and investment in the development of new
products will start to bear more fruit in the second half of the
current financial year. While there is a time delay in adoption by
the NHS for new innovations, our AIHL test is supported by the
outcomes which dramatically improve lives and has the potential to
save the NHS millions of pounds every year. The route to adoption
of new clinical tests however takes time, as healthcare systems are
conservative in their nature and face inevitable budgetary
constraints. The engagement level from the markets is
encouraging.
It is pleasing to see that our two new emergency point-of-care
genetic screening tests are being evaluated by NICE. The AIHL test
has been selected to be fast-tracked via NICE's Early Value
Assessment Programme ("EVA"). EVA is a new review process, created
to drive innovation into the hands of healthcare professionals by
actively drawing in digital products, medical devices and
diagnostics that address national unmet needs. This should expedite
the test being written into clinical guidelines and rolled out to
the NHS nationally, allowing clinicians and patients to benefit
from the test sooner.
The US is a particularly attractive market for our unique AIHL
test given the potential to save hundreds of individuals from
life-long deafness and reduce litigation costs relating to the
unwanted side effects from antibiotic use on those carrying the
gene variant. In 2021, 3.7 million babies were born in the USA,
with 10.5% born prematurely. It was estimated that malpractice
litigation settlements in cases related to deafness caused by the
use of aminoglycosides average over US$1.1 million per case,
further adding to the positive health economic case of providing
accurate and timely testing to reduce unwanted side effects of
gentamicin usage.
We recruited a new Business Development team in mid-2022 to
execute our commercial strategy alongside our distribution partners
and with an innovative R&D pipeline, we continue to add to our
menu of assays and remain confident to deliver success in the
future in both improving lives and creating shareholder value.
David Budd
Chief Executive Officer
Financial Review
Revenue for the year was GBP0.05m (2021: GBP0.69m) and was
adversely impacted by absence of COVID-19 revenue, due to the
timing of bringing an approved product to the market. In the prior
year, revenue also included DoD sales that were not recurring in
the current year. Research and development costs were GBP3.9m
(2021: GBP4.5m) successfully adding to our menu of assays and
pipeline for future innovative products. Net cash outflow from
operating activities before taxation was GBP5.7m, down on the
GBP6.2m in the prior year following reduced activity and tight cost
control especially in the second half of the year. The operating
loss for the year was GBP5.6m (2021: GBP5.5m).
Financing costs and income
Financing costs were GBP0.02m (2021: GBP3.6m income) with 2021
including non-cash movements on the loan notes outstanding at 30
June 2020. These loan notes were held by the Business Growth Fund
and were converted in part in September 2020 and then in full in
December 2020. The finance income on the loan notes had two
elements: one attached to the option to convert and the other
related to the discount on these long-term loan notes. The option
to convert the loan notes to ordinary shares had a value that
fluctuated as the share price of the entity rose and fell. Owing to
share price movements between 30 June 2020 and the date of
conversions the value of the option to convert fell and created a
GBP3.9m gain. Interest accruing and unwinding of the discount up to
the point of conversion was GBP0.2m, giving a net financing income
of GBP3.6m. These movements were non-cash.
Taxation
The tax credit for the year was GBP1.0m (2021: GBP1.2m). The
Group investment in R&D falls within the UK Government's
R&D tax relief scheme for small and medium sized companies
where it meets the qualifying criteria and as the Group did not
make a profit in the year it is collected in cash following
submission of tax returns. The GBP1.0m is a receivable on the
balance sheet at the year end. In the prior year the total amount
of qualifying costs for the research and development tax credit was
restricted by grant income that the Group received. There is no
grant income restriction to the size of the claim in 2022.
Cash resources
Net cash outflow from operating activities before taxation was
GBP5.8m (2021: GBP6.2m). The operating loss cashflows were GBP5.3m
(2021: GBP5.2m) with working capital consuming GBP0.4m (2021:
GBP0.9m) mainly due to the decrease in trade and other payables and
increase in inventory.
The tax credit received was GBP1.2m (2021: GBP1.0m) and relates
to cash received under the UK Government's R&D tax relief
scheme.
Capital expenditure in the period was GBP0.06m (2021: GBP0.1m)
and cash paid to settle the loan notes converted during the year
was GBPnil (2021: GBP0.4m). Proceeds from sale of shares was
GBP6.7m (2021: GBP0.05m). The increase in cash for the year was
GBP2.0m (2021: GBP5.6m decrease) meaning a closing cash position of
GBP4.6m (2021: GBP2.6m).
Our unaudited cash balance as at the end of October 2022 was
GBP3m, reflecting a monthly burn rate of GBP0.4m since the year
end.
Balance sheet
Balance sheet net assets at 30 June 2022 were GBP5.6m (2021:
GBP3.6m). Fixed assets were GBP0.2m (2021: GBP0.3m) and include
right to use lease assets of GBP0.02m (2021: GBP0.2m).
Current assets of GBP6.4m (2021: GBP4.5m) included cash of
GBP4.6m (2021: GBP2.6m). Inventories of GBP0.7m (2021: GBP0.6m),
consisted mainly of raw materials used in manufacturing and
R&D. The remainder of current asset values were in receivables
of GBP0.1m (2021: GBP0.2m) and tax. The tax receivable was GBP1.0m
(2021: GBP1.2m) for the current year Corporation Tax Research and
Development tax claim.
Current liabilities were GBP1.0m (2021: GBP1.3m).
Net assets closed at GBP5.6m (2021: GBP3.6m). The comprehensive
loss for the year was GBP4.7m (2021: GBP0.7m).
Going concern
Following the equity fund raise which completed in October 2021
the Company has a cash runway to the end of the June 2023 financial
year. We are confident in gaining commercial traction and securing
significant revenues, but due to the time required to achieve this,
we will require additional funding in our 2023 financial year. As
described in the accounting policies, we continue to adopt a going
concern basis for the preparation of the accounts, but the above
condition represents a material uncertainty that may cast
significant doubt on the Group and Company's ability to continue as
a going concern.
Russ Shaw
Chief Financial Officer
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2022
Year ended Year ended
30 June 30 June
2022 2021
Note GBP'000 GBP'000
--------------------------------------------------- ---- ---------- ----------
Continuing operations
--------------------------------------------------- ---- ---------- ----------
Revenue 2 49 687
--------------------------------------------------- ---- ---------- ----------
Research and development costs (3,871) (4,509)
--------------------------------------------------- ---- ---------- ----------
Administrative costs (1,793) (1,660)
--------------------------------------------------- ---- ---------- ----------
Operating loss (5,615) (5,482)
--------------------------------------------------- ---- ---------- ----------
Finance (costs)/income 3 (16) 3,630
--------------------------------------------------- ---- ---------- ----------
Loss on ordinary activities before taxation (5,631) (1,852)
--------------------------------------------------- ---- ---------- ----------
Taxation 4 956 1,161
--------------------------------------------------- ---- ---------- ----------
Loss for the financial year (4,675) (691)
--------------------------------------------------- ---- ---------- ----------
Loss/total comprehensive expense for the financial
year (4,675) (691)
--------------------------------------------------- ---- ---------- ----------
Loss per share (pence)
--------------------------------------------------- ---- ---------- ----------
- Basic and diluted 5 (5.5p) (1.2p)
--------------------------------------------------- ---- ---------- ----------
Consolidated Balance Sheet
as at 30 June 2022
30 June 30 June
2022 2021
Note GBP'000 GBP'000
------------------------------------ ---- -------- --------
Assets
------------------------------------ ---- -------- --------
Non-current assets
------------------------------------ ---- -------- --------
Plant and equipment 206 301
------------------------------------ ---- -------- --------
Contingent consideration receivable 6 - 47
------------------------------------ ---- -------- --------
206 348
------------------------------------ ---- -------- --------
Current assets
------------------------------------ ---- -------- --------
Inventories 748 556
------------------------------------ ---- -------- --------
Trade and other receivables 107 158
------------------------------------ ---- -------- --------
Contingent consideration receivable 6 15 75
------------------------------------ ---- -------- --------
Current tax asset 956 1,166
------------------------------------ ---- -------- --------
Cash and cash equivalents 4,589 2,574
------------------------------------ ---- -------- --------
6,415 4,529
------------------------------------ ---- -------- --------
Total assets 6,621 4,877
------------------------------------ ---- -------- --------
Liabilities
------------------------------------ ---- -------- --------
Current liabilities
------------------------------------ ---- -------- --------
Trade and other payables (994) (1,166)
------------------------------------ ---- -------- --------
Lease liabilities (16) (119)
------------------------------------ ---- -------- --------
(1,010) (1,285)
------------------------------------ ---- -------- --------
Non-current liabilities
------------------------------------ ---- -------- --------
Total liabilities (1,010) (1,285)
------------------------------------ ---- -------- --------
Net assets 5,611 3,592
------------------------------------ ---- -------- --------
Equity
------------------------------------ ---- -------- --------
Called-up equity share capital 7 1,388 950
------------------------------------ ---- -------- --------
Other reserves 51,294 45,000
------------------------------------ ---- -------- --------
Accumulated losses (47,071) (42,358)
------------------------------------ ---- -------- --------
Total equity 5,611 3,592
------------------------------------ ---- -------- --------
Consolidated Statement of Changes in Equity
for the year ended 30 June 2022
Share Other Accumulated Total
capital reserves losses equity
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------- -------- --------- ----------- --------
Balance at 30 June 2020 780 42,620 (46,742) (3,342)
---------------------------------------- -------- --------- ----------- --------
Transactions with owners in their
capacity as owners:
Share issue - conversion of BGF bond 168 2,332 5,079 7,579
Share issue 2 44 - 46
Equity-settled share-based payments - 4 (4) -
---------------------------------------- -------- --------- ----------- --------
Transactions settled directly in equity 170 2,380 5,075 7,625
---------------------------------------- -------- --------- ----------- --------
Total comprehensive loss for the year - - (691) (691)
---------------------------------------- -------- --------- ----------- --------
Balance at 30 June 2021 950 45,000 (42,358) 3,592
---------------------------------------- -------- --------- ----------- --------
Transactions with owners in their
capacity as owners:
Share issue 426 6,186 - 6,612
Share issue - deferred consideration 8 (8) - -
Equity-settled share-based payments 4 116 (38) 82
---------------------------------------- -------- --------- ----------- --------
Transactions settled directly in equity 438 6,294 (38) 6,694
---------------------------------------- -------- --------- ----------- --------
Total comprehensive loss for the year - - (4,675) (4,675)
---------------------------------------- -------- --------- ----------- --------
Balance at 30 June 2022 1,388 51,294 (47,071) 5,611
---------------------------------------- -------- --------- ----------- --------
Consolidated Cash Flow Statement
for the year ended 30 June 2022
Year ended Year ended
30 June 30 June
2022 2021
Note GBP'000 GBP'000
-------------------------------------------------- ---- ---------- ----------
Cash flows from operating activities
-------------------------------------------------- ---- ---------- ----------
Operating loss for the year (5,615) (5,482)
-------------------------------------------------- ---- ---------- ----------
Depreciation, amortisation and impairment 63 60
-------------------------------------------------- ---- ---------- ----------
Depreciation, right-of-use assets 187 186
-------------------------------------------------- ---- ---------- ----------
ATL Research credits - (5)
-------------------------------------------------- ---- ---------- ----------
Share-based payment 38 4
-------------------------------------------------- ---- ---------- ----------
Operating loss before changes in working capital (5,327) (5,237)
-------------------------------------------------- ---- ---------- ----------
Increase in inventories (192) (143)
-------------------------------------------------- ---- ---------- ----------
Decrease in trade and other receivables 51 240
-------------------------------------------------- ---- ---------- ----------
Decrease in deferred revenue - (67)
-------------------------------------------------- ---- ---------- ----------
Decrease in trade and other payables (292) (963)
-------------------------------------------------- ---- ---------- ----------
Net cash outflow from operating activities
before taxation (5,760) (6,170)
-------------------------------------------------- ---- ---------- ----------
Tax received 1,166 1,018
-------------------------------------------------- ---- ---------- ----------
Net cash outflow from operating activities (4,594) (5,152)
-------------------------------------------------- ---- ---------- ----------
Cash flows from investing activities
-------------------------------------------------- ---- ---------- ----------
Finance income - 1
-------------------------------------------------- ---- ---------- ----------
Finance costs (16) (33)
-------------------------------------------------- ---- ---------- ----------
Acquisition of plant and equipment, net of
loss on disposals (62) (104)
-------------------------------------------------- ---- ---------- ----------
Proceeds from disposal of discontinued operations 6 107 137
-------------------------------------------------- ---- ---------- ----------
Net cash inflow from investing activities 29 1
-------------------------------------------------- ---- ---------- ----------
Cash flows from financing activities
-------------------------------------------------- ---- ---------- ----------
Proceeds from share issue 6,694 46
Repayment of lease liabilities (119) (144)
Cash paid to settle convertible bonds - (358)
-------------------------------------------------- ---- ---------- ----------
Net inflow/(outflow) from financing activities 6,575 (456)
-------------------------------------------------- ---- ---------- ----------
Net increase/(decrease) in cash equivalents 2,010 (5,607)
-------------------------------------------------- ---- ---------- ----------
Effects of exchange rate changes on cash and
cash equivalents 5 (37)
-------------------------------------------------- ---- ---------- ----------
Cash and cash equivalents at beginning of year 2,574 8,218
-------------------------------------------------- ---- ---------- ----------
Cash and cash equivalents at end of year 4,589 2,574
-------------------------------------------------- ---- ---------- ----------
Analysis of net funds
-------------------------------------------------- ---- ---------- ----------
Cash at bank and in hand 4,589 2,574
-------------------------------------------------- ---- ---------- ----------
Net funds 4,589 2,574
-------------------------------------------------- ---- ---------- ----------
Notes to the Financial Information
for the year ended 30 June 2022
General information
genedrive plc ('the Company') is a company incorporated and
domiciled in the UK. The registered head office is The CTF
Building, Grafton Street, Manchester M13 9XX, United Kingdom.
genedrive plc and its subsidiaries (together, 'the Group') is a
molecular diagnostics business developing and commercialising a
low-cost, rapid, versatile, simple-to-use and robust point-of-need
or point-of-care diagnostics platform for the diagnosis of
infectious diseases and for use in patient stratification
(genotyping), pathogen detection and other indications.
genedrive plc is a public limited company, whose shares are
listed on the London Stock Exchange Alternative Investment
Market.
1. Significant accounting policies
The financial information for the year ended 30 June 2021 has
been extracted from the Group's audited statutory financial
statements which were approved by the Board of Directors on 8
November 2021 and which have been delivered to the Registrar of
Companies for England and Wales. The report of the auditor on these
financial statements was unqualified, did not contain a statement
under Section 498(2) or Section 498(3) of the Companies Act
2006.
The report of the auditor on the 30 June 2022 statutory
financial statements was unqualified, did not contain a statement
under Section 498(2) or Section 498(3) of the Companies Act 2006,
but did draw attention to the Group's ability to continue as a
going concern by way of a material uncertainty paragraph.
The information included in this announcement has been prepared
on a going concern basis under the historical cost convention as
modified by the revaluation of financial assets and financial
liabilities (including derivative instruments) at fair value
through profit or loss, and in accordance with UK-adopted
International Accounting Standards.
The information in this announcement has been extracted from the
audited statutory financial statements for the year ended 30 June
2022 and as such, does not constitute statutory financial
statements within the meaning of section 435 of the Companies Act
2006 as it does not contain all the information required to be
disclosed in the financial statements prepared in accordance with
UK-adopted International Accounting Standards.
This announcement was approved by the board of directors and
authorised for issue via RNS on 21 November 2022.
Going concern
The Group's business activities, market conditions, principal
risks and uncertainties along with the Group's financial position
are described in the full annual accounts.. The Group funds its
day-to-day cash requirements from existing cash reserves. These
matters have been considered by the Directors in forming their
assessment of going concern.
The Directors have concluded that it is necessary to draw
attention to the revenue and cost forecasts in the business plans
during the period to June 2024. The Group and Company does not
currently have sufficient cash resources to continue as a going
concern during the forecast period due to the time expected to be
needed to gain commercial traction in its revenues. The forecasts
prepared by the Directors include a plan to raise additional funds
from shareholders or debt providers in the financial year to June
2023.
While the Board has a successful track record in raising funds,
there remains uncertainty as to the amount of funding that could be
raised from shareholders or debt providers. This condition
represents a material uncertainty that may cast significant doubt
on the Group and Company's ability to continue as a going
concern.
However, based on the progress being made towards bringing the
AIHL product to market and having made enquiries, the Directors
have reasonable confidence in their ability to raise additional
funds and therefore have a reasonable expectation that the Group
has access to adequate resources to continue in operational
existence for the foreseeable future.
Accordingly, the Directors have concluded that it is appropriate
to continue to adopt the going concern basis of accounting in
preparing these financial statements. These financial statements do
not include the adjustments that would result if the Group and
Company were unable to continue as a going concern.
2. Operating segments
For internal reporting and decision-making, the Group is
organised into one segment, Diagnostics. Diagnostics is
commercialising the Genedrive(R) point-of need molecular testing
platform. In future periods, and as revenue grows, the Group may
review management account information by type of assay and thus
split out Diagnostics into segments - however, for now, the single
segment is appropriate.
The chief operating decision-maker primarily relies on turnover
and operating loss to assess the performance of the Group and make
decisions about resources to be allocated to each segment.
Geographical factors are reviewed by the chief operating
decision-maker, but as substantially all operating activities are
undertaken in the UK, geography is not a significant factor for the
Group. Accordingly, only sales have been analysed into geographical
statements.
The results of the operating division of the Group are detailed
below.
Diagnostics Corporate
segment costs Total
Business segments GBP'000 GBP'000 GBP'000
-------------------------------------------- ----------- --------- --------
Year ended 30 June 2022
-------------------------------------------- ----------- --------- --------
Revenue 49 - 49
-------------------------------------------- ----------- --------- --------
Operating loss (3,822) (1,793) (5,615)
-------------------------------------------- ----------- --------- --------
Net finance costs (16)
-------------------------------------------- ----------- --------- --------
Loss on ordinary activities before taxation (5,631)
-------------------------------------------- ----------- --------- --------
Taxation 956
-------------------------------------------- ----------- --------- --------
Loss for the financial year (4,675)
-------------------------------------------- ----------- --------- --------
Total comprehensive expense for the year (4,675)
-------------------------------------------- ----------- --------- --------
Diagnostics Corporate
segment costs Total
Business segments GBP'000 GBP'000 GBP'000
-------------------------------------------- ----------- --------- --------
Year ended 30 June 2021
-------------------------------------------- ----------- --------- --------
Revenue 687 - 687
-------------------------------------------- ----------- --------- --------
Operating loss (3,822) (1,660) (5,482)
-------------------------------------------- ----------- --------- --------
Net finance costs 3,630
-------------------------------------------- ----------- --------- --------
Loss on ordinary activities before taxation (1,852)
-------------------------------------------- ----------- --------- --------
Taxation 1,161
-------------------------------------------- ----------- --------- --------
Loss for the financial year (691)
-------------------------------------------- ----------- --------- --------
Total comprehensive expense for the year (691)
-------------------------------------------- ----------- --------- --------
Diagnostics Corporate
segment costs Total
GBP'000 GBP'000 GBP'000
------------------------ ----------- --------- --------
Year ended 30 June 2022
------------------------ ----------- --------- --------
Segment assets 1,003 5,618 6,621
------------------------ ----------- --------- --------
Segment liabilities (905) (105) (1,010)
------------------------ ----------- --------- --------
Year ended 30 June 2021
------------------------ ----------- --------- --------
Segment assets 923 3,954 4,877
------------------------ ----------- --------- --------
Segment liabilities (937) (348) (1,285)
------------------------ ----------- --------- --------
Additions to non-current assets: Diagnostics segment GBP124k
(2021: GBP320k) and Corporate costs GBP31k (2021: GBP80k).
Geographical segments
The Group's operations are located in the United Kingdom. The
following table provides an analysis of the Group's revenue by
customer location:
Year ended Year ended
30 June 30 June
2022 2021
All on continuing operations GBP'000 GBP'000
----------------------------- ---------- ----------
United Kingdom 37 40
Europe 10 17
United States of America 2 613
----------------------------- ---------- ----------
Rest of the world - 17
----------------------------- ---------- ----------
49 687
----------------------------- ---------- ----------
Revenues from two customers accounted for more than 10% of total
revenue in the current and prior year.
3. Finance income/(costs)- net
Year ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
------------------------------------------------------------- ---------- ----------
Interest income on bank deposits - 1
Movement in fair value of derivative embedded in convertible
bonds - 3,864
------------------------------------------------------------- ---------- ----------
Finance cost on liabilities measured at amortised cost - (202)
------------------------------------------------------------- ---------- ----------
Finance lease costs (16) (33)
------------------------------------------------------------- ---------- ----------
(16) 3,630
------------------------------------------------------------- ---------- ----------
4. Taxation
(a) Recognised in the income statement
Year ended Year ended
30 June 30 June
2022 2021
Current tax: GBP'000 GBP'000
----------------------------------------- ---------- ----------
Research and development tax credits (956) (1,166)
----------------------------------------- ---------- ----------
Less: recognised as ATL Research credits - 5
----------------------------------------- ---------- ----------
Total tax credit for the year (956) (1,161)
----------------------------------------- ---------- ----------
(b) Reconciliation of the total tax credit
The tax credit assessed on the loss for the year is lower (2021:
higher) than the weighted average applicable tax rate for the year
ended 30 June 2022 of 19.0% (2021: 19.0%). The differences are
explained below:
Year
ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
--------------------------------------------------------- -------- ----------
Loss before taxation on continuing operations (5,631) (1,852)
--------------------------------------------------------- -------- ----------
Tax using UK corporation tax rate of 19.0% (2021: 19.0%) (1,070) (352)
--------------------------------------------------------- -------- ----------
Adjustment in respect of R&D tax credit recognised as
Above The Line ('ATL') - 1
--------------------------------------------------------- -------- ----------
Adjustment in respect of R&D tax credit claimed (412) (500)
--------------------------------------------------------- -------- ----------
Items (taxable) for tax purposes - permanent (7) (777)
--------------------------------------------------------- -------- ----------
Items not deductible for tax purposes - temporary (3) -
--------------------------------------------------------- -------- ----------
Deferred tax not recognised 703 467
--------------------------------------------------------- -------- ----------
Rate differences (167) -
--------------------------------------------------------- -------- ----------
Total tax credit for the year (956) (1,161)
--------------------------------------------------------- -------- ----------
No deferred tax assets are recognised at 30 June 2022 (2021:
GBPnil). Having reviewed future profitability in the context of
trading losses carried, it is not probable that there will be
sufficient profits available to set against brought forward
losses.
The Group had trading losses, as computed for tax purposes, of
approximately GBP19,032k (2021: GBP14,356k) available to carry
forward to future periods; this excludes management expenses.
In accordance with the provisions of the Finance Act 2000 in
respect of research and development allowances, the Group is
entitled to claim tax credits for certain research and development
expenditure. These credits are disclosed partly as Above The Line
research and development credits ('ATL Research credits') within
research and development costs and partly as research and
development tax credits within taxation on ordinary activities. The
total amount included in the financial statements in respect of the
year ended 30 June 2022 was GBP956k (2021: GBP1,166k) which
included GBPnil (2021: GBP5k) disclosed as ATL Research credits
deducted from research and development costs with the balance of
GBP956k (2021: GBP1,161k) disclosed within taxation on ordinary
activities as detailed above.
5. Earnings per share
2022 2021
GBP'000 GBP'000
--------------------------------- -------- --------
Loss for the year after taxation (4,675) (691)
--------------------------------- -------- --------
2022 2021
Group Number Number
---------------------------------------------------- ---------- ----------
Weighted average number of ordinary shares in issue 84,860,240 58,987,344
---------------------------------------------------- ---------- ----------
Potentially dilutive ordinary shares - -
---------------------------------------------------- ---------- ----------
Adjusted weighted average number of ordinary shares
in issue 84,860,240 58,987,344
---------------------------------------------------- ---------- ----------
Loss per share on continuing operations
---------------------------------------------------- ---------- ----------
- Basic (5.5)p (1.2)p
---------------------------------------------------- ---------- ----------
- Diluted (5.5)p (1.2)p
---------------------------------------------------- ---------- ----------
The basic earnings per share is calculated by dividing the
earnings attributable to ordinary shareholders for the year by the
weighted average number of ordinary shares in issue during the
year.
As the Company is loss-making, no potentially dilutive options
have been added into the EPS calculation. Had the Company made a
profit in the period:
2022 2021
Group Number Number
------------------------------------------------------ --------- ---------
Potentially dilutive shares on deferred consideration - 500,000
Potentially dilutive shares from share options 971,238 3,027,508
------------------------------------------------------ --------- ---------
Potentially dilutive shares within the SIP 208,703 158,784
------------------------------------------------------ --------- ---------
Potentially dilutive ordinary shares 1,179,941 3,686,292
------------------------------------------------------ --------- ---------
6. Contingent consideration receivable
Greater
than Less than
12 months 12 months Total
GBP'000 GBP'000 GBP'000
------------------------ ---------- ---------- --------
Balance at 30 June 2020 47 212 259
------------------------ ---------- ---------- --------
Balance at 30 June 2021 47 75 122
------------------------ ---------- ---------- --------
Received in the period (47) (60) (107)
------------------------ ---------- ---------- --------
Balance at 30 June 2022 - 15 15
------------------------ ---------- ---------- --------
The amount provided on the balance sheet of GBP15k represents
contingent consideration held under the sale and purchase agreement
for the disposal of the Services business. The amount relates to
the remaining six months trading under the agreement and was
settled in October 2022.
7. Share capital
Allotted, issued and fully paid:
Number GBP'000
-------------------------------------------------- ---------- -------
Balance at 30 June 2020 51,986,071 780
-------------------------------------------------- ---------- -------
Share issue - equity-settled share-based payments 137,274 2
Share issue - conversion of BGF loan notes 11,196,703 168
-------------------------------------------------- ---------- -------
Balance at 30 June 2021 63,320,048 950
-------------------------------------------------- ---------- -------
Share issue - equity-settled share-based payments 271,546 4
Share issue - deferred consideration 500,000 8
Share issue 28,450,852 426
Balance at 30 June 2022 92,542,446 1,388
-------------------------------------------------- ---------- -------
On 1 October 2021 the Company issued 28,450,852 shares as part
of a placing and open offer to shareholders for net proceeds of
GBP6.6m.
On 10 December 2021 the Company issued 500,000 shares in
genedrive plc to the former owner of Visible Genomics as part of a
Deed of Amendment agreed in December 2018 to the Visible Genomics
Sale and Purchase Agreement.
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END
FR FLFVFLTLIFIF
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November 21, 2022 02:00 ET (07:00 GMT)
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