TIDMOCTP
RNS Number : 3482C
Oxford Cannabinoid Tech.Holdings
22 February 2022
22 February 2022
Oxford Cannabinoid Technologies Holdings plc
("OCTP" or the "Company")
Interim Results for the six months ended 30 November 2021
London, 22 February 2022 : Oxford Cannabinoid Technologies
Holdings plc (LSE: OCTP, OTCQB: OCTHF, "OCT or the "Group") the
pharmaceutical company developing prescription cannabinoid
medicines for approval by global regulatory agencies and targeting
the US$ multi-billion pain market, announces its Interim Results
for the six months ended 30 November 2021 (the "Period").
Operational Highlights
-- Good progress made across all four of the Group's current drug development programmes.
-- OCT461201, a cannabinoid-like compound for neuropathic and
visceral pain, is expected to enter phase 1 clinical trials in Q1
2023.
-- OCT130401, a combination of inhaled phytocannabinoids for
Trigeminal Neuralgia, is expected to enter phase 1 clinical trials
in Q4 2022.
-- Timescales to phase 2 clinical trials remain on target, with
revenue generation expected to commence in 2027.
-- GBP2.6 million contract research agreement with Aptuit
(Verona) SRL, a subsidiary of Evotec SE.
-- Exclusive license agreement with Canopy Growth for
pharmaceutical cannabinoid derivative library, including 335
compounds and 14 patent families.
Financial Highlights
-- Robust balance sheet, debt-free with cash reserves of
approximately GBP12.0m at Period-end (31 May 2021: GBP14.6m). Cash
is still forecast to be fully utilised by March 2023.
-- Cost savings continue to be made, including closure of London
office, expected to generate savings of approximately GBP130k
p.a.
-- Research costs (excluding salary costs) of GBP935k incurred
during first half, of which GBP604k relates to OCT461201.
-- Administrative costs of GBP1.2m include salary and associated
costs of GBP677k and a share based (non-cash) payment charge of
GBP204k in advance of phase 1 clinical trials.
-- R&D tax credit in the first half of GBP269k (31 May 2021:
GBP139k), with tax losses surrendered for the R&D tax credit
payment.
-- Repayment of GBP50k government Bounce-Back loan in November 2021.
Post Period-end highlights
-- Admission to trading on the OTC QB market in the United
States under the ticker symbol "OCTHF".
-- Company currently finalising the organisation of its
Scientific Advisory Board with details expected to be announced in
the first half of 2022.
-- Change of Accounting year end to 30 April.
John Lucas, CEO of Oxford Cannabinoid Technologies Holdings plc,
said: " The Group has continued to build on the positive start made
to the current financial year. During the period, progress was made
on all four of the Group's programmes, particularly regarding the
Group's lead candidate OCT461201: a cannabinoid-like compound for
neuropathic and visceral pain.
"The several agreements signed across all of our drug
programmes, including with Aptuit (Verona) SRL, a subsidiary of
Evotec SE, Voisin Consulting SARL, Canopy Growth Corporation and
Oxford Stemtech Ltd all reflect the Company's core ethos: to
partner with organisations recognised as "best-in-class" that can
drive quality and shareholder value.
"The Board remains confident that OCTP is well placed to benefit
from the opportunities that lie ahead. The fundamentals of the
Group remain strong, delivering against the strategy laid out in
the IPO prospectus and with a strong financial base."
Analyst Briefing, 9:30am, Today 22 February 2022
A briefing for Analysts will be held at 9:30am GMT today.
Analysts interested in attending should contact Walbrook PR by
emailing oxcantech@walbrookpr.com or by calling 020 7933 8780.
Investor Presentation, 4.30pm, Today 22 February 2022
A live online presentation via the Investor Meet Company
platform will also be held at 4.30pm (BST) today, which is open to
all existing and potential shareholders. Questions can be submitted
at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add
to meet Oxford Cannabinoid Technologies Holdings plc via:
https://www.investormeetcompany.com/oxford-cannabinoid-technologies-holdings-plc/register-investor
Investors who follow OCTP on the Investor Meet Company platform
will automatically receive an invitation to the event.
The unaudited interim report for the 6 months ended 30 November
2021 is available on the Company's website at: www.oxcantech.com
and in hard copy form at the Company's registered office at Maddox
House, 1 Maddox Street,
London W1S 2PZ . It is also available for inspection at www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism .
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information for the purposes of Article 7 of EU Regulation 596/2014
(which forms part of domestic UK law pursuant to the European Union
(Withdrawal) Act 2018) . With the publication of this announcement,
this information is now considered to be in the public domain.
The Directors of the Company accept responsibility for the
content of this announcement.
Enquiries:
Oxford Cannabinoid Technologies +44 (0)20 3034 2820
Holdings plc john@oxcantech.com
Dr John Lucas (CEO) clarissa@oxcantech.com
Clarissa Sowemimo-Coker (COO)
Cairn Financial Advisers
Emily Staples +44 (0)20 7213 0897
Jo Turner +44 (0) 20 7213 0885
Walbrook PR Limited +44 (0)20 7933 8780
Paul Vann +44 (0)7768 807631
Nicholas Johnson oxcantech@walbrookpr.com
Harbor Access LLC (US/OTCB enquiries)
Jonathan Paterson +1 (203) 862 0492
Richard Leighton Richard.Leighton@harboraccessllc.com
About Oxford Cannabinoid Technologies Holdings Plc
Oxford Cannabinoid Technologies Holdings plc is the holding
company of Oxford Cannabinoid Technologies Ltd, a pharmaceutical
company developing prescription cannabinoid medicines for approval
by key medicines regulatory agencies worldwide and targeting the U$
multi-billion pain market (together the "Group"). Cannabinoids are
compounds found in the cannabis plant that have been shown to have
a range of therapeutic effects on the body, including pain relief.
The Group has a clearly defined path to commercialisation,
revenues, and growth. The Group is developing drug candidates
through clinical trials to gain regulatory approval (FDA/MHRA/EMA)
that will enable medical professionals to prescribe them with
confidence.
The Group's portfolio aims to balance risk, value and time to
market, whilst ensuring market exclusivity around all its key
activities. The Group's lead compound, OCT461201, is a highly
potent and selective CB2 agonist and is being developed by OCT in a
solid oral dosage form. OCT is conducting pre-clinical testing and
development with clinical trials scheduled for Q1 2023. The Group's
product pipeline also uses a balanced drug product strategy that
employs both natural and synthetic compounds for the treatment of
rare diseases and includes chemically modified phytocannabinoids
with improved drug-like characteristics and a proprietary library
of cannabinoids.
OCTP operates a partnership model with external academic and
commercial partners.
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed
to be, forward looking statements. Forward looking statements are
identi ed by their use of terms and phrases such as "believe",
"could", "should" "envisage", "estimate", "intend", "may", "plan",
"potentially", "expect", "will" or the negative of those,
variations or comparable expressions, including references to
assumptions. These forward-looking statements are not based on
historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of
operations, performance, future capital and other expenditures
(including the amount, nature and sources of funding thereof),
competitive advantages, business prospects and opportunities. Such
forward looking statements re ect the Directors' current beliefs
and assumptions and are based on information currently available to
the Directors.
CEO's Interim Management Statement
Oxford Cannabinoid Technologies Holdings plc ("OCTP") is a
pharmaceutical company developing prescription cannabinoid
medicines for approval by global regulatory agencies and targeting
the US$ multi-billion pain market. The Group is comprised of Oxford
Cannabinoid Technologies Holdings plc ("OCTP") and its wholly owned
subsidiary Oxford Cannabinoid Technologies Ltd ("OCT").
This unaudited interim report for the six-month period ended 30
November 2021 should be read in conjunction with the Group's
published annual report for the period ended 31 May 2021 and the
public announcements made by the Group during the interim reporting
period (accessible at www.oxcantech.com ).
Programmes 1 and 2
The Group has continued to build on the positive start made to
the current financial year. During the period, progress was made on
all four of the Group's programmes, particularly regarding the
Group's lead candidate OCT461201: cannabinoid-like compound for
neuropathic and visceral pain ("Programme 1").
In July 2021, OCT entered into a GBP2.6 million contract
research agreement with Aptuit (Verona) SRL, a subsidiary of Evotec
SE (together "Evotec") with the planning phase now completed and
work having commenced on the manufacturing process development and
crystallisation development. The Group now expects to commence
phase 1 clinical trials in Q1 2023 rather than Q3 2022 as a result
of technical issues requiring additional optimisation of the
crystal development for scale-up manufacturing, which has been now
successfully implemented. However, the Board does not believe this
will impact the time to phase 2 clinical trials, there is no
material cash flow implications and, importantly, time to market is
currently expected/anticipated to remain the same.
The Group's development work with Voisin Consulting SARL
("VCLS") remains on track. VCLS has generated the risk and gap
analysis and the clinical roadmap to support the ongoing
pre-clinical package for Programme 1 and has also undertaken
activities in preparation for the commencement of the phase 1
clinical trials. In addition, VCLS is providing the Group with
regulatory support to address immediate priorities for filing and
registration of OCT130401's (Programme 2) metered dose inhaler in
the UK and US markets.
In October 2021, the Group announced trigeminal neuralgia ("TN")
as the initial target for OCT130401. TN is a chronic pain condition
that causes an excruciating, stabbing, electric shock-like facial
pain. It has a fast and unexpected onset and because of this has
been difficult to treat. Each episode may only last a few seconds,
but some people will suffer multiple (up to 100) episodes during
one day. It is on the rise with between approximately 10,000 and
15,000 new cases in the United States diagnosed each year. The
Directors estimate that in 2021 there were between 60,000 to 95,000
people living with the condition in the UK.
Post period-end, in January 2022 OCT entered into a drug
development agreement with Charles Rivers Laboratories Edinburgh
Ltd ("Charles Rivers"). Charles Rivers will complete the
preclinical safety and pharmacological work for the metered dose
inhaler developed with Purisys LLC, which provides the current Good
Manufacturing Practice ("cGMP") active product ingredients, and Oz
UK Ltd, which is developing the formulation and the device, as the
Company prepares OCT130401 for phase 1 clinical trials anticipated
in Q4 2022. This short delay from Q3 2022 is a result of unforeseen
challenges in the capacity of partners caused by increased demand
for laboratory time generated by the ongoing Covid-19 pandemic. The
Board does not believe this will affect the time to phase 2
clinical trials, there is no material cash flow impact and,
importantly, the time to market is currently anticipated to remain
the same.
Programmes 3 and 4
OCTP announced its exclusive agreement with Canopy Growth
Corporation ("Canopy Growth") in September 2021 for its
pharmaceutical cannabinoid derivative library, including 335
derivatives and 14 patent families. These cannabinoid derivatives
are at the centre of Programmes 3 and 4. OCTP has started multiple
screening programmes for the drug-like compounds with the aim of
targeting multiple therapeutic areas, including pain, neurology,
immune-inflammation and oncology. OCTP is working with Dalriada
Drug Discovery Inc ("Dalriada"), to screen the Canopy compounds and
OCT's existing proprietary cannabinoid library. Dalriada previously
designed, synthesised, and experimentally tested all of the
compounds in the Canopy library and as such, OCT will be able to
leverage Dalriada's existing knowledge and experience as it
continues its experimental research. The aim is to identify two
drug candidates for pre-clinical development by the end of
2022.
The drug development agreement with Oxford Stemtech Ltd
("Stemtech") is supporting R&D for all the Company's drug
development programmes, with a particular focus on Programmes 3 and
4. Stemtech's cutting-edge "Pain-in-a-dish" model replicates human
pain using stem cells from volunteers that are re-programmed into
pain neurons. This agreement also marks an evolution of OCTP's
relationship with Oxford University Professor, Dr Zameel Cader.
The agreements signed across all of the Group's drug programmes
reflect the Group's core ethos: to partner with organisations
recognised as "best-in-class" that can drive quality and
shareholder value. In a cannabis market where, unlicensed medicines
remain abundant and unproven, our underlying philosophy remains
unchanged: that it is only the development of cannabinoid-based
medicines through existing channels of licensed drug development
that allows the medical community to prescribe drugs with
confidence and in volume.
Principal Risks and Uncertainties
The principal risks and uncertainties of the Group are as
detailed in the annual report and are summarised below. These risks
and uncertainties are reviewed throughout the year and since the
annual report was issued for the period ended 31 May 2021 a new
principal risk has been added to the corporate risk register
relating to volatility of share price. The main change to
mitigating controls is in relation to key staff dependency risk,
where the notice periods of key staff were extended in January 2022
from 6 months to 9 months.
The principal risks are as follows:
-- Unsuccessful or delayed development;
-- Cash flow and cash resources;
-- Key staff dependency;
-- Quality assurance;
-- Legal claims;
-- Unlicensed medical cannabis;
-- Reputational damage; and
-- Volatile share price.
Related Parties
Related party disclosures are given in note 8.
Going Concern and Viability Statement
The Group's business activities, together with the factors
likely to affect its future development, performance and position,
are set out in the annual report (accessible via www.oxcantech.com
) and remain unchanged for the six months ended 30 November
2021.
The Group prepares budgets and cashflow forecasts to ensure that
the Group can meet its liabilities as they fall due. Cash resources
remain well within forecast at GBP12m and, in line with the IPO
prospectus, the Board anticipate conducting the next fund raising
within the 2022/23 financial year.
The uncertainty as to the future impact on the Group of the
continued COVID-19 pandemic has been considered as part of the
Group's adoption of the going concern basis. Whilst the Group has
not been significantly impacted by COVID-19 during the period, it
remains an inherent risk to the business. The Directors remain
confident that the Group is working in alignment with the
development plan set out in the IPO prospectus. Timelines are being
met, key partners have been onboarded and there is good progress
across all four programmes. The internal controls framework is
being continually refined and enhanced, and cash management remains
disciplined.
Outlook
The fundamentals of the Group remain strong, delivering against
the strategy laid out in the IPO prospectus and with a strong
financial base.
Dr John Lucas
Chief Executive Officer
21 February 2022
Financial and Operational Highlights
Operational and financial highlights for the six months ended 30
November 2021 are as follows:
-- research costs of GBP935k were incurred, of which GBP604k
relates to OCT461201 ("Programme 1"), with progress being made
across all four of the Group's programmes. The timescales set out
in the Company's IPO prospectus dated 17 May 2021, as updated by
subsequent announcements, for all four programmes remain on target,
with revenue generation expected in 2027;
-- OCTP is in the process of putting together its Scientific
Advisory Board and expects to announce details during the first
half of 2022;
-- OCT entered into a GBP2.6 million contract research agreement
with Aptuit (Verona) SRL, a subsidiary of Evotec SE (together
"Evotec") in July 2021 for Programme 1, and expects to be entering
phase 1 clinical trials by Q1 2023;
-- cost savings continue to be made, with the closure of the
London head office (from 31 March 2022) generating savings of over
GBP130k p.a. There was a write down of leasehold improvements
during the reporting period of GBP23k that relates to the office
closure.
-- overall, administrative costs increased to GBP1.2m with the
main costs in the six months relating to salaries and associated
expenses (GBP677k), and a shared based payment charge of GBP204k
(which is accounted for as an exceptional item);
-- the Group benefited from a Research and Development
("R&D") tax credit of GBP269k in the six months (compared to
GBP31k in the same period in the prior year), with tax losses
surrendered for the R&D tax credit payment. There was a debtor
of GBP408k at the period end relating to R&D tax credits (2021:
GBP139k);
-- cash absorbed by operations was GBP2.6m (31 May 2021: GBP1.9m);
-- cash reserves stood at GBP12.0m at 30 November 2021 (31 May
2021: GBP14.6m) and is still forecast to have been used up entirely
by March 2023. The Group repaid a GBP50k government Bounce-Back
loan in November 2021 and is now debt-free; and
-- after the period-end, on 1 December 2021, the Company's s
hares were admitted to trading on the OTC QB market in the United
States under the ticker symbol "OCTHF", providing more efficient
access for US investors and increased liquidity for all
shareholders. Harbor Access LLC were appointed as the Company's US
investor relations adviser, and introductory meetings with
potential US investors commenced in January 2022 .
Directors' Statements
Responsibility Statement
The Directors, whose names and functions are set out below, with
the registered office located at Maddox House, 1 Maddox Street,
London W1S 2PZ, accept responsibility for the information contained
in this unaudited interim report and condensed financial
statements, which have not been audited by an independent auditor,
for the six months ended 30 November 2021. To the best of the
knowledge of the Directors:
-- the unaudited condensed interim financial statements are
prepared in accordance with the applicable set of accounting
standards (including UK adopted IAS 34 Interim Financial
Reporting), and give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Group and
the undertakings included in the consolidation taken as a whole;
and
-- the CEO's Interim Management Report includes a fair review of
the information required under rules 4.2.7 and 4.2.8 of the
Disclosure Guidance and Transparency Rules (being: (1) indication
of the important events during the first six months, and their
impact on the unaudited condensed interim financial statements: (2)
a description of principal risks and uncertainties for the
remaining six months of the year; (3) related parties' transactions
that have taken place in the first six months of the current
financial year and that have materially affected the financial
position or the performance of the entity during that period; and
(4) any changes in the related parties transactions described in
the last annual report that could have a material effect on the
financial position or performance of the enterprise in the first
six months of the current financial year).
The Directors confirm that the condensed interim financial
statements comply with the above requirements.
Directors and their functions:
-- Julie Pomeroy - Non-Executive Chairperson (appointed 12
February 2022, previously Non-Executive Director)
-- Dr John Lucas - Chief Executive Officer
-- Clarissa Sowemimo-Coker - Chief Operating Officer
-- Karen Lowe - Chief Finance Officer
-- Bishrut Mukherjee - Non-Executive Director
-- Neil Mahapatra- Non-Executive Director (Executive Chairperson until 11 February 2022)
-- Charanjit Cheryl Dhillon- Non-Executive Director
-- Richard Hathaway - Non-Executive Director (appointed 1 February 2022)
Forward Looking Statements
Certain statements in this announcement are forward-looking
statements. Such statements may relate to OCTP's business, strategy
and plans.
Statements that are not historical facts, including statements
about OCTP's or its management's beliefs and expectations, are
forward-looking statements. Words such as 'believe', 'anticipate',
'estimates', 'expects', 'intends', 'aims', 'potential', 'will',
'would', 'could', 'considered', 'likely', and variations of these
words and similar future or conditional expressions are intended to
identify forward-looking statements but are not the exclusive means
of doing so.
By their nature, forward-looking statements involve a number of
risks, uncertainties or assumptions, some known and some unknown,
many of which are beyond OCTP's control that could cause actual
results or events to differ materially from those expressed or
implied by the forward-looking statements. These risks,
uncertainties or assumptions could adversely affect the outcome and
financial effects of the plans and events described herein.
Forward-looking statements contained in these interim financial
accounts regarding past trends or activities should not be taken as
a representation that such trends or activities will continue in
the future. Nor are they indicative of future performance and
OCTP's actual results of R&D and financial condition and the
development of the industry and markets in which OCTP plan to
operate may differ materially from those made in or suggested by
the forward-looking statements.
You should not place undue reliance on forward-looking
statements because such statements relate to events and depend on
circumstances that may or may not occur in the future. Except as
required by law, OCTP is under no obligation to update (and will
not) or keep current the forward-looking statements contained
herein or to correct any inaccuracies which may become apparent in
such forward-looking statements. Forward-looking statements reflect
OCTP's judgement at the time of preparation of these unaudited
interim condensed financial statements and are not intended to give
any assurance as to future result.
Clarissa Sowemimo-Coker
Company Secretary
21 February 2022
Unaudited Consolidated Statement of Comprehensive Income
6 months 6 months ended 30 November
ended 30 November 2020 12 months ended 31 May
2021 2021
Notes GBP GBP GBP
Unaudited Unaudited Audited
Proforma
Revenue - - -
Research costs (934,513) (150,350) (445,400)
------------------ ------------------------------ ----------------------
Gross loss (934,513) (150,350) (445,400)
Administrative expenses (1,197,271) (679,716) (1,518,596)
Exceptional items 4 (204,317) - (1,381,949)
------------------ ------------------------------ ----------------------
Operating loss (2,336,101) (830,066) (3,345,945)
Finance income 35,910 15,571 47,021
Finance costs - - (67,713)
------------------ ------------------------------ ----------------------
Loss before taxation (2,300,191) (814,495) (3,366,637)
Income tax 5 269,146 30,938 138,651
------------------ ------------------------------ ----------------------
Loss for the period (2,031,045) (783,557) (3,227,986)
Other comprehensive income - - -
Items that may be reclassified - -
to profit or loss -
------------------ ------------------------------ ----------------------
Total comprehensive income for
the period attributable to
owners of the Group arising
from
continuing operations (2,031,045) (783,557) (3,227,986)
================== ============================== ======================
Loss per share attributable to
the ordinary equity holders of
the Company:
Basic loss per share from
continuing and total
operations 6 (0.211p) (0.124p) (0.504p)
Diluted loss per share from
continuing and total
operations (0.211p) (0.124p) (0.504p)
Unaudited Consolidated Statement of Financial Position
6 months ended 30 November 6 months ended 30 November 12 months ended 31 May
2021 2020 2021
Notes GBP GBP GBP
Unaudited Unaudited Audited
Proforma
Non-current assets
Intangible assets 82,251 125,174 101,657
Property, plant and equipment 16,961 54,711 46,826
Right-of-use assets 4,226 87,667 10,565
--------------------------- --------------------------- ----------------------
103,438 267,552 159,048
--------------------------- --------------------------- ----------------------
Current assets
Trade and other receivables 842,344 374,967 421,909
Cash and cash equivalents 12,014,856 71,151 14,630,801
--------------------------- --------------------------- ----------------------
12,857,200 446,118 15,052,710
--------------------------- --------------------------- ----------------------
Total assets 12,960,638 713,670 15,211,758
--------------------------- --------------------------- ----------------------
Current liabilities
Trade and other payables 518,146 833,408 824,114
Lease liabilities 55,461 58,305 123,885
Borrowings - - 3,136
--------------------------- --------------------------- ----------------------
Total current liabilities 573,607 891,713 951,135
--------------------------- --------------------------- ----------------------
Non-current liabilities
Lease liabilities - 22,713 -
Borrowings - - 46,864
--------------------------- --------------------------- ----------------------
Total non-current liabilities - 22,713 46,864
--------------------------- --------------------------- ----------------------
Total liabilities 573,607 914,426 997,999
--------------------------- --------------------------- ----------------------
Net assets / (liabilities) 12,387,031 (200,756) 14,213,759
--------------------------- --------------------------- ----------------------
Equity
Called up share capital 9,604,156 - 9,604,156
Share premium account 11,877,466 - 11,877,466
Share based payment reserve 9 1,362,327 136,534 1,158,010
Other reserve 10 643,455 6,287,609 643,455
Retained earnings (11,100,373) (6,624,899) (9,069,328)
--------------------------- --------------------------- ----------------------
Total equity 12,387,031 (200,756) 14,213,759
--------------------------- --------------------------- ----------------------
These unaudited condensed six-monthly financial statements were
approved and authorised for issue by the Board of Directors on 21
February 2022 and were signed on behalf by:
Karen Lowe
Finance Director
Company Registration No. 13179529
Unaudited Consolidated Statement of Changes in Equity
Share premium Share based Other Retained
Share capital account payment reserve reserve earnings Total
GBP GBP GBP GBP GBP GBP
Unaudited
At 1 June 2020
(Proforma) - - 136,534 6,287,609 (5,841,342) 582,801
------------- ------------- ----------------------- --------- ----------- ---------
Loss for the period - - - - (783,557) (783,557)
Other comprehensive - - - - - -
income
------------- ------------- ----------------------- --------- ----------- ---------
Total comprehensive
loss - - - - (783,557) (783,557)
Transactions with
owners
Share-based payment - - - - - -
charge
(options)
------------- ------------- ----------------------- ----------- ---------
Total transactions - - - - - -
with
owners
------------- ------------- ----------------------- --------- ----------- ---------
Balance at 30 November
2020 (Proforma) - - 136,534 6,287,609 (6,624,899) (200,756)
------------- ------------- ----------------------- --------- ----------- ---------
Share premium Share based Other
Share capital account payment reserve reserve Retained earnings Total
GBP GBP GBP GBP GBP GBP
At 1 June 2021 9,604,156 11,877,466 1,158,010 643,455 (9,069,328) 14,213,759
Loss for the period - - - - (2,031,045) (2,031,045)
Other comprehensive - - - - - -
income
------------- -------------------- ---------------- --------- ----------------- -----------
Total comprehensive
loss - - - - (2,031,045) (2,031,045)
Transactions with
owners
Share-based payment
charge (warrants) - - 107,554 - - 107,554
Share-based payment
charge (options) - - 96,763 - - 96,763
Total transactions
with owners - - 204,317 - - 204,317
------------- -------------------- ---------------- --------- ----------------- -----------
Balance at 30
November 2021 9,604,156 11,877,466 1,362,327 643,455 (11,100,373) 12,387,031
------------- -------------------- ---------------- --------- ----------------- -----------
Unaudited Consolidated Statement of Cash Flows
6 months ended 30 November 6 months Year
2021 ended 30 November ended
GBP 2020 31 May
GBP 2021
GBP
Notes Unaudited Unaudited Audited
Proforma
Cash flows from operating activities
Cash absorbed from operations (2,584,779) (479,298) (1,936,955)
Interest paid - - (67,713)
Tax refunded - 225,726 225,726
-------------------------- ------------------ -----------
Net cash (outflow)/inflow from operating activities (2,584,779) (253,572) (1,778,942)
Cash flows from investing activities
Payments for property, plant and equipment - - (769)
Proceeds from disposal of property, plant and equipment - - 571
Interest received 35,910 15,571 47,021
-------------------------- ------------------ -----------
Net cash inflow from investing activities 35,910 15,571 46,823
-------------------------- ------------------ -----------
Cash flows from financing activities
Proceeds from issues of shares on IPO in May 2021 - - 16,500,000
Proceeds from issues of shares in January 2020 - - 250,000
Proceeds from borrowings - - 650,000
Share issue transaction costs - - (1,322,534)
Repayment of borrowings (50,000) - -
Lease liability payments (17,076) - (23,698)
-------------------------- ------------------ -----------
Net cash (used in)/ generated from financing activities (67,076) - 16,053,768
-------------------------- ------------------ -----------
Net increase/(decrease) in cash and cash equivalents (2,615,945) (238,001) 14,321,649
Cash and cash equivalents at the beginning of the period 14,630,801 309,152 309,152
-------------------------- ------------------ -----------
Cash and cash equivalents at end of the period 12,014,856 71,151 14,630,801
-------------------------- ------------------ -----------
Notes to the Interim Financial Statements
1 General Information
Oxford Cannabinoid Technologies Holdings Plc is a public limited
company limited by shares, incorporated and domiciled in England
and Wales. Its registered office and principal place of business is
Maddox House, 1 Maddox Street, London W1S 2PZ. Incorporated on 4
February 2021, the Company's shares were admitted to trading on the
London Stock Exchange on 21 May 2021.
All press releases, financial reports (including the Annual
Report and Financial Statements for the period ended 31 May 2021)
and other information are available at our Shareholder Centre on
our website: www.oxcantech.com .
The consolidated interim financial statements are presented in
Pound Sterling (GBP).
2 Summary of Significant Accounting Policies
The accounting policies applied by the Group in these condensed
consolidated interim financial statements are consistent with those
applied by the Group in its consolidated financial statements for
the period ended 31 May 2021 and are those which will form the
basis of the financial statements for the period ended 30 April
2022 .
2(a) Basis of preparation
Compliance with IFRS
These unaudited condensed consolidated interim financial
statements for the six months ended 30 November 2021 have been
prepared in accordance with IAS 34 'Interim Financial Reporting' as
adopted by the UK, and the Disclosures Guidance and Transparency
Rules ("DTR") of the Financial Conduct Authority, the Listing
Rules, and UK adopted international accounting standards.
These unaudited condensed consolidated interim financial
statements should be read in conjunction with the Annual Report and
financial statements for the period ended 31 May 2021, which were
prepared in accordance with UK adopted international accounting
standards and the applicable legal requirements of the Companies
Act 2006. These condensed consolidated interim financial statements
do not comprise statutory accounts within the meaning of Section
435 of the Companies Act 2006.
The Annual Report and financial statements for the period ended
31 May 2021 were reported upon by the Group's auditor and delivered
to the Registrar of Companies. The report of the auditor on the
annual report and financial statements for the period ended 31 May
2021 was unqualified, did not include a reference to any matters to
which the auditor drew attention by way of emphasis without
qualifying their report and did not contain statements under
Section 498 (2) or (3) of the Companies Act 2006.
The accounting policies used and presentation of these condensed
consolidated half year financial statements (including principles
of consolidation and equity accounting) are consistent with the
accounting policies applied by the Group in its consolidated annual
report and financial statements as at, and for the period ended, 31
May 2021, and comply with UK adopted international accounting
standards.
The half year report for the six months ended 30 November 2021
was approved for release by the Directors on 21 February 2022. The
figures for the six months ended 30 November 2020 have been
reviewed by the auditor; those for the six months ended 30 November
2021 are neither audited nor reviewed by auditors pursuant to the
Financial Reporting Council guidance on Review of Interim Financial
Information.
2(b) Going concern
The Directors are required to satisfy themselves that it is
reasonable for them to conclude whether it is appropriate to
prepare the financial statements on a going concern basis, and as
part of that process they have followed the Financial Reporting
Council's guidelines ("Guidance on the Going Concern Basis of
Accounting and Reporting on Solvency and Liquidity Risk" issued
April 2016).
The Group's business activities together with factors that are
likely to affect its future development and position are set out in
the Chairman's statement, the CEO's Review and Financial Review of
the Annual Report and Financial Statements (accessible via
www.oxcantech.com), in addition to the CEO's Management Statement
in this interim report. Budgets and detailed cashflow forecasts
that look beyond twelve months from the date of these condensed
consolidated financial statements have been prepared and used to
ensure that the Group can meet its liabilities as they fall due.
The Directors have made various assumptions in preparing these
forecasts, using their view of both the current and future economic
conditions that may impact on the Group during the forecast
period.
Key risks and potential scenarios that could negatively impact
on the Group's ability to continue to research and ultimately
develop and retail prescribed medicines within the timescale
detailed within the IPO prospectus have been considered, and risks
mitigated as far as is practical and reasonable.
The Board anticipate making an equity fund raise within the
2022/23 financial year, in order to provide further financial
resources to progress with the next stages of the research
programmes.
The Directors have also considered the continued impact of the
COVID-19 pandemic and the impact of the measures taken to contain
it, on the Group. The Directors note the global supply chain issues
and challenges in the capacity of partners caused by the increased
demand in laboratory time generated by COVID-19 and they continue
to monitor the situation. Due to the nature of the Group's
activities, there has not been a significant on-going impact on the
business. Nonetheless, the Directors continue to monitor the
situation and, if required, will take steps to safeguard the assets
of the Group whilst the pandemic continues.
After making enquiries including detailed consideration of the
Group's cashflow, solvency and liquidity position, the Board has a
reasonable expectation that OCTP, OCT and the Group as a whole have
adequate resources to continue in operational existence for at
least twelve months from the date of signing of these unaudited
condensed six-monthly financial statements. As such, the Board
continues to adopt the going concern basis in preparing the
unaudited condensed six-monthly financial statements.
2(c) Leases
The Group leases the head office in London under a five-year
lease period and office equipment. In November 2021, the Group
exercised its right under the agreement to terminate the lease with
effect from 31 March 2022. This has not had any material impact on
the value of the right-of-use asset in the six-month period to 30
November 2021.
2(d) Property, plant and equipment
Property, plant and equipment is stated at historical cost less
depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items. Depreciation is
calculated using the straight-line method to allocate the cost or
revalued amounts of the assets, net of any residual values, over
the lease term for leasehold improvements and estimated useful
lives for office and computer equipment, being 5 years for all 3
categories.
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting period. Given
the early termination of the lease on the London Head Office, the
carrying value of the leasehold improvement has been written down
during the period to its recoverable amount.
2(e) Prior six-month period results
Differences between the prior six-month period results in the
IPO prospectus and the figures in the financial statements above
for the period ended 30 November 2020 are largely due to the
prospectus recording a GBP345k share-based payment charge in the
first half of the year (whereas this was recognised in the second
half of the year in the filed financial statements for year ended
31 May 2021). In addition to this, there are some presentational
and minor differences which are immaterial both individually and
when aggregated.
2(f) New and forthcoming standards and interpretations
New and amended standards adopted by the Group
There were no new or amended standards adopted by the Group
during the review period.
New standards and interpretations not yet adopted
A number of new accounting standards, amendments to accounting
standards and interpretations have been issued by the International
Accounting Standards Board with an effective date after the date of
these financial statements. The Directors have chosen not to early
adopt these standards and interpretations, the Directors do not
expect them to have a material impact on the entity in the current
or future reporting periods and on foreseeable future
transactions.
Effective date
IFRS 9 Financial Instruments - amendments resulting from Annual Improvements to IFRS Standards
2018-2020 1 January 2022
(fees in the "10 per cent." test for derecognition of financial liabilities)
IAS 1 Presentation of Financial Statements - amendments regarding the classification of 1 January 2023
liabilities
IAS 1 Presentation of Financial Statements - amendments regarding the disclosure of accounting
policies 1 January 2023
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors - amendments regarding the
definition of accounting estimates 1 January 2023
IAS 37 Provisions, Contingent Liabilities and Contingent Assets - amendments regarding the costs
to include when assessing whether a contract is onerous 1 January 2022
3 Critical Estimates and Judgements
The preparation of financial statements requires the use of
accounting estimates which, by definition, will seldom equal the
actual results. Management also needs to exercise judgement in
applying the Group's accounting policies. However uncertainty about
these assumptions and estimates could result in outcomes that would
require a material adjustment to the carrying amount of the asset
or liability in future periods.
Estimates and judgements are continually evaluated. They are
based on historical experience and other factors, including
expectations of future events that may have a financial impact on
the entity and that are believed to be reasonable under the
circumstances. The areas involving significant estimates or
judgements which management consider may have a significant risk of
causing a material adjustment to the reported amounts in the period
were:
Going concern basis
As outlined in note 2(b), judgement has been applied in
accounting for the Group as a going concern. In reaching the
decision the Directors have considered current cash reserves and
forecast cashflow, solvency and liquidity. The forecasts are based
on various assumptions including charges from research partners,
rate of progression through to commercialisation, and external
economic conditions.
Research & development costs
Judgement is used in the classification and hence treatment of
costs incurred in the research and development of the core
programmes outlined in the CEO's Review. During the period all of
the GBP935k costs incurred were accounted for as research costs and
expensed to profit or loss, on the basis that none of the
programmes were yet at a stage of having gained regulatory approval
for commercialisation.
R&D tax credits receivable
Judgement is applied in calculating the tax credits that the
Group consider to be receivable from HMRC in relation to research
costs incurred. Evidence is retained to support the methodology
adopted by the Group in calculating R&D tax relief claims, part
of which involves the judgement of experienced Senior Managers and
Directors in articulating the scientific advancements and
uncertainties for the wider market of the Group's research
programmes based on contemporaneous evidence . At the period end
there was a tax credit receivable of GBP408k (2021: GBP139k).
Lease accounting
In calculating the right-of-use asset value and lease liability,
a significant element of judgement and estimation are involved
including determining a comparable cost of capital interest rate
and lease term. In determining the lease term for example,
management considers all facts and circumstances that create an
economic incentive to exercise or not exercise a termination
option. As detailed in note 2(c) during the period notice was given
on the lease on the London head office, which will terminate on 31
March 2022. It has been assumed that the leasehold improvements
will not have a significant remaining value and hence an impairment
charge of GBP23k has been recognised in the period.
Impairment of intangible fixed assets
Judgement is involved in determining the useful economic life
and potential impairment of the licence intangible asset held by
the Group at a net book value of GBP82k. This includes
consideration of the continuing likelihood of the asset to generate
value to the Group and the adherence to the terms of the agreement
or any other event which may have a detrimental effect on the
carrying value of the asset. The Directors have carried out an
impairment review of the asset during the period with no charge
considered necessary.
Warrants and share options
The Black-Scholes model is used to calculate the appropriate
charge of the warrants and share options. The calculation involves
a number of estimates and judgements to establish the appropriate
inputs to be entered into the model, including the use of an
appropriate interest rate, expected volatility, exercise
restrictions and behavioural considerations. A significant element
of judgement is therefore involved in the calculation of the
charge. The estimates used remain unchanged from those applied in
the Annual Report and Financial Statements.
4 Exceptional Items
The Consolidated Statement of Comprehensive Income includes
exceptional items totalling GBP204k (31 May 2021: GBP1,382k
included IPO costs) comprised entirely of a share-based payment
charge (31 May 2021: GBP1,021k).
The Group operates two share option schemes for its Directors
and senior employees one relating to options transferred from OCT
and a new scheme for OCTP. In addition, warrants were issued as
part of the listing in May 2021 (as detailed in the Annual Report
and Financial Statements).
5 Income Tax
The Group is pre-revenue generating, but on target to reach
commercialisation of their products in 2027. The Group benefits
from research and development corporation tax relief in both the
current period and prior years claimed by the Group on allowable
research expenditure. A deferred tax asset is not recognised due to
the uncertainty of the timing of future taxable profits.
6 Earnings Per Share
6 months 6 months 12 months
to 30 Nov 2021 to 30 Nov 2020 to 31 May 2021
GBP GBP GBP
Unaudited Unaudited Audited
Proforma
6(a) Basic loss per share
Basic loss per share attributable to the ordinary equity holders of
the Company (0.00211) (0.00124) (0.00504)
--------------- --------------- ---------------
6(b) Diluted loss per share
From continuing operations attributable to the ordinary equity
holders of the Company (0.00211) (0.00124) (0.00504)
--------------- --------------- ---------------
Total diluted loss per share attributable to the ordinary equity
holders of the Company (0.00211) (0.00124) (0.00504)
--------------- --------------- ---------------
6(c) Reconciliations of loss used in calculating loss per
share
6 months to 6 months 12 months to
30 Nov to 31 May
2021 30 Nov 2021
GBP 2020 GBP
Unaudited GBP Audited
Unaudited
Basic loss per share
Loss attributable to the ordinary equity holders of the Company used in
calculating basic
loss per share: (2,031,045) (783,557) (3,227,986)
----------- ---------- ------------
Diluted loss per share
Loss from continuing operations attributable to the ordinary equity holders of
the Company:
Used in calculating basic loss per share (2,031,045) (783,557) (3,227,986)
----------- ---------- ------------
Used in calculating diluted loss per share (2,031,045) (783,557) (3,227,986)
Loss attributable to the ordinary equity holders of the Company used in
calculating diluted
loss per share (2,031,045) (783,557) (3,227,986)
----------- ---------- ------------
6(d) Weighted average number of shares used as the
denominator
30 Nov 2021 30 Nov 2020 31 May 2021
Number Number Number
------------- ------------- -------------
Weighted average number of ordinary shares used as the denominator in
calculating basic loss
per share 960,415,644 630,415,444 640,378,738
Adjustments for calculation of diluted loss per share: - - -
Weighted average number of ordinary shares and potential ordinary shares
used as the denominator
in calculating diluted loss per share 960,415,644 630,415,444 640,378,738
------------- ------------- -------------
The prior six-month period calculation has been based on the
shares issued in respect of the share for share exchange that took
place between OCTP and OCT in May 2021 as part of the Group
restructuring.
7 Events Occurring After the Reporting Period
On 1 December 2021 the Company's s hares were admitted to
trading on the OTC QB market in the United States, providing more
efficient access for US investors and increased liquidity for all
shareholders. At the same time, Harbor Access LLC were appointed as
its US investor relations adviser.
As outlined in the CEO's Interim Management Statement, in
January 2022, the Group entered into a drug development agreement
with Charles Rivers, who will complete the preclinical safety and
pharmacological work for the metered dose inhaler developed with
Purisys LLC and Oz UK Ltd as OCT prepares OCT130401 for phase 1
clinical trials anticipated in Q4 2022.
Also in January 2022, the notice periods for Chief Financial
Officer, Karen Lowe, Chief Scientific Officer, Valentino
Parravicini, Chief Executive Officer, John Lucas and Chief
Operating Officer, Clarissa Sowemimo-Coker
were extended from six to nine months to better allow for succession planning.
Following his exit from Imperial Brands Ventures Limited in
September 2021, non-executive Director, Bishrut Mukherjee, has been
paid the commensurate non-executive director fee of GBP 25,000 per
year as from October 2021.
8 Related Party Transactions
There were no related party transactions in the period or
changes in the related party transactions described in the last
annual report that have had or could have a material effect on the
financial position or performance of the Group.
During the period, notice was given on the management services
agreement with Kingsley Capital Partners LLP ("KCP") which was
terminated on 31 December 2021.
9 Share based payments
During the six-month period ended 30 November 2021, no new
options or warrants were issued and none of the existing options
and warrants were exercised.
As detailed in the Annual Report, the Group operates an
equity-settled share-based remuneration scheme for employees. On 21
May 2021, OCTP issued a total of 33,307,275 warrants all with an
exercise price of GBP0.05 and a five-year exercise period, vesting
on the day of issue.
During the period, the Group recognised share-based payment
expense of:
-- GBP96,763 (31 May 2021: GBP924,926) in relation to options; and
-- GBP107,554 (31 May 2021: GBP96,650) in relation to the warrants.
10 Accounting for group reconstruction
As detailed in the Annual Report on 17 May 2021 OCTP
unconditionally acquired the shares of OCT in a share for share
exchange, prior to the admission of the Group on the main market of
the London Stock Exchange on 21 May 2021. The transaction did not
meet the definition of a business combination as the Company was
not a business and therefore fell outside the scope of IFRS 3
(Revised) Business Combinations (IFRS 3). However although the
transaction was not a reverse acquisition as defined in IFRS 3, the
Directors accounted for the transaction on a similar basis as
detailed in guidance issued by the IFRS Interpretation
Committee.
As the transaction was not a business combination, no fair value
adjustments were made and no goodwill was recognised. The
difference on consolidation, between the value of the shares issued
and the value of shares acquired, has been included as an other
reserve of GBP643,455. The prior year results have been presented
on a similar basis to a reverse acquisition method of accounting,
with the share capital and share premium of the legal acquiror
being presented rather than that of the accounting acquiror.
Directors and Professional Advisers
Directors
Julie Pomeroy
Dr John Lucas
Clarissa Sowemimo-Coker
Karen Lowe
Neil Mahapatra
Bishrut Mukherjee
Charanjit Cheryl Dhillon
Gavin Sathianathan (resigned 24 November 2021)
Richard Hathaway (appointed 1 February 2022)
Secretary
Clarissa Sowemimo-Coker
Company number
13179529
Registered office
Maddox House
1 Maddox Street
London W1S 2PZ
Auditor
Moore Kingston Smith LLP
Devonshire House
60 Goswell Road
London EC1M 7AD
Financial Advisers
Cairn Financial Advisers LLP
107 Cheapside
London EC2V 6DN
Principal Bankers
Metro Bank Plc
247-249 Cromwell Road
London SW5 9GA
Co Operative Bank Plc
St Pauls House
10 Warwick Lane
London EC4M 7BP
Public Relations Advisers
Walbrook PR Limited
75 King William Street
London EC4N 7BE
Brokers
States Bridge Capital Ltd (until 30 November 2021)
Blackwell House
Guildhall Yard
London EC2V 5AE
Harbor Access LLC (appointed 1 December 2021)
283 Tresser Blvd 9(th) floor
Stamford
Connecticut 06901
USA
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