TIDMROQ
RNS Number : 9878K
Roquefort Therapeutics PLC
11 May 2022
11 May 2022
Roquefort Therapeutics plc
("Roquefort Therapeutics" or the "Company")
Annual Report & Financial Statements for period ended 31
December 2021
Roquefort Therapeutics (LSE:ROQ), the Main Market listed biotech
company focused on early-stage opportunities in the medical
biotechnology sector, announces its audited results for period
ended 31 December 2021.
Copies of the Annual Report and Financial Statements will be
posted to shareholders and made available on the Company's website
at: https://www.roquefortplc.com/category/financial-reports/
Highlights
-- Acquisition of Lyramid Pty Limited ("Lyramid") for GBP1
million (before adjustments), a combination of cash and shares via
a Reverse Take Over
-- Expert in molecular virology and cancer and a leading global
expert on Midkine, Professor Graham Robertson joined Roquefort as
Chief Scientific Officer from Lyramid
-- Commencement of Lyramid's pre-clinical programme
-- Fully funded to deliver drug candidate to clinical trials by H2 2023
Post Period End Highlights
-- Lead compounds identified for cancer programme
-- Midkine patent filed following positive pe-clinical in vitro trials
-- Significantly strengthened the Board with two highly experienced sector NED appointments
-- Professor Trevor Jones appointment as advisor to the Board
-- Cash at the bank as at 30 April 2022: GBP2.47 million
Commenting on the Annual Results, Executive Chairman, Stephen
West said: " I am pleased to report the first annual results to
shareholders as a biotech company. The Company has made significant
progress as a biotech entity which culminated in the acquisition of
Lyramid and its pre-clinical drug development programmes in
December 2021. We believe Lyramid to be a clear market leader in
Midkine inhibiting RNA therapeutic drugs with its exclusive
worldwide licence to commercialise up to 37 patents for the
treatment of cancer patients, autoimmune disorders, chronic kidney
disease and Covid-19.
Since the year-end we have made progress with our pre-clinical
programme, and selected our most promising lead drug candidates in
cancer. The Company then filed a patent application for a new class
of RNA therapeutic drugs targeting Midkine following the highly
encouraging pre-clinical data. To help drive the Company forward
towards commercialisation, the Board has also been strengthened
immensely with the appointments of pharmaceutical industry
heavyweights, Simon Sinclair and Jean Duvall as NEDs and Professor
Trevor Jones as advisor to the Board.
The Company is fully funded to take our lead drug candidate to
clinical trials in H2 2023, and we are optimistic in the
therapeutic potential of Midkine in meeting a number of indications
of unmet needs in major multi-billion dollar markets. I would like
to thank shareholders for their continued support and I look
forward to updating them as we progress through the year."
Enquiries:
Roquefort Therapeutics plc
+44 (0)20 3290
Stephen West (Chairman) 9339
Buchanan (Public Relations)
Ben Romney / Jamie Hooper / George
Beale +44 (0)20 7466
Optiva Securities Limited (Broker) 5000
+44 (0)20 3411
Christian Dennis 1881
CHAIRMAN'S STATEMENT
I am pleased to report the audited financial statements to
shareholders for the period ended 31 December 2021. During the
period the Company has made substantial progress as a London-listed
biotechnology company.
Most notably, in December 2021, Roquefort successfully completed
a placing of GBP3 million in order to fund the cash component of
the acquisition of Lyramid Pty Limited ("Lyramid"), its
pre-clinical drug development programmes and working capital. At
the same time the Company completed the acquisition of Lyramid's
entire issued share capital, through a combination of GBP500,000
cash (50%) and the issue of 5,000,000 new ordinary shares (50%).
The acquisition constituted as a Reverse Take-Over ("RTO") under
the Listing Rules of the FCA and accordingly the Company applied
for re-admission of its shares to the Official List and the Main
Market of the London Stock Exchange, which completed on 21 December
2021.
Acquisition of Lyramid
We were attracted to Lyramid as it is a clear market leader in
Midkine inhibiting RNA therapeutic drugs with the exclusive
worldwide licence to commercialise up to 37 patents related to
Midkine-based therapies for the treatment of cancer patients,
autoimmune disorders, chronic kidney disease and Covid-19. Lyramid
operates in a market with significant growth potential as this is a
novel disease target - where there is therapeutic potential for
Midkine for a number of indications of unmet needs. The potential
Midkine blocking drug development market is enormous with the drug
markets for cancer estimated to be $75 billion, anti-inflammatory
$98 billion, autoimmune $110 billon and Covid-19 $25.6 billion.
Our aim is to achieve value creation at an early stage as RNA
based therapeutic drugs offer a quicker and cheaper route to market
versus the monoclonal antibody approach to drug discovery. We
believe the foundations are in place to achieve value in the medium
term with the Company fully funded to drive our pre-clinical
programmes forward and we expect to enter the clinic by H2 2023.
Our strategy remains to either partner with or sell our drugs to
big pharma.
Post Period End
The Company has made encouraging progress with its pre-clinical
programme and on 17 January 2022 completed the first stage
screening of a novel series of gene silencing reagents targeting
Midkine, with the most promising lead drugs selected. The lead
compounds were synthesized in preparation for in vitro experiments
to test efficacy in altering cancer cell properties. This is a
first-in-class drug target with significant clinical potential and
we believe the targeted delivery of Midkine inhibiting RNA
therapeutic drugs to tumours represents a novel anti-cancer
treatment strategy. After establishing efficacy to inhibit Midkine
in cancer, this opens up the significant possibility to target
Midkine for other indications such as Covid-19, anti-inflammatory
and autoimmune disorders.
Following the positive pre-clinical trials, the Company
announced on 21 March 2022 that it had filed its first composition
of matter provisional patent application for a new class of RNA
therapeutic drugs targeting Midkine. The in vitro experiments
generated very positive results demonstrating that the Company's
lead oligonucleotide drug candidates significantly reduce Midkine
levels seen in human cancer cells, in line with initial pre-test
expectations.
In order to drive our preclinical programmes forward towards
commercialisation, the Company has strengthened the team with three
appointments from the pharmaceutical industry, each of whom add
significant relevant expertise in drug development, commercialising
programmes and driving pre-clinical and clinical programmes. As
such, I'd like to again welcome Professor Trevor Jones, as
strategic and scientific advisor to the Board who joined the
Company on 14 February 2022, and Ms Jean Duvall and Dr Simon
Sinclair as Non-Executive Directors, who joined on 5 April and 20
April 2022, respectively. All three appointments will help further
the Company's ability to capitalise on the significant growth
potential that Midkine inhibiting RNA therapeutics drugs offer.
Outlook
As we look to the future, we are optimistic in the therapeutic
potential of Midkine in meeting a number of indications of unmet
needs in major multi-billion dollar markets. In cancer in
particular, we continue to believe it is a first-in-class drug
target with significant clinical potential and we believe the
targeted delivery of Midkine inhibiting RNA therapeutic drugs to
tumours represents a novel anti-cancer treatment strategy.
With licences held for the largest portfolio of patents on
Midkine and a limited competitive landscape, the Company is
uniquely positioned to progress this exciting area of development
and achieve significant value. I would like to thank shareholders
for their continued support and I look forward to updating them as
we progress through the year.
Stephen West,
Executive Chairman
10 May 2022
DIRECTORS REPORT
The Directors present their report with the audited financial
statements of Roquefort Therapeutics plc ("the Company") and its
subsidiary Lyramid Pty Limited ("Lyramid"), together "the Group"
for the period from the Company's incorporation on 17 August 2020
to 31 December 2021. A commentary on the business for the period is
included in the Chairman's Statement on page 3. A review of the
business is also included in the Strategic Report on pages 12 to
22.
The Company's Ordinary Shares were admitted to listing on the
London Stock Exchange, on the Official List pursuant to Chapters 14
of the Listing Rules, which sets out the requirements for Standard
Listings.
Directors
The Directors of the Company during the year and their
beneficial interest in the Ordinary shares of the Company at 31
December 2021 were as follows:
Ordinary
Director Position Appointed Resigned shares Warrants
------------------- --------------------------- ----------- ----------- --------------- ------------
Stephen West(1) Executive Chairman 17/08/2020 - 4,400,000 7,500,000
Glenn Whiddon(2,3) Non-Executive Director 17/08/2020 20/10/2021 8,000,000 3,500,000
Mark Rollins Non-Executive Director 02/11/2020 04/04/2022 4,000,000 3,750,000
Dr Michael
Stein Non-Executive Director 22/03/2021 - - 2,000,000
Mark Freeman Non-Executive Director 20/10/2021 - - 500,000
------------------- --------------------------- ----------- ----------- --------------- ------------
(1) 4,399,000 Ordinary shares and warrants held by Stephen West
were held by Cresthaven Investments Pty Ltd ATF The Bellini Trust;
and 1,000 were held by Stephen West direct.
(2) 2,500,000 shares held by MIMO Strategies Pty Ltd (ATF the
Mimo Trust), 4,100,000 shares held by 6466 Investment Pty Ltd and
700,000 shares held by Nautical Holdings WA Pty Ltd which are
entities controlled by Jane Whiddon, the spouse of Glenn Whiddon.
700,000 shares held by Getmeoutofhere Pty Ltd which is an entity
controlled by Glenn Whiddon.
(3) 2,500,000 warrants held by MIMO Strategies Pty Ltd (ATF the
Mimo Trust), 300,000 warrants held by 6466 Investment Pty Ltd and
350,000 warrants held by Nautical Holdings WA Pty Ltd which are
entities controlled by Jane Whiddon, the spouse of Glenn Whiddon.
350,000 warrants held by Getmeoutofhere Pty Ltd which is an entity
controlled by Glenn Whiddon.
Qualifying Third Party Indemnity Provision
At the date of this report, the Company has a third-party
indemnity policy in place for all Directors.
Substantial shareholders
As at 31 December 2021, the total number of issued Ordinary
Shares with voting rights in the Company was 71,900,000. Details of
the Company's capital structure and voting rights are set out in
note 17 to the financial statements.
The Company has been notified of the following interests of 3
per cent or more in its issued share capital as at the date of
approval of this report.
Number of Ordinary % of
Party Name Shares Share Capital
----------------- ----------------------------- --------------
Jane Whiddon (1) 7,300,000 10.15%
Abdelatif Lachab 7,200,000 10.00%
Provelmare SA 5,000,000 6.90%
Stephen West (2) 4,550,000 6.33%
Mark Rollins 4,000,000 5.56%
Sebastian Marr 2,400,000 3.34%
----------------- ----------------------------- --------------
(1) 2,500,000 shares held by MIMO Strategies Pty Ltd (ATF the
MIMO Trust); 4,100,000 shares held by 6466 Investments Pty Ltd;
700,000 shares held by Nautical Holdings WA Pty Ltd - all of which
are entities controlled by J Whiddon
(2) 4,399,000 shares held by Cresthaven Investments Pty Ltd (ATF
the Bellini Trust) - an entity associated with S West
Financial instruments
Details of the use of the Company's financial risk management
objectives and policies as well as exposure to financial risk are
contained in the Accounting policies and note 19 of the financial
statements.
Greenhouse Gas (GHG) Emissions
The Company is aware that it needs to measure its operational
carbon footprint in order to limit and control its environmental
impact. However, given the very limited nature of its operations
during the year under review, it has not been practical to measure
its carbon footprint.
In the future, the Company will only measure the impact of its
direct activities, as the full impact of the entire supply chain of
its suppliers cannot be measured practically.
Dividends
The Directors do not propose a dividend in respect of the period
ended 31 December 2021.
Future developments and events subsequent to the year end
Further details of the Company's future developments and events
subsequent to the year-end are set out in the Strategic Report on
pages 12 to 22.
Corporate Governance
The Governance report forms part of the Director's Report and is
disclosed on pages 23 to 26.
Going Concern
The Company's business activities, together with facts likely to
affect its future operations and financial and liquidity positions
are set out in the Chairman's Statement and also note 1 of the
financial statements. In addition, note 19 to the financial
statements disclose the Company's financial risk management
policy.
The Directors, having made due and careful enquiry, are of the
opinion that the Company and the newly formed group have as a
result of the successful RTO and significant funds raised, adequate
working capital to execute its operations over the next 12 months.
As a result, the Directors have adopted the going concern basis of
accounting in the preparation of the annual financial
statements.
Principal Activities
The Company's principal activity in the reporting period was to
seek investment opportunities in businesses focused on early-stage
opportunities in the medical biotechnology sector.
Auditors
The Board appointed Jeffreys Henry Audit Limited as auditors of
the Company on 18 February 2022. They have expressed their
willingness to continue in office and a resolution to reappoint
them will be proposed at the Annual General Meeting.
Statement of Directors' responsibilities
The Directors are responsible for preparing the Annual Report
alongside the financial statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have prepared the financial statements in accordance with UK
adopted International Accounting Standards.
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Company and of the profit or
loss of the Company for that year. The Directors are also required
to prepare financial statements in accordance with the rules of the
London Stock Exchange for companies with a Standard Listing.
In preparing these financial statements, the Directors are
required to:
-- Select suitable accounting policies and then apply them consistently;
-- Make judgments and accounting estimates that are reasonable and prudent;
-- State whether applicable UK adopted International Accounting
Standards have been followed, subject to any material departures
disclosed and explained in the financial statements; and
-- Prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements and the Remuneration Committee Report
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities. They are also responsible to make a statement
that they consider that the annual report and accounts, taken as a
whole, is fair, balanced, and understandable and provides the
information necessary for the shareholders to assess the Company's
position and performance, business model and strategy.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of the financial statements may
differ from legislation in other jurisdictions.
Statement of Directors' responsibilities pursuant to Disclosure
and Transparency Rule
Each of the Directors, whose names and functions are listed on
page 5 to 7 confirm that, to the best of their knowledge and
belief:
-- the financial statements prepared in accordance with UK
adopted International Accounting Standards, give a true and fair
view of the assets, liabilities, financial position and loss of the
Company; and
-- the Annual Report and financial statements, including the
Strategic Report, includes a fair review of the development and
performance of the business and the position of the Company,
together with a description of the principal risks and
uncertainties that they face.
Disclosure of Information to Auditors
So far as the Directors are aware, there is no relevant audit
information of which the Company's auditors are unaware, and each
Director has taken all the steps that he ought to have taken as a
Director in order to make himself aware of any relevant audit
information and to establish that the Company's auditors are aware
of that information.
This directors' report was approved by the Board of Directors on
10 May 2022 and is signed on its behalf by:
Stephen West,
Executive Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Period
ended
31 December
Note 2021
GBP
---------------------------------------- ------- -------------
Revenue 7 719
Other income 130
Cost of goods (10,069)
Administrative expenses 8 (252,392)
Costs associated with the IPO (182,053)
Share based payments to directors
and senior managers (248,326)
Costs associated with the acquisition
of Lyramid (224,744)
Research and development expenditure (698)
----------------------------------------- ------- -------------
Operating loss (917,433)
Finance income -
---------------------------------------- ------- -------------
Loss before taxation (917,433)
Taxation 9 -
---------------------------------------- ------- -------------
Loss for the period (917,433)
Foreign exchange loss -
---------------------------------------- ------- -------------
Total comprehensive loss for the
period attributable to equity holders
of the parent (917,433)
Loss per share (basic and diluted)
attributable to the equity holders
(pence) 10 (3.71)
----------------------------------------- ------- -------------
The notes to the financial statements form an integral part of
these financial
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December
2021
Note GBP GBP
------------------------------------- ----- ---------- ----------
Assets
Non-current assets
Intangible assets 11 1,481,530
Current assets
Trade and other receivables 13 2,178,783
Cash and cash equivalents 14 899,721
------------------------------------- ----- ---------- ----------
Total current assets 3,078,504
------------------------------------- ----- ---------- ----------
Total assets 4,560,034
------------------------------------- ----- ---------- ----------
Equity and liabilities
Equity attributable to shareholders
Share capital 17 719,000
Share premium 17 3,910,595
Share based payments reserve 18 366,708
Retained deficit (914,321)
Currency translation reserve 624
------------------------------------- ----- ---------- ----------
Total equity 4,082,606
------------------------------------- ----- ---------- ----------
Liabilities
Non-current liabilities
Deferred tax liabilities 16 281,911
Current liabilities
Trade and other payables 15 195,517
------------------------------------- ----- ---------- ----------
Total liabilities 477,428
------------------------------------- ----- ---------- ----------
Total equity and liabilities 4,560,034
------------------------------------- ----- ---------- ----------
The notes to the financial statements form an integral part of
these financial statements.
This report was approved by the board and authorised for issue
on 10 May 2022 and signed on its behalf by:
Stephen West
Executive Chairman
STATEMENT OF FINANCIAL POSITION FOR ROQUEFORT THERAPEUTICS
PLC
As at 31 December
2021
Note GBP GBP
------------------------------------- ----- ---------- ----------
Assets
Non-current assets
Investments 12 1,015,695
Intercompany receivables 132,800
------------------------------------- ----- ---------- ----------
Total non-current assets 1,148,495
------------------------------------- ----- ---------- ----------
Current assets
Trade and other receivables 13 2,136,224
Cash and cash equivalents 14 857,614
------------------------------------- ----- ---------- ----------
Total current assets 2,993,838
------------------------------------- ----- ---------- ----------
Total assets 4,142,333
------------------------------------- ----- ---------- ----------
Equity and liabilities
Equity attributable to shareholders
Share capital 17 719,000
Share premium 17 3,910,595
Share based payments reserve 18 366,708
Retained deficit (981,620)
------------------------------------- ----- ---------- ----------
Total equity 4,014,683
------------------------------------- ----- ---------- ----------
Liabilities
Current liabilities
Trade and other payables 15 127,650
------------------------------------- ----- ---------- ----------
Total liabilities 127,650
------------------------------------- ----- ---------- ----------
Total equity and liabilities 4,142,333
------------------------------------- ----- ---------- ----------
The notes to the financial statements form an integral part of
these financial statements.
This report was approved by the board and authorised for issue
on 10 May 2022 and signed on its behalf by:
Stephen West
Executive Chairman
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share
Ordinary Based
Share Payment Retained Translation
capital Share Premium Reserve earnings Reserve Total equity
GBP GBP GBP GBP GBP GBP
---------------------- -------- -------------------- -------------- --------- -------------- -------------------
On Incorporation - - - 3,112 - 3,112
Profit/ (Loss) for
the period - - - (917,433) 624 (916,809)
---------------------- -------- -------------------- -------------- --------- -------------- -------------------
Total comprehensive
profit / (loss) for
the period - - - (914,321) 624 (913,697)
Transactions with
owners
Ordinary Shares issued 719,000 4,070,000 - - - 4,789,000
Share issue costs - (159,405) - - - (159,405)
Warrants issued - - 366,708 - - 366,708
---------------------- -------- -------------------- -------------- --------- -------------- -------------------
Total transactions
with owners 719,000 3,910,595 366,708 (914,321) 624 4,082,606
---------------------- -------- -------------------- -------------- --------- -------------- -------------------
As at 31 December
2021 719,000 3,910,595 366,708 (914,321) 624 4,082,606
---------------------- -------- -------------------- -------------- --------- -------------- -------------------
Share capital comprises the ordinary issued share capital of the
Company.
Share premium represents consideration less nominal value of
issued shares and costs directly attributable to the issue of new
shares.
Share based payments represents the value of equity settled
share-based payments provided to employees, including key
management personnel, and third parties for services provided.
Retained deficit represents the cumulative retained losses of
the Company at the reporting date.
Translation reserve represents the exchange difference arising
on the consolidation of foreign subsidiaries. The notes to the
financial statements form an integral part of these financial
statements.
STATEMENT OF CHANGES IN EQUITY FOR ROQUEFORT THERAPEUTICS
PLC
Share
Based
Payment
Ordinary Share Reserves Retained
Share capital Premium earnings Total equity
GBP GBP GBP GBP GBP
------------------------- -------------------- ----------- --------------- --------- -------------------
On Incorporation - - - - -
Loss for the period - - - (981,620) (981,620)
------------------------- -------------------- ----------- --------------- --------- -------------------
Total comprehensive loss
for the period - - - (981,620) (981,620)
Transactions with owners
Ordinary Shares issued 719,000 4,070,000 - - 4 789 000
Share issue costs - (159,405) - - (159,405)
Warrants issued - - 366,708 - 366,708
------------------------- -------------------- ----------- --------------- --------- -------------------
Total transactions with
owners 719,000 3,910,595 366,708 (981,620) 4,014,683
------------------------- -------------------- ----------- --------------- --------- -------------------
As at 31 December 2021 719,000 3,910,595 366,708 (981,620) 4,014,683
------------------------- -------------------- ----------- --------------- --------- -------------------
The notes to the financial statements form an integral part of
these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOW
Period
ended
31 December
Note 2021
GBP
-------------------------------------------- ------- -------------
Cash flow from operating activities
Loss before income tax (996,068)
Adjustments for:
Foreign Exchange 765
Non-cash adjustment (2,602)
Share based payment 18 366,708
Changes in working capital:
Increase in trade and other receivables (2,130,636)
Increase in trade and other payables 129,525
Decrease in Inventory 9,273
--------------------------------------------- ------- -------------
Net cash used in operating activities (2,623,035)
Cash flow from Investing activities
Acquisition of subsidiary, net of
cash acquired (1,106,225)
Cash flows from financing activities
Proceeds from the issue of ordinary
shares 17 4,789,000
Share issue costs 17 (159,405)
--------------------------------------------- ------- -------------
Net Cash used in financing activities 4,669,502
--------------------------------------------- ------- -------------
Net increase in cash and cash equivalents 900,335
Cash and cash equivalents at the beginning -
of the period
Foreign exchange impact on cash (614)
--------------------------------------------- ------- -------------
Cash and cash equivalents at the
end of the period 14 899,721
--------------------------------------------- ------- -------------
A net debt reconciliation has not been included as the Company
had no debt during the year.
The notes to the financial statements form an integral part of
these financial statements.
NOTES TO THE ACCOUNTS
1. General Information
Roquefort Therapeutics plc, the Group's ultimate parent company,
was incorporated on 17 August 2020 as a public company in England
and Wales with company number 12819145 under the Companies Act.
The address of its registered office is Eccleston Yards, 25
Eccleston Place, London SW1W 9NF, United Kingdom.
The principal activity of the Company is to pursue opportunities
to acquire biotechnology businesses that are focused on early stage
opportunities in the medical biotechnology sector to include (but
not limited to):
-- Drug and vaccine development;
-- Diagnostics;
-- Immuno-therapy; and
-- Cell and gene therapies.
The Company listed on the London Stock Exchange ("LSE") on 22
March 2021.
The consolidated financial statements of the Group have been
prepared in accordance with UK adopted International Accounting
Standards as issued by the UK Accounting Standards Board (ASB).
They have been prepared under the assumption that the Group
operates on a going concern basis.
2. New Standards and Interpretations
No new standards, amendments or interpretations, effective for
the first time for the period beginning on or after 17 August 2020
have had a material impact on the Group.
Standards, amendments and interpretations that are not yet
effective and have not been early adopted are as follows:
Standard Impact on initial application Effective
date
-------------------- ---------------------------------- ----------
IFRS 3 Reference to Conceptual Framework 1 January
2022
IAS 37 Onerous contracts 1 January
2022
IAS 16 Proceeds before intended use 1 January
2022
Annual improvements 2018-2020 Cycle 1 January
2023
IFRS 17 Insurance contracts 1 January
2023
IAS 8 Accounting estimates 1 January
2023
IAS 1 Classification of Liabilities as 1 January
Current or Non-Current 2023
-------------------- ---------------------------------- ----------
The Directors are evaluating the impact of the new and amended
standards above. The Directors believe that these new and amended
standards are not expected to have a material impact on the
financial statements of the Group.
3. Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of
these financial statements are set out below. These policies have
been consistently applied to all the period presented, unless
otherwise stated.
a) Basis of Preparation
The financial statements of Roquefort Therapeutics plc have been
prepared in accordance with UK adopted International Accounting
Standards and the Companies Act 2006.
The financial statements have been prepared on an accrual basis
and under the historical cost convention.
b) Going Concern
The preparation of the financial statements requires an
assessment on the validity of the going concern assumption.
The Directors, having made due and careful enquiry, are of the
opinion that the Company and the newly formed Group have, as a
result of the successful Reverse Takeover (RTO) and significant
funds raised, adequate working capital to execute its operations
over the next 12 months. As a result, the Directors have adopted
the going concern basis of accounting in the preparation of the
annual financial statements.
Furthermore, the Directors acknowledge that COVID-19 has had,
and will continue to have, a significant adverse impact on the
global economy. The Directors do not believe that COVID-19's impact
on the global economy gives rise to a material uncertainty in
respect of the Company's going concern status due to the Company
not being dependent on future financing being obtained in the going
concern period.
c) Basis of Consolidation
The Group's financial statements consolidate those of the parent
company and its subsidiary as of 31 December 2021. Its subsidiary
has a reporting date of 31 December.
All transactions and balances between Group companies are
eliminated on consolidation, including unrealised gains and losses
on transactions between Group companies. Where unrealised losses on
intra-group asset sales are reversed on consolidation, the
underlying asset is also tested for impairment from a Group
perspective. Amounts reported in the financial statements of its
subsidiary have been adjusted where necessary to ensure consistency
with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries
acquired or disposed of during the year are recognised from the
effective date of acquisition, or up to the effective date of
disposal, as applicable.
The Group attributes total comprehensive income or loss of
subsidiaries between the owners of the parent and the
non-controlling interests based on their respective ownership
interests.
d) Business combinations
The Group applies the acquisition method in accounting for
business combinations. The consideration transferred by the Group
to obtain control of a subsidiary is calculated as the sum of the
acquisition-date fair values of assets transferred, liabilities
incurred and the equity interests issued by the Group, which
includes the fair value of any asset or liability arising from a
contingent consideration arrangement. Acquisition costs are
expensed as incurred.
Assets acquired and liabilities assumed are generally measured
at their acquisition-date fair values.
e) Foreign Currency Translation
i) Functional and Presentation Currency
The financial statements are presented in Pounds Sterling (GBP),
which is the Company's functional and presentation currency. IAS 21
The Effects of Changes in Foreign Exchange Rates requires that
assets and liabilities be translated using the exchange rate at
period end, and income, expenses and cash flow items are translated
using the rate that approximates the exchange rates at the dates of
the transactions (i.e. the average rate for the period). The
foreign exchange differences on translation is recognised in other
comprehensive income (loss).
ii) Transactions and Balances
Transactions denominated in a foreign currency are translated
into the functional currency at the exchange rate at the date of
the transaction. Assets and liabilities in foreign currencies are
translated to the functional currency at rates of exchange ruling
at balance date. Gains or losses arising from settlement of
transactions and from translation at period-end exchange rates of
monetary assets and liabilities denominated in foreign currencies
are recognised in the income statement for the period.
iii) Foreign operations
In the Group's financial statements, all assets, liabilities and
transactions of Group entities with a functional currency other
than GBP are translated into GBP upon consolidation. The functional
currencies of entities within the Group have remained unchanged
during the reporting period.
On consolidation, assets and liabilities have been translated
into GBP at the closing rate of 0.5371 at the reporting date.
Goodwill and fair value adjustments arising on the acquisition of a
foreign entity have been treated as assets and liabilities of the
foreign entity and translated into GBP at the closing rate on the
acquisition date of 0.5387.
Income and expenses have been translated into GBP at the average
rate of 0.5461 over the reporting period. Exchange differences are
charged or credited to other comprehensive income and recognised in
the currency translation reserve in equity. On disposal of a
foreign operation, the related cumulative translation differences
recognised in equity are reclassified to profit or loss and are
recognised as part of the gain or loss on disposal.
f) Segment Reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-makers.
The chief operating decision-makers, who are responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the executive Board of
Directors.
All operations and information are reviewed together so that at
present there is only one reportable operating segment.
In the opinion of the Directors, during the period the Group
operated in the single business segment of biotechnology.
g) Goodwill and Intangible assets
Goodwill represents the future economic benefits arising from a
business combination that are not individually identified and
separately recognised. Goodwill is carried at cost less accumulated
impairment losses. Refer to Note (h) for a description of
impairment testing procedures.
Other intangible assets, including customer relationships,
licences, patents and trademarks, that are acquired by the Group
and have finite useful lives are measured at cost less accumulated
amortisation and any accumulated impairment losses. Refer to Note
(h) for amortisation procedures.
h) Impairment testing of goodwill, other intangible assets and property, plant and equipment
For impairment assessment purposes, assets are grouped at the
lowest levels for which there are largely independent cash inflows
(cash-generating units). As a result, some assets are tested
individually for impairment and some are tested at cash-generating
unit level. Goodwill is allocated to those cash-generating units
that are expected to benefit from synergies of a related business
combination and represent the lowest level within the Group at
which management monitors goodwill.
Cash-generating units to which goodwill has been allocated
(determined by the Group's management as equivalent to its
operating segments) are tested for impairment at least annually.
All other individual assets or cash-generating units are tested for
impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the
asset's (or cash-generating unit's) carrying amount exceeds its
recoverable amount, which is the higher of fair value less costs of
disposal and value-in-use. To determine the value-in-use,
management estimates expected future cash flows from each
cash-generating unit and determines a suitable discount rate in
order to calculate the present value of those cash flows. The data
used for impairment testing procedures are directly linked to the
Group's latest approved budget, adjusted as necessary to exclude
the effects of future reorganisations and asset enhancements.
Discount factors are determined individually for each
cash-generating unit and reflect current market assessments of the
time value of money and asset-specific risk factors.
Impairment losses for cash-generating units reduce first the
carrying amount of any goodwill allocated to that cash-generating
unit. Any remaining impairment loss is charged pro rata to the
other assets in the cash-generating unit.
Amortisation is calculated to write off the cost of intangible
assets less their estimated residual values using the straight-line
method over their estimated useful lives, and is generally
recognised in profit or loss. Goodwill is not amortised.
The estimated useful lives for current and comparative periods
are as follows:
-- licences, patents and trademarks: 1-5 years
Amortisation methods, useful lives and residual values are
reviewed at each reporting date and adjusted if appropriate.
i) Financial Instruments
IFRS 9 requires an entity to address the classification,
measurement and recognition of financial assets and
liabilities.
i) Classification
The Company classifies its financial assets in the following
measurement categories:
-- those to be measured at amortised cost.
The classification depends on the Company's business model for
managing the financial assets and the contractual terms of the cash
flows.
The Company classifies financial assets as at amortised cost
only if both of the following criteria are met:
-- the asset is held within a business model whose objective is
to collect contractual cash flows; and
-- the contractual terms give rise to cash flows that are solely
payment of principal and interest.
ii) Recognition
Purchases and sales of financial assets are recognised on trade
date (that is, the date on which the Company commits to purchase or
sell the asset). Financial assets are derecognised when the rights
to receive cash flows from the financial assets have expired or
have been transferred and the Company has transferred substantially
all the risks and rewards of ownership.
iii) Measurement
At initial recognition, the Company measures a financial asset
at its fair value plus, in the case of a financial asset not at
fair value through profit or loss (FVPL), transaction costs that
are directly attributable to the acquisition of the financial
asset.
Transaction costs of financial assets carried at FVPL are
expensed in profit or loss.
Debt instruments
Amortised cost: Assets that are held for collection of
contractual cash flows, where those cash flows represent solely
payments of principal and interest, are measured at amortised cost.
Interest income from these financial assets is included in finance
income using the effective interest rate method. Any gain or loss
arising on derecognition is recognised directly in profit or loss
and presented in other gains/(losses) together with foreign
exchange gains and losses. Impairment losses are presented as a
separate line item in the statement of profit or loss.
iv) Impairment
The Company assesses, on a forward looking basis, the expected
credit losses associated with any debt instruments carried at
amortised cost. The impairment methodology applied depends on
whether there has been a significant increase in credit risk. For
trade receivables, the Company applies the simplified approach
permitted by IFRS 9, which requires expected lifetime losses to be
recognised from initial recognition of the receivables.
j) Financial Liabilities
The Group's financial liabilities include borrowings, trade and
other payables and derivative financial instruments.
Financial liabilities are initially measured at fair value, and,
where applicable, adjusted for transaction costs unless the Group
designated a financial liability at fair value through profit or
loss.
Subsequently, financial liabilities are measured at amortised
cost using the effective interest method except for derivatives and
financial liabilities designated at FVTPL, which are carried
subsequently at fair value with gains or losses recognised in
profit or loss (other than derivative financial instruments that
are designated and effective as hedging instruments).
All interest-related charges and, if applicable, changes in an
instrument's fair value that are reported in profit or loss are
included within finance costs or finance income.
k) Inventories
Inventories are measured at the lower of cost and net realisable
value. The cost of manufactured products includes direct materials
and direct labour with any variable and fixed overheads expensed is
a period cost. Costs of purchased inventory are determined after
deducting rebates and realisable value as the estimated selling
price in the ordinary course of business less the estimated costs
of completion and the estimated cost necessary to make the
sale.
l) Borrowings
Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of
transaction costs) and the redemption amount is recognised in
profit or loss over the period of the borrowings using the
effective interest method. Fees paid on the establishment of loan
facilities are recognised as transaction costs of the loan to the
extent that it is probable that some or all of the facility will be
drawn down. In this case, the fee is deferred until the draw down
occurs.
Borrowings are removed from the balance sheet when the
obligation specified in the contract is discharged, cancelled or
expired. The difference between the carrying amount of a financial
liability that has been extinguished or transferred to another
party and the consideration paid, including any non cash assets
transferred or liabilities assumed, is recognised in profit or loss
as other income or finance costs.
Where the terms of a financial liability are renegotiated and
the entity issues equity instruments to a creditor to extinguish
all or part of the liability, a gain or loss is recognised in
profit or loss, which is measured as the difference between the
carrying amount of the financial liability and the fair value of
the equity instruments issued.
Borrowings are classified as current liabilities unless the
entity has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting period.
m) Taxation
Taxation comprises current and deferred tax.
Current tax is based on taxable profit or loss for the period.
Taxable profit or loss differs from profit or loss as reported in
the income statement because it excludes items of income and
expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible. The
asset or liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the balance
sheet date.
Deferred tax is recognised on differences between the carrying
amounts of assets and liabilities in the financial information and
the corresponding tax bases used in the computation of taxable
profit and is accounted for using the balance sheet liability
method. Deferred tax liabilities are generally recognised for all
taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits
will be available against which deductible temporary differences
can be utilised. Such assets and liabilities are not recognised if
the temporary difference arises from initial recognition of
goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and associates,
and interests in joint ventures, except where the Company is able
to control the reversal of the temporary difference and it is
probable that the temporary difference will not reverse in the
foreseeable future.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled, or the asset
realised. Deferred tax is charged or credited to profit or loss,
except when it relates to items charged or credited directly to
equity, in which case the deferred tax is also dealt with in
equity.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Company intends to settle
its current tax assets and liabilities on a net basis.
n) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and
demand deposits with banks and other financial institutions, that
are readily convertible into known amounts of cash, and which are
subject to an insignificant risk of changes in value.
o) Equity, reserves and dividend payments
Share capital represents the nominal (par) value of shares that
have been issued.
Share premium includes any premiums received on issue of share
capital. Any transaction costs associated with the issuing of
shares are deducted from share premium, net of any related income
tax benefits.
Translation reserve comprises foreign currency translation
differences arising from the translation of financial statements of
the Group's foreign entities into GBP.
Retained losses includes all current period results as disclosed
in the income statement and share-based employee remuneration.
All transactions with owners of the parent are recorded
separately within equity.
No dividends are proposed for the period.
p) Earnings per Ordinary Share
The Company presents basic and diluted earnings per share data
for its Ordinary Shares.
Basic earnings per Ordinary Share is calculated by dividing the
profit or loss attributable to Shareholders by the weighted average
number of Ordinary Shares outstanding during the period.
Diluted earnings per Ordinary Share is calculated by adjusting
the earnings and number of Ordinary Shares for the effects of
dilutive potential Ordinary Shares.
q) Employee benefits
For the period the Group's only employees due benefits were
within its subsidiary, Lyramid.
Provision is made for Lyramid's liability for employee benefits
arising from services rendered by employees up to the end of the
reporting period. In determining the liability, consideration is
given to employee wage increases and the probability that the
employee may satisfy vesting requirements.
Short term obligations
Liability for wages and salaries, including non-monetary
benefits, annual leave, long service leave and accumulating sick
leave expected to be settled within 12 months of the reporting date
are recognised in other payables in respect of employees' services
up to the reporting date and are measured at the amounts expected
to be paid when the liabilities are settled.
Other long-term employee benefit obligations
Liability for annual leave and long service leave not expected
to be settled within 12 months from the reporting date is
recognised in the provision for employee benefits and measured as
the present value of expected future payments to be made in respect
of services provided by employees up to the reporting date, using
the projected unit credit method. Consideration is given to
expected future wage and salary levels, of employee departures and
period of service.
Retirement benefit obligations
Contributions for retirement benefit obligations are recognised
as an expense as they become payable. Prepaid contributions are
recognised as an asset to the extent that a cash refund or a
reduction in the future payment is available. Contributions are
paid into the fund nominated by the employee.
Employee benefits provision
The liability for employee benefits expected to be settled more
than 12 months from the reporting date are recognised and measured
at the present value of the estimated future cash flows to be made
in respect of all employees at the reporting date. In determining
the present value of the liability, estimates of attrition rates
and pay increases through promotion and inflation have been taken
into account.
r) Share-based payments
The Company has applied the requirements of IFRS 2 Share-based
payments.
The Company issues equity settled share based payments to the
directors and to third parties for the provision of services
provided for assistance in raising private equity. Equity settled
share based payments are measured at fair value at the date of
grant, or the date of the service provided. The fair value
determined at the grant date or service date of the equity settled
share based payment is recognised as an expense, or recognised
against share premium where the service received relates assistance
in raising equity, with a corresponding credit to the share base
payment reserve. The fair value determined at the grant date of
equity settled share based payment is expensed on a straight line
basis over the life of the vesting period, based on the company's
estimate of shares that will eventually vest. Once an option or
warrant vests, no further adjustment is made to the aggregate
expensed.
The fair value is measured by use of the Black Scholes model as
the Directors view this as providing the most reliable measure of
valuation. The expected life used in the model has been adjusted,
based on management's best estimates, for the effects of
non-transferability, exercise restrictions and behavioural
considerations. The market price used in the model is the quoted
LSE closing price immediately preceding the calculation date. The
fair value calculated is inherently subjective and uncertain due to
the assumptions made and the limitation of the calculation
used.
s) Financial Risk Management Objectives and Policies
The Company does not enter into any forward exchange rate
contracts.
The main financial risks arising from the Company's activities
are market risk, interest rate risk, foreign exchange risk, credit
risk, liquidity risk and capital risk management. Further details
on the risk disclosures can be found in Note 19.
t) Significant accounting judgements, estimates and assumptions
The preparation of the financial statements in conformity with
International Financial Reporting Standards requires the use of
certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Company's
accounting policies.
Estimates and judgements are continually evaluated, and are
based on historical experience and other factors, including
expectations of future events that are believed to be reasonable
under the circumstances. The Directors consider the significant
accounting judgements, estimates and assumptions used within the
financial statements to be:
Impairment of non-financial assets and goodwill
In assessing impairment, management estimates the recoverable
amount of each asset or cash-generating unit based on expected
future cash flows and uses an interest rate to discount them.
Estimation uncertainty relates to assumptions about future
operating results and the determination of a suitable discount
rate. In the period the Directors consider the significant
accounting judgements, estimates and assumptions used within the
financial statements to be:
Business combinations
Management uses valuation techniques when determining the fair
values of certain assets and liabilities acquired in a business
combination (see Note (d)). In particular, the fair value of
contingent consideration is dependent on the outcome of many
variables including the acquirees' future profitability (see Note
4).
Share Based Payments
In the period to 31 December 2021 35,875,000 warrants were
granted. When accounting for the share based payment expense in
respect of those warrants granted, Management must calculate the
fair value of the share warrants issued. Management have done so
using the Black Scholes model, however, a number of the inputs in
this model are subjective and thus management must make
estimates.
4. Acquisition of Lyramid Pty Limited
On 21 December 2021, Roquefort Therapeutics made its first
acquisition. It acquired 100% of the equity instruments of Lyramid
Pty Limited, an Australian based business, thereby obtaining
control. The acquisition was made in line with the Company's stated
strategic objective to pursue investments in the global
biotechnology sector.
The details of the business combination as follows:
Fair value of consideration transferred GBP
----------------------------------------------- ----------
Amount settles in cash 1,148,495
Loans assigned at acquisition (132,800)
Fair value of contingent consideration -
----------------------------------------------- ----------
Total 1,015,695
----------------------------------------------- ----------
Recognised amounts of identifiable net assets
at book values
Inventories 9,273
Trade and other receivables 42,674
Cash and cash equivalents 42,270
----------------------------------------------- ----------
Total current assets 94,217
----------------------------------------------- ----------
Borrowings 212,065
Deferred tax liabilities 281,911
----------------------------------------------- ----------
Total non-current liabilities 493,976
----------------------------------------------- ----------
Provisions
Other liabilities 28,195
Trade and other payables 37,881
----------------------------------------------- ----------
Total current liabilities 66,076
----------------------------------------------- ----------
Identifiable net liabilities 465,835
----------------------------------------------- ----------
Intangible asset at fair value 1,481,530
----------------------------------------------- ----------
Consideration transferred settled in cash 648,496
Cash and cash equivalents acquired 42,270
----------------------------------------------- ----------
Net cash outflow on acquisition 606,226
----------------------------------------------- ----------
Acquisition costs charged to expenses 224,744
----------------------------------------------- ----------
Consideration transferred
The acquisition of Lyramid was settled for a consideration of
GBP1,148,495; GBP648,495 being payable in cash and GBP500,000
payable in shares. On acquisition, loans of GBP132,800 were
assigned from the previous owner.
The purchase agreement included an additional contingent
deferred consideration to the Seller to be satisfied in the form of
Ordinary Shares as follows:
(a) if prior to fifth anniversary of Admission (on 21 December
2021), the Company's market capitalisation exceeds GBP25,000,000
for a period of 5 or more consecutive trading days the Company
shall issue to the Seller (or its nominee) 5,000,000 Ordinary
Shares; and
(b) if prior to fifth anniversary of Admission (on 21 December
2021) the Company's market capitalisation exceeds GBP50,000,000 for
a period of 5 or more consecutive trading days the Company shall
issue to the Seller (or its nominee) a further 5,000,000 Ordinary
Shares.
Acquisition-related costs amounting to GBP224,744 are not
included as part of consideration transferred and have been
recognised as an expense in the consolidated statement of profit or
loss, as part of other expenses.
Identifiable net assets
The fair value of the trade and other receivables acquired as
part of the business combination amounted to GBP42,674. As of the
acquisition date, the Group's best estimate of the contractual cash
flow not expected to be collected amounted to zero.
Lyramid's contribution to the Group results
Lyramid incurred a loss of GBP14,449, for the eleven days from
21 December 2021 to the reporting date. Revenue for this period was
GBP719.
If Lyramid had been acquired on 17 August 2020, revenue of the
Group for the period would have been GBP23,857, and loss for the
period would have increased by GBP193,881.
5. Investments in subsidiaries
The parent company has investments in the following subsidiary
undertakings which are unlisted:
Name Country of Holding Proportion Principal
incorporation of voting activity
rights
------------ --------------- ---------------- ----------- ------------------
Lyramid Pty Australia Ordinary shares 100% Biotechnology
Limited research company
------------ --------------- ---------------- ----------- ------------------
6. Directors' and Employees' Remuneration
Directors' Remuneration
Period
ended
31 December
2021
GBP
---------------------------------- -------------
Fee's to non-executive directors 47,301
Bonus 10,000
Share based payment charge 178,053
------------------------------------ -------------
235,354
---------------------------------- -------------
Further information about the remuneration of individual
directors are provided in the Directors' Remuneration Report.
Remuneration of Key Management Personnel
Period
ended
31 December
2021
GBP
------------------------------------------- -------------
Salaries and short-term employee benefits 1,899
Long term benefits 221
Post-employment benefits 186
Share based payment charge 62,464
--------------------------------------------- -------------
64,770
------------------------------------------- -------------
Average number of employees during the year (including Directors
full time equivalent)
Period
ended
31 December
2021
----------------------- -------------
Continuing operations 1
------------------------- -------------
Stephen West is the sole employee of the Company, and the
Company has had no other employees in the period. Lyramid's sole
employee is Graham Robertson.
7. Revenue
Revenue in the period was GBP719 and was in the Group's only
business segment of biotechnology.
8. Operating Loss
The following items have been charged/(credited) to the income
statement in arriving at the Group's operating loss from continuing
operations:
Period
ended
31 December
2021
GBP
---------------------------------------------- -------------
Other operating costs
Costs associated with the IPO 182,053
Directors' and employee costs 59,607
Share based payments to directors and senior
management 248,326
Costs associated with the acquisition
of Lyramid 224,744
Legal fees 31,165
Consulting and professional fees 125,807
Other expenditure 35,818
------------------------------------------------ -------------
907,515
---------------------------------------------- -------------
During the year the Group obtained the following services from
its auditor:
Period
ended
31 December
2021
GBP
------------------------------------- -------------
Audit Services
Statutory audit - Group and Company 22,000
22,000
------------------------------------- -------------
9. Taxation
Period
ended
31 December
2021
GBP
------------------- -------------
Current tax -
Deferred tax -
Income tax expense -
------------------- -------------
Income tax can be reconciled to the loss in the statement of
comprehensive income as follows:
Period
ended
31 December
2021
GBP
-------------------------------------------- -------------
Loss before taxation (917,433)
---------------------------------------------- -------------
Tax at the UK Corporation of 19% 174,312
Effect of overseas tax 867
Expenditure disallowable for taxation -
Tax losses on which no deferred tax assets
has been recognised (175,179)
--------------------------------------------- -------------
Total tax (charge)/credit -
---------------------------------------------- -------------
UK -
Overseas -
---------------------------------------------- -------------
Total tax (charge)/credit -
---------------------------------------------- -------------
The Group has accumulated tax losses of approximately GBP917,000
that are available, under current legislation, to be carried
forward indefinitely against future profits.
A deferred tax asset has not been recognised in respect of these
losses due to the uncertainty of future profits. The amount of the
deferred tax asset not recognised is approximately GBP175,000.
On 11 March 2020 it was announced (and substantively enacted on
17 March 2020) that the UK corporation tax rate would remain at 19%
and not reduce to 17% (the previously enacted rate) from 1 April
2020. On 3 March 2021, the Chancellor announced that the
corporation tax rate will be increasing to 25% from 1 April
2023.
10. Earnings per share
Period
ended
31 December
2021
GBP
------------------------------------------ -------------
Loss attributable to equity shareholders (917,433)
-------------------------------------------- -------------
Weighted average number of ordinary
shares 24,701,793
Loss per share in pence
Basic (3.71)
Diluted (3.71)
-------------------------------------------- -------------
There is no difference between the basic and diluted earnings
per share as the effect would be to decrease earnings per
share.
As at the end of the financial period there were 34,375,000
warrants in issue, which could potentially have an anti-dilutive
impact depending on the results of the Company.
11. Intangible Assets
Period
ended
31 December
2021
GBP
--------------------- -------------
Cost
At 17 August 2020 -
Goodwill 281,911
Licences 1,199,619
----------------------- -------------
At 31 December 2021 1,481,530
----------------------- -------------
Amortisation
At 17 August 2021 -
Impairment Charge -
--------------------- -------------
At 31 December 2021 -
--------------------- -------------
Carrying value
At 17 August 2020 -
--------------------- -------------
At 31 December 2021 1,481,530
----------------------- -------------
The Directors have concluded that there has been no material
impairment of the goodwill associated with the acquisition of
Lyramid Pty Limited at 31 December 2021. The Goodwill represents
the deferred tax value of the licence agreement and patents held by
Lyramid.
12. Investments
The Group had no investments at 31 December 2021, or 17 August
2020.
Shares
in subsidiary
undertakings
Company GBP
------------------------------------ ---------------
Cost at 17 August 2020 -
Additions 1,015,695
-------------------------------------- ---------------
Cost at 31 December 2021 1,015,695
-------------------------------------- ---------------
Impairment
At 17 August 2021 -
Charge for period -
------------------------------------ ---------------
At 31 December 2021 -
------------------------------------ ---------------
Net book value at 17 August 2020 -
------------------------------------ ---------------
Net book value at 31 December 2021 1,015,695
-------------------------------------- ---------------
In the period the Company acquired 100% of the issued shares of
Lyramid Pty Limited. The net book value of shares in subsidiary
undertakings is subject to commercial and management review, as
well as review for indicators of impairment at least once a year.
This is to confirm the carrying amount of the investment in the
financial statements does not exceed the estimated recoverable
amount of the investment. When this is no longer the case, the
costs are written off through the statement of profit or loss and
other comprehensive income. The Directors have concluded that there
has been no material impairment to the investment in Lyramid Pty
Limited at 31 December 2021.
13. Trade and other receivables
Group Company
31 December 31 December
2021 2021
GBP GBP
-------------------------------- ------------- -------------
Trade receivables 17,825 -
Other receivables 2,135,031 2,130,875
Prepayments and accrued income 25,927 5,349
2,178,783 2,136,224
-------------------------------- ------------- -------------
There are no material differences between the fair value of
trade and other receivables and their carrying value at the year
end.
The other receivables balance primarily relates to shares issued
in December 2021 as part of the RTO to acquire Lyramid. These
monies were collected in full in January 2022.
No receivables were past due or impaired at the year end.
14. Cash and cash equivalents
Group Company
31 December 31 December
2021 2021
GBP GBP
-------------------------- ------------- -------------
Cash at bank and in hand 899,271 857,614
--------------------------- ------------- -------------
The Directors consider the carrying amount of cash and cash
equivalents approximates to their fair value.
15. Trade and other payables
Group Company
31 December 31 December
2021 2021
GBP GBP
------------------------------ ------------- -------------
Trade creditors 40,718 962
Accruals and other creditors 154,799 126,688
195,517 127,650
------------------------------ ------------- -------------
16. Deferred tax assets and liabilities
Group Company
Period Period
ended ended
31 December 31 December
2021 2021
GBP GBP
----------------------------------- ------------- -------------
At 17 August 2020 - -
Recognised in business combination 281,911 -
At 31 December 2021 281,911 -
----------------------------------- ------------- -------------
See note 4 - Acquisition of Lyramid Pty Limited.
17. Share capital
Ordinary Share Share Premium
Shares Capital GBP Total
Group and Company No. GBP GBP
------------------------------- ------------ ----------- ------------------------ ---------
Issue of ordinary shares on
incorporation(1) 5,000,000 50,000 - 50,000
Issue of ordinary shares(2) 7,400,000 74,000 - 74,000
Issue of ordinary shares(3) 20,000,000 200,000 800,000 1,000,000
Exercise of broker warrants(4) 1,500,000 15,000 - 15,000
Issue of ordinary shares(5) 3,000,000 30,000 120,000 150,000
Issue of ordinary shares(6) 30,000,000 300,000 2,700,000 3,000,000
Issue of ordinary shares(7) 5,000,000 50,000 450,000 500,000
Share issue costs - - (159,405) (159,405)
------------------------------- ------------ ----------- ------------------------ ---------
At 31 December 2021 71,900,000 719,000 3,910,595 4,629,595
------------------------------- ------------ ----------- ------------------------ ---------
(1) On incorporation on 17 August 2020, the Company issued
5,000,000 ordinary shares of GBP0.01 at their nominal value of
GBP0.01.
(2) On 20 November 2020, the Company issued 7,400,000 ordinary
shares at their nominal value of GBP0.01.
(3) On admission to the Standard List of the LSE on 22 March
2021, 20,000,000 shares were issued at a placing price of
GBP0.05.
(4) On 19 April 2021 1,500,000 brokers warrants were exercised
at the exercise price if GBP0.01 resulting in the issue of
1,500,000 ordinary shares.
(5) On 18 August 2021, the Company issued 3,000,000 ordinary
shares of GBP0.01 at an issue price of GBP0.05.
(6) On 21 December 2021, the Company issued 30,000,000 ordinary
shares of GBP0.01 at an issue price of GBP0.10.
(7) On 21 December 2021, the Company issued 5,000,000 ordinary
shares of GBP0.01 at an issue price of GBP0.10.
18. Share Based Payment Reserves
Total
GBP
-------------------------------------- --------
Directors warrants issued(1) 6,833
Broker seed warrants issued(2) 60,002
Broker placing warrants issued(3) 8,076
Completion warrants issued(4) 100,947
Senior management warrants issued(5) 140,544
Optiva warrants issued(6) 44,417
Orana warrants issued(7) 5,889
---------------------------------------- --------
At 31 December 2021 366,708
---------------------------------------- --------
(1) On admission to LSE on 22 March 2021 750,000 directors'
warrants were issued that entitle the warrant holder to subscribe
for one Ordinary Share at GBP0.05 per ordinary share and a further
750,000 directors warrants were issued that entitle the warrant
holder to subscribe for one ordinary share at GBP0.10 per ordinary
share.
(2) On admission to LSE on 22 March 2021 1,500,000 brokers
warrants were issued that entitle the warrant holder to subscribe
for one Ordinary Share at GBP0.01 per ordinary share.
(3) On admission to LSE on 22 March 2021, 480,000 Broker Placing
Warrants were issued that entitle the warrant holder to subscribe
for one ordinary share at the placing price of GBP0.05 per ordinary
share.
(4) On readmission to LSE on 21 December 2021, 3,000,000
Completion Warrants were issued that entitle, Stephen West (the
warrant holder) to subscribe for one ordinary share at GBP0.10 per
ordinary share.
(5) On readmission to LSE on 21 December 2021, 4,500,000 Senior
Management Warrants were issued that entitle the warrant holder to
subscribe for one ordinary share at GBP0.15 per ordinary share.
(6) On readmission to LSE on 21 December 2021, 1,320,000 Optiva
Warrants were issued that entitle the warrant holder to subscribe
for one ordinary share at GBP0.10 per ordinary share.
(7) On readmission to LSE on 21 December 2021, 175,000 Orana
Warrants were issued that entitle the warrant holder to subscribe
for one ordinary share at GBP0.10 per ordinary share.
The fair value of the services received in return for the
warrants granted are measured by reference to the fair value of the
warrants granted. The estimate of the fair value of the warrants
granted is measured based on the Black-Scholes valuations model.
Measurement inputs and assumptions are as follows:
Risk
Number of Share Exercise Expected Expected free Expected
Warrant warrants Price Price volatility life rate dividends
------------------ --------- ------- -------- ----------- -------- ------ ----------
Director 750,000 GBP0.05 GBP0.05 50.00% 5 15.00% 0.00%
Director 750,000 GBP0.05 GBP0.10 50.00% 5 15.00% 0.00%
Broker 1,500,000 GBP0.05 GBP0.01 50.00% 0.08 15.00% 0.00%
Broker Placing 480,000 GBP0.05 GBP0.05 50.00% 3 15.00% 0.00%
Completion 3,000,000 GBP0.10 GBP0.10 50.00% 3 15.00% 0.00%
Senior Management 4,500,000 GBP0.10 GBP0.15 50.00% 5 15.00% 0.00%
Optiva 1,320,000 GBP0.10 GBP0.10 50.00% 3 15.00% 0.00%
Orana 175,000 GBP0.10 GBP0.10 50.00% 3 15.00% 0.00%
------------------ --------- ------- -------- ----------- -------- ------ ----------
Exercise
Warrants Number of Warrants Price Expiry date
----------------------------- ---------------------------------------- -------- -------------
On incorporation - - -
Issued on 25 November 2020(1) 5,000,000 GBP0.10 22 March 2026
Issued on 25 November 2020(1) 7,000,000 GBP0.10 22 March 2026
Issued on 17 March 2021 1,500,000 GBP0.01 20 April 2021
Issued on 17 March 2021 480,000 GBP0.05 22 March 2024
Issued on 17 March 2021(1) 750,000 GBP0.05 22 March 2026
Issued on 17 March 2021(1) 750,000 GBP0.10 22 March 2026
Issued on 17 March 2021 10,000,000 GBP0.10 21 March 2023
Exercised on 19 April 2021 (1,500,000) GBP0.01 20 April 2021
Issued on 18 August 2021 1,500,000 GBP0.10 22 March 2023
Issued on 13 October 2021 3,000,000 GBP0.10 21 December
2024
Issued on 13 October 2021 4,500,000 GBP0.15 21 December
2026
Issued on 13 October 2021 1,320,000 GBP0.10 21 December
2024
Issued on 13 October 2021 175,000 GBP0.10 21 December
2024
----------------------------- ---------------------------------------- -------- -------------
At 31 December 2021 34,375,000 GBP0.105
----------------------------- ---------------------------------------- -------- -------------
(1) The warrants vest on 21 March 2022, being 12 months from
date of admission.
The weighted average time to expiry of the warrants as at 31
December 2021 is 3.05 years.
19. Financial Instruments and Risk Management
Capital Risk Management
The Group manages its capital to ensure that it will be able to
continue as a going concern while maximising the return
to stakeholders. The overall strategy of the Group is to
minimise costs and liquidity risk.
The capital structure of the Group consists of equity
attributable to equity holders of the Group, comprising issued
share capital, reserves and retained earnings as disclosed in the
Statement of Changes of Equity.
The Group is exposed to a number of risks through its normal
operations, the most significant of which are interest, credit,
foreign exchange, commodity and liquidity risks. The management of
these risks is vested to the Board of Directors.
The sensitivity has been prepared assuming the liability
outstanding was outstanding for the whole period. In all cases
presented, a negative number in profit and loss represents an
increase in finance expense / decrease in interest income.
Credit Risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from the Group's
receivables from customers. Indicators that there is no reasonable
expectation of recovery include, amongst others, failure to make
contractual payments for a period of greater than 120 days past
due.
The carrying amount of financial assets represents the maximum
credit exposure.
The principal financial assets of the Group are bank balances.
The Group deposits surplus liquid funds with counterparty banks
that have high credit ratings and the Directors consider the credit
risk to be minimal.
The Group's maximum exposure to credit by class of individual
financial instrument is shown in the table below:
Carrying Maximum
value at Exposure
31 December at
2021 31 December
GBP 2021
GBP
--------------------------- ------------- -------------
Trade receivables 17,825 17,825
Other receivables 2,160,958 2,160,958
Cash and cash equivalents 899,721 899,721
3,078,504 3,078,504
--------------------------- ------------- -------------
Currency Risk
The Group operates in a global market with income and costs
possibly arising in a number of currencies and is exposed to
foreign currency risk arising from commercial transactions,
translation of assets and liabilities and net investment in foreign
subsidiaries. Exposure to commercial transactions arise from sales
or purchases by operating companies in currencies other than the
Group's functional currency. Currency exposures are reviewed
regularly.
The Group has a limited level of exposure to foreign exchange
risk through their foreign currency denominated cash balances and a
portion of the Group's costs being incurred in Australian Dollars.
Accordingly, movements in the Sterling exchange rate against these
currencies could have a detrimental effect on the Group's results
and financial condition.
Currency risk is managed by maintaining some cash deposits in
currencies other than Sterling. The table below shows the currency
profiles of cash and cash equivalents:
At
31 December
2021
Cash and cash equivalents GBP
--------------------------- -------------
Sterling 857,614
Australian Dollars 42,107
899,721
--------------------------- -------------
Liquidity Risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another
financial asset. The Group's approach to managing liquidity is to
ensure, as far as possible, that it will have sufficient liquidity
to meet its liabilities when they are due, under both normal and
stressed conditions, without incurring unacceptable losses or
risking damage to the Group's reputation.
The Group seeks to manage liquidity risk by regularly reviewing
cash flow budgets and forecasts to ensure that sufficient liquidity
is available to meet foreseeable needs and to invest cash assets
safely and profitably. The Group deems there is sufficient
liquidity for the foreseeable future.
The Group had cash and cash equivalents at period end as
below:
At
31 December
2021
GBP
--------------------------- -------------
Cash and cash equivalents 899,721
899,721
--------------------------- -------------
Interest Rate Risk
The Group is exposed to interest rate risk whereby the risk can
be a reduction of interest received on cash surpluses held and an
increase in interest on borrowings the Group may have. The maximum
exposure to interest rate risk at the reporting date by class of
financial asset was:
At
31 December
2021
GBP
--------------- -------------
Bank balances 899,721
899,721
--------------- -------------
Given the extremely low interest rate environment on bank
balances, any probable movement in interest rates would have an
immaterial effect.
20. Financial assets and financial liabilities
Group Financial Financial
Assets at Liabilities
amortised at amortised
31 December 2021 cost cost Total
Financial assets/liabilities GBP GBP GBP
------------------------------- ----------- -------------- ----------
Trade and other receivables 2,178,783 - 2,178,783
Cash and cash equivalents 899,721 - 899,721
Trade and other payables - (195,517) (195,517)
------------------------------- ----------- -------------- ----------
3,078,504 (195,517) 2,882,987
------------------------------- ----------- -------------- ----------
Company Financial Financial
Assets at Liabilities
amortised at amortised
31 December 2021 cost cost Total
Financial assets/liabilities GBP GBP GBP
------------------------------- ----------- -------------- ----------
Trade and other receivables 2,136,224 - 2,136,224
Cash and cash equivalents 857,614 - 857,614
Trade and other payables - (127,650) (127,650)
------------------------------- ----------- -------------- ----------
2,993,838 (127,650) 2,866,188
------------------------------- ----------- -------------- ----------
21. Capital Commitments
There were no capital commitments at 31 December 2021.
22. Contingent Liabilities
There were no contingent liabilities at 31 December 2021.
23. Operating lease commitments
There were no operating lease commitments at 31 December
2021.
24. Related party transactions
On incorporation, the Company issued 2,500,000 Ordinary Shares
of GBP0.01 at GBP0.01 per Ordinary Share for cash consideration of
GBP25,000 to Stephen West, a Director and 2,500,000 Ordinary Shares
of GBP0.01 at GBP0.01 per Ordinary Share for cash consideration of
GBP25,000 to Glenn Whiddon, a Director.
On 20 November 2020, the Company issued 500,000 Ordinary Shares
of GBP0.01 at GBP0.01 per Ordinary Share for cash consideration of
GBP5,000 to Cresthaven Investments Pty Ltd ATF The Bellini Trust
(an entity associated with Stephen West, a Director); 3,500,000
Ordinary Shares of GBP0.01 at GBP0.01 per Ordinary Share for cash
consideration of GBP35,000 to 6466 Investments Pty Ltd (an entity
associated with Glenn Whiddon, a Director); 3,000,000 Ordinary
Shares of GBP0.01 at GBP0.01 per Ordinary Share for cash
consideration of GBP30,000 to Mark Rollins, a Director; and 400,000
Ordinary Shares of GBP0.01 at GBP0.01 per Ordinary Share for cash
consideration of GBP4,000 to Orana Corporate LLP, an entity which
has a service agreement with the Company for the provision of
accounting and company secretarial services. All of these shares
are paid up.
On admission to the Standard List of the LSE on 22 March 2021,
the Company issued 700,000 Ordinary Shares of GBP0.01 at GBP0.10
per Ordinary Share for cash consideration of GBP70,000 to Nautical
Holdings Pty Limited (an entity associated with Glenn Whiddon, a
Director); 600,000 Ordinary Shares of GBP0.01 at GBP0.10 per
Ordinary Share for cash consideration of GBP60,000 to 6466
Investments Pty Limited (an entity associated with Glenn Whiddon, a
Director); 700,000 Ordinary Shares of GBP0.01 at GBP0.10 per
Ordinary Share for cash consideration of GBP70,000 to
Getmeoutofhere Pty Limited (an entity associated with Glenn
Whiddon, a Director); 1,000,000 Ordinary Shares of GBP0.01 at
GBP0.10 per Ordinary Share for cash consideration of GBP100,000 to
Cresthaven Investments Pty Ltd ATF The Bellini Trust (an entity
associated with Stephen West, a Director); and 1,000,000 Ordinary
Shares of GBP0.01 at GBP0.10 per Ordinary Share for cash
consideration of GBP100,000 to Mark Rollins a Director;
On 21 December 2021, the Company issued 399,000 Ordinary Shares
of GBP0.01 at GBP0.10 per Ordinary Share for cash consideration of
GBP39,900 to Cresthaven Investments Pty Ltd ATF The Bellini Trust
(an entity associated with Stephen West, a Director) and 1,000
Ordinary Shares of GBP0.01 at GBP0.10 per Ordinary Share for cash
consideration of GBP100 to Stephen West, a Director.
Orana Corporate LLP has a service agreement with the Company for
the provision of accounting and company secretarial services. In
the period Orana Corporate LLP received GBP6,930 for these services
from the Company. A further GBP24,000 was received for advisory
work in connection with the Company's initial listing on the LSE. A
further GBP30,000 was received for the Placing and subsequent
relisting of the Company.
In the period the Company made a loan of GBP80,000 to its
subsidiary Lyramid. This loan has been impaired and a provision has
been made against it at the year end.
25. Post reporting date events
No adjusting or significant non-adjusting events have occurred
between the 31 December reporting date and the date of
authorisation.
26. Ultimate controlling party
As at 31 December 2021, there was no ultimate controlling party
of the Company.
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END
FR BXGDULXBDGDG
(END) Dow Jones Newswires
May 11, 2022 02:00 ET (06:00 GMT)
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